Image Entertainment, Nyx extend time to close merger

By Lisa Kerner

Charlotte, N.C., March 24 - Image Entertainment, Inc. said it amended its merger agreement with Nyx Acquisitions, Inc., extending the deadline for finalizing the transaction to April 6 from March 20.

In exchange, Nyx has agreed to increase the business interruption fee to $2.5 million by depositing an additional $200,000 into a trust account.

Nyx has also agreed to release to Image $1 million of the $2.5 million currently being held in the trust account. The $1 million payment is nonrefundable and will have no effect on the purchase price, which remains $2.75 per share.

Under the amended agreement, Nyx has two opportunities to extend the closing date.

If it notifies Image by April 2, increases the interruption fee by a further $1.5 million and deposits that amount by April 6 it can extend the closing to April 20.

Nyx can further extend the date to May 4 if it notifies Image by April 16 and adds a further $3 million to the interruption fee, depositing the extra by April 20.

Earlier in the day Image Entertainment and Nyx said they were negotiating an amended agreement.

As previously reported, Nyx said it planned to cure its breach of the amended merger agreement with Image Entertainment by delivering the outstanding balance of the business interruption fee to a trust account.

Nyx, an affiliate of Q-Black, LLC, failed to deliver an additional deposit of $500,000 to Image Entertainment by March 19 as required under the amended merger agreement in order to extend the merger closing date to March 26.

In November, Image Entertainment announced that it agreed to be acquired by Nyx for $2.75 per share in a transaction valued at about $100 million, including the assumption of Image Entertainment's debt.

Both companies had agreed to extend the closing date for their merger to March 20 from Feb. 26.

Image Entertainment is an independent licensee, producer and distributor of home entertainment programming in North America. The company is based in Chatsworth, Calif.

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