Document:

Exhibit 10.9

 

SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
(this “Amendment”), dated as of May 3, 2010, is entered into between
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN), a California corporation, as
Agent and Lender (in such capacities, “Lender”), IMAGE
ENTERTAINMENT, INC., a Delaware corporation (“Image”), EGAMI MEDIA, INC.,
a Delaware corporation (“Egami”, and together with Image, the “Borrowers”,
and each a “Borrower”), and IMAGE ENTERTAINMENT (UK), INC., a
Delaware corporation (“Guarantor”).

 

RECITALS

 

A.            Borrowers, Guarantor, Home
Vision Entertainment, Inc., a Delaware corporation (“Home Vision”)
(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, and as amended by that certain Fifth Amendment to Loan
and Security Agreement dated as of April 15, 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 and Guarantor 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 and Guarantor 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.             Amendments to Loan Agreement.

 

(a)           The definition of “Inventory
Loan Limit” in Section 1.58.1 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

 

“1.58.1   ‘Inventory Loan Limit’ shall mean an
amount equal to $3,000,000.”

 

1

 

2.             Effectiveness of this
Amendment.  The
effectiveness of this Amendment is subject to the following conditions
precedent:

 

(a)           Amendment.  Lender shall have received this Amendment,
fully executed in a sufficient number of counterparts for distribution to all
parties.

 

(b)           Representations and
Warranties.  The
representations and warranties set forth herein and in the Loan Agreement shall
be true and correct.

 

(c)           Other Required
Documentation.  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.             Representations and
Warranties.  Borrowers
and Guarantor represent and warrant as follows:

 

(a)           Authority.  Each Borrower and Guarantor 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 Borrowers and Guarantor of
this Amendment have been duly approved by all necessary corporate action and no
other corporate proceedings are necessary to consummate such transactions.

 

(b)           Enforceability.  This Amendment has been duly executed and
delivered by Borrowers and Guarantor. 
This Amendment and each Financing Agreement (as amended or modified
hereby) is the legal, valid and binding obligation of Borrowers and Guarantor,
enforceable against them 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 Borrowers and Guarantor, 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 or Guarantor.

 

(e)           No Default.  No event has occurred and is continuing that
constitutes an Event of Default.

 

4.             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.

 

5.             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

 

2

 

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.

 

6.             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 and Guarantor to Lender.

 

(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.

 

7.             Estoppel.  To induce Lender to enter into this Amendment
and to continue to make advances to Borrowers under the Loan Agreement,
Borrowers and Guarantor hereby acknowledge and agree that, as of the date
hereof, there exists no right of offset, defense, counterclaim or objection in
favor of any Borrower or Guarantor as against Lender with respect to the
Obligations.

 

8.             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.

 

9.             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]

 

3

 

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EGAMI MEDIA, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN AVAGLIANO

  
	
   

  	
  Name:

  	
  John
  Avagliano

  
	
   

  	
  Title:

  	
  COO/CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IMAGE ENTERTAINMENT (UK), INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN AVAGLIANO

  
	
   

  	
  Name:

  	
  John
  Avagliano

  
	
   

  	
  Title:

  	
  COO/CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  CAPITAL FINANCE CORPORATION (WESTERN), 

  
	
   

  	
  as
  Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  CARLOS VALLES

  
	
   

  	
  Name:

  	
  Carlos
  Valles

  
	
   

  	
  Title:

  	
  Director

  

 

4Exhibit
10.1

 

AMENDMENT
NUMBER 10 TO LOAN DOCUMENTS

 

This
AMENDMENT NUMBER 10 TO LOAN DOCUMENTS (this “Tenth Amendment”) is
entered into as of May 3, 2010, by and among GVEC RESOURCE IV INC. (the “Agent”).
as Agent and as a Lender, PRIVATE EQUITY MANAGEMENT GROUP LLC, a Delaware
limited liability company (“PEMG”). EMRISE CORPORATION, a Delaware
corporation (“Parent”), and Parent’s Subsidiaries that are signatories
hereto (collectively with Parent, the “Borrowers” and each individually,
a “Borrower”) with reference to the following facts:

 

A.                                 Borrowers.
Agent and the Lenders named therein are parties to that certain Credit
Agreement dated as of November 30, 2007, as amended by that certain Amendment
Number 1 to Loan Documents, dated as of August 20, 2008, that certain
Amendment Number 2 to Loan Documents, dated as of February 12, 2009, that
certain Forbearance Agreement and Amendment Number 3 to Loan Documents, dated
as of March 20, 2009 (as amended by that certain Amendment to Forbearance
Agreement and Amendment Number 3 to Loan Documents, dated as of April 9,
2009), that certain Amendment Number 4 to Loan Documents, dated as of April 14,
2009, that certain Amendment Number 5  to Loan Documents, dated as of
August 14, 2009, that certain Amendment Number 6 to Loan Documents, dated
as of November 3, 2009, that certain Amendment Number 7 to Loan Documents,
dated as of November 13,
2009, that certain Amendment Number 8 to Loan Documents, dated as of December 31,
2009 and that certain Amendment Number 9 to Loan Documents, dated as of April 13,
2010 (as further amended, restated, supplemented or modified from time to time,
the “Credit Agreement”).

 

NOW, THEREFORE, for good and
valuable consideration, the parties agree as follows:

 

1.                                      Defined Terms. Capitalized
terms not otherwise defined herein shall have the same meanings as set forth in
the Credit Agreement

 

2.                                      Representations and Warranties.

 

(a)                                    Each Borrower
hereby represents and warrants that after giving effect to this Tenth
Amendment, no Event of Default or failure of condition has occurred or exists,
or would exist with notice or lapse of time or both under the Credit Agreement.

 

(b)                                   All
representations and warranties of Borrowers in this Tenth Amendment and the
Credit Agreement are true and correct as of the date hereof, and shall survive
the execution of this Tenth Amendment.

 

3.                                      Amendments. “Key
Milestones” numbered 8, 9 and 10, as set forth in Annex Y to the Credit
Agreement, are hereby replaced in their entireties with the Key Milestones set
forth in Annex Y-l attached hereto.

 

4.                                      Default. In addition
to all other Events of Default under the Credit Agreement, Borrowers’ failure
to pay any amount when due under this Tenth Amendment or to perform any
covenant or other agreement contained in this Tenth Amendment, or any other
document entered into pursuant hereto, shall constitute Events of Default under
this Tenth Amendment and the Credit Agreement.

 

5.                                      Conditions
Precedent.  The
effectiveness of this Tenth Amendment is subject to Agent’s receipt of all of
the following:

 

(a)                               this Tenth
Amendment and such other agreements and instruments reasonably requested by
Agent pursuant hereto (including such documents as are necessary to create and
perfect Agent’s interest in the Collateral), each duly executed by each Borrower;

 

(b)                              payment by
Borrowers of all legal fees and expenses incurred through the date of this
Tenth Amendment (which shall be remitted via wire transfer according to the
instructions set forth on Exhibit A hereto); and

 

(c)                               such other
documents and completion of such other matters as Agent may reasonably deem
necessary or appropriate.

 

1

 

6.                                    Release.

 

(a)                               Each Borrower
acknowledges that neither Agent, any Lender nor PEMG (the “Released Parties”)
would enter into this Tenth Amendment without Borrowers’ assurance hereunder.
Except for the obligations arising hereafter under this Tenth Amendment, each
Borrower hereby absolutely discharges and releases the Released Parties, any
person or entity that has obtained any interest from any of them under the
Credit Agreement or otherwise and each of the Released Parties’ and such
entities’ former and present partners, stockholders, officers, directors,
employees, successors, assignees, agents and attorneys from any known or
unknown claims which any Borrower now has against any of them of any nature,
including any claims that any Borrower, its successors, counsel, and advisors
may in the future discover they would have now had if they had known facts not
now known to them, whether founded in contract, in tort or pursuant to any
other theory of liability, including but not limited to any claims arising out
of or related to the Credit Agreement or the transactions contemplated thereby.

 

(b)                              Each Borrower
waives die provisions of California Civil Code Section 1542, which states:

 

A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

(c)                               The provisions,
waivers and releases set forth in this section are binding upon each Borrower
and each Borrower’s shareholders, agents, employees, assigns and successors in
interest. The provisions, waivers and releases of this section shall inure to
the benefit of the Released Parties and their respective agents, employees,
officers, directors, assigns and successors in interest.

 

(d)                              Each Borrower
warrants and represents that such Borrower is the sole and lawful owner of all
right, title and interest in and to all of the claims released hereby and no
Borrower has heretofore assigned or transferred or purported to assign or
transfer to any person any such claim or any portion thereof. Each Borrower
shall indemnify and hold harmless Agent, each Lender and PEMG from and against
any claim, demand, damage, debt, liability (including payment of attorneys’
fees and costs actually incurred whether or not litigation is commenced) based
on or arising out of any such assignment or transfer.

 

(e)                               The provisions
of this section shall survive payment in full of the Obligations, full
performance of all the terms of this Tenth Amendment and the Credit Agreement,
and/or Agent’s, any Lender’s or PEMG’s actions to exercise any remedy available
under the Credit Agreement or otherwise.

 

7.                                    Consultation of
Counsel. Each Borrower acknowledges that such Borrower has had the opportunity
to be represented by legal counsel of its own choice throughout all of the negotiations
that preceded the execution of this Tenth Amendment. Each Borrower has executed
this Tenth Amendment after reviewing and understanding each provision of this
Tenth Amendment and without reliance upon any promise or representation of any
person or persons acting for or on behalf of Agent, Each Borrower further
acknowledges that such Borrower and its counsel have had adequate opportunity
to make whatever investigation or inquiry they may deem necessary or desirable
in connection with the subject matter of this Tenth Amendment prior to the
execution hereof and the delivery and acceptance of the consideration described
herein.

 

8.                                    Miscellaneous.

 

(a)                                Successors and
Assigns. This Tenth Amendment shall be binding upon and shall inure to the
benefit of Borrower and Agent and their respective successors and assigns:
provided, however, that the foregoing shall not authorize any assignment by Borrower
of its rights or duties hereunder.

 

(b)                               Integration. This Tenth
Amendment and any documents executed in connection herewith or pursuant hereto
contain the entire Tenth Amendment between the parties with respect to the
subject matter hereof and supersede all prior agreements, understandings,
offers and negotiations, oral or written, with respect thereto and no extrinsic
evidence whatsoever may be introduced in any judicial or arbitration
proceeding, if any, involving this Tenth Amendment; except that any financing
statements or other agreements or instruments filed by Agent with respect to
Borrower shall remain in full force and effect.

 

(c)                                Course of Dealing;
Waivers. No course of dealing on the part of Agent or its officers, nor any
failure or delay in the exercise of any right by Agent, shall operate as a
waiver, thereof, and any single or partial exercise of any such right shall not
preclude any later exercise of any such right, Agents failure at any time to
require shirt performance by Borrower of any

 

2

 

provision shall not affect
any right of Agent thereafter to demand strict compliance and performance. Any
suspension or waiver of a right must be in writing signed by an officer of
Agent.

 

(d)                               Time is of the
Essence. Time is of the essence as to each and every term and provision of
this Tenth Amendment and the other Credit Agreement.

 

(e)                                Legal Effect. The Credit  Agreement
remains in full force and effect. If any provision of this Tenth Amendment
conflicts with applicable law, such provision shall be deemed severed from this
Tenth Amendment, and the balance of this Tenth Amendment shall remain in full
force and effect.

 

(f)                                  Choice of Law
and Venue; Jury Trial Waiver; Judicial Reference; Service of Process. Section 12
of the Credit Agreement hereby is incorporated herein by this reference as
though fully set forth.

 

(g)                               Upon the
effectiveness of this Tenth Amendment, each reference in the Credit Agreement
to “this Tenth Amendment,” “hereunder,” “herein,” “hereof”
or words of like import referring to the Credit Agreement shall mean and refer
to the Credit Agreement as amended by this Tenth Amendment.

 

(h)                               Upon the
effectiveness of this Tenth Amendment, each reference in the Loan Documents to
the “Credit Agreement” “thereunder,” “therein,” “thereof
or words of like import referring to the Credit Agreement shall mean and refer
to the Credit Agreement as amended by this Tenth Amendment.

 

(i)                                   Assignment and
Indemnity. Borrower consents to Agent’s assignment, in
accordance with Section 13 of the Credit Agreement, of all or any part of
Agent’s rights under this Tenth Amendment and the Credit Agreement.

 

9.                                    Entire
Amendment; Effect of Tenth Amendment. This Tenth Amendment, and
the terms and provisions hereof, constitutes the entire Tenth Amendment among
the parties pertaining to the subject matter hereof and supersedes any and all
prior or contemporaneous amendments relating to the subject matter hereof.
Except as expressly set forth in this Tenth Amendment, the Credit Agreement and
other Loan Documents shall remain unchanged and in full force and effect. To
the extent any terms or provisions of this Tenth Amendment conflict with those
of the Credit Agreement or other Loan Documents., the terms and provisions of
this Tenth Amendment shall control. This Tenth Amendment is a Loan Document.

 

10.                              Counterparts;
Electronic Transmission. This Tenth Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Tenth
Amendment by signing any such counterpart. Delivery of an executed counterpart
of this Tenth Amendment by electronic mail shall be equally as effective as
delivery of an original executed counterpart of this Tenth Amendment. Any party
delivering an executed counterpart of this Tenth Amendment by electronic mail
also shall deliver an original executed counterpart of this Tenth Amendment,
but the failure to deliver an original executed counterpart shall not affect
the validity, enforceability, and binding effect of this Tenth Amendment.

 

[Balance of
Page Intentionally Left Blank]

 

3

 

IN WITNESS WHEREOF, the
parties have caused this Amendment Number 10 to Loan Documents to be executed
and delivered on the date first written above.

 

	
  EMRISE CORPORATION

  	
   

  	
  EMRISE ELECTRONICS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Carmine Oliva

  	
   

  	
  By:

  	
  /s/ Carmine Oliva

  
	
  Name:

  	
  Carmine Oliva

  	
   

  	
  Name:

  	
  Carmine Oliva

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CXR LARUS CORPORATION

  	
   

  	
  ADVANCED CONTROL
  COMPONENTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Carmine Oliva

  	
   

  	
  By:

  	
  /s/ Carmine Oliva

  
	
  Name:

  	
  Carmine Oliva

  	
   

  	
  Name:

  	
  Carmine Oliva

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CUSTOM COMPONENTS, INC.

  	
   

  	
  GVEC RESOURCE IV INC.,

  
	
   

  	
   

  	
  as Agent and a Lender

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Carmine Oliva

  	
   

  	
  By: PRIVATE EQUITY
  MANAGEMENT GROUP LLC, its Court-Appointed Receiver

  
	
   

  
	
  Name:

  	
  Carmine Oliva

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
  By:

  	
  /s/ Jim LeSieur

  
	
   

  	
   

  	
  Name:

  	
  Jim LeSieur

  
	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
  PRIVATE EQUITY MANAGEMENT GROUP
  LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jim LeSieur

  	
   

  	
   

  
	
  Name:

  	
  Jim LeSieur

  	
   

  	
   

  
	
  Title:

  	
  Chief Operating Officer

  	
   

  	
   

  

 

[Signature
Page to Amendment Number 10 to Loan Documents]

 

 

ANNEX
Y-1

(Amended
“Key Milestones” re Sale of ACC)

 

	
  Key

  Milestone

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  #

  	
   

  	
  Date

  	
   

  	
  PEM Deliverable

  	
   

  	
  Description

  
	
  8

  	
   

  	
  5/17

  	
   

  	
  Binding SPA

  	
   

  	
  ·                  Sign binding SPA

  
	
  9

  	
   

  	
  5/19

  	
   

  	
  Preliminary proxy

  	
   

  	
  ·                  File preliminary proxy for
  shareholder approval

  
	
  10

  	
   

  	
  6/29

  	
   

  	
  Closing documentation

  	
   

  	
  ·                  Complete vote and close
  transaction

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