Exhibit 10.5

 

ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

 

This Assignment, Assumption and Amendment Agreement (this “Agreement”) is made
as of October 3, 2012, by and among RLJ Acquisition, Inc., a Nevada corporation
(the “Company”), RLJ Entertainment, Inc., a Nevada corporation (“RLJ
Entertainment”), and Continental Stock Transfer & Trust Company, a New York
corporation (the “Warrant Agent”).

 

WHEREAS, the Company and the Warrant Agent are parties to that certain Warrant
Agreement, dated as of February 22, 2011 and filed with the United States
Securities and Exchange Commission on February 28, 2011 (the “Existing Warrant
Agreement”), pursuant to which the Company has issued warrants (collectively,
the “Warrants”) to purchase 21,041,667 shares of the Company’s common stock, par
value $0.001 per share (“Common Stock”);

 

WHEREAS, the terms of the Warrants are governed by the Existing Warrant
Agreement and capitalized terms used herein, but not otherwise defined, shall
have the meanings given to such terms in the Existing Warrant Agreement;

 

WHEREAS, on April 2, 2012, the Company and Image Entertainment, Inc., a Delaware
corporation (“Image”), entered into an Agreement and Plan of Merger (as amended
from time to time, the “Merger Agreement”), and on April 10, 2012, the Company,
RLJ Entertainment, Image, and the other signatories thereto entered into a
Joinder Agreement, pursuant to which RLJ Entertainment became a party to the
Merger Agreement;

 

WHEREAS, the Merger Agreement provides for the merger of the Company with and
into RLJ Merger Sub I, Inc., a Nevada corporation and wholly owned subsidiary of
RLJ Entertainment (the “Merger”), pursuant to which, each share of Common Stock
will be automatically converted into one newly issued share of common stock, par
value $0.001 per share, of RLJ Entertainment (“RLJ Entertainment Common Stock”);

 

WHEREAS, upon consummation of the Merger, as provided in Section 4.4 of the
Existing Warrant Agreement, the Warrants will no longer be exercisable for
shares of Common Stock but instead will be exercisable (subject to the terms and
conditions of the Existing Warrant Agreement as amended hereby) for shares of
RLJ Entertainment Common Stock;

 

WHEREAS, the Board of Directors of the Company has determined that the
consummation of the transactions contemplated by the Merger Agreement will
constitute a Business Combination (as defined in Section 3.2 of the Existing
Warrant Agreement);

 

WHEREAS, in connection with the Merger, the Company desires to assign all of its
right, title and interest in the Existing Warrant Agreement to RLJ
Entertainment; and

 

WHEREAS, Section 9.8 of the Existing Warrant Agreement provides that the Company
and the Warrant Agent may amend the Existing Warrant Agreement without the
consent of any Registered Holders for the purpose of curing any ambiguity, or
curing, correcting or supplementing any defective provision contained therein or
adding or changing any other provisions with respect to matters or questions
arising under the Existing Warrant Agreement as the Company and the Warrant
Agent may deem necessary or desirable and that the Company and the Warrant Agent
deem shall not adversely affect the interest of the Registered Holders.

 

 

 

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows.

 

1.             Assignment and Assumption; Consent.

 

1.1           Assignment and Assumption. The Company hereby assigns to RLJ
Entertainment all of the Company’s right, title and interest in and to the
Existing Warrant Agreement (as amended hereby) as of the RLJ Effective Time (as
defined in the Merger Agreement). RLJ Entertainment hereby assumes, and agrees
to pay, perform, satisfy and discharge in full, as the same become due, all of
the Company’s liabilities and obligations under the Existing Warrant Agreement
(as amended hereby) arising from and after the RLJ Effective Time.

 

1.2           Consent. The Warrant Agent hereby consents to the assignment of
the Existing Warrant Agreement by the Company to RLJ Entertainment pursuant to
Section 1.1 hereof effective as of the RLJ Effective Time, and the assumption of
the Existing Warrant Agreement by RLJ Entertainment from the Company pursuant to
Section 1.1 hereof effective as of the RLJ Effective Time, and to the
continuation of the Existing Warrant Agreement in full force and effect from and
after the RLJ Effective Time, subject at all times to the Existing Warrant
Agreement (as amended hereby) and to all of the provisions, covenants,
agreements, terms and conditions of the Existing Warrant Agreement and this
Agreement.

 

2.            Amendment of Existing Warrant Agreement. The Company and the
Warrant Agent hereby amend the Existing Warrant Agreement as provided in this
Section 2, effective as of the RLJ Effective Time, and acknowledge and agree
that the amendments to the Existing Warrant Agreement set forth in this Section
2 are necessary or desirable and that such amendments do not adversely affect
the interests of the Registered Holders:

 

2.1           Preamble. The preamble on page one of the Existing Warrant
Agreement is hereby amended by deleting “RLJ Acquisition, Inc.” and replacing it
with “RLJ Entertainment, Inc.” As a result thereof, all references to the
“Company” in the Existing Warrant Agreement shall be references to RLJ
Entertainment, Inc. rather than RLJ Acquisition, Inc.

 

2.2           Recitals. The recitals on pages one and two of the Existing
Warrant Agreement are hereby deleted and replaced in their entirety as follows:

 

“WHEREAS, RLJ Acquisition, Inc. (“RLJ Acquisition”) has entered into that
certain Subscription Agreement, dated as of December 2, 2010 (the “Sponsor
Warrants Purchase Agreement”), with RLJ SPAC Acquisition, LLC, a Delaware
limited liability company (the “Sponsor”), an entity controlled by Robert L.
Johnson, RLJ Acquisition’s Chairman of the Board of Directors (the “Founder”),
pursuant to which the Sponsor purchased an aggregate of 6,666,667 warrants,
bearing the legend set forth in Exhibit B hereto at a purchase price of $0.75
per warrant, in a private placement transaction occurring simultaneously with
the closing of the Offering (as defined below) (collectively, the “Sponsor
Warrants”); and

 

2

 

 

WHEREAS, RLJ Acquisition and the Sponsor are parties to that certain
Contribution Agreement, dated October 3, 2012, pursuant to which the Sponsor
contributed 1,850,000 Sponsor Warrants to RLJ Acquisition (which Sponsor
Warrants have been cancelled by RLJ Acquisition); and

 

WHEREAS, on February 22, 2010, RLJ Acquisition consummated an initial public
offering (the “Offering”) of 14,375,000 units of the Company’s equity
securities, including units issued and sold pursuant to the underwriters’
over-allotment option, each such unit comprised of one share of RLJ Acquisition
Common Stock (as defined below) and one Offering Warrant (as defined below) (the
“Units”) and, in connection therewith, issued and delivered 14,375,000 warrants
to public investors in the Offering (the “Offering Warrants”), each such
Offering Warrant evidencing the right of the holder thereof to purchase one
share of the common stock of RLJ Acquisition, par value $0.001 per share (the
“RLJ Acquisition Common Stock”), for $12.00 per share, subject to adjustment as
described herein; and

 

WHEREAS, RLJ Acquisition has filed with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form S-1, No. 333-170947 (the
“Registration Statement”) and prospectus (the “Prospectus”), for the
registration, under the Securities Act of 1933, as amended (the “Securities
Act”), of the Units, the Offering Warrants and the RLJ Acquisition Common Stock
included in the Units; and

 

WHEREAS, on October 3, 2012, the Company, RLJ Acquisition and the Warrant Agent
entered into an Assignment, Assumption and Amendment Agreement (the “Warrant
Assumption Agreement”), pursuant to which RLJ Acquisition assigned this
Agreement to the Company and the Company assumed this Agreement from RLJ
Acquisition; and

 

WHEREAS, RLJ Acquisition, the Company and Image Entertainment, Inc. (“Image”)
are parties to that certain Agreement and Plan of Merger, dated as of April 2,
2012 (the “Merger Agreement”), which provides for the merger of RLJ Acquisition
with and into RLJ Merger Sub I, Inc., a Nevada corporation and wholly owned
subsidiary of the Company, pursuant to which, each share of RLJ Acquisition
Common Stock will be automatically converted into one newly issued share of
common stock, par value $0.001 per share, of the Company (the “Common Stock”);
and

 

WHEREAS, pursuant to the Merger Agreement, the Warrant Assumption Agreement and
Section 4.4 of this Agreement, each Sponsor Warrant and each Offering Warrant
has been converted into the right to purchase one share of Common Stock of the
Company rather than one share of RLJ Acquisition Common Stock; and

 

WHEREAS, RLJ Acquisition, the Company, Acorn Media Group, Inc. (“Acorn”) and the
shareholders of Acorn are parties to that certain Stock Purchase Agreement,
dated as of April 2, 2012, as amended, which provides, among other things, for
the issuance of 1,150,000 warrants to purchase one share of Common Stock to the
shareholders of Acorn on substantially the same terms as the Offering Warrants
(the “Acorn Warrants”); and

 

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WHEREAS, RLJ Acquisition, the Company, and the holders of preferred stock of
Image are parties to that certain Preferred Stock Purchase Agreement, dated as
of April 2, 2012, as amended, which provides, among other things, for the
issuance of 150,000 warrants to purchase one share of Common Stock to the
holders of preferred stock of Image on substantially the same terms as the
Offering Warrants (the “Image Warrants”); and

 

WHEREAS, RLJ Acquisition, the Company and Wexford Spectrum Investors LLC
(“Wexford”) are parties to that certain Consulting Agreement, dated as of
September 18, 2012, which provides, among other things, for the issuance of
550,000 warrants to purchase one share of Common Stock to Wexford on
substantially the same terms as the Offering Warrants (the “Wexford Warrants”);
and

 

WHEREAS, the transactions contemplated by that certain Credit Agreement, dated
as of the date hereof, by and among the Company, as a Borrower, the other
parties designated therein as Borrowers, the guarantors from time to time party
thereto, the several banks and other financial institutions and Lenders from
time to time party thereto, including Fortress Credit Corp. (“Fortress”),
SunTrust, as Administrative Agent, Issuing Bank and a Lender, with SunTrust
Robinson Humphrey, Inc. as Lead Arranger and Bookrunner, provide, among other
things, for the issuance of 1,000,000 warrants to purchase one share of Common
Stock to Fortress on substantially the same terms as the Offering Warrants (the
“Fortress Warrants”); and

 

WHEREAS, the Sponsor Warrants, the Offering Warrants, the Acorn Warrants, the
Image Warrants, the Wexford Warrants and the Fortress Warrants are referred to
collectively as the “Warrants”; and

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the Warrants; and

 

WHEREAS, the Company desires to provide for the form and provisions of the
Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants; and

 

WHEREAS, all acts and things have been done and performed which are necessary to
make the Warrants, when executed on behalf of the Company and countersigned by
or on behalf of the Warrant Agent, as provided herein, the valid, binding and
legal obligations of the Company, and to authorize the execution and delivery of
this Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:”

 

2.3           Detachability of Warrants. Section 2.4 of the Existing Warrant
Agreement is hereby deleted and replaced with the following:

 

“[INTENTIONALLY OMITTED.]”

 

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2.4           Duration of Warrants. The first sentence of Section 3.2 of the
Existing Warrant Agreement is hereby deleted and replaced with the following:

 

“A Warrant may be exercised only during the period (the “Exercise Period”)
commencing on the date that is thirty (30) days after the consummation of the
transactions contemplated by the Merger Agreement (a “Business Combination”),
and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x)
the date that is five (5) years after the date on which the Company completes
the Business Combination, (y) the liquidation of the Company, or (z) other than
with respect to the Sponsor Warrants, the Redemption Date (as defined below) as
provided in Section 6.2 hereof (the “Expiration Date”); provided, however, that
the exercise of any Warrant shall be subject to the satisfaction of any
applicable conditions, as set forth in subsection 3.3.2 below with respect to an
effective registration statement.”

 

2.5           Issuance of Shares of Common Stock on Exercise. The last sentence
of Section 3.3.2 of the Existing Warrant Agreement is hereby deleted.

 

3.            Miscellaneous Provisions.

 

3.1           Effectiveness of Warrant. Each of the parties hereto acknowledges
and agrees that the effectiveness of this Agreement shall be expressly subject
to the occurrence of the RLJ Merger (as defined in the Merger Agreement) and
shall automatically be terminated and shall be null and void if the Merger
Agreement shall be terminated for any reason.

 

3.2           Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their permitted respective successors and assigns.

 

3.3           Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.

 

3.4           Applicable Law. The validity, interpretation and performance of
this Agreement shall be governed in all respects by the laws of the State of New
York, without giving effect to conflict of laws. The parties hereby agree that
any action, proceeding or claim against it arising out of or relating in any way
to this Agreement shall be brought and enforced in the courts of the State of
New York or the United States District Court for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. Each of the parties hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.

 

3.5           Counterparts. This Agreement may be executed in any number of
counterparts, and by facsimile or portable document format (pdf) transmission,
and each of such counterparts shall for all purposes be deemed to be an original
and all such counterparts shall together constitute but one and the same
instrument.

 

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3.6           Effect of Headings. The Section headings herein are for
convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.

 

3.7           Entire Agreement. The Existing Warrant Agreement, as modified by
this Agreement, constitutes the entire understanding of the parties and
supersedes all prior agreements, understandings, arrangements, promises and
commitments, whether written or oral, express or implied, relating to the
subject matter hereof, and all such prior agreements, understandings,
arrangements, promises and commitments are hereby canceled and terminated.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed as of the date first above written.

 

  RLJ ACQUISITION, INC.       By: /s/ H. Van Sinclair   Name: H. Van Sinclair  
Title: President and Chief Executive Officer

 

  RLJ ENTERTAINMENT, INC.       By: /s/ H. Van Sinclair   Name: H. Van Sinclair
  Title: President and Chief Executive Officer

 

  CONTINENTAL STOCK TRANSFER &
TRUST COMPANY       By: /s/ Mark Zimkind   Name: Mark Zimkind   Title: Vice
President

 

[Signature Page to Assignment, Assumption and Amendment Agreement by and among
RLJ Acquisition, Inc.,

RLJ Entertainment, Inc. and Continental Stock Transfer &Trust Company]