Image Terminates Merger Agreement

CHATSWORTH, February 6:
The North American home-entertainment distributor Image Entertainment is
terminating its June 2007 merger agreement with BTP Acquisition Company, an
affiliate of David Bergstein.

Image is demanding “prompt
payment” of a $4.2 million business interruption fee required by the merger
agreement. In addition, the parties have terminated the discussions that
commenced on February 1, 2008.

An Image Entertainment
spokesman said: “The Image Entertainment Board of Directors has determined that
the company is best served by terminating the merger agreement and the
constraints it imposes on Image. Image granted numerous requests made by BTP to
extend the closing date to allow BTP the time to finalize the required
financing for the merger. We are very disappointed that despite Image’s
willingness to close the merger and enormous patience, BTP was either unable or
unwilling to finance the transaction. We remain committed to enhancing
shareholder value and believe the immediate need is to move forward and focus
our energies on our business. In addition, our termination of the merger
agreement in no way affects our rights under the output distribution agreement,
as specifically indicated and addressed in that agreement. Image remains in
full compliance with the distribution agreement and intends to fully enforce
its rights under that agreement.”

—By Mansha Daswani