Wall Street sent Image Entertainment Inc. shares up more than a third on Tuesday on new signs that the arduous $100 million acquisition of the Chatsworth home entertainment company by a San Francisco private equity company appeared to be on track.

The companies announced a third amendment to its merger agreement, in which Nyx Acquisition Inc. would pay $1 million directly to Image today.

The companies previously had agreed that Nyx, an affiliate of Q-Black LLC, could have until April 20 to complete financing of the agreement if it added $1.5 million to a $2.5 million escrow account for the business interruption fee, which Image could only tap if the deal fell through. The amended deal means Image can use the $1 million now for business opportunities and general corporate purposes.

"We see the opportunities that Image has at its fingertips right now," Nyx Chief Executive Joe Q. Bretz said in a statement. "By paying this money directly to Image instead of holding it in a trust account, we know we are providing Image with added opportunities for growth, as well as demonstrating our continued support and commitment to closing the merger."

Image in November agreed to sell itself to Nyx for $60.2 million in cash, plus assumption of debt, in a transaction originally to have closed February 26. But the credit crunch has made it harder than the parties originally thought to finalize financing, leading to missed deadlines and rising concerns that Image's second effort in as many years to sell itself would collapse.

Image shares closed up 41 cents, or 33 percent, to $1.63 on the Nasdaq.

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