Document:

EXHIBIT 10.19

 

AMENDMENT NUMBER 4 TO

SECURITIES PURCHASE AGREEMENT

 

This Amendment Number 4 to Securities Purchase
Agreement, dated March 8, 2010 (the “Amendment”), is by and between
Image Entertainment, Inc., a Delaware corporation (the “Company”),
JH Partners, LLC, as the Investor Representative, and the several
Investors listed on Schedule 1 to the Securities Purchase Agreement dated
December 21, 2009, as amended December 24, 2009, December 30,
2009 and January 20, 2010 (the “Purchase Agreement”).

 

WHEREAS, the parties wish to amend certain
provisions of the Purchase Agreement.

 

NOW THEREFORE, the parties hereto agree as follows:

 

1.                                     Capitalized
terms used herein without definition have the meanings ascribed to them in the
Purchase Agreement.

 

2.                                     The second
WHEREAS clause of the Purchase Agreement is hereby amended to read in its
entirety as follows:

 

WHEREAS, in connection with such purchase and sale,
the Company has agreed to grant to the Investors the right, under certain
circumstances, to purchase up to an additional 7,400 shares of the Series B
Preferred and 66,163.4 shares of the Series C Preferred; and

 

3.                                     Section 2.3
of the Purchase Agreement is hereby amended to read in its entirety as follows:

 

2.3                Exercise of the Additional
Purchase Right. The Additional Purchase Right shall be divided
into two tranches. The first tranche shall be comprised of 3,700 shares of
Series B Preferred and 33,081.7 shares of Series C Preferred. The
Investors may exercise the first tranche in whole or in part and in one or more
instances, until the maximum number of Additional Preferred Shares included in
the first tranche shall have been purchased, at any time during the period
commencing on the Initial Closing Date and ending at 5:00 p.m.
(PST) on the date that is 120 days after the Initial Closing Date
(the “First Tranche Additional Purchase Period”) by delivering a written
notice to the Company in accordance with Section 12.8 hereof (each such
notice, a “First Tranche Additional Purchase Notice”). The second
tranche also shall be comprised of 3,700 shares of Series B Preferred and
33,081.7 shares of Series C Preferred. The Investors may exercise the
second tranche in whole or in part and in one or more instances, until the
maximum number of Additional Preferred Shares included in the second tranche
shall have been purchased, at any time during the period commencing on the
Initial Closing Date and ending at 5:00 p.m. (PST) on the date that
is 360 days after the Initial Closing Date (the “Second Tranche
Additional Purchase Period”) by delivering a written notice to the Company
in accordance with Section 12.8 hereof

 

 

(each such notice, a “Second Tranche Additional
Purchase Notice”). For the sake of clarity, the parties understand and
agree that the Investors may exercise both tranches during the first
120 days after the Initial Closing Date. Each Additional Purchase Notice
shall specify the number of Additional Preferred Shares to be purchased and the
anticipated Subsequent Closing Date.

 

4.                                     Section 2.6
of the Purchase Agreement is hereby amended to read in its entirety as follows:

 

2.6                                 Purchase and
Sale of the Additional Preferred Shares. If, following any exercise
by the Investors of the Additional Purchase Right, all of the conditions to the
purchase, sale and issuance of the Additional Preferred Shares set forth in
Sections 8 and 9 of this Agreement shall have been satisfied or waived in
accordance herewith, then on the terms and conditions set forth in this
Agreement, on the applicable Subsequent Closing Date, the Investors will
purchase from the Company, and the Company will issue, sell and deliver to the
Investors, the number of Additional Preferred Shares specified in the
applicable Additional Purchase Notice for an aggregate purchase price equal to
the Additional Shares Purchase Price or, if less than all of the Additional
Preferred Shares are to be purchased, then at a purchase price equal to
$7,400,000 multiplied by a fraction, the numerator of which is the number of
Units to be purchased and the denominator of which is 7,400, to be paid in full
to the Company on the applicable Subsequent Closing Date.

 

5.                                     Section 4.13
of the Purchase Agreement is hereby amended to read in its entirety as follows:

 

4.13 Conversion Shares.
To the extent permitted by the number of shares of authorized common stock, the
Conversion Shares issuable upon conversion of the Series C Preferred
Shares have been duly and validly reserved for issuance and, upon issuance,
will be duly and validly issued, fully paid and nonassessable and will be free
of any Liens or restrictions on transfer other than restrictions on transfer
under this Agreement and under applicable state and federal securities laws.

 

6.                                     Section 4.14
of the Purchase Agreement is hereby amended to read in its entirety as follows:

 

4.14 Capitalization.
The authorized capital stock of the Company consists of 100,000,000 shares of
Common Stock and 25,000,000 shares of preferred stock, par value $0.0001. All
issued and outstanding shares have been duly authorized and validly issued and
are fully paid and nonassessable. The respective rights, preferences,
privileges, and restrictions of the Series B Preferred, Series C
Preferred and the Common Stock are as stated in the Certificate of
Incorporation (including the Series

 

 

B Certificate of Designations and Series C
Certificate of Designations). All outstanding securities have been issued in
compliance with state and federal securities laws.

 

7.                                     Section 10.1
of the Purchase Agreement is hereby amended to read in its entirety as follows:

 

10.1                           Intentionally
Omitted.

 

8.                                     Section 10.3
of the Purchase Agreement is hereby amended to read in its entirety as follows:

 

10.3                           Intentionally
Omitted.

 

On and after the date hereof, each reference in the
Purchase Agreement to the “Agreement” shall mean the Purchase Agreement as
amended hereby.  Except as specifically
amended above, the Purchase Agreement shall remain in full force and effect and
is hereby ratified and confirmed.

 

	
  IMAGE ENTERTAINMENT, INC.

  	
   

  	
  JH PARTNERS, LLC, as the Investor Representative

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ JOHN P. AVAGLIANO

  	
   

  	
  /s/ JOHN HANSEN

  
	
  By:  John P. Avagliano, COO/CFO

  	
   

  	
  Name: John Hansen

  
	
   

  	
   

  	
  Title: PresidentExhibit 10.1

 

EXECUTION VERSION

 

AMENDMENT
NO. 17 dated as of June 29, 2010 (this “Amendment”) to the Credit,
Security, Guaranty and Pledge Agreement dated as of August 31, 2001 as
amended by Amendments 1 through 15 thereto, dated as of December 14,
2001, December 31, 2001, March 29, 2002, May 14, 2002,
February 5, 2003, August 4, 2003, October 28, 2004, March 1,
2005, March 21, 2006, April 28, 2006, December 8, 2006, March 2,
2007, July 27, 2007, March 10, 2008, March 2, 2009 and March 2,
2010, among Crown Media Holdings, Inc. (the “Borrower”), the
Guarantors named therein, the Lenders referred to therein and JPMorgan Chase
Bank, N.A. (formerly known as JPMorgan Chase Bank), as Administrative Agent and
as Issuing Bank for the Lenders (the “Agent”) (as the same may be
further amended, supplemented or otherwise modified, the “Credit Agreement”).

 

INTRODUCTORY STATEMENT

 

WHEREAS,
the Lenders have made available to the Borrower a credit facility pursuant to
the terms of the Credit Agreement;

 

WHEREAS,
the Borrower intends to effectuate a recapitalization of its intercompany
Indebtedness pursuant to a Master Recapitalization Agreement dated as of
February 26, 2010 among Hallmark Cards, HCC and certain other parties
pursuant to which, among other things, it is contemplated that various of the
Borrowers’ Subordinated Debt to HCC and its Affiliates will be converted into
reduced intercompany Indebtedness, common stock and preferred stock;

 

WHEREAS,
in connection with a condition precedent to the effectiveness of the Recapitalization
Agreement, the Borrower has requested that the Maturity Date of the Credit
Agreement be extended from August 31, 2010 to June 30, 2011.

 

WHEREAS,
the Administrative Agent and each of the Lenders have agreed to make certain
modifications to the Credit Agreement in order to accommodate the items
described in the preceding recitals.

 

NOW
THEREFORE, the parties hereto hereby agree as follows:

 

Section 1.               Defined Terms.  Capitalized terms used herein and not
otherwise defined herein shall have the meaning given them in the Credit
Agreement.

 

Section 2.               Amendments to Credit Agreement.  Upon the Amendment Effective Date (as defined
below):

 

(A)          the Credit Agreement is hereby amended by (i) inserting
all of the words and/or provisions which appear with computerized underscoring
in the document annexed hereto

 

 

as Exhibit A and (ii) deleting each
of the words and/or provisions which appear with computerized strike-through in
the document annexed hereto as Exhibit A (with the Credit Agreement
as to be so amended reflecting the changes set forth on Exhibit A
referred to herein as the “Revised Credit Agreement”).  It is understood and agreed that this
Amendment and the marked document attached hereto as Exhibit A
intentionally omit Section 4.1 and all of the pre-existing Exhibits to the
Credit Agreement, which shall be unaffected by this Amendment;

 

(B)           Schedules 3.1, 3.6(a), 3.6(b), 3.7(a), 3.7(b), 3.8, 3.10,
3.11, 3.17, 3.18(a), 3.18(b), 3.18(c), 3.23, 3.25 and 8.3 of the Credit
Agreement are hereby replaced with Schedules 3.1, 3.6(a), 3.6(b), 3.7(a),
3.7(b), 3.8, 3.10, 3.11, 3.17, 3.18(a), 3.18(b), 3.18(c), 3.23, 3.25 and 8.3,
respectively, to this Amendment, which replacement schedules reflect the Equity
Interests of the Credit Parties on a pro forma basis upon the consummation of
the Recapitalization and the intercompany mergers contemplated in connection
therewith;

 

(C)           The Hallmark Cards Subordination and Support Agreement is
hereby terminated;

 

(D)          Notwithstanding anything to the contrary in the Credit
Agreement, the Required Lenders consent to the merger of Hallmark Holdings and
Hallmark Entertainment Investments Co. with and into the Borrower in connection
with the Recapitalization (as defined in the Revised Credit Agreement);

 

(E)           An Exhibit T is hereby added to the Credit Agreement
[“Recapitalized Debt Intercreditor Agreement”] in the form of Exhibit T
to this Agreement, and the Table of Contents of the Credit Agreement is hereby
updated as appropriate;

 

(F)           A Schedule 3.17B [“Material Affiliate Transactions”]
is hereby added to the Credit Agreement in the form of Schedule 3.17B to
this Amendment, and the Table of Contents of the Credit Agreement is hereby
updated as appropriate.

 

Section 3.               Conditions to Effectiveness.  The effectiveness of this Amendment is
subject to the satisfaction in full of each of the conditions precedent set
forth below (the date on which all such conditions have been satisfied being
herein called the “Amendment Effective Date”):

 

(A)          the Agent shall have received counterparts of this
Amendment which, when taken together, bear the signatures of the Borrower,
Hallmark Cards, each Guarantor and each of the Lenders;

 

(B)           the Agent shall have received for the account of the
Lenders a fee of $25,000 in consideration for the extensions of the Maturity
Date to be implemented hereunder;

 

(C)           the representations and warranties in Section 4
hereof shall be true on the Amendment Effective Date as if made on such date;

 

(D)          all legal matters incident to this Amendment shall be
satisfactory to Morgan, Lewis & Bockius, LLP, counsel for the Agent;

 

2

 

(E)           the Agent has received a fully-executed Recapitalized Debt
Intercreditor Agreement in the form of Exhibit T to this Amendment;

 

(F)           the prior or simultaneous consummation of the
Recapitalization on terms and conditions satisfactory to the Agent including
that (i) criteria set forth under the definition of Recapitalization as
set forth in the Revised Credit Agreement are satisfied in connection
therewith, (ii) that each Recapitalization Credit Document (as defined in
the Revised Credit Agreement) is satisfactory in form and substance to the
Agent; and (iii) the Agent is satisfied with any and all liabilities of
Hallmark Holdings and Hallmark Entertainment Investments Co., who are
contemplated to be merged with and into the Borrower in connection with the
consummation of the Recapitalization;

 

(G)           the Agent shall have received evidence satisfactory to it
that Hallmark Cards and/or its Affiliates shall have, pursuant to documentation
satisfactory to the Administrative Agent, extended through no earlier than the
Maturity Date (as the same is being extended in the Revised Credit Agreement)
the license agreement which provides the Borrower and its Subsidiaries with the
right to use the “Hallmark” name and the “Crown” name in their respective
television series or on or with respect to any channels owned or operated by
the Borrower or any of its Subsidiaries; and

 

Section 4.               Representations and Warranties
of the Credit Parties.  Each Credit
Party represents and warrants that:

 

(A)          before and after giving effect to this Amendment, the
representations and warranties contained in Section 3 of the Credit
Agreement and in the other Fundamental Documents (including with respect to the
accuracy of Schedules 3.6(a) and 3.6(b)) are true and correct in all
material respects (except to the extent that any such representations and
warranties specifically relate to an earlier date, in which case they shall be
true and correct as of such earlier date, or changed circumstances specifically
contemplated by, and allowed pursuant to, the Revised Credit Agreement) with
the same effect as if made on and as of the date hereof;

 

(B)           before and after giving effect to this Amendment, no Event
of Default or Default will have occurred and be continuing on and as of the
date hereof; and

 

(C)           the Service Agreement referred to in Section 4.1(h) of
the Credit Agreement has heretofore been terminated..

 

Section 5.               Acknowledgment re: Hallmark
Cards Facility Guarantee.  By its
execution of this Amendment, Hallmark Cards, in its capacity as guarantor under
the Hallmark Cards Facility Guarantee, hereby acknowledges the extension of the
Maturity Date which is being implemented under the Credit Agreement pursuant to
this Amendment, and hereby acknowledges and agrees that the provisions of the
Hallmark Cards Facility Guarantee shall be in full force and effect both prior
and subsequent to the Amendment Effective Date, and regardless of whether any
Change in Control (as defined in the Revised Credit Agreement) may occur
subsequent to the date hereof.

 

Section 6.               Further Assurances.  At any time and from time to time, upon the
Agent’s request and at the sole expense of the Credit Parties, each Credit
Party will promptly and duly

 

3

 

execute and deliver any and all further instruments
and documents and take such further action as the Agent shall reasonably
request.

 

Section 7.               Fundamental Documents.  This Amendment is designated a Fundamental
Document by the Agent.

 

Section 8.               Full Force and Effect.  Except as expressly amended hereby, the
Credit Agreement and the other Fundamental Documents shall continue in full
force and effect in accordance with the provisions thereof on the date
hereof.  As used in the Credit Agreement,
the terms “Agreement”, “this Agreement”, “herein”,  “hereafter”, “hereto”, “hereof”, and words of
similar import, shall, unless the context otherwise requires, mean the Credit
Agreement as amended by this Amendment.

 

Section 9.               APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 10.             Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.

 

Section 11.             Expenses.  The Borrower agrees to pay all out-of-pocket
expenses incurred by the Agent in connection with the preparation, execution
and delivery of this Amendment, including, but not limited to, the reasonable
fees and disbursements of counsel for the Agent.

 

Section 12.             Headings.  The headings of this Amendment are for the
purposes of reference only and shall not affect the construction of or be taken
into consideration in interpreting this Amendment.

 

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

 

[Signature Pages Follow]

 

4

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  CROWN
  MEDIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Brian Stewart

  
	
   

  	
  Name:
  Brian Stewart

  
	
   

  	
  Title:
  EVP/CFO

  

 

 

	
   

  	
  GUARANTORS:

  
	
   

  	
  CM
  INTERMEDIARY, LLC

  
	
   

  	
  CROWN
  MEDIA UNITED STATES, LLC

  
	
   

  	
  CITI
  TEEVEE, LLC

  
	
   

  	
  DOONE
  CITY PICTURES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Brian Stewart

  
	
   

  	
  Name:
  Brian Stewart

  
	
   

  	
  Title:
  EVP/CFO

  

 

 

	
   

  	
  LENDER:

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A., individually and as Agent and Issuing Bank

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Gregory T. Martin

  
	
   

  	
   

  	
  Name: Gregory
  T. Martin

  
	
   

  	
   

  	
  Title:   Vice
  President

  

 

 

Acknowledged and Agreed, solely with

Respect to Section 5 hereof:

 

 

HALLMARK CARDS, INCORPORATED

 

 

	
  By

  	
  /s/
  Timothy Griffith

  	
   

  
	
   

  	
  Name:
  Timothy Griffith

  	
   

  
	
   

  	
  Title:
  EVP, Chief Financial Officer

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