EXHIBIT 10.26.d
FOURTH AMENDMENT
TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this "Fourth Amendment") dated as
of October 31, 1997, is made and entered into by and between IMAGE
ENTERTAINMENT, INC., a California corporation ("Borrower"), and UNION BANK OF
CALIFORNIA, N.A., a national banking association ("Bank").
RECITALS:
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A. Borrower and Bank are parties to that certain Loan Agreement dated as of
December 17, 1996, as amended by that certain First Amendment dated as of
February 5, 1997, that certain Second Amendment dated as of February 28, 1997
and that certain Third Amendment dated as of September 27, 1997 (as so amended,
the "Agreement"), pursuant to which Bank agreed to extend credit to Borrower in
the aggregate principal amount at any one time outstanding not to exceed the
lesser of (i) Fifteen Million Dollars ($15,000,000) and (ii) the Borrowing Base
(as described in Section 1.3 of the Agreement).
B. Pursuant to that certain Credit Agreement dated as of September 29, 1997
(as in effect as of the date of this Fourth Amendment, the "Credit Agreement"),
by and between Image Investors Co., a Delaware corporation ("Subordinated
Creditor"), and Borrower, Subordinated Creditor agreed to make, and did make, an
unsecured loan (the "Subordinated Loan") to Borrower in the principal sum of
Five Million Dollars ($5,000,000). Borrower's obligation to repay the principal
amount of the Subordinated Loan, together with accrued interest thereon, is
evidenced by that certain Convertible Subordinated Promissory Note dated as of
October 29, 1997 issued by Borrower in favor of Subordinated Creditor, a true
and correct copy of which is attached hereto as Exhibit A (the "Subordinated
Note"). Borrower has requested that Bank consent to the incurrence by Borrower
of the indebtedness provided for in the Credit Agreement and evidenced by the
Subordinated Note, which would otherwise be prohibited by the terms of Section
5.2 of the Agreement. Bank is willing to so consent, but subject to the terms
and conditions of this Fourth Amendment.
AGREEMENT:
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In consideration of the above recitals and of the mutual covenants and
conditions contained herein, Borrower and Bank agree as follows:
1. DEFINED TERMS. Initially capitalized terms used herein which are not
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otherwise defined shall have the meanings assigned thereto in the Agreement.
2. CONSENT. Bank hereby consents to the incurrence by Borrower of the
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indebtedness provided for in the Credit Agreement and evidenced by the
Subordinated Note, which would otherwise be prohibited by the terms of Section
5.2 of the Agreement. Notwithstanding anything to the contrary contained in the
Subordinated Note, including without limitation paragraph 5 thereof, so long as
no Event of Default has occurred and is continuing, Borrower shall be entitled
to make regularly scheduled payments (i.e., no prepayments or payments made as a
result of acceleration) of the principal of and accrued interest on the
Subordinated Note. Borrower shall not be entitled to make any prepayment of the
principal of or accrued interest on the Subordinated Note without the prior
written consent of Bank.
3. AMENDMENTS TO THE AGREEMENT.
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(a) The last sentence of Section 5.2 of the Agreement is hereby, amended to
read in full as
follows:
"Borrower will not borrow any money, become contingently liable to borrow
money, nor enter into any agreement to directly or indirectly obtain borrowed
money, except (a) the purchase money indebtedness owing to Bank of America, NT &
SA in connection with the financing of the Las Vegas real property and
equipment, (b) the obligations owing to Subordinated Creditor under the
Subordinated Loan and evidenced by the Subordinated Note; provided, however,
that the aggregate outstanding principal amount of the Subordinated Note shall
not exceed Five Million Dollars ($5,000,000) at any one time and (c) pursuant to
agreements made with Bank."
(b) Section 6.4 of the Agreement is hereby amended to read in full as
follows:
"6.4 Borrower shall default in any other material indebtedness with
respect to the payment of borrowed monies, bonds, debentures, notes or
similar instruments, including without limitation the indebtedness
owing to Subordinated Creditor under the Subordinated Loan, as
evidenced by the Subordinated Note."
4. EFFECTIVENESS OF THIS FOURTH AMENDMENT. This Fourth Amendment shall become
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effective as of the date hereof when, and only when, Bank shall have received
all of the following, in form and substance satisfactory to Bank:
(a) A counterpart of this Fourth Amendment, duly executed by Borrower and
acknowledged by U.S. Laser Video Distributors, Inc., in its capacity as
guarantor, where indicated herein below; and
(b) Such other documents, instruments or agreements as Bank may reasonably
deem necessary.
5. RATIFICATION.
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(a) Except as specifically amended herein above, the Agreement shall
remain in full force and effect and is hereby ratified and confirmed; and
(b) Upon the effectiveness of this Fourth Amendment, each reference in the
Agreement to "this Agreement," "hereunder," "herein," "hereof" or words of like
import referring to the Agreement shall mean and be a reference to the Agreement
as amended by this Fourth Amendment.
6. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as
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follows:
(a) Each of the representations and warranties contained in Section 3 of
the Agreement, as amended hereby, is hereby reaffirmed as of the date hereof,
each as if set forth herein;
(b) The execution, delivery and performance of this Fourth Amendment are
within Borrower's corporate powers, have been duly authorized by all necessary
corporate action, have received all necessary approvals, if any, and do not
contravene any law or any contractual restriction binding on Borrower;
(c) This Fourth Amendment is the legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with its terms; and
(d) No event has occurred and is continuing or would result from this
Fourth Amendment which constitutes an Event of Default under the Agreement, or
would constitute an Event of Default but
for the requirement that notice be given or time elapse or both.
7. GOVERNING LAW. This Fourth Amendment shall be deemed a contract under and
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subject to, and shall be construed for all purposes and in accordance with, the
laws of the State of California.
8. COUNTERPARTS. This Fourth Amendment may be executed in two or more
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counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
WITNESS the due execution hereof as of the date first above written.
IMAGE ENTERTAINMENT, INC.
By: /s/ XXXX X. XXXXXX
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Title: Chief Financial Officer
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXX XXXXXXX
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Title: Vice President
Acknowledgment of Guarantor
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The undersigned, as Guarantor pursuant to that certain Continuing Guaranty
dated as of August 4, 1997 (the "Guaranty"), hereby consents to the foregoing
Fourth Amendment and acknowledges and agrees, without in any manner limiting or
qualifying its obligations under the Guaranty, that payment of the Obligations
(as such term is defined in the Guaranty) and the punctual and faithful
performance, keeping, observance and fulfillment by Borrower of all of the
agreements, conditions, covenants and obligations of Borrower contained in the
Agreement are and continue to be unconditionally guaranteed by the undersigned
pursuant to the Guaranty.
U.S. LASER VIDEO DISTRIBUTORS, INC.
By: /s/ XXXX X. XXXXXX
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Title: Chief Financial Officer