EXHIBIT 10.26.f.
June 18, 1998
Xxxx Xxxxxx, C.F.O.
Image Entertainment, Inc.
0000 Xxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Re: Sixth Amendment and Waiver ("Amendment") to the Loan Agreement dated
December 17, 1996 (the Loan Agreement, together with all prior amendments,
is called the "Agreement")
Dear Xxxx:
In reference to the Agreement between UNION BANK OF CALIFORNIA, N.A.
("Bank") and IMAGE ENTERTAINMENT, INC. ("Borrower"), Bank and Borrower desire to
amend the Agreement. Initially, capitalized terms used herein which are not
otherwise defined shall have the meanings given them in the Agreement.
1. Amendments to the Agreement
(a) SECTION 2.3 GUARANTIES shall be deleted in its entirety.
(b) SECTION 1.3.2 ELIGIBLE INVENTORY shall be deleted in its entirety.
(c) SECTION 1.1 THE REVOLVING LINE shall be deleted in its entirety and a
new Section 1.1 shall be added as follows:
(d) SECTION 1.11 LOAN FEE of the Agreement is hereby added in its entirety
as follows:
SECTION 1.11 LOAN FEE. Borrower shall pay a fee of Twenty-Five Thousand
Dollars ($25,000) on or before the date of execution of this agreement.
Thereafter, Borrower shall pay a fee of One Thousand Dollars ($1,000) for
any waiver made to the Agreement.
1.1 THE REVOLVING LOAN. Bank will loan to Borrower an amount not to
exceed Ten Million Dollars ($10,000,000) outstanding in the aggregate at
any one time (the "Revolving Loan"). Borrower may borrow, repay and
reborrow all or part of the Revolving Loan in the amounts of not less than
One Hundred Thousand Dollars ($100,000) in accordance with the terms of the
Revolving Note. All borrowings of the Revolving Loan must be made before
June 30, 1999 at which time all unpaid principal and interest of the
Revolving Loan shall be due and payable. The Revolving Loan shall be
evidenced by a promissory note (the "Revolving Note") on the standard form
used by Bank for commercial loans. Bank shall enter each amount borrowed
and repaid in Bank's record and such entries shall be deemed to be the
amount of the Revolving Loan outstanding absent manifest error. Omission
of Bank to make any such entries shall not discharge Borrower of its
obligation to repay in full with interest all amounts borrowed.
(d) SECTION 4.7 CONSOLIDATED TANGIBLE NET WORTH shall be deleted in its
entirety and a new Section 4.7 shall be added as follows:
4.7 CONSOLIDATED TANGIBLE NET WORTH. Borrower will maintain Consolidated
Tangible Net
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Worth of not less than $13.2MM for the first quarter ending 06/30/98, not
less than $13.45MM for the second quarter ending 09/30/98, not less than
$14.85MM for the third quarter ending 12/31/98 and not less than $16MM for
the fourth quarter ending 03/31/99. "Consolidated Tangible Net Worth" shall
mean net worth increased by indebtedness of Borrower and its subsidiaries
subordinated to Bank and decreased by patents, licenses, trademarks of
Borrower and its subsidiaries, trade names, goodwill and other similar
intangible assets, organizational expenses, and monies due from affiliates
(including officers, shareholders and directors).
(e) SECTION 4.9 PROFITABILITY shall be deleted in its entirety and a new
Section 4.9 shall be added as follows:
4.9 PROFITABILITY. Borrower will maintain two quarter consecutive average
net profit, after provisions for income taxes, not less than $5.4MM for the
first quarter ending 06/30/98, not less than $125M for the second quarter
ending 09/30/98, not less than $500M for the third quarter ending 12/31/98
and not less than $500M for the fourth quarter ending 03/31/99.
2. Waiver
(a) Bank hereby waives Borrower's breach of Section 4.7 (Tangible Net
Worth), Section 4.9 (Profitability), Section 5.3 (Sale of Assets,
Liquidation or Merger) and Section 5.7 (Parent and Subsidiary Property) of
the Agreement occurring on March 31, 1998. Any further breach of the
section is not waived.
Except as specifically amended hereby, the Agreement shall remain in full
force and effect and is hereby ratified and confirmed. This Amendment shall not
be a waiver of any existing or future default or breach of a condition or
covenant unless specified herein.
This Amendment shall become effective when Bank shall have received the
acknowledgment copy of this Amendment executed by Borrower, which Bank must be
received before June 30, 1998.
Very truly yours,
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXX XXXX
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Xxxx Xxxx
Title: Vice President
Agreed and Accepted to this 18th day of June, 1998.
IMAGE ENTERTAINMENT, INC.
By: /s/ Xxxx X. Xxxxxx
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Xxxx Xxxxxx
Title: C.F.O.
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