LOAN AGREEMENT ("Agreement"), dated as of August 18, 2000, by and between Image Entertainment, Inc.,
a California corporation (the "Company"), and Martin W. Greenwald, an individual ("Greenwald").
A. On July 3, 2000, July 20, 2000, August 3, 2000, and August 18, 2000, Greenwald borrowed sums in the
amount of $40,000, $15,000, $2,300, and $70,000, respectively, from the Company to cover "margin calls"
relative to the Company's common stock from brokers from whom he had borrowed.
B. On August 18, 2000, the Company's Board of Directors determined that it would be in the Company's best
interest to consolidate the principal amounts and the accrued interest of the loans, said amount totaling
C. The Company desires to lend to Greenwald and Greenwald desires to borrow from the Company
$127,980.20, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereby agree as
1. The Loan. Subject to the terms and conditions hereof, the Company hereby agrees to loan (the "Loan") to
representing the aggregate borrowings and accrued interest at August 18, 2000, as set forth on EXHIBIT A,
attached hereto and incorporated herein by this reference.
2. The Note. The Loan made by the Company shall be evidenced by a promissory note in the form of EXHIBIT
B (the "Note"), attached
hereto and incorporated herein by this reference.
3. Optional Prepayments. Greenwald may at any time and from time to time upon three (3) days advance notice
to the Company, prepay the Loan, in whole or in part, without premium or penalty. Any such prepayment shall
be applied first to interest and then to principal.
4. The Interest Rate. The Loan shall bear interest (the "Interest
Rate") at a rate equal to the Company's then borrowing rate plus
.5% (currently 10.75%). Interest shall be calculated on the basis of a 365-day year for the actual days elapsed.