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Exhibit 10.9

NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of November 3, 2010, is entered into between WELLS FARGO CAPITAL FINANCE, LLC, a
Delaware limited liability company, as successor by merger to Wachovia Capital
Finance Corporation (Western), as Agent and Lender (in such capacities,
“Lender”), IMAGE ENTERTAINMENT, INC., a Delaware corporation ("Image"), and
IMAGE/MADACY HOME ENTERTAINMENT, LLC, a California limited liability
company  ("Image/Madacy" and collectively with Image, the “Borrowers” and each a
"Borrower").
 
RECITALS
 
A.            Image, Egami Media, Inc., a Delaware corporation (which has since
been merged with and into Image), Image Entertainment (UK), Inc., a Delaware
corporation (which has since been merged with and into Image), Home Vision
Entertainment, Inc., a Delaware corporation (which has since been merged with
and into Image), and Lender have previously entered into that certain Loan and
Security Agreement dated May 4, 2007, as amended by that certain First Amendment
to Loan and Security Agreement dated as of April 28 2008, as amended by that
certain Second Amendment to Loan and Security Agreement dated as of June 23,
2009, as amended by that certain Third Amendment to Loan and Security Agreement
dated as of July 30, 2009, as amended by that certain Fourth Amendment to Loan
and Security Agreement dated as of January 8, 2010, as amended by that certain
Fifth Amendment to Loan and Security Agreement dated as of April 15, 2010, as
amended by that certain Sixth Amendment to Loan and Security Agreement dated as
of May 3, 2010, as amended by that certain Seventh Amendment to Loan and
Security Agreement dated as of July 29, 2010, and as amended by that certain
Eighth Amendment to Loan and Security Agreement dated as of August 13, 2010 (as
amended, the “Loan Agreement”), pursuant to which Lender has made certain loans
and financial accommodations available to Image.  Terms used herein without
definition shall have the meanings ascribed to them in the Loan Agreement.
 
B.            Borrowers have requested that Lender amend the Loan Agreement in
certain respects, and Lender is willing to accommodate such request on the terms
and conditions set forth herein.
 
C.            Borrowers are entering into this Amendment with the understanding
and agreement that, except as specifically provided herein, none of Lender’s
rights or remedies as set forth in the Loan Agreement is being waived or
modified by the terms of this Amendment.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
 
1.            Amendment to Loan Agreement.
 
 
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(a)           Addition of Image/Madacy.  Image/Madacy is hereby added as a
co-borrower under the Loan Agreement with the same force and effect as if
Image/Madacy had duly executed and delivered the Loan Agreement as a Borrower
thereunder in addition to Image.  Without limiting the foregoing:
 
(1)           The definitions of “Borrower” and “Borrowers” in the preamble of
the Loan Agreement and Section 1 of the Loan Agreement are hereby amended to
include Image/Madacy in addition to Image.
 
(2)           Image/Madacy and Image shall be jointly and severally liable for
all Obligations.
 
(3)           To secure payment and performance of all Obligations, Image/Madacy
hereby grants to Agent a continuing security interest in, a lien upon, and a
right of set off against, and hereby assigns to Agent as security, all
Collateral, whether now owned or hereafter acquired or existing, and wherever
located.
 
(4)           The Information Certificate of Image/Madacy attached hereto as
Exhibit A is hereby included in Exhibit B to the Loan Agreement in addition to
the Information Certificate of Image.
 
(5)           Image/Madacy hereby represents and warrants to Agent and the
Lenders the truth and accuracy of all representations and warranties applicable
to Borrowers in the Loan Agreement (after giving effect to the inclusions of
Image/Madacy and its Information Certificate as set forth in clauses (1) and (4)
above).
 
(6)           Image/Madacy hereby agrees to perform all of the covenants and
agreements applicable to Borrowers in the Loan Agreement.
 
(7)           Agent and the Lenders shall have all of the rights, remedies,
interests and powers as against Image/Madacy as provided to Agent and the
Lenders in relation to Borrowers in the Loan Agreement.
 
(b)           The following is hereby added to the Loan Agreement as Section
1.1.1:
 
"1.1.1       'Acquisition' shall mean (a) the purchase or other acquisition by a
Person or its Subsidiaries of all or substantially all of the assets of (or any
division or business line of) any other Person, or (b) the purchase or other
acquisition (whether by means of a merger, consolidation, or otherwise) by a
Person or its Subsidiaries of all or substantially all of the Stock of any other
Person."
 
(c)           The definition of "Borrowing Base" in Section 1.13 of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:
 
"1.13        'Borrowing Base' shall mean, at any time, the amount equal to:
 
 
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(a)
the amount equal to eighty-five percent (85%) of the Eligible Accounts of
Borrowers, plus

 
 
(b)
the lesser of (A) the Inventory Loan Limit or (B) the sum of: (1) the lesser of
sixty percent (60%) multiplied by the Value of the Eligible Inventory of
Borrowers consisting of Under 52 Week Supply Inventory, or eighty-five percent
(85%) percent of the Net Recovery Percentage multiplied by the Value of such
Eligible Inventory, plus (2) the lesser of twenty percent (20%) multiplied by
the Value of the Eligible Inventory of Borrowers which does not consist of Under
52 Week Supply Inventory, or eighty-five percent (85%) percent of the Net
Recovery Percentage multiplied by the Value of such Inventory, minus

 
 
(c)
the Availability Block, minus

 
 
(d)
Reserves.

 
Notwithstanding the foregoing: (x) the maximum portion of the Borrowing Base
calculated upon Eligible Accounts that are unpaid more than ninety (90) days
after the date of the original invoice for them (but not more than one hundred
five (105) days after such date), shall be limited to Two Million Five Hundred
Thousand Dollars ($2,500,000); (y) the maximum portion of the Borrowing Base
calculated upon Eligible Inventory of Image/Madacy shall be limited to One
Million Two Hundred Fifty Thousand Dollars ($1,250,000); and (z) the maximum
portion of the Borrowing Base calculated upon Eligible Inventory and Eligible
Accounts of Image/Madacy shall be limited to Four Million Dollars
($4,000,000).  For purposes only of applying the Inventory Loan Limit, Agent may
treat the then undrawn amounts of outstanding Letters of Credit for the purpose
of purchasing Eligible Inventory as Revolving Loans to the extent Agent is in
effect basing the issuance of the Letter of Credit on the Value of the Eligible
Inventory being purchased with such Letter of Credit.  In determining the actual
amounts of such Letter of Credit to be so treated for purposes of the sublimit,
the outstanding Revolving Loans and Reserves shall be attributed first to any
components of the lending formulas set forth above that are not subject to such
sublimit, before being attributed to the components of the lending formulas
subject to such sublimit.  The amounts of Eligible Inventory of any Borrower
shall, at Agent's option, be determined based on the lesser of the amount of
Inventory set forth in the general ledger of such Borrower or the perpetual
inventory record maintained by such Borrower."
 
(d)           Clause (m) of the definition of "Eligible Accounts" contained in
Section 1.29 of the Loan Agreement is hereby amended and restated to read in its
entirety as follows:
 
 
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"(m)         (i) the aggregate amount of such Accounts owing by a single account
debtor (other than Amazon.com, Anderson Merchandisers, L.P., Wal-Mart Stores,
Inc.,  Best Buy Co., Inc., Ingram Entertainment, Inc., Target Corporation, AEC
One Stop, and Sony Pictures Home Entertainment Inc.) do not constitute more than
fifteen percent (15%) of the aggregate amount of all otherwise Eligible
Accounts; (ii) the aggregate amount of such Accounts owing by Target Corporation
do not constitute more than: (A) prior to December 31, 2010, twenty-five percent
(25%) of the aggregate amount of all otherwise Eligible Accounts, and (B) at all
times after December 31, 2010, fifteen percent (15%) of the aggregate amount of
all otherwise Eligible Accounts; (iii) the aggregate amount of such Accounts
owing by Best Buy Co., Inc. and Ingram Entertainment, Inc. do not, in the
aggregate, constitute more than: (A) prior to December 31, 2010, twenty-five
percent (25%) of the aggregate amount of all otherwise Eligible Accounts, and
(B) at all times after December 31, 2010, fifteen percent (15%) of the aggregate
amount of all otherwise Eligible Accounts; (iv) the aggregate amount of such
Accounts owing by Amazon.com do not constitute more than: (A) prior to December
31, 2010, thirty-five percent (35%) of the aggregate amount of all otherwise
Eligible Accounts, and (B) at all times after December 31, 2010, fifteen percent
(15%) of the aggregate amount of all otherwise Eligible Accounts; (v) the
aggregate amount of such Accounts owing by AEC One Stop do not constitute more
than: (A) prior to December 31, 2010, twenty-five percent (25%) of the aggregate
amount of all otherwise Eligible Accounts, and (B) at all times after December
31, 2010, fifteen percent (15%) of the aggregate amount of all otherwise
Eligible Accounts; (vi) the aggregate amount of such Accounts owing by Anderson
Merchandisers, L.P. and Wal-Mart Stores, Inc. do not, in the aggregate,
constitute more than: (A) prior to December 31, 2010, thirty-five percent (35%)
of the aggregate amount of all otherwise Eligible Accounts, and (B) at all times
after December 31, 2010, fifteen percent (15%) of the aggregate amount of all
otherwise Eligible Accounts; and (vii) the aggregate amount of such Accounts
owing by Sony Pictures Home Entertainment Inc. do not constitute more than: (A)
ninety percent (90%) of the aggregate amount of all otherwise Eligible Accounts
to the extent Sony Pictures Home Entertainment Inc. maintains a rating of at
least A- from Standard & Poor’s Rating Group; and (B) fifteen percent (15%) of
the aggregate amount of all otherwise Eligible Accounts to the extent Sony
Pictures Home Entertainment Inc. does not maintain a rating of at least A from
Standard & Poor’s Rating Group (but, in each case, the portion of the Accounts
not in excess of the applicable percentages may be deemed Eligible Accounts);"
 
(e)           The definition of "Fixed Charge Coverage Ratio" contained in
Section 1.44 of the Loan Agreement is hereby amended and restated to read in its
entirety as follows:
 
 
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“1.44       ‘Fixed Charge Coverage Ratio’ shall mean, as to any Person, with
respect to any period, the ratio of (a) the EBITDA of such Person during such
period, plus any amortization of production costs (to the extent not already
added to Net Income in calculating such EBITDA), minus any costs or expenses
incurred in connection with any Acquisition by such Person (but excluding up to
$707,000 of costs and expenses incurred by Parent and its Subsidiaries in
connection with the acquisition by Image/Madacy on or about August 31, 2010 of
certain business assets of Madacy Entertainment LP, a limited partnership
organized under the laws of the Province of Quebec), minus taxes, whether
Federal, State or local, and whether foreign or domestic, that are paid or
payable by such Person or its Subsidiaries in cash in respect of such period,
minus any Capital Expenditures made by such Person or its Subsidiaries during
such period to the extent they are not financed, minus production costs
expenditures made by such Person or its Subsidiaries during such period, and
minus any advances made by such Person or its Subsidiaries during such period to
licensors of any Intellectual Property acquired by any Borrower or Guarantor
(but excluding any advances made by Parent prior to December 31, 2010 in an
aggregate amount of up to $2,500,000 in connection with the acquisition by
Parent of the films "Gun", "The Way Back", "The Resident", and "Passion Play"),
to (b) all principal sums paid or payable by such Person or its Subsidiaries on
Indebtedness during such period and all Interest Expense of such Person and its
Subsidiaries during such period, minus any such Interest Expense not paid or
payable in cash, minus deferred finance expense on subordinated Indebtedness,
and minus any warrant amortization, in each case made or incurred by such Person
or its Subsidiaries during such period.”
 
(f)            The following is hereby added to the Loan Agreement as Section
1.51.1:
 
"1.51.1     'Image/Madacy' shall mean IMAGE/MADACY HOME ENTERTAINMENT, LLC, a
California limited liability company."
 
(g)           Section 9.8(k) of the Loan Agreement is hereby amended and
restated in its entirety as follows:
 
"(k)           liens of: (i) Sony Pictures Home Entertainment Inc. on personal
property of Parent so long as Sony Pictures Home Entertainment Inc. has entered
into an intercreditor agreement with Agent, in form and substance satisfactory
to Agent; and (ii) Sony DADC US Inc. d/b/a Sony DADC Americas on personal
property of Image/Madacy so long as Sony DADC US Inc. d/b/a Sony DADC Americas
has entered into an intercreditor agreement with Agent, in form and substance
satisfactory to Agent.”
 
(h)           The following is hereby added to the Loan Agreement as Section
9.24:
 
 
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"9.24        Distribution Agreement.  Borrowers shall not permit that certain
Distribution Services and License Agreement, by and between Parent and Sony
Pictures Home Entertainment Inc., to be amended without the prior written
consent of Agent."
 
2.           Effectiveness of this Amendment.  The effectiveness of this
Amendment is subject to the following conditions precedent:
 
(a)           Lender shall have received this Amendment, fully executed in a
sufficient number of counterparts for distribution to all parties.
 
(b)           Lender shall have received such documents as Lender may require to
establish that it has a valid, perfected and first priority security interest in
the Collateral.
 
(c)           Lender shall have received a secretary certificate from
Image/Madacy and such other documents as Lender may require with respect to the
organization, existence, good standing, power and authority of Image/Madacy.
 
(d)           Lender shall have received evidence of insurance and loss payable
endorsements with respect to the insurance policies of Image/Madacy.
 
(e)           Lender shall have received a favorable opinion letter of counsel
to Image/Madacy with respect to the transactions contemplated hereby.
 
(f)            Lender shall have received (i) a Bailee Agreement; (ii) an
Intercreditor Agreement; and (iii) a Non-Offset Letter, in each case, duly
executed by Sony DADC US Inc. d/b/a Sony DADC Americas, and in each case, in
form and substance satisfactory to Lender.
 
(g)           Lender shall have received Deposit Account Control Agreements by
and among Agent, Image/Madacy and each bank where Image/Madacy has a deposit
account, in each case, duly authorized, executed and delivered by such bank and
Image/Madacy.
 
(h)           The representations and warranties set forth herein and in the
Loan Agreement shall be true and correct.
 
(i)            All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance satisfactory to Lender.
 
3.           Amendment Fee.     Borrowers shall pay to Lender an amendment fee
in the amount of Twenty Thousand Dollars ($20,000), which shall be fully earned
by Lender, non-refundable, and due and payable by Borrowers on the date of this
Amendment.
 
4.           Representations and Warranties.  Each Borrower represents and
warrants as follows:
 
(a)           Authority.  Each Borrower has the requisite corporate power and
authority to execute and deliver this Amendment, and to perform its obligations
hereunder and under the Financing Agreements (as amended or modified hereby) to
which it is a party.  The execution, delivery and performance by each Borrower
of this Amendment have been duly approved by all necessary corporate action and
no other corporate proceedings are necessary to consummate such transactions.
 
 
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(b)           Enforceability.  This Amendment has been duly executed and
delivered by each Borrower.  This Amendment and each Financing Agreement (as
amended or modified hereby) is the legal, valid and binding obligation of each
Borrower, enforceable against it in accordance with its terms, and is in full
force and effect.
 
(c)           Representations and Warranties.  The representations and
warranties contained in each Financing Agreement (other than any such
representations or warranties that, by their terms, are specifically made as of
a date other than the date hereof) are correct on and as of the date hereof as
though made on and as of the date hereof.
 
(d)           Due Execution.  The execution, delivery and performance of this
Amendment are within the power of each Borrower, have been duly authorized by
all necessary corporate action, have received all necessary governmental
approval, if any, and do not contravene any law or any contractual restrictions
binding on any Borrower.
 
(e)           No Default.  No event has occurred and is continuing that
constitutes an Event of Default.
 
5.             Choice of Law.  The validity of this Amendment, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of California governing contracts only to be performed in that
State.
 
6.             Counterparts.  This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument.  Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.
 
7.             Reference to and Effect on the Financing Agreements.
 
(a)           Upon and after the effectiveness of this Amendment, each reference
in the Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words of
like import referring to the Loan Agreement, and each reference in the other
Financing Agreements to “the Loan Agreement”, “thereof” or words of like import
referring to the Loan Agreement, shall mean and be a reference to the Loan
Agreement as modified and amended hereby.
 
(b)           Except as specifically amended above, the Loan Agreement and all
other Financing Agreements, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed and shall
constitute the legal, valid, binding and enforceable obligations of Borrowers to
Lender.
 
 
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(c)           The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Lender under any of the Financing Agreements, nor constitute
a waiver of any provision of any of the Financing Agreements.
 
(d)           To the extent that any terms and conditions in any of the
Financing Agreements shall contradict or be in conflict with any terms or
conditions of the Loan Agreement, after giving effect to this Amendment, such
terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.
 
8.             Estoppel.  To induce Lender to enter into this Amendment and to
continue to make advances to Borrowers under the Loan Agreement, each Borrower
hereby acknowledges and agrees that, as of the date hereof, there exists no
right of offset, defense, counterclaim or objection in favor of any Borrower as
against Lender with respect to the Obligations.
 
9.             Integration.  This Amendment, together with the other Financing
Agreements, incorporates all negotiations of the parties hereto with respect to
the subject matter hereof and is the final expression and agreement of the
parties hereto with respect to the subject matter hereof.
 
10.           Severability.  In case any provision in this Amendment shall be
invalid, illegal or unenforceable, such provision shall be severable from the
remainder of this Amendment and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
 
[Remainder of Page Left Intentionally Blank]
 
 
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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.
 

 
IMAGE ENTERTAINMENT, INC.,
 
a Delaware corporation
         
By:
/s/ JOHN AVAGLIANO
 
Name:
John Avagliano
 
Title:
COO/CFO
             
IMAGE/MADACY HOME ENTERTAINMENT, LLC,
  a California limited liability company          
By:
/s/ TED GREEN
 
Name:
Ted Green
 
Title:
CEO
             
WELLS FARGO CAPITAL FINANCE, LLC,
 
as Agent and Lender
         
By:
/s/ CARLOS VALLES
 
Name:
Carlos Valles
 
Title:
Vice President

 

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