Image says Nyx under breach of contract again

Nyx missed $500,000 payment deadline

By Susanne Ault -- Video Business, 3/3/2009

MARCH 3 | Image Entertainment is calling Nyx Acquisitions in breach of the two companies’ merger contract for a second time.

Under the terms of the amended merger agreement, Nyx was required to pay Image $500,000 by 5 p.m. on March 2, in order to secure a time delay in closing the transaction.

Last week, Image agreed to extend the closing date to March 20, with the assurance from Nyx that it would increase its business interruption fee to $2.3 million, from an earlier $1.8 million.

Nyx failed to deliver the necessary incremental $500,000, according to Image. However, Nyx has already notified Image that it intends to contribute the funds by the close of business today.

If Image decides to call off the merger, the company would be due the $2.3 million business fee, according to the revised contract.

Image initially said Nyx was in breach of contract when the company was late in delivering the original $1.8 million fee terms.

Image shareholders recently approved Nyx’s acquisition proposal, in which it would purchase outstanding Image stock for $2.75 per share.