February 5, 2008 BTP Acquisition Company, LLC IEAC, Inc. 10100 Santa Monica Boulevard, Suite 1259 Los Angeles, California 90067 Attention: Susan Tregub, Esq. CT1 Holdings, LLC 10100 Santa Monica Boulevard, Suite 1259 Los Angeles, California 90067...

Exhibit 99.1

February 5, 2008

BTP Acquisition Company, LLC
IEAC, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.

CT1 Holdings, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.

R2D2, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.

Re: Amended and Restated Agreement and Plan of Merger, dated as of June 27, 2007, among
Image Entertainment, Inc., BTP Acquisition Company, LLC and IEAC, Inc. (“Merger Agreement”)

Dear Xx.Xxxxxx:

Reference is made to (i) the Merger Agreement and (ii) that certain Guarantee (“Guarantee”), dated as of March 29, 2007, by CT1 Holdings, LLC and R2D2, LLC (collectively, “Guarantors”) in favor of Image Entertainment, Inc. (“Image”). Capitalized terms used but not defined herein shall have the meaning ascribed thereto in the Merger Agreement.

Pursuant to Section 7.01(f) of the Merger Agreement, Image hereby terminates the Merger Agreement, effective immediately. Pursuant to Section 7.02(c)(i) of the Merger Agreement, Image hereby demands prompt payment of the Business Interruption Fee ($4,200,000) by wire transfer of same day funds to the account designated on Annex A hereto.

In addition, please be advised that this letter shall constitute notice to the Guarantors under the Guarantee pursuant to which the Guarantors have absolutely, irrevocably and unconditionally guaranteed, among other things, the prompt and complete payment in cash of the Business Interruption Fee.

00000 XXXXXXXX XXXXXX • XXXXX 000 • XXXXXXXXXX, XX 00000-0000 • TEL 000.000.0000
xxx.xxxxx-xxxxxxxxxxxxx.xxx

Furthermore, we respectfully remind Parent, Merger Sub and the Guarantors of the provisions of Section 7.02(c)(ii) of the Merger Agreement, which provides that if the Business Interruption Fee is not promptly paid when due and Image commences a suit that results in a judgment for the Business Interruption Fee, Parent shall pay to Image its costs and expenses (including reasonable attorney’s fees) in connection with such suit and the reference thereto in Section 1(ii) of the Guarantee.

Finally, we inform Parent, Merger Sub and the Guarantors that pursuant to those certain Irrevocable Trust Instructions, dated January 14, 2008 (“Trust Instructions”), among Image, Parent and Manatt, Xxxxxx & Philips, LLP, special legal counsel to Image (“Manatt”), Image has sent the required written notification under such Trust Instructions to permit Manatt to release the $3,000,000 deposit from the trust account and pay such amount directly to Image.

	Yours truly, IMAGE ENTERTAINMENT, INC.
	By:	/s/ Xxxxxx Xxxx Xxx
		Name:	Xxxxxx Xxxx Cho
		Title:	General Counsel

cc: Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxx, Esq.
Xxxxx Xxxxxxxx, Esq.
Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx, Esq.
Xxxxxxx X. Xxxxx, Esq.
CT1 Holdings, LLC
R2D2, LLC