Document:

Exhibit
4.17

 

SECOND AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

AND CONSENTS

 

This SECOND AMENDMENT TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT AND CONSENTS (this “Amendment”) is
dated as of February 19, 2004, and entered into by and among EARLE M. JORGENSEN HOLDING COMPANY, INC., a Delaware corporation (“Holding”), EARLE M. JORGENSEN COMPANY, a Delaware corporation (the “Borrower”),
the banks and other financial institutions signatory hereto that are
parties as Lenders to the Credit Agreement referred to below (the “Lenders”),
and DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly known as Bankers Trust Company),
as agent for the Lenders (in such capacity, the “Agent”).

 

Recitals

 

Whereas, the Borrower, Holding, the
Lenders, the Agent and Deutsche Bank Securities, Inc., as Lead Arranger and
Sole Book Runner, have entered into that certain Second Amended and Restated
Credit Agreement dated as of March 3, 1993, amended and restated as of
March 24, 1998 and further amended and restated as of April 12, 2002,
as amended by that certain First Amendment to Second Amended and Restated
Credit Agreement and Consent dated as of May 22, 2002 (as so amended, the “Credit
Agreement”; capitalized terms used in this Amendment without definition
shall have the meanings given such terms in the Credit Agreement); and

 

Whereas,
Holding, the Borrower and its wholly-owned Subsidiary, EMJ
Metals LLC, have entered into an Agreement and Plan of Merger and
Reorganization, dated as of December 18, 2003, providing for the merger of
Holding with and into EMJ Metals LLC, with EMJ Metals LLC surviving and all of
the shares of the capital stock of Holding converting into the right to receive
shares of common stock of the Borrower; 
and

 

Whereas, Holding and the holder of the Holding Notes and certain of Holding’s
stockholders have entered into that certain Exchange Agreement, dated as of
December 18, 2003, providing for the exchange of all outstanding Holding
Notes, Holding PIK Notes and warrants for shares of the common stock of the
Borrower; and

 

Whereas,
the Borrower has requested that the Lenders agree to permit
the merger and the exchange of the Holding Notes, Holding PIK Notes and
warrants and to amend certain provisions of the Credit Agreement and the
Lenders are willing to agree to do so, subject to the conditions and on the
terms set forth herein;

 

Now Therefore, in consideration of the
premises and the mutual agreements set forth herein, the Borrower, Holding, the
Lenders and the Agent agree as follows:

 

 

1.                                       CONSENT TO MERGER
AND EXCHANGE OF HOLDING NOTES, HOLDING PIK NOTES AND WARRANTS.  By execution of this Amendment, each Lender hereby
consents to (a) the merger of Holding with and into EMJ Metals LLC on the terms
set forth in the Agreement and Plan of Merger and Reorganization dated as of
December 18, 2003 and (c) the exchange of the Holding Notes, Holding PIK
Notes and warrants for shares common stock of the Borrower on the terms set
forth in the Exchange Agreement dated as of December 18, 2003, all notwithstanding
the restrictions contained in Sections 8.1 and 8.11 of the Credit Agreement.

 

2.                                       AMENDMENTS TO CREDIT AGREEMENT. 
Subject to the conditions and on the terms set forth in this Amendment
and in reliance on the representations and warranties of the Borrower and
Holding set forth in this Amendment, the Credit Agreement is hereby amended as
follows:

 

2.1                                 Amendments
to Definitions.  Section 1.1 of the Credit Agreement is
amended as follows:

 

(a)                                  The
definitions of “Change of Control,” “Credit Parties,” “ESOP”,
“Expiration Date”, “Fixed Charges”, “Guarantor” and “Permitted
Transactions” are deleted in their entirety and replaced with the
following:

 

Change of Control
shall mean (x) a “Change of Control” (or any similar term) under and as defined
in the Senior Secured Note Documents, (y) the direct or indirect acquisition by
any Person, entity or “group” (as such term is defined in Section 13(d)(3)
of the Securities Exchange Act of 1934 as amended (the “Exchange Act”))
of beneficial ownership (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of the outstanding shares of voting
stock of the Borrower or, prior to the Merger Effective Time, Holding, other
than any such Person, entity or group which is the direct transferee of any of
the voting stock of the Borrower or Holding from Kelso & Company and/or its
Affiliates, officers and employees of Holding or the Borrower and/or the ESOP
so long as Kelso & Company and its Affiliates, officers and employees of
Holding or the Borrower and/or the ESOP which owned the voting stock on the
Restatement Effective Date continue to own a majority of the voting stock of
the Borrower or Holding, as the case may be, or (z) prior to the Merger
Effective Time, Holding shall cease to own a majority of the Voting Stock of
the Borrower.

 

Credit Parties shall
mean, collectively, the Borrower, EMJ Metals and, prior to the Merger Effective
Time, Holding..

 

ESOP
shall mean (i) prior to the Merger Effective Time, The Earle M. Jorgensen
Employee Stock Ownership Plan, as in effect on the Restatement Effective Date,
and as amended to the extent required by applicable law and as required by the
Merger Agreement and (ii) thereafter, the Earle M. Jorgensen Employee Stock
Ownership Plan, assumed by the Borrower, and as amended to the extent required
by applicable law.

 

2

 

Expiration Date
shall mean April 7, 2006.

 

Fixed Charges for
any period shall mean the sum of (i) Interest Expense and (ii) any amounts that
the Borrower is required by the DOL Consent Order or Section 9.8(a) of the
Merger Agreement to pay to repurchase shares of its capital stock from
participants to whom such shares were distributed from the ESOP in excess of
the fair market value of such shares as determined pursuant to the most recent
annual ESOP appraisal.

 

Guarantor
shall mean, prior to the Merger Effective Time, Holding in its capacity as the
guarantor under Article 12 and thereafter shall mean EMJ Metals as the
successor by merger to Holding.

 

Permitted
Transactions means: (i) reasonable and customary fees,
compensation and benefits paid to officers, directors, employees or consultants
of the Borrower or any of its Subsidiaries or their respective Affiliates for
services rendered to the Borrower or any such Subsidiary in the ordinary course
of business consistent with past practice; (ii) transfers of goods and services
by or among the Borrower and its Subsidiaries and their respective Affiliates
in the ordinary course of business on fair and reasonable terms, provided,
that if any such transaction or series of related transactions involves payment
in excess of $3,000,000, the Board of Directors of the Borrower shall determine
in good faith by resolution that such transaction is on terms fair and reasonable
to the Borrower, (iii) Dividends permitted under Section 8.6; (iv) prior
to the Merger Effective Time, transactions pursuant to the Holding Management
Agreement (provided that the 5% service fee referred to in Section 5 of
the Holding Management Agreement shall not exceed $200,000 per annum) and the
Tax Sharing Agreement; (v) any transactions between the Borrower or any
Subsidiary and the ESOP and permitted under Sections 8.3 and 8.5; (vi)
transactions between Holding, the Borrower or its Subsidiaries (other than
Insurance Sub) and Insurance Sub in connection with compliance by the Borrower
with Section 7.10 and (vii) the Merger in accordance with the Merger
Agreement and the exchange of common stock of the Borrower for the Holding
Notes, Holding PIK Notes and warrants in accordance with the Exchange
Agreement.

 

(2)                                  The
following new definitions are inserted in proper alphabetical order:

 

Borrower
Stockholders’ Agreement shall mean that certain Stockholders’
Agreement, dated as of the Merger Effective Time, and any extension on
substantially the same terms and conditions, among the Borrower, various
Affiliates of Kelso & Company, employee stockholders and other investors
named therein.

 

3

 

DOL Consent Order
shall mean the Consent Order and Release dated January 27, 2003 in
connection with Civil Action No. SACV 02-257 DOL (MLGx).

 

EMJ Metals
shall mean EMJ Metals LLC, a Delaware limited liability company and a
Wholly-Owned Subsidiary of the Borrower.

 

Exchange Agreement
shall mean that certain Exchange Agreement dated as of December 18, 2003
among Holding, the Borrower, Kelso Investment Associates, L.P., Kelso Equity
Partners II, L.P., KIA-III-Earle M. Jorgensen, L.P. and Kelso Investment
Associates IV, L.P.

 

Merger
means the merger of Holding with and into EMJ Metals, with EMJ Metals
surviving, pursuant to the Merger Agreement.

 

Merger Agreement
means that certain Agreement and Plan of Merger and Reorganization, dated as of  December 18,
2003, by and among Holding, the Borrower and EMJ Metals.

 

Merger
Effective Time shall mean the time of filing of a certificate of merger
with the Secretary of State of the State of Delaware effecting the Merger.

 

Reorganization
Documents shall mean the Merger Agreement, the Exchange
Agreement, the Borrower Stockholders’ Agreement and the Supplemental Indenture
No. 1 by and between the Borrower and The Bank of New York, as trustee.

 

Second Amendment
shall mean the Second Amendment to Second Amended and Restated Credit Agreement
and Consents dated as of
                       ,
2004 by and among Holding, the Borrower, the Lenders and the Agent.

 

Second Amendment
Effective Date shall mean the date on which the Second
Amendment became effective in accordance with its terms.

 

2.2                                 Amendment
to Section 7.1 (Financial Information). 
Clause (a)(i) of Section 7.1 is deleted in its entirety.

 

2.3                                 Amendment
to Section 8.1 (Consolidation, Merger, Sale or Purchase of Assets, etc). 
A new clause (e) is added to Section 8.1 of the Credit Agreement to
read as follows:

 

(e)            The
Credit Parties may effect the Merger.

 

2.4                                 Amendment
to Sections 8.2, , 8.3, 8.4 and 8.5. 
Each of Sections 8.2., 8.3, 8.4 and 8.5 is amended
to delete the phrase “Holding will not, and will not permit any

 

4

 

of its Subsidiaries to” and to
replace it with “Prior to the Merger Effective Time, Holding will not, and
after the Merger Effective Time, the Borrower will not, nor will either of them
permit any Subsidiary to”.

 

2.5                                 Amendments
to Section 8.6 (Dividends). 
Section 8.6 of the Credit Agreement is amended to (i) insert at the
beginning of clause (b) “prior to the Merger Effective Time”;

 

and (ii) add the
following new clauses (c) and (d):

 

(c)  the Borrower may acquire Holding Notes,
Holding PIK Notes and warrants of Holding in exchange for the Borrower’s common
stock in accordance with the Merger Agreement and the Exchange Agreement;

 

(d)  after the Merger Effective Time, the
Borrower may (i) repurchase shares of its capital stock as required pursuant to
the ESOP or pursuant to the Borrower Stockholders’ Agreement, provided
that the repurchase price therefor is available to the Borrower from the net
proceeds of any benefits paid pursuant to the terms of any life insurance policies
covering certain participants in the ESOP and certain other executives of the
Borrower, (ii) so long as no Default or Event of Default then exists, (A) pay
the repurchase price payable to any officer or employee (or their estates) of
the Borrower or any of its Subsidiaries upon death, disability or termination
of employment of such officers and employees to the extent provided by the
terms of the Borrower Stockholders’ Agreement (including any extension
thereof); provided, however, that the aggregate amount of all
such repurchases plus any purchases by Holding under Section 8.6(b)(iv)(A)
above in any fiscal year of the Borrower shall not exceed $5,000,000, and (B)
pay amounts to repurchase shares of its capital stock from participants to whom
such shares were distributed from the ESOP as required under the ESOP and the
Merger Agreement; provided, however, that any amounts that the
Borrower is required by the DOL Consent Order or Section 9.8(a) of the
Merger Agreement to pay in excess of the fair market value of such shares as
determined pursuant to the most recent annual ESOP appraisal shall be treated
as a Fixed Charge.

 

2.6                                 Amendment
to Section 8.7 (Transactions with Affiliates).  Clause (vi) of Section 8.7 of the Credit
Agreement is deleted in its entirety and replaced with the following

 

(vi) cash contributions
by the Borrower and its Subsidiaries to the ESOP in an amount not to exceed 10%
of their aggregate cash compensation to employees during any fiscal year plus
any amounts reinvested by the ESOP prior to the Merger Effective Time in
capital stock of Holding and contributed to the Borrower or, after the Merger
Effective Time, in capital stock of the Borrower,

 

2.7                                 Amendment
to Section 8.8 (Changes in Business). 
A new clause (d) is added to Section 8.8 of the Credit Agreement to
read as follows:

 

5

 

(d)  EMJ Metals shall not engage in any business.

 

2.8                                 Amendment
to Section 8.11 (Limitation on Voluntary Payments, etc.).   Section 8.11 of the Credit Agreement
is amended to (i)  delete clause
(a)(ii)(z) in its entirety and replace it with the following:

 

(a)(ii)(z)                                    any
provision of its Certificate of Incorporation or By Laws relating to any
preferred or preference stock (other than the amendment and restatement of the
Certificate of Incorporation effected at the Merger Effective Time to increase
the authorized capital stock) or the Shareholders’ Agreement (other than to
terminate such Shareholders’ Agreement at the Merger Effective Time) or the
Borrower Stockholders’ Agreement (without the consent of the Agent).

 

and (ii) to add the
following at the end of clause (b):

 

Notwithstanding the
foregoing, the Holding Notes and Holding PIK Notes may be redeemed or acquired
solely in exchange for the issuance of common stock of the Borrower in
accordance with the terms of the Exchange Agreement at the Merger Effective
Time.

 

2.9                                 Amendment
to Section 11.5 (Notices). 
Section 11.5 of the Credit Agreement is amended to change the
address and facsimile for notices to the Agent and the Lenders to:

 

Deutsche Bank Trust
Company Americas

222 South Riverside Plaza

Floor 29SE

Chicago,
IL 60606

Attention:  Steven Friedlander

Facsimile:  312-537-1327

 

and for notices to the
Borrower to:

 

Earle M. Jorgensen
Company

10650 South Alameda
Street

Lynwood, CA 90262

Attention:  William S. Johnson

Facsimile:  323-567-1034

 

3.                                       REPRESENTATIONS AND WARRANTIES OF THE BORROWER AND
HOLDING.  In order to induce the Lenders and
the Agent to enter into this Amendment, the Borrower and Holding represent and
warrant to each Lender and the Agent that the following statements are true,
correct and complete on the date hereof and will be true, correct and complete
on the effective date of this Amendment:

 

6

 

3.1                                 Power
and Authority.  Each of the Credit Parties has all corporate
power and authority to enter into this Amendment and the Reorganization
Documents and to carry out the transactions contemplated by, and to perform its
obligations under or in respect of, this Amendment, the Credit Agreement as
amended hereby and the Reorganization Documents.

 

3.2                                 Corporate
Action.  The execution and delivery of this Amendment
and the Reorganization Documents and the performance of the obligations of each
Credit Party under or in respect thereof and of the Credit Agreement as amended
hereby have been duly authorized by all necessary corporate action on the part
of each of the Credit Parties.

 

3.3                                 No
Conflict or Violation or Required Consent or Approval. 
The execution and delivery of this Amendment and the Reorganization
Documents and the performance of the obligations of each Credit Party under or
in respect of this Amendment, the Credit Agreement as amended hereby and the
Reorganization Documents do not and will not conflict with or violate (a) any
provision of the articles or certificate of incorporation or bylaws or other
governing documents of any Credit Party, (b) any Requirement of Law, (c) any
order, judgment or decree of any court or other governmental agency binding on
any Credit Party or any of its Subsidiaries, or (d) any indenture, agreement or
instrument to which any Credit Party or any of its Subsidiaries is a party or
by which any Credit Party or any of its Subsidiaries, or any property of any of
them, is bound, and do not and will not require any consent or approval of any
Person, except shareholder approval of the Merger Agreement and the Exchange
Agreement and the filing of the certificate to effect the Merger.

 

3.4                                 Execution,
Delivery and Enforceability.  This
Amendment, the Reorganization Documents and the Credit Agreement as amended
hereby have been duly executed and delivered by each Credit Party which is a
party thereto and are the legal, valid and binding obligations of such Credit
Party, enforceable in accordance with their terms, except as enforceability may
be affected by applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws of general application relating to or affecting the rights of
creditors generally.

 

3.5                                 No
Default or Event of Default. No event has occurred and is continuing or will
result from the execution and delivery of this Amendment or the execution,
delivery and performance of the Reorganization Documents that would constitute
a Default or an Event of Default.

 

3.6                                 No
Material Adverse Effect.  No change or
development which has had or is reasonably expected to have a Material Adverse
Effect has occurred and is continuing.

 

3.7                                 Representations
and Warranties.  Each of the representations and warranties
contained in the Credit Documents is and will be true and correct in all
material respects on and as of the date hereof and as of the effective date of
this Amendment, except to the extent that such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects as of such earlier date.

 

7

 

4.                                       CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT.  This Amendment shall be effective only if and when
signed by, and when counterparts hereof shall have been delivered to the Agent
(by hand delivery, mail or telecopy) by, the Borrower, Holding and Required
Lenders and only if and when each of the following conditions is satisfied:

 

4.1                                 No
Default or Event of Default; Accuracy of Representations and Warranties. No Default or Event of Default
shall exist and each of the representations and warranties made by the Credit
Parties herein and in or pursuant to the Credit Documents shall be true and
correct in all material respects as if made on and as of the date on which this
Amendment becomes effective (except that any such representation or warranty
that is expressly stated as being made only as of a specified earlier date
shall be true and correct as of such earlier date).

 

4.2                                 Reorganization
Documents.  The Credit Parties shall have
entered into the Reorganization Documents, and received all consents and
approvals to effect the Merger and the exchange pursuant to the Exchange
Agreement.  Certified copies of the
Reorganization Documents and copies of such consents and approvals shall have
been delivered to the Agent.

 

4.3                                 Dissenters’
Rights.  Stockholders of Holding shall not have
exercised dissenters’ or appraisal rights with respect to shares of the capital
stock of Holding valued, in the aggregate, at more than $4,000,000 based on the
respective values of each class of capital stock used to determine the merger
consideration for Holding shares (namely $5.46 per share of common stock,
$681.51 per share of Series A Preferred Stock and $1,027.96 per share of Series
B Preferred Stock).

 

4.4                                 Opinion
of Counsel.  If required by the Agent, the Borrower shall
have delivered to the Agent opinion(s) of counsel in form and substance
satisfactory to Agent and its counsel.

 

4.5                                 Expense
Reimbursements.  The Borrower shall have paid all expense
reimbursements due to the Agent pursuant to Section 11.10 of the Credit
Agreement.

 

5.                                       EFFECT OF THIS AMENDMENT. 
From
and after the date on which this Amendment becomes effective, all references in
the Credit Documents to the Credit Agreement shall mean the Credit Agreement as
amended hereby.  Except as expressly
amended hereby or waived herein, the Credit Agreement and the other Credit Documents,
including the Liens granted thereunder, shall remain in full force and effect,
and are hereby ratified and confirmed.

 

6.                                       APPLICABLE LAW.  THE VALIDITY, INTERPRETATIONS AND
ENFORCEMENT OF THIS AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION
WITH THIS AMENDMENT, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS
PROVISIONS OTHER THAN SECTION 5-1401

 

8

 

OF THE NEW YORK GENERAL
OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.

 

7.                                       COMPLETE AGREEMENT.  This Amendment sets forth the
complete agreement of the parties in respect of any amendment to any of the
provisions of any Credit Document or any waiver thereof.

 

8.                                       CATCHLINES AND COUNTERPARTS. 
The
catchlines and captions herein are intended solely for convenience of reference
and shall not be used to interpret or construe the provisions hereof.  This Amendment may be executed by one or
more of the parties to this Amendment on any number of separate counterparts
(including by telecopy), all of which taken together shall constitute but one
and the same instrument.

 

[remainder of page
intentionally left blank]

 

9

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed by a duly authorized officer as of
the date first above written.

 

 

	
   

  	
  EARLE M. JORGENSEN HOLDING

  COMPANY,
  INC..

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EARLE M. JORGENSEN COMPANY.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
											

 

 

	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS,

  
	
   

  	
  as
  Agent 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
													

 

11

 

	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

12

 

	
   

  	
  CONGRESS FINANCIAL CORPORATION

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

13

 

	
   

  	
  FLEET
  CAPITAL CORPORATION,

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

14

 

	
   

  	
  FOOTHILL CAPITAL CORPORATION,

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

15

 

	
   

  	
  GMAC COMMERCIAL CREDIT, LLC,

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

16

 

	
   

  	
  LA SALLE NATIONAL BANK,

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

17

 

	
   

  	
  MANUFACTURERS BANK,

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

18

 

	
   

  	
  THE PROVIDENT BANK,

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

19EXHIBIT 10.33(k)

 

AMENDMENT
NUMBER ELEVEN TO

LOAN AND SECURITY AGREEMENT 

 

THIS AMENDMENT NUMBER ELEVEN TO LOAN
AND SECURITY AGREEMENT (this “Amendment”), is effective as of
March 31, 2004, between WELLS FARGO FOOTHILL,
INC., a California corporation (“Foothill”), formerly known as
Foothill Capital Corporation, with a place of business located at 2450 Colorado
Avenue, Suite 3000 West, Santa Monica, California 90404, and IMAGE
ENTERTAINMENT, INC., a California corporation (“Borrower”), with its
chief executive office located at 9333 Oso Avenue, Chatsworth, California
91311, with reference to the following facts:

 

WHEREAS, Borrower
has requested that Foothill amend that certain Loan and Security Agreement
dated as of December 28, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the “Agreement”), between Foothill and
Borrower as set forth herein; and

 

WHEREAS, subject to
the satisfaction of the conditions set forth herein, Foothill is willing to so
amend the Agreement in accordance with the terms and conditions hereof.

 

NOW, THEREFORE, in
consideration of the above recitals and the mutual promises contained herein,
Foothill and Borrower hereby agree as follows:

 

SECTION 1.                            DEFINED TERMS.

 

Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed
to them in the Agreement.

 

SECTION 2.                            AMENDMENTS TO
THE AGREEMENT.

 

(a)                                  Section 1
of the Agreement is hereby amended by adding the following definition in
alphabetical order:

 

“Eleventh Amendment Fee” has the meaning set
forth in Section 2.10(j).

 

(b)                                 Section 2.10
of the Agreement is hereby amended by deleting the word “and” at the end of
clause (h), by deleting the period at the end of clause (i) and replacing it
with “, and”, and by adding the following new clause (j):

 

“(j)                               Eleventh
Amendment Fee.  An amendment
fee in the amount of $5,000 (the “Eleventh Amendment Fee”), which
amendment fee shall be fully earned and non-refundable as of the date hereof,
and shall be charged to Borrower’s Loan Account on such date.”

 

(c)                                  Section 6.12(b)
of the Agreement is hereby amended and restated in its entirety as follows:

 

“(b)                           EBITDA.  Borrower shall maintain EBITDA, for each
fiscal period set forth below, of not less than the amount indicated below
opposite such fiscal period:

 

 

	
  for
  the immediately preceding three-month period ending 03/31/04

  	
   

  	
  $

  	
  1,105,000

  	
   

  
	
  for
  the immediately preceding six-month period ending 06/30/04

  	
   

  	
  $

  	
  1,324,000

  	
   

  
	
  for
  the immediately preceding nine-month period ending 09/30/04

  	
   

  	
  $

  	
  2,182,000

  	
   

  
	
  for
  the immediately preceding twelve-month period ending 12/31/04

  	
   

  	
  $

  	
  3,552,000

  	
   

  
	
  for
  the immediately preceding twelve-month period ending 03/31/05

  	
   

  	
  $

  	
  4,034,000

  	
   

  
	
  for
  the immediately preceding twelve-month period ending 06/30/05

  	
   

  	
  $

  	
  4,218,000

  	
   

  
	
  for
  the immediately preceding twelve-month period ending 09/30/05

  	
   

  	
  $

  	
  4,271,000

  	
   

  

 

SECTION 3.                            REPRESENTATIONS
AND WARRANTIES.  

 

Borrower
hereby represents and warrants to Foothill that (a) the execution, delivery,
and performance of this Amendment and of the Agreement, as amended by this
Amendment, are within its corporate powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which
any of its properties may be bound or affected, and (b) this Amendment and the
Agreement, as amended by this Amendment, constitute Borrower’s legal, valid,
and binding obligation, enforceable against Borrower in accordance with its
terms.

 

 

SECTION 4.                            CONDITIONS
PRECEDENT TO AMENDMENT.  

 

The
satisfaction of each of the following, unless waived or deferred by Foothill in
its sole discretion, shall constitute conditions precedent to the effectiveness
of this Amendment:

 

(a)                                  The
representations and warranties in this Amendment, the Agreement as amended by
this Amendment, and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date);

 

(b)                                 No
Default, Event of Default, or event which with the giving of notice or passage
of time would constitute an Event of Default shall have occurred and be
continuing on the date hereof, nor shall result from the consummation of the
transactions contemplated herein; 

 

(c)                                  No
injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated
herein shall have been issued and remain in force by any governmental authority
against Borrower or Foothill;

 

(d)                                 All
other documents, agreements, instruments, 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
Foothill and its counsel; and

 

(e)                                  Foothill
shall have received the Eleventh Amendment Fee in full in immediately available
funds, which Eleventh Amendment Fee shall be paid by Borrower to Foothill by
being charged to Borrower’s Loan Account as of the date hereof.

 

SECTION 5.                            FURTHER
ASSURANCES.  

 

Borrower
shall execute and deliver all agreements, documents, and instruments, in form
and substance satisfactory to Foothill, and take all actions as Foothill may
reasonably request from time to time fully to consummate the transactions
contemplated under this Amendment and the Agreement, as amended by this
Amendment.

 

SECTION 6.                            MISCELLANEOUS.

 

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

 

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

 

 

(c)                                  This
Amendment shall be governed by and construed in accordance with the laws of the
State of California.

 

(d)                                 This
Amendment can only be amended by a writing signed by both Foothill and
Borrower.

 

(e)                                  This
Amendment may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Amendment. 
Delivery of an executed counterpart of this Amendment by telefacsimile
shall be equally as effective as delivery of an original executed counterpart
of this Amendment.  Any party delivering
an executed counterpart of this Amendment by telefacsimile also shall deliver
an original executed counterpart of this Amendment but the failure to deliver
an original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.

 

(f)                                    This
Amendment reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

 

[Signature Page Follows]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed as
of the date first written above.

 

 

	
   

  	
  IMAGE ENTERTAINMENT, INC.,

  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jeff M. Framer

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL, INC.,

  a California corporation, formerly known as Foothill

  Capital Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Trent Smart

  	
   

  
	
   

  	
  Title:

  	
  Vice President

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