EXHIBIT 10.36
BANK OF AMERICA Subordination Agreement
Nevada Commercial Lending
000 Xxxxx 0/xx/ Xxxxxx
Xxx Xxxxx, Xxxxxx 00000 March 13, 2001
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The undersigned, MRT TECHNOLOGY, L.L.C., a limited liability company doing
business as RITEK GLOBAL MEDIA (hereinafter referred to as "Creditor") is a
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creditor of IMAGE ENTERTAINMENT, INC. (hereinafter referred to as "Borrower"),
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and desires that Bank of America, N.A. (hereinafter referred to as "Bank") or
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any other subsidiary or affiliate of Bank of America Corporation which has or
may in the future extend credit to Borrower (each a "Lending Bank") continue to
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extend or extend such financial accommodations to Borrower as Borrower may
request and as Bank and Lending Banks may deem proper. For the purpose of
inducing Bank and Lending Banks to grant, continue or renew such financial
accommodations, and in consideration thereof, Creditor agrees as follows:
1. Any and all claims of Creditor against Borrower, now or hereafter
existing, are, and shall be at all times, subject and subordinate to any and all
claims, now or hereafter existing which Bank or any Lending Bank may have
against Borrower (including any claim by Bank or Lending Banks for interest
accruing after any assignment for the benefit of creditors by Borrower or the
institution by or against Borrower of any proceedings under the Bankruptcy Act,
or any claim by Bank or Lending Banks for any such interest which would have
accrued in the absence of such assignment or the institution of such
proceedings).
2. Creditor agrees not to xxx upon, or to collect, or to receive payment
of the principal or interest of any claim or claims now or hereafter existing
which Creditor may hold against Borrower, and not to sell, assign, transfer,
pledge, hypothecate, or encumber such claim or claims except subject expressly
to this Agreement, and not to enforce or apply any security now or hereafter
existing therefor, nor to file or join in any petition to commence any
proceeding under the Bankruptcy Act, nor to take any lien or security of any of
Borrower's property, real or personal, so long as any claim of Bank or any
Lending Bank against Borrower shall exist.
3. In case of any assignment for the benefit of creditors by Borrower or
in case any proceedings under the Bankruptcy Act are instituted by or against
Borrower, or in case of the appointment of any receiver for Borrower's business
or assets, or in case of any dissolution or winding up of the affairs of
Borrower: (a) Borrower and any assignee, trustee in bankruptcy, receiver, debtor
in possession or other person or persons in charge are hereby directed to pay to
Bank and any Lending Bank the full amount of Bank's and Lending Banks' claims
against Borrower (including interest to the date of payment) before making any
payment of principal or interest to Creditor.
4. Bank and Lending Banks are hereby authorized by Creditor to: (a) renew,
compromise, extend, accelerate or otherwise change the time of payment, or any
other terms, of any existing or future claim of Bank or Lending Banks against
Borrower, (b) increase or decrease the rate of interest payable thereon or any
part thereof, (c) exchange, enforce, waiver or release any security therefor,
(d) apply such security and direct the order or manner of sale thereof in such
manner as Bank and Lending Banks may at their discretion determine, (e) release
Borrower or any guarantor of any indebtedness of Borrower from liability, and
(f) make optional future advances to Borrower, all without notice to Creditor
and without affecting the subordination provided by this Agreement.
5. Until all such claims of Bank and each Lending Bank against Borrower,
now or hereafter existing, shall be paid in full, no gift or loan shall be made
by Borrower to Creditor.
6. For violation of this Agreement, Creditor shall be liable for loss and
damage sustained by reason of such breach, and upon any such violation Bank and
each Lending Bank may, at its option, accelerate the maturity of any of its
existing or future claims against Borrower.
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7. This Agreement shall be binding upon the heirs, successors and assigns
of Creditor, Borrower, Bank and each Lending Bank. This Agreement and any
existing or future claim of Bank or any Lending Bank against Borrower may be
assigned by Bank or such Lending Bank, in whole or in part, without notice to
Creditor or Borrower.
8. Notwithstanding the provisions of Paragraph 2, so long as there has
been no occurrence of any default under any agreement between Borrower and Bank
or any Lending Bank, now existing or hereafter entered into, Creditor may
receive regularly scheduled principal payments on the Borrower's obligations to
Creditor which have been subordinated to the Bank, as such regularly schedule
payments are described in the Optical Disc Replication Agreement, dated as of
March 13, 2001, between the Borrower and the Creditor, as a copy of such
agreement was delivered to the Bank prior to February 8, 2001; provided,
however, that Creditor shall not receive any prepayment of principal on said
indebtedness without prior written consent of Bank.
CREDITOR:
MRT TECHNOLOGY, L.L.C., doing business as RITEK GLOBAL MEDIA
By: /s/ XXXXXX XXXX
Name: Xxxxxx Xxxx
Title: President
Acceptance of Subordination Agreement by Borrower
The undersigned being the Borrower named in the foregoing Subordinate
Agreement, hereby accepts and consents thereto and agrees to be bound by all the
provisions thereof and to recognize all priorities and other rights granted
thereby to Bank and each Lending Bank and their successors and assigns, and to
perform in accordance therewith.
Dated: March 13, 2001
BORROWER
IMAGE ENTERTAINMENT, INC.
By: /s/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: CFO
BANK OF AMERICA
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
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