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SECOND AMENDMENT TO CREDIT AGREEMENT

        This Second Amendment ("Amendment") to the Credit Agreement
("Agreement") dated as of September 29, 1997, between Image Investors Co., a
Delaware corporation ("Lender"), and Image Entertainment, Inc., a California
corporation and its subsidiary ("Borrower"), is entered into and effective as of
September 30, 2002.

R E C I T A L S:

        WHEREAS, Borrower and Lender entered into the Agreement as of
September 29, 1997, pursuant to which Lender loaned Five Million Dollars
($5,000,000) to Borrower, as evidenced by the Convertible Subordinated
Promissory Note ("Note") for $5,000,000 dated as of October 29, 1997;

        WHEREAS, Borrower and Lender entered into the first amendment to the
Agreement as of July 9, 2002 (the "First Amendment"), pursuant to which the
parties agreed to modify the interest rate, extend the term of the Note three
(3) years to October 1, 2005, and amend certain terms and provisions of the
Agreement as provided therein, including an agreement by Borrower that it would,
subject to the approval of Foothill Capital Corporation, pay Lender an amount
equal to the lesser of Two Million Five Hundred Thousand Dollars ($2,500,000) or
seventy-five percent (75%) of Borrower's net cash proceeds from the occurrence
of either or both of the following transactions: (a) Borrower selling and
leasing back that certain real property commonly known as 6650 South Spencer,
Las Vegas, Nevada, or (b) each instance of Borrower selling its common stock or
other equity securities;

        WHEREAS, Borrower has received net case proceeds in the amount of
$2,000,000 from a sale of common stock;

        WHEREAS, the parties have again agreed to modify the terms and
provisions of the Agreement as provided herein;

        WHEREAS, the remaining provisions of the Note and Agreement, as amended
by the First Amendment, including without limitation the conversion ratio
provided in Subsection 1.7.1 of the Agreement, will remain as stated in the
original Note and Agreement;

        NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, Borrower and Lender agree as follows:

A G R E E M E N T:

        1.    Initial Payment of Principal.    On the date hereof, Borrower is
making a prepayment of principal in the amount of $750,000. Lender acknowledges
receipt of a check in such amount.

        2.    Future Payments of Principal.    Commencing on October 1, 2002, in
addition to the required payment of interest, Borrower will make a quarterly
payment of principal in the amount of Three Hundred Fifty Thousand Dollars
($350,000) on each Interest Payment Date through July 1, 2003, in the amount of
Four Hundred Seventy-Five Thousand Dollars ($475,000) on each Interest Payment
Date from October 1, 2003 through April 1, 2004 and in the amount of Four
Hundred Twenty-Five Thousand Dollars ($425,000) on the Interest Payment Date
occurring on July 1, 2004, in the amount of Six Hundred Twenty-Five Thousand
Dollars ($625,000) on the Interest Payment Date occurring on October 1, 2004,
and in the amount of Three Hundred Seventy-Five Thousand Dollars ($375,000) on
the Interest Payment Date occurring on January 1, 2005. Lender acknowledges
receipt of two checks in the amount of $350,000 reflecting payment due on
October 1, 2002.

        3.    Additional Payments.    (a) Upon the consummation of the
transaction pursuant to which Borrower intends to sell and lease back its real
property commonly known as 6650 South Spencer, Las Vegas, Nevada, Borrower shall
prepay an amount of the outstanding loan balance under the agreement equal to
the lesser of $1,000,000 or the net proceeds remaining from the transaction
after payment of related sales commissions and expenses and the payoff of the
outstanding borrowings secured by the real property.

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        (b)  Upon the consummation by the Borrower of any issuance or sale by
Borrower of its common stock or other debt or equity securities or other loan
transaction, Borrower shall prepay to Lender an amount equal to the lesser of
the net cash proceeds of such financing transaction and the Remaining Extension
Amount. The "Remaining Extension Amount" shall initially be $750,000, and shall
be decreased by $100,000 for each regularly scheduled principal payment made
pursuant to Section 2 hereof from October 1, 2002 through and including April 1,
2004 and by $50,000 for the regularly scheduled principal payment made pursuant
to Section 2 hereof on July 1, 2004, it being understood that the Remaining
Extension Amount shall never be less than zero.

        (c)  Any such payment will be applied to the principal balance of the
Note and offset, in reverse order commencing with the final payment, the
Debtor's obligation to make the principal payments provided in Section 2 above.

        4.    Preservation of the Agreement.    Except as specifically modified
by the terms of this Amendment, all the terms, conditions, provisions,
covenants, representations, warranties, and agreements contained in the
Agreement shall remain in full force and effect.

        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers.

    LENDER:
 
 
 
      IMAGE INVESTORS CO.
 
 
 
      By: /s/  STUART SUBOTNICK      

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    Name: Stuart Subotnick     Title: Executive Vice President
 
 
 
      BORROWER:
 
 
 
      IMAGE ENTERTAINMENT, INC.
 
 
 
      By: /s/  MARTIN W. GREENWALD      

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    Name: Martin W. Greenwald     Title: President        

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SECOND AMENDMENT TO CREDIT AGREEMENT