TABLE OF CONTENTS

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ARTICLE I     THE MERGER							1
		SECTION 1.01		Certain Definitions			1
		SECTION 1.02		The Merger			10
		SECTION 1.03		Closing			11
		SECTION 1.04		Effective Time			11
		SECTION 1.05		Effects of the Merger			11
		SECTION 1.06		Certificate of Incorporation and Bylaws			11
		SECTION 1.07		Directors			12
		SECTION 1.08		Officers			12
ARTICLE II     EFFECT OF THE MERGER ON THE SECURITIES OF THE CONSTITUENT CORPORATIONS;                            EXCHANGE PROCEDURES							12
		SECTION 2.01		Effect on Capital Stock			12
		SECTION 2.02		Exchange of Certificates			15
ARTICLE III     REPRESENTATIONS AND WARRANTIES							18
		SECTION 3.01		Representations and Warranties of the Company			18
		SECTION 3.02		Representations and Warranties of Parent and Merger Sub			37
ARTICLE IV     COVENANTS							42
		SECTION 4.01		Conduct of Business of the Company			42
		SECTION 4.02		Conduct of Business of Parent and Merger Sub Pending the Merger			45
		SECTION 4.03		Control of Other Partys Business			45
ARTICLE V     ADDITIONAL AGREEMENTS							45
		SECTION 5.01		Preparation of Proxy Statement; Stockholders Meeting			45
		SECTION 5.02		No Solicitation			46
		SECTION 5.03		Access to Information; Confidentiality			49
		SECTION 5.04		Regulatory Matters; Reasonable Best Efforts			50
		SECTION 5.05		Fees and Expenses			51
		SECTION 5.06		Indemnification; Directorsand Officers Insurance			51
		SECTION 5.07		Public Announcements			53
		SECTION 5.08		Transfer Taxes			53
		SECTION 5.09		State Takeover Laws			53

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TABLE OF CONTENTS
(continued)

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		SECTION 5.10		Notification of Certain Matters			53
		SECTION 5.11		Employees			54
		SECTION 5.12		Delisting			55
		SECTION 5.13		Financing			55
		SECTION 5.14		No Agreements with Company Stockholders			56
		SECTION 5.15		No Undisclosed Arrangements with Company Employees			57
		SECTION 5.16		Rule 16b-3			57
		SECTION 5.17		Reservation of Rights to Modify Structure			57
		SECTION 5.18		Professional Fees			57
ARTICLE VI     CONDITIONS							58
		SECTION 6.01		Conditions to Each Partys Obligation to Effect the Merger			58
		SECTION 6.02		Additional Conditions to Obligations of Parent and Merger Sub			58
		SECTION 6.03		Additional Conditions to Obligations of the Company			59
ARTICLE VII     TERMINATION, AMENDMENT AND WAIVER							60
		SECTION 7.01		Termination			60
		SECTION 7.02		Effect of Termination			61
		SECTION 7.03		Amendment			64
		SECTION 7.04		Extension; Waiver			64
ARTICLE VIII     GENERAL PROVISIONS							64
		SECTION 8.01		Nonsurvival of Representations and Warranties			64
		SECTION 8.02		Notices			64
		SECTION 8.03		Interpretation			65
		SECTION 8.04		Counterparts			66
		SECTION 8.05		Entire Agreement; Third Party Beneficiaries			66
		SECTION 8.06		Governing Law			66
		SECTION 8.07		Severability			66
		SECTION 8.08		Assignment			67
		SECTION 8.09		Submission To Jurisdiction; Waivers			67
		SECTION 8.10		Enforcement			67
		SECTION 8.11		WAIVER OF JURY TRIAL			67

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THIS AGREEMENT AND PLAN OF MERGER (this Agreement), dated as of March 29, 2007, is among BTP Acquisition Company, LLC, a Delaware limited liability company (Parent), IEAC, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (Merger Sub), and Image Entertainment, Inc., a Delaware corporation (the Company).

WHEREAS, the respective boards of directors or managing members, as the case may be, of each of Parent, Merger Sub and the Company have (i) approved and declared advisable this Agreement, the merger of Merger Sub with and into the Company on the terms and subject to the conditions set forth in this Agreement (the Merger) and the other transactions contemplated hereby and (ii) determined that the Merger and the other transactions contemplated by this Agreement are fair to, and in the best interest of, their respective entities and stockholders or members.