AMENDMENT NO. 2 TO RIGHTS AGREEMENT
EXHIBIT 4.1
AMENDMENT NO. 2 TO RIGHTS AGREEMENT
This Amendment No. 2 to Rights Agreement (this “Amendment”) is entered into as of June 25,
2007 (to become effective on the date set forth in Section 5.0 of this Amendment), between Image
Entertainment, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A.,
a Delaware corporation, as Rights Agent (the “Rights Agent”), and amends the Rights Agreement dated
as of October 31, 2005, between the Company and the Rights Agent, as amended by Amendment No. 1 to
the Rights Agreement dated as of March 29, 2007 (the “Rights Agreement”).
WHEREAS, the Company desires to amend the Rights Agreement to prevent certain Persons acting
with the approval of the Board of Directors of the Company who propose to acquire all of the equity
interests in the Company from becoming Acquiring Persons, and to prevent the execution, delivery or
performance of the Amended and Restated Merger Agreement (as such term is defined below), the
Securities Purchase Agreement (as such term is defined below) or the Amended and Restated Support
Agreements (as such term is defined below) from resulting in a Section 11(a)(ii) Event, a Section
13 Event, a Distribution Date or a Share Acquisition Date; and
WHEREAS, this Amendment is entered into pursuant to Section 27 of the Rights Agreement prior
to the time that any Person, to the knowledge of the Company, has become an Acquiring Person.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the parties hereto agree as follows:
1.0 Defined Terms. Terms defined in the Rights Agreement and used and not otherwise defined
herein shall have the meanings given to them in the Rights Agreement.
2.0 Additional Definitions. Section 1 of the Rights Agreement is hereby amended to add the
following definitions, which shall be inserted into Section 1 in alphabetical order:
“Amended and Restated Merger Agreement” shall mean the Amended and Restated Agreement and Plan
of Merger made and entered into as of June 25, 2007, by and among Parent, Merger Sub and the
Company, as amended from time to time in accordance with its terms.
“Amended and Restated Support Agreements” shall mean the Amended and Restated Support
Agreements dated as of June 25, 2007 by and between Parent and certain stockholders of the Company,
as amended from time to time in accordance with their terms.
“Merger Sub” shall mean IEAC, Inc., a Delaware corporation and a wholly-owned subsidiary of
Parent.
“Parent” shall mean BTP Acquisition Company, a Delaware limited liability company.
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“Securities Purchase Agreement” shall mean the Securities Purchase Agreement to be executed
and delivered by Parent and the Company immediately prior to the Effective Time (as such term is
defined in the Amended and Restated Merger Agreement), pursuant to which Parent will be entitled to
purchase from the Company, and the Company will agree to issue and sell to Parent, shares of common
stock of the Company and/or shares of series a convertible preferred stock of the Company.
3.0 Amendment of Section 7. Paragraph (a) of Section 7 of the Rights Agreement is amended by:
3.1 | deleting the word “and” immediately preceding clause (iii) thereof and by
adding a “,” immediately preceding clause (iii) thereof; and |
3.2 | by adding the following immediately following clause (iii) thereof: “or (iv)
immediately prior to the Effective Time (as such term is defined in the Amended and
Restated Merger Agreement). The Company hereby agrees to promptly notify the Rights
Agent, in writing, upon the occurrence of the Effective Time (as such term is defined
in the Amended and Restated Merger Agreement), which notice shall specify (i) that the
Effective Time (as such term is defined the Amended and Restated Merger Agreement) has
occurred, and (ii) the date upon which the Rights established hereby expired and this
Agreement terminated.” |
4.0 Amendment of Section 35. Section 35 of the Rights Agreement is hereby amended and restated in
its entirety to read as follows:
“Section 35. Exception For Amended and Restated Merger Agreement.
Notwithstanding any provision of this Agreement to the contrary,
neither a Section 11(a)(ii) Event, a Section 13 Event, a
Distribution Date, nor a Share Acquisition Date shall be deemed to
have occurred, none of Parent, Merger Sub or any of their Affiliates
or Associates shall be deemed to have become an Acquiring Person,
and no holder of any Rights shall be entitled to exercise such
Rights under, or be entitled to any rights pursuant to, any of
Sections 3(a), 7(a), 11(a) or 13 of this Agreement, in any such case
by reason of (a) the announcement of the Merger (as such term is
defined in the Amended and Restated Merger Agreement), (b) the
approval, execution or delivery of the Amended and Restated Merger
Agreement or any amendments thereof, (c) the execution and delivery
of the Amended and Restated Support Agreements or any amendments
thereof, (d) the approval, execution and delivery of the Securities
Purchase Agreement or any amendments thereof, (e) the commencement
or, the consummation of, any of the transactions contemplated by the
Amended and Restated Merger Agreement, including the Merger (as such
term defined in the Amended and Restated Merger Agreement), (f) the
commencement or, the consummation of, any of the transactions
contemplated by the Amended and Restated
Support Agreements, or (g) the commencement or, the consummation of,
any of the transactions contemplated by the Securities Purchase
Agreement.”
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5.0 Effectiveness. This Amendment shall be deemed effective as of the time immediately prior to
the signing of the Amended and Restated Merger Agreement. Except as amended hereby, the Rights
Agreement shall remain in full force and effect and shall be otherwise unaffected hereby.
6.0 Miscellaneous. This Amendment shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in accordance with the
laws of such state. This Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed an original and all such counterparts shall together
constitute but one and the same instrument. If any term, provision, covenant or restriction of
this Amendment is held by a court of competent jurisdiction or other authority to be invalid,
illegal, or unenforceable, the remainder of the terms, provisions, covenants and restrictions of
this Amendment shall remain in full force and effect and shall in no way be affected, impaired or
invalidated.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the Rights
Agreement to be duly executed as of the day and year first above written.
IMAGE ENTERTAINMENT, INC. |
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By: | /s/ Xxxxxx Xxxx Xxx | |||
Name: | Xxxxxx Xxxx Cho | |||
Title: | Senior Vice President, General Counsel and Corporate Secretary |
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COMPUTERSHARE TRUST COMPANY, N.A. |
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By: | /s/ Xxxxxx Xxxxx | |||
Name: | Xxxxxx Xxxxx | |||
Title: | Vice President | |||
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