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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, DC 20549</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT PURSUANT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO SECTION 13 OR 15(D) OF THE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of report (Date of earliest event reported):&nbsp;&nbsp;<B>April
2, 2012</B></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="font-weight: bold; text-align: center">RLJ Acquisition, Inc.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="text-align: center">(Exact Name of Registrant as Specified in Its Charter)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%">&nbsp;</TD>
    <TD STYLE="width: 30%">&nbsp;</TD>
    <TD STYLE="width: 19%">&nbsp;</TD>
    <TD STYLE="width: 19%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="font-weight: bold; text-align: center">Nevada</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="text-align: center">(State or Other Jurisdiction of Incorporation)</TD></TR>
</TABLE>

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<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%">&nbsp;</TD>
    <TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 29%">&nbsp;</TD>
    <TD STYLE="width: 19%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">000-54276</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">27-3970903</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: center">(Commission File Number)</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(IRS Employer Identification No.)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>3 Bethesda Metro Center, Suite 1000</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Bethesda, MD</B></P></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">20814</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: center">(Address of Principal Executive Offices)</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(Zip Code)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="font-weight: bold; text-align: center">(301) 280-7737</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="text-align: center">(Registrant&rsquo;s Telephone Number, Including Area Code)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Wingdings 2">S</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Wingdings 2">&pound;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#9;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Wingdings 2">&pound;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Wingdings 2">&pound;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 1.01.&#9;Entry Into A Material
Definitive Agreement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 2, 2012,
RLJ Acquisition, Inc. (&ldquo;<U>RLJ</U>&rdquo;) and Image Entertainment, Inc. (&ldquo;<U>Image</U>&rdquo;) entered into an
Agreement and Plan of Merger (the &ldquo;<U>Merger Agreement</U>&rdquo;). Concurrently with the execution of the Merger
Agreement, RLJ, Acorn Media Group, Inc. (&ldquo;<U>Acorn</U>&rdquo;), the shareholders of Acorn (the &ldquo;<U>Acorn
Shareholders</U>&rdquo;) and Peter Edwards, as the Shareholder Representative, entered into a Stock Purchase Agreement (the
&ldquo;<U>Acorn Purchase Agreement</U>&rdquo;). After the completion of the proposed business combination contemplated by the
Merger Agreement and the Acorn Purchase Agreement, the current stockholders of Image and Acorn will own approximately 11% and
5%, respectively, of a new combined company, RLJ Entertainment, Inc. (&ldquo;<U>RLJ Entertainment</U>&rdquo;), and the
current stockholders of RLJ who purchased shares in RLJ&rsquo;s initial public offering and RLJ&rsquo;s founders will own
approximately 84% of RLJ Entertainment, assuming that none of the RLJ stockholders exercise their rights to redeem stock they
hold in the RLJ Share Redemption (as described below). RLJ Entertainment is expected apply to list its shares on The Nasdaq
Stock Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Merger Agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The Mergers</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 2, 2012, RLJ
and Image entered into the Merger Agreement. The Merger Agreement provides that RLJ will incorporate three subsidiaries: (i) RLJ
Entertainment, a Nevada corporation, which will initially be directly wholly owned by RLJ; (ii) RLJ Merger Sub I, Inc., a Nevada
corporation (&ldquo;<U>RLJ Sub</U>&rdquo;), which will be wholly owned by RLJ Entertainment, and (iii) RLJ Merger Sub II, Inc.,
a Delaware corporation (&ldquo;<U>Image Sub</U>&rdquo;), which will also be wholly owned by RLJ Entertainment. At the closing of
the transactions contemplated by the Merger Agreement (the &ldquo;<U>Merger Transaction</U>&rdquo;), Image Sub will merge with
and into Image, with Image surviving such merger as a wholly owned subsidiary of RLJ Entertainment, and RLJ Sub will merge with
and into RLJ, with RLJ surviving such merger as a wholly owned subsidiary of RLJ Entertainment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Consideration</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the closing of the
Merger Transaction, the outstanding shares of Image common stock (excluding dissenting shares) will be automatically converted,
in the aggregate, into the right to receive a total of 2,289,000 shares of common stock of RLJ Entertainment, subject to adjustment
as set forth in the Merger Agreement, except that shares of Image common stock held by Image, Image Sub, RLJ Entertainment, or
any direct or indirect wholly owned subsidiary of RLJ Entertainment or Image will be canceled without any conversion, payment,
or distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All shares of the Series
B Preferred Stock of Image will have been purchased by RLJ immediately prior to the consummation of the Merger Transaction pursuant
to the Preferred Stock Purchase Agreement described below. As a result of the Merger Transaction, each share of the Series B Preferred
Stock of Image will be canceled, without conversion, payment, or distribution.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the closing of the
Merger Transaction, each share of RLJ common stock will be automatically converted into one share of common stock of RLJ Entertainment.
Each warrant to purchase shares of RLJ common stock will convert into a right to acquire equal number of shares of common stock
of RLJ Entertainment on the same contractual terms and conditions as were in effect immediately prior to the closing of the Merger
Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
the Merger Transactions, the holders of 13,622,664 shares of common stock of RLJ which were purchased in RLJ&rsquo;s initial public
offering may effect redemption of their shares of common stock of RLJ for cash in an amount equal to their pro rata share of the
aggregate amount on deposit in a trust account holding the proceeds of RLJ&rsquo;s initial public offering (the &ldquo;<U>RLJ Share
Redemption</U>&rdquo;). RLJ has no specified maximum redemption threshold; however, RLJ will not redeem its shares in an amount
that would cause its stockholders&rsquo; equity to be less than $5,000,001.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Representations and Warranties</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Image has made customary
representations and warranties in the Merger Agreement relating to, among other things, its organization, capitalization, financial
statements, absence of certain changes, and Image&rsquo;s public filings with the Securities and Exchange Commission (the &ldquo;<U>SEC</U>&rdquo;).
Similarly, RLJ has made customary representations and warranties in the Merger Agreement relating to, among other things, its organization,
capitalization, financial statements, absence of certain changes, and RLJ&rsquo;s public filings with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Conditions to Completion
of the Merger Transaction</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consummation of the
Merger Transaction is subject to customary conditions, including receipt of any necessary governmental or third party consents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consummation of the
Merger Transaction is also subject to other conditions, including (i) the registration statement of RLJ Entertainment on Form S-4,
which will include a joint proxy statement of Image and RLJ, having been declared effective by the SEC, (ii) the stockholders of
Image and RLJ having approved and adopted the Merger Agreement, (iii)&nbsp;absence of a governmental order that would make the
Merger Transaction illegal, (iv) the Acorn Purchase Agreement (as described below) having not been terminated and the conditions
to the consummation of the Acorn Transaction (as described below) having been satisfied, and (v)&nbsp;RLJ having an aggregate of
at least $92,000,000 available in cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, RLJ&rsquo;s
obligation to close the Merger Transaction is conditioned upon, among other things, (i) the accuracy of Image&rsquo;s representations
and warranties in the Merger Agreement and performance by Image of its covenants and agreements in the Merger Agreement, (ii) no
material adverse change of Image, (iii) certain stockholders of Image having contributed an aggregate of up to 35,401,977 shares
of Image common stock to Image, and (iv) the consummation of the Preferred Stock Purchase Transaction (as described below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Image&rsquo;s obligation
to close the Merger Transaction is also conditioned upon, among other things, (i) the accuracy of RLJ&rsquo;s representations and
warranties in the Merger Agreement and performance by RLJ of its covenants and agreements in the Merger Agreement, (ii) no material
adverse change of RLJ, (iii) RLJ SPAC Acquisition, LLC having contributed 792,739 shares of common stock of RLJ and warrants to
purchase 1,000,000 shares of common stock of RLJ to RLJ and (iv) the consummation of the Preferred Stock Purchase Transaction.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Claims against Trust
Account</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the terms of
the Merger Agreement, Image waived any right to any amount held in the trust account established pursuant to the Investment Management
Trust Agreement, dated as of February 22, 2011, by and between RLJ and Continental Stock Transfer &amp; Trust Co. (the &ldquo;<U>Trust
Account</U>&rdquo;), and it has agreed not to make any claim against any funds in the Trust Account.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Stockholder Meetings</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the terms
of the Merger Agreement, each of RLJ and Image is required to promptly call a meeting of its respective stockholders for the purpose
of voting upon the Merger Agreement. Pursuant to the Support Agreement described below, JH Partners Evergreen Fund, LP, JH Investment
Partners III, LP and JH Investment Partners GP Fund III, LLC, the controlling stockholders of Image, have agreed to vote the Image
shares they control, directly or indirectly, in favor of the Merger Transaction. In connection with the initial public offering
of RLJ, each of the RLJ initial stockholders agreed to vote all of their shares of RLJ common stock acquired in, or subsequent
to, RLJ&rsquo;s initial public offering, which shares constitute approximately 20% of RLJ&rsquo;s outstanding shares of common
stock, for the Merger Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Registration Statement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that RLJ Entertainment will prepare and file with the SEC a registration statement on Form S-4 in connection with the
registration of the shares and warrants of RLJ Entertainment to be issued pursuant to the Merger Agreement and the Acorn Purchase
Agreement, which registration statement will include a proxy statement of each of Image and RLJ to be sent to the stockholders
of RLJ and Image. RLJ, Image and RLJ Entertainment are required to use their reasonable efforts to have such registration statement
declared effective as promptly as practicable thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Termination of the
Merger Agreement </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
may be terminated prior to consummation of the Merger Transaction by mutual consent of the parties. In addition, the Merger Agreement
may be terminated: (i) by either party (A) if&nbsp;the Merger Transaction has not closed by November 22, 2012; (B)&nbsp;if the
consummation of the Merger Transaction becomes illegal or otherwise prohibited by law, (C) in the event of a breach of a representation,
warranty, covenant or agreement by the other party, if such breach is not cured within thirty days after notice of such breach
by the non-breaching party; (D) if the Merger Agreement is not approved and adopted by the stockholders of either RLJ or Image;
(ii)&nbsp;by RLJ upon certain &ldquo;triggering events&rdquo;, which include, among other things, withdrawal, modification and
changes by the board of directors of Image of the recommendation to the stockholders of Image in a manner adverse to RLJ or recommendation
by the board of directors of Image of a competing transaction to the stockholders of Image; and (iii) upon written notice by Image,
at any time prior to approval by the Image stockholders of the Merger Agreement, to enter into a definitive agreement with respect
to a superior proposal.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Expenses and Termination
Fee</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that each party will be responsible for its own costs in connection with the Merger Transaction, except that Image and
RLJ will each pay half of the expenses relating to certain enumerated costs, including the preparation, filing and mailing of the
registration statement and joint proxy statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Image must pay a termination
fee of $1,620,000 plus RLJ&rsquo;s expenses, if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">RLJ terminates the Merger Agreement pursuant to a &ldquo;triggering event&rdquo; as described above;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">either party terminates the Merger Agreement pursuant to a failure by the stockholders of Image
to approve the Merger Agreement, and prior to such failure to approve, a competing transaction with respect to Image was publicly
announced; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Image terminates the Merger Agreement pursuant to the provision allowing termination in order for
Image to accept a superior proposal.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, if RLJ
is required to pay the termination fee to Acorn under the Acorn Purchase Agreement as described below, Image must pay one-half
of such termination fee actually paid by RLJ to Acorn pursuant to the Acorn Purchase Agreement, not to exceed $500,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of the Merger
Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description
of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement filed with this Current
Report on Form 8-K. The Merger Agreement is included to provide investors and security holders with information regarding its terms.
It is not intended to provide any other factual information about Image or the other parties thereto. In particular, the assertions
embodied in representations and warranties by Image and RLJ contained in the Merger Agreement are qualified by information in the
disclosure schedules provided by Image and RLJ in connection with the signing of the Merger Agreement. These disclosure schedules
contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger
Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk
between Image and RLJ, rather than establishing matters as facts. Accordingly, investors and security holders should not rely on
the representations and warranties in the Merger Agreement as characterizations of the actual state of facts about Image or RLJ.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Series B Preferred Stock Purchase
Agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
the Merger Transaction, on the date of the Merger Agreement, RLJ entered into a Preferred Stock Purchase Agreement (the &ldquo;<U>Preferred
Stock Purchase Agreement</U>&rdquo;) with the holders (the &ldquo;<U>Preferred Holders</U>&rdquo;) of the shares of Series B Preferred
Stock of Image (the &ldquo;<U>Preferred Shares</U>&rdquo;). Pursuant to the Preferred Stock Purchase Agreement, the Preferred Holders
will sell all of the Preferred Shares to RLJ (the &ldquo;<U>Preferred Stock Purchase Transaction</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The aggregate purchase
price for all of such Preferred Shares is equal to $22,600,000. Certain Preferred Holders will receive only cash in the aggregate
amount of $600,000 allocated pro rata among such Preferred Holders. The remaining Preferred Holders will receive $22,000,000, comprised
of cash and subordinated promissory notes of RLJ Entertainment in amounts to be determined by the amount of cash available to RLJ
at the closing of the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Preferred Holders
have made customary representations and warranties in the Preferred Stock Purchase Agreement relating to organization, authority
and ownership of the Preferred Shares. Preferred Holders receiving promissory notes have also made additional representations and
warranties relating to the investment in the subordinated promissory notes and governmental compliance, including representations
with respect to acquisition and resale of restricted securities and their status as accredited investors. RLJ has made customary
representations and warranties in the Preferred Stock Purchase Agreement relating to organization, authority and absence of conflicts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">RLJ has agreed to provide
registration rights to certain of the Preferred Holders. Each such Preferred Holder is entitled to demand registration on Form
S-3 of the shares of common stock of RLJ Entertainment being receiving by them pursuant to the Merger Transactions. Such registration
rights shall be available to the applicable Preferred Holders no more than two times commencing nine months after the closing of
the Merger Agreement and otherwise pursuant to the terms of a registration rights agreement to be entered into by RLJ Acquisition
and the applicable Preferred Holders at the closing of the Merger Agreement; provided that RLJ Entertainment shall be obligated
to file a Form S-3 registration statement with the SEC in connection with a demand by the Preferred Holders only if RLJ Entertainment
shall be eligible to use Form S-3 at such time</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The representations
and warranties of the parties survive the closing of the Preferred Stock Purchase Transaction indefinitely. All covenants and agreements
in the Preferred Stock Purchase Agreement remain in full force and effect for (i) 12 months after the closing of the Preferred
Stock Purchase Transaction or (ii) for those covenants and agreements that are required to be performed in whole or in part after
the closing, 12 months from the date by which such performance is required. Any claim made within the timeframes stated above will
survive until such claim is finally and fully resolved.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Preferred Holder
must indemnify RLJ and its affiliates for all losses and claims (including reasonable attorneys&rsquo; and consultants&rsquo; fees)
arising out of any breach by such Preferred Holder of any representation, warranty, covenant or agreement made by such Preferred
Holder under the Preferred Stock Purchase Agreement. Similarly, RLJ must indemnify the Preferred Holders and their affiliates for
all losses and claims (including reasonable attorneys&rsquo; and consultants&rsquo; fees) arising out of any breach by RLJ of any
representation, warranty, covenant or agreement made by RLJ under the Preferred Stock Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The indemnification
obligations of each Preferred Holder is limited to the purchase price received by such Preferred Holder, and the indemnification
obligations of RLJ to each Preferred Holder are limited to the purchase price paid to such Preferred Holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Preferred
Stock Purchase Agreement, the Preferred Holders may not sell, assign, transfer or otherwise subject to other encumbrance any Preferred
Shares prior to the closing of the Preferred Stock Purchase Transaction. All parties agreed to use all reasonable efforts to consummate
the Preferred Stock Purchase Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Preferred Stock
Purchase Agreement may be terminated prior to the consummation of the Preferred Stock Purchase Transaction by mutual consent of
the parties. In addition, the Preferred Stock Purchase Agreement may be terminated: (i) by the Preferred Holders or RLJ (A) if
the Preferred Stock Purchase Transaction has not closed by November 22, 2012; (B) in the event any governmental order prohibiting
the Preferred Stock Purchase Transaction is final and nonappealable; (ii) by RLJ (A) if the Merger Agreement is terminated for
any reason; or (B) if the Preferred Holders have breached any of their representations, warranties, covenants or agreements in
the Preferred Stock Purchase Agreement if such breach has not been cured within thirty days of notice given by RLJ to the Preferred
Holders; or (iii) by the Preferred Holders if RLJ has breached any of its representations, warranties, covenants or agreements
in the Preferred Stock Purchase Agreement if such breach has not been cured within thirty days of notice given by the Preferred
Holders to Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of the Preferred
Stock Purchase Agreement is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
The foregoing description of the Preferred Stock Purchase Agreement is qualified in its entirety by reference to the full text
of the Preferred Stock Purchase Agreement filed with this Current Report on Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Subordinated Promissory Notes</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The subordinated promissory
notes of RLJ Entertainment issued pursuant to the Preferred Stock Purchase Agreement will constitute unsecured subordinated obligations
of RLJ Entertainment. The subordinated promissory notes will bear interest at the rate of 12% per annum (increasing to 14% per
annum during the continuance of an event of default), and accrued interest for each calendar year will be due and payable on May
15 of the following calendar year, and on the maturity date described below. A minimum of 5.4% per annum of interest will be payable
in cash on each interest payment date, and additional cash interest may be payable, at RLJ Entertainment&rsquo;s discretion, under
certain circumstances. Any interest which is not paid in cash will be payable through the issuance of additional subordinated promissory
notes, or, at the holder&rsquo;s option, in shares of common stock of RLJ Entertainment valued at their market price at or about
the time of issuance of such common stock of RLJ Entertainment. The principal of the subordinated promissory notes will be due
and payable in a single payment on the earlier of the sixth anniversary of issuance or one year from the original stated maturity
date of RLJ Entertainment&rsquo;s senior secured debt, or upon a change of control of RLJ Entertainment. The subordinated promissory
notes will be subordinated to the prior payment in full of RLJ Entertainment&rsquo;s senior secured debt and may be further subordinated
to additional indebtedness which RLJ Entertainment may incur from time to time, subject to satisfaction of certain financial tests.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of the form
of subordinated promissory note is attached as Exhibit A to the Preferred Stock Purchase Agreement filed with this Current Report
on Form 8-K as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the form of subordinated promissory
note is qualified in entirety by reference to the full text of the form of subordinated promissory note filed with this Current
Report on Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Stockholder Support Agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
the Merger Transaction, on the date of the Merger Agreement, RLJ also entered into a Stockholder Support Agreement (the &ldquo;<U>Support
Agreement</U>&rdquo;) with JH Partners Evergreen Fund, LP, JH Investment Partners III, LP and JH Investment Partners GP Fund III,
LLC (the &ldquo;<U>Image Stockholders</U>&rdquo;), who collectively own approximately 70% of the outstanding shares of Image common
stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the terms
of the Support Agreement, each Image Stockholder agreed to vote all of such Image Stockholder&rsquo;s shares (i) in favor of the
approval and adoption of the Merger Agreement and approval of the Merger Transaction, (ii) against any action, agreement or transaction
or proposal (including any competing transaction) that would result in a breach of any covenant, representation or warranty or
any other obligation or agreement of Image under the Merger Agreement or that could result in any of the conditions to Image&rsquo;s
obligations under the Merger Agreement not being fulfilled, and (iii) in favor of any other matter necessary to the consummation
of the Merger Transaction considered and voted upon by the stockholders of Image.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Image Stockholder
also agreed not to sell, transfer or dispose of or otherwise encumber any of the shares of the common stock of Image that such
Image Stockholder owns or enter into a voting arrangement that is inconsistent with the terms of the Support Agreement. Each Image
Stockholder further agreed not to solicit any competing transaction or participate in any discussions regarding a superior proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Support Agreement
and the obligations of the Image Stockholders under the Support Agreement automatically terminate upon the earlier to occur of
(i)&nbsp;the consummation of the Merger Transaction and (ii)&nbsp;the termination of the Merger Agreement in accordance with its
terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of the Support
Agreement is filed with this Current Report on Form 8-K as Exhibit 10.2 and is incorporated herein by reference. The foregoing
description of the Support Agreement is qualified in its entirety by reference to the full text of the Support Agreement filed
with this Current Report on Form 8-K.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Acorn Purchase Agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Stock Purchase</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&#9;</B>On the date of the Merger Agreement,
concurrently with the execution of the Merger Agreement, RLJ, Acorn, the Acorn Shareholders and Peter Edwards, as the Shareholder
Representative entered into the Acorn Purchase Agreement. Pursuant to the Acorn Purchase Agreement, the Acorn Shareholders will
sell all of the issued and outstanding shares of capital stock of Acorn, par value $0.01 per share, to RLJ (the &ldquo;<U>Acorn
Transaction</U>&rdquo; and, together with the Merger Transaction and the Preferred Stock Purchase Transaction, the &ldquo;<U>Transactions</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Consideration</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The aggregate purchase
price to be paid to the Acorn Shareholders is comprised of (i)&nbsp;$101,818,343 in cash, plus an amount equal to the aggregate
transaction costs incident to the negotiation, preparation or consummation of the acquisition by Acorn Productions Limited, a wholly
owned subsidiary of Acorn, of Agatha Christie Limited (except for those transaction costs funded from working capital of Acorn
or any Acorn subsidiary), (ii)&nbsp;1,000,000 newly issued shares of common stock of RLJ Entertainment and (iii)&nbsp;newly issued
warrants to purchase 1,000,000 shares of the common stock of RLJ Entertainment. The cash portion of the purchase price to be paid
to the Acorn Shareholders at closing will be reduced by the (i) transaction costs incurred by Acorn and Acorn&rsquo;s subsidiaries
since January 1, 2012 in connection with the Acorn Transaction, including the payments required to be made to cancel the outstanding
options to purchase shares of capital stock of Acorn&rsquo;s subsidiaries and to buy out the minority holders of Acorn&rsquo;s
subsidiaries; (ii)&nbsp;the amount required to repay Acorn&rsquo;s SuntTrust Bank senior term loan and to repay the principal amount
of certain subordinated notes issued by Acorn; and (iii)&nbsp;$5,000,000 (an indemnification escrow, which amount will be released
from escrow within 3 days of the 18-month anniversary of the closing, less any amounts paid to or claimed by RLJ prior to the 18-month
anniversary of the closing). The cash purchase price will be subject to a post-closing adjustment based upon the closing net working
capital of Acorn.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Representations and
Warranties</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Acorn has made customary
representations and warranties in the Acorn Purchase Agreement, including, among other things, its (and certain of its subsidiaries&rsquo;)
capital structure and organization, financial condition and business, operations, absence of conflicts or violations, licenses
and other intellectual property rights and assets. Similarly, RLJ has made customary representations and warranties in the Acorn
Purchase Agreement relating to, among other things, its organization, capitalization, financial statements, and RLJ&rsquo;s public
filings with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Acorn Shareholders
have made customary representations and warranties relating to beneficial ownership and absence of encumbrances, organization and
enforceability.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Conditions to Completion
of the Acorn Transaction</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consummation of the
Acorn Transaction is subject to customary conditions, including the expiration or termination of the waiting period under the United
States Hart-Scott-Rodino Antitrust Improvements Act of 1976.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consummation of the
Acorn Transaction is also subject to other conditions, including (i) the consummation of Merger Transaction and (ii) the absence
of any order prohibiting or restraining the Acorn Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, RLJ&rsquo;s
obligation to close the Acorn Transaction is conditioned upon, among other things, (i) the accuracy of Acorn&rsquo;s representations
and warranties in the Acorn Purchase Agreement and performance by Acorn of its covenants and agreements in the Acorn Purchase Agreement,
(ii) no material adverse change of Acorn, (iii) RLJ having an aggregate of at least $92,000,000 available in cash and (iv) RLJ
having received evidence that, immediately prior to the closing of the Acorn Transaction, Acorn will have purchased the minority
interests in two of its foreign subsidiaries that are currently held by third parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Acorn&rsquo;s obligation
to close the Acorn Transaction is also conditioned upon, among other things, (i) the accuracy of RLJ&rsquo;s representations and
warranties in the Acorn Purchase Agreement and performance by RLJ of its covenants and agreements in the Acorn Purchase Agreement,
(ii) no material adverse change of RLJ and (iii) certain current directors and officers of RLJ, Image and Acorn being the directors
and/or officers of RLJ Entertainment as of the consummation of the Acorn Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Acorn Purchase
Agreement contemplates that the parties will use all commercially reasonable efforts to do all things necessary, proper or advisable
to consummate the Acorn Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Indemnification by
Acorn Shareholders</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the terms
of the Acorn Purchase Agreement, the Acorn Shareholders must indemnify and reimburse RLJ and its affiliates for all losses and
claims, including third party claims, arising out of: (i)&nbsp;any breach of the Acorn Purchase Agreement or the other transaction
documents by the Acorn Shareholders, Acorn or Acorn&rsquo;s subsidiaries; (ii)&nbsp;any of Acorn or Acorn&rsquo;s subsidiaries&rsquo;
transaction costs not listed on the transaction costs spreadsheet as costs to be deducted from the purchase price; (iii)&nbsp;any
incentive payment obligations; (iv)&nbsp;severance payment obligations not disclosed; (v)&nbsp;the granting, exercise, transfer
or cancellation of any Acorn or Acorn subsidiary stock purchase rights on or after the date of the Acorn Purchase Agreement; (vi)&nbsp;any
third party claim arising out of any actions of Acorn or Acorn&rsquo;s subsidiaries or any of their affiliates on or prior to the
closing date; and (vii)&nbsp;any fraud of Acorn or Acorn&rsquo;s subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each of Acorn, Acorn&rsquo;s
subsidiaries and the Acorn Shareholders waived any right to any amount held in the Trust Account, and they have agreed not to make
any claim against any fund in the Trust Account. Each Acorn Shareholder also waived, effective as of the date of the Acorn Purchase
Agreement and as of the closing date, any and all claims against Acorn or Acorn&rsquo;s subsidiaries or any present or former director,
officer, employee or agent of Acorn or Acorn&rsquo;s subsidiaries.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Termination of the
Acorn Purchase Agreement and Termination Fee</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Acorn Purchase
Agreement may be terminated prior to the consummation of the Acorn Transaction by mutual consent of the parties. In addition, the
Acorn Purchase Agreement may be terminated: (i)&nbsp;by either party (A) if&nbsp;the Acorn Transaction has not closed by November
22, 2012; (B) if the consummation of the Acorn Transaction becomes illegal or otherwise prohibited by law;&nbsp;(C) in the event
of a material breach of a representation, warranty, covenant, or agreement by the other party, if such breach is not cured within
fifteen business days after notice of such material breach by the non-breaching party; (D) if the Merger Agreement is not approved
by the stockholders of either RLJ or Image; and (ii)&nbsp;by RLJ (A) if&nbsp;the Merger Agreement is terminated for any reason;
or (B)&nbsp;if the estimated net working capital of Acorn as of the closing is more than $5,000,000 less than the agreed upon working
capital target amount specified in the Acorn Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the Acorn Purchase
Agreement is terminated (i)&nbsp;because the Acorn Transaction has not closed by November 22, 2012 (and, at the time of such termination,
RLJ does not have an aggregate of at least $92,000,000 in cash), (ii) by Acorn because of RLJ&rsquo;s material breach, (iii)&nbsp;by
RLJ because the Merger Agreement is terminated for any reason, or (iv)&nbsp;by either RLJ or Acorn because the Merger Agreement
is not approved by the stockholders of either RLJ or Image, then RLJ must pay Acorn a $1,000,000 termination fee, as liquidated
damages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of the Acorn
Purchase Agreement is filed with this Current Report on Form 8-K as Exhibit 2.2 and is incorporated herein by reference. The foregoing
description of the Acorn Purchase Agreement is qualified in entirety by reference to the full text of the Acorn Purchase Agreement
filed with this Current Report on Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Forward-Looking Statements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><BR>
<I>This Current Report on Form 8-K may include &ldquo;forward looking statements&rdquo; within the meaning of the &ldquo;safe harbor&rdquo;
provisions of the United Stated Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified
by the use of words such as &ldquo;anticipate&rdquo;, &ldquo;believe&rdquo;, &ldquo;expect&rdquo;, &ldquo;estimate&rdquo;, &ldquo;plan&rdquo;,
&ldquo;outlook&rdquo;, and &ldquo;project&rdquo; and other similar expressions that predict or indicate future events or trends
or that are not statements of historical matters. Investors are cautioned that such forward looking statements with respect to
revenues, earnings, performance, strategies, prospects and other aspects of the businesses of RLJ, RLJ Entertainment, Image, Acorn
and the combined group after completion of the proposed Transactions are based on current expectations that are subject to risks
and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such
forward looking statements. These factors include, but are not limited to: (1)&nbsp;the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger Agreement, the Preferred Stock Purchase Agreement, or the Acorn
Purchase Agreement; (2)&nbsp;the outcome of any legal proceedings that may be instituted against RLJ, Image or others following
announcement of the Merger Agreement, the Acorn Purchase Agreement and the Transactions; (3)&nbsp;the inability to complete the
Merger Transactions due to the failure to obtain approval of the stockholders of RLJ or Image; (4)&nbsp;delays in obtaining, adverse
conditions contained in, or the inability to obtain necessary regulatory approvals required to complete the Transactions; (5)&nbsp;the
risk that the proposed Transactions disrupt current plans and operations as a result of the announcement and consummation of the
Transactions described herein; (6) the ability to recognize the anticipated benefits of the proposed Transactions; (7)&nbsp;costs
related to the proposed Transactions; (8)&nbsp;changes in applicable laws or regulations; (9)&nbsp;the possibility that Image or
Acorn may be adversely affected by other economic, business, and/or competitive factors; and (10)&nbsp;other risks and uncertainties
indicated from time to time in filings with the SEC by RLJ, RLJ Entertainment or Image. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Investors are referred to the most recent
reports filed with the SEC by RLJ and Image. Investors are cautioned not to place undue reliance upon any forward-looking statements,
which speak only as of the date made, and RLJ undertakes no obligation to update or revise the forward-looking statements, whether
as a result of new information, future events or otherwise.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Additional Information</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">RLJ Entertainment intends to file with
the SEC a Registration Statement on Form S-4, which will include a joint preliminary proxy statement of RLJ and Image and a prospectus
in connection with the proposed Transactions. RLJ and Image will mail a definitive proxy statement and other relevant documents
to the stockholders of the respective companies. Stockholders of RLJ and Image and other interested persons are advised to read,
when available, the joint preliminary proxy statement, and amendments thereto, and definitive proxy statement in connection with
RLJ&rsquo;s and Image&rsquo;s solicitation of proxies for the special meeting to be held to approve the Merger Transaction because
these proxy statements will contain important information about RLJ, Image, Acorn and the Transactions. The definitive proxy statement
will be mailed to stockholders of RLJ and Image as of a record date to be established for voting on the Merger Transaction. Stockholders
will also be able to obtain copies of the registration statement and the joint proxy statement/prospectus, without charge, once
available, at the SEC&rsquo;s Internet site at http://www.sec.gov or by directing a request to: Lisa Warner Pickrum at 301.280.7703
or RLJA@rljcompanies.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Participants in the Transaction</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">RLJ Entertainment, RLJ, Image and their
respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders
of RLJ and Image in connection with the proposed Transactions. Information regarding the officers and directors of RLJ is available
in RLJ&rsquo;s annual report on Form 10-K for the year ended December&nbsp;31, 2011, which has been filed with the SEC. Information
regarding the officers and directors of Image is available in Image&rsquo;s annual report on Form 10-K/A for the year ended March&nbsp;31,
2011, which has been filed with the SEC. Additional information regarding the interests of such potential participants will also
be included in the Registration Statement on Form S-4 (and will be included in the definitive proxy statement/prospectus for the
proposed business combination) and the other relevant documents filed with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Disclaimer</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><BR>
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of
a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 9.01. Financial Statements and
Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(d) Exhibits</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">2.1*</TD><TD STYLE="text-align: justify">Agreement and Plan of Merger, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and
Image Entertainment, Inc.</TD></TR>                                   <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">2.2*</TD><TD STYLE="text-align: justify">Stock Purchase Agreement, dated as of April 2, 2012, by and among RLJ Acquisition, Inc., Acorn
Media Group, Inc., the shareholders of Acorn Media Group, Inc. and Peter Edwards, as the Shareholder Representative.</TD></TR>                                                                                                                              <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">10.1</TD><TD STYLE="text-align: justify">Preferred Stock Purchase Agreement, dated as of April 2, 2012, by and between RLJ Acquisition,
Inc. and the holders of the shares of Series B Preferred Stock of Image Entertainment, Inc.</TD></TR>                                                                                                     <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">10.2</TD><TD STYLE="text-align: justify">Stockholder Support Agreement, dated as of April 2, 2012, by and between RLJ Acquisition, Inc.
and JH Partners Evergreen Fund, LP, JH Investment Partners III, LP and JH Investment Partners GP Fund III, LLC.</TD></TR></TABLE>

________________

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">*</TD><TD STYLE="text-align: justify">Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation
S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities
and Exchange Commission upon its request.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">RLJ Acquisition, Inc. </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; width: 55%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; width: 6%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; width: 39%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:&nbsp;April 6, 2012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By: <U> </U></TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ H. Van Sinclair</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD>H. Van Sinclair</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>President and Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>EXHIBIT INDEX</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 11%; padding-right: 0; padding-bottom: 0; padding-left: 0; text-decoration: underline">Exhibit No.</TD>
    <TD STYLE="width: 89%; padding-right: 0; padding-bottom: 0; padding-left: 0; text-decoration: underline">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">2.1*</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">Agreement and Plan of Merger, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and Image Entertainment, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">2.2*</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">Stock Purchase Agreement, dated as of April 2, 2012, by and among RLJ Acquisition, Inc., Acorn Media Group, Inc., the shareholders of Acorn Media Group, Inc. and Peter Edwards, as the Shareholder Representative.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">10.1</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">Preferred Stock Purchase Agreement, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and the holders of the shares of Series B Preferred Stock of Image Entertainment, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">10.2</TD>
    <TD STYLE="padding-right: 0; padding-bottom: 0; padding-left: 0">Stockholder Support Agreement, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and JH Partners Evergreen Fund, LP, JH Investment Partners III, LP and JH Investment Partners GP Fund III, LLC.</TD></TR>
</TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">*&#9;Certain of the exhibits and schedules to this Exhibit have
been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of all omitted
exhibits and schedules to the Securities and Exchange Commission upon its request.</P>

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
April
2, 2012
RLJ Acquisition, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
000-54276
27-3970903
(Commission File Number)
(IRS Employer Identification No.)
3 Bethesda Metro Center, Suite 1000
Bethesda, MD
20814
(Address of Principal Executive Offices)
(Zip Code)
(301) 280-7737
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
S
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
£
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
1
Item 1.01.	Entry Into A Material
Definitive Agreement.
On April 2, 2012,
RLJ Acquisition, Inc. ("
RLJ
") and Image Entertainment, Inc. ("
Image
") entered into an
Agreement and Plan of Merger (the "
Merger Agreement
"). Concurrently with the execution of the Merger
Agreement, RLJ, Acorn Media Group, Inc. ("
Acorn
"), the shareholders of Acorn (the "
Acorn
Shareholders
") and Peter Edwards, as the Shareholder Representative, entered into a Stock Purchase Agreement (the
"
Acorn Purchase Agreement
"). After the completion of the proposed business combination contemplated by the
Merger Agreement and the Acorn Purchase Agreement, the current stockholders of Image and Acorn will own approximately 11% and
5%, respectively, of a new combined company, RLJ Entertainment, Inc. ("
RLJ Entertainment
"), and the
current stockholders of RLJ who purchased shares in RLJ's initial public offering and RLJ's founders will own
approximately 84% of RLJ Entertainment, assuming that none of the RLJ stockholders exercise their rights to redeem stock they
hold in the RLJ Share Redemption (as described below). RLJ Entertainment is expected apply to list its shares on The Nasdaq
Stock Market.
Merger Agreement
The Mergers
On April 2, 2012, RLJ
and Image entered into the Merger Agreement. The Merger Agreement provides that RLJ will incorporate three subsidiaries: (i) RLJ
Entertainment, a Nevada corporation, which will initially be directly wholly owned by RLJ; (ii) RLJ Merger Sub I, Inc., a Nevada
corporation ("
RLJ Sub
"), which will be wholly owned by RLJ Entertainment, and (iii) RLJ Merger Sub II, Inc.,
a Delaware corporation ("
Image Sub
"), which will also be wholly owned by RLJ Entertainment. At the closing of
the transactions contemplated by the Merger Agreement (the "
Merger Transaction
"), Image Sub will merge with
and into Image, with Image surviving such merger as a wholly owned subsidiary of RLJ Entertainment, and RLJ Sub will merge with
and into RLJ, with RLJ surviving such merger as a wholly owned subsidiary of RLJ Entertainment.
Consideration
At the closing of the
Merger Transaction, the outstanding shares of Image common stock (excluding dissenting shares) will be automatically converted,
in the aggregate, into the right to receive a total of 2,289,000 shares of common stock of RLJ Entertainment, subject to adjustment
as set forth in the Merger Agreement, except that shares of Image common stock held by Image, Image Sub, RLJ Entertainment, or
any direct or indirect wholly owned subsidiary of RLJ Entertainment or Image will be canceled without any conversion, payment,
or distribution.
All shares of the Series
B Preferred Stock of Image will have been purchased by RLJ immediately prior to the consummation of the Merger Transaction pursuant
to the Preferred Stock Purchase Agreement described below. As a result of the Merger Transaction, each share of the Series B Preferred
Stock of Image will be canceled, without conversion, payment, or distribution.
2
At the closing of the
Merger Transaction, each share of RLJ common stock will be automatically converted into one share of common stock of RLJ Entertainment.
Each warrant to purchase shares of RLJ common stock will convert into a right to acquire equal number of shares of common stock
of RLJ Entertainment on the same contractual terms and conditions as were in effect immediately prior to the closing of the Merger
Transaction.
In connection with
the Merger Transactions, the holders of 13,622,664 shares of common stock of RLJ which were purchased in RLJ's initial public
offering may effect redemption of their shares of common stock of RLJ for cash in an amount equal to their pro rata share of the
aggregate amount on deposit in a trust account holding the proceeds of RLJ's initial public offering (the "
RLJ Share
Redemption
"). RLJ has no specified maximum redemption threshold; however, RLJ will not redeem its shares in an amount
that would cause its stockholders' equity to be less than $5,000,001.
Representations and Warranties
Image has made customary
representations and warranties in the Merger Agreement relating to, among other things, its organization, capitalization, financial
statements, absence of certain changes, and Image's public filings with the Securities and Exchange Commission (the "
SEC
").
Similarly, RLJ has made customary representations and warranties in the Merger Agreement relating to, among other things, its organization,
capitalization, financial statements, absence of certain changes, and RLJ's public filings with the SEC.
Conditions to Completion
of the Merger Transaction
Consummation of the
Merger Transaction is subject to customary conditions, including receipt of any necessary governmental or third party consents.
Consummation of the
Merger Transaction is also subject to other conditions, including (i) the registration statement of RLJ Entertainment on Form S-4,
which will include a joint proxy statement of Image and RLJ, having been declared effective by the SEC, (ii) the stockholders of
Image and RLJ having approved and adopted the Merger Agreement, (iii) absence of a governmental order that would make the
Merger Transaction illegal, (iv) the Acorn Purchase Agreement (as described below) having not been terminated and the conditions
to the consummation of the Acorn Transaction (as described below) having been satisfied, and (v) RLJ having an aggregate of
at least $92,000,000 available in cash.
Additionally, RLJ's
obligation to close the Merger Transaction is conditioned upon, among other things, (i) the accuracy of Image's representations
and warranties in the Merger Agreement and performance by Image of its covenants and agreements in the Merger Agreement, (ii) no
material adverse change of Image, (iii) certain stockholders of Image having contributed an aggregate of up to 35,401,977 shares
of Image common stock to Image, and (iv) the consummation of the Preferred Stock Purchase Transaction (as described below).
Image's obligation
to close the Merger Transaction is also conditioned upon, among other things, (i) the accuracy of RLJ's representations and
warranties in the Merger Agreement and performance by RLJ of its covenants and agreements in the Merger Agreement, (ii) no material
adverse change of RLJ, (iii) RLJ SPAC Acquisition, LLC having contributed 792,739 shares of common stock of RLJ and warrants to
purchase 1,000,000 shares of common stock of RLJ to RLJ and (iv) the consummation of the Preferred Stock Purchase Transaction.
3
Claims against Trust
Account
Under the terms of
the Merger Agreement, Image waived any right to any amount held in the trust account established pursuant to the Investment Management
Trust Agreement, dated as of February 22, 2011, by and between RLJ and Continental Stock Transfer & Trust Co. (the "
Trust
Account
"), and it has agreed not to make any claim against any funds in the Trust Account.
Stockholder Meetings
Pursuant to the terms
of the Merger Agreement, each of RLJ and Image is required to promptly call a meeting of its respective stockholders for the purpose
of voting upon the Merger Agreement. Pursuant to the Support Agreement described below, JH Partners Evergreen Fund, LP, JH Investment
Partners III, LP and JH Investment Partners GP Fund III, LLC, the controlling stockholders of Image, have agreed to vote the Image
shares they control, directly or indirectly, in favor of the Merger Transaction. In connection with the initial public offering
of RLJ, each of the RLJ initial stockholders agreed to vote all of their shares of RLJ common stock acquired in, or subsequent
to, RLJ's initial public offering, which shares constitute approximately 20% of RLJ's outstanding shares of common
stock, for the Merger Transaction.
Registration Statement
The Merger Agreement
provides that RLJ Entertainment will prepare and file with the SEC a registration statement on Form S-4 in connection with the
registration of the shares and warrants of RLJ Entertainment to be issued pursuant to the Merger Agreement and the Acorn Purchase
Agreement, which registration statement will include a proxy statement of each of Image and RLJ to be sent to the stockholders
of RLJ and Image. RLJ, Image and RLJ Entertainment are required to use their reasonable efforts to have such registration statement
declared effective as promptly as practicable thereafter.
Termination of the
Merger Agreement
The Merger Agreement
may be terminated prior to consummation of the Merger Transaction by mutual consent of the parties. In addition, the Merger Agreement
may be terminated: (i) by either party (A) if the Merger Transaction has not closed by November 22, 2012; (B) if the
consummation of the Merger Transaction becomes illegal or otherwise prohibited by law, (C) in the event of a breach of a representation,
warranty, covenant or agreement by the other party, if such breach is not cured within thirty days after notice of such breach
by the non-breaching party; (D) if the Merger Agreement is not approved and adopted by the stockholders of either RLJ or Image;
(ii) by RLJ upon certain "triggering events", which include, among other things, withdrawal, modification and
changes by the board of directors of Image of the recommendation to the stockholders of Image in a manner adverse to RLJ or recommendation
by the board of directors of Image of a competing transaction to the stockholders of Image; and (iii) upon written notice by Image,
at any time prior to approval by the Image stockholders of the Merger Agreement, to enter into a definitive agreement with respect
to a superior proposal.
4
Expenses and Termination
Fee
The Merger Agreement
provides that each party will be responsible for its own costs in connection with the Merger Transaction, except that Image and
RLJ will each pay half of the expenses relating to certain enumerated costs, including the preparation, filing and mailing of the
registration statement and joint proxy statement.
Image must pay a termination
fee of $1,620,000 plus RLJ's expenses, if:
·
RLJ terminates the Merger Agreement pursuant to a "triggering event" as described above;
·
either party terminates the Merger Agreement pursuant to a failure by the stockholders of Image
to approve the Merger Agreement, and prior to such failure to approve, a competing transaction with respect to Image was publicly
announced; or
·
Image terminates the Merger Agreement pursuant to the provision allowing termination in order for
Image to accept a superior proposal.
In addition, if RLJ
is required to pay the termination fee to Acorn under the Acorn Purchase Agreement as described below, Image must pay one-half
of such termination fee actually paid by RLJ to Acorn pursuant to the Acorn Purchase Agreement, not to exceed $500,000.
A copy of the Merger
Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description
of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement filed with this Current
Report on Form 8-K. The Merger Agreement is included to provide investors and security holders with information regarding its terms.
It is not intended to provide any other factual information about Image or the other parties thereto. In particular, the assertions
embodied in representations and warranties by Image and RLJ contained in the Merger Agreement are qualified by information in the
disclosure schedules provided by Image and RLJ in connection with the signing of the Merger Agreement. These disclosure schedules
contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger
Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk
between Image and RLJ, rather than establishing matters as facts. Accordingly, investors and security holders should not rely on
the representations and warranties in the Merger Agreement as characterizations of the actual state of facts about Image or RLJ.
5
Series B Preferred Stock Purchase
Agreement
In connection with
the Merger Transaction, on the date of the Merger Agreement, RLJ entered into a Preferred Stock Purchase Agreement (the "
Preferred
Stock Purchase Agreement
") with the holders (the "
Preferred Holders
") of the shares of Series B Preferred
Stock of Image (the "
Preferred Shares
"). Pursuant to the Preferred Stock Purchase Agreement, the Preferred Holders
will sell all of the Preferred Shares to RLJ (the "
Preferred Stock Purchase Transaction
").
The aggregate purchase
price for all of such Preferred Shares is equal to $22,600,000. Certain Preferred Holders will receive only cash in the aggregate
amount of $600,000 allocated pro rata among such Preferred Holders. The remaining Preferred Holders will receive $22,000,000, comprised
of cash and subordinated promissory notes of RLJ Entertainment in amounts to be determined by the amount of cash available to RLJ
at the closing of the Merger Agreement.
The Preferred Holders
have made customary representations and warranties in the Preferred Stock Purchase Agreement relating to organization, authority
and ownership of the Preferred Shares. Preferred Holders receiving promissory notes have also made additional representations and
warranties relating to the investment in the subordinated promissory notes and governmental compliance, including representations
with respect to acquisition and resale of restricted securities and their status as accredited investors. RLJ has made customary
representations and warranties in the Preferred Stock Purchase Agreement relating to organization, authority and absence of conflicts.
RLJ has agreed to provide
registration rights to certain of the Preferred Holders. Each such Preferred Holder is entitled to demand registration on Form
S-3 of the shares of common stock of RLJ Entertainment being receiving by them pursuant to the Merger Transactions. Such registration
rights shall be available to the applicable Preferred Holders no more than two times commencing nine months after the closing of
the Merger Agreement and otherwise pursuant to the terms of a registration rights agreement to be entered into by RLJ Acquisition
and the applicable Preferred Holders at the closing of the Merger Agreement; provided that RLJ Entertainment shall be obligated
to file a Form S-3 registration statement with the SEC in connection with a demand by the Preferred Holders only if RLJ Entertainment
shall be eligible to use Form S-3 at such time
The representations
and warranties of the parties survive the closing of the Preferred Stock Purchase Transaction indefinitely. All covenants and agreements
in the Preferred Stock Purchase Agreement remain in full force and effect for (i) 12 months after the closing of the Preferred
Stock Purchase Transaction or (ii) for those covenants and agreements that are required to be performed in whole or in part after
the closing, 12 months from the date by which such performance is required. Any claim made within the timeframes stated above will
survive until such claim is finally and fully resolved.
6
Each Preferred Holder
must indemnify RLJ and its affiliates for all losses and claims (including reasonable attorneys' and consultants' fees)
arising out of any breach by such Preferred Holder of any representation, warranty, covenant or agreement made by such Preferred
Holder under the Preferred Stock Purchase Agreement. Similarly, RLJ must indemnify the Preferred Holders and their affiliates for
all losses and claims (including reasonable attorneys' and consultants' fees) arising out of any breach by RLJ of any
representation, warranty, covenant or agreement made by RLJ under the Preferred Stock Purchase Agreement.
The indemnification
obligations of each Preferred Holder is limited to the purchase price received by such Preferred Holder, and the indemnification
obligations of RLJ to each Preferred Holder are limited to the purchase price paid to such Preferred Holder.
Pursuant to the Preferred
Stock Purchase Agreement, the Preferred Holders may not sell, assign, transfer or otherwise subject to other encumbrance any Preferred
Shares prior to the closing of the Preferred Stock Purchase Transaction. All parties agreed to use all reasonable efforts to consummate
the Preferred Stock Purchase Transaction.
The Preferred Stock
Purchase Agreement may be terminated prior to the consummation of the Preferred Stock Purchase Transaction by mutual consent of
the parties. In addition, the Preferred Stock Purchase Agreement may be terminated: (i) by the Preferred Holders or RLJ (A) if
the Preferred Stock Purchase Transaction has not closed by November 22, 2012; (B) in the event any governmental order prohibiting
the Preferred Stock Purchase Transaction is final and nonappealable; (ii) by RLJ (A) if the Merger Agreement is terminated for
any reason; or (B) if the Preferred Holders have breached any of their representations, warranties, covenants or agreements in
the Preferred Stock Purchase Agreement if such breach has not been cured within thirty days of notice given by RLJ to the Preferred
Holders; or (iii) by the Preferred Holders if RLJ has breached any of its representations, warranties, covenants or agreements
in the Preferred Stock Purchase Agreement if such breach has not been cured within thirty days of notice given by the Preferred
Holders to Company.
A copy of the Preferred
Stock Purchase Agreement is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
The foregoing description of the Preferred Stock Purchase Agreement is qualified in its entirety by reference to the full text
of the Preferred Stock Purchase Agreement filed with this Current Report on Form 8-K.
Subordinated Promissory Notes
The subordinated promissory
notes of RLJ Entertainment issued pursuant to the Preferred Stock Purchase Agreement will constitute unsecured subordinated obligations
of RLJ Entertainment. The subordinated promissory notes will bear interest at the rate of 12% per annum (increasing to 14% per
annum during the continuance of an event of default), and accrued interest for each calendar year will be due and payable on May
15 of the following calendar year, and on the maturity date described below. A minimum of 5.4% per annum of interest will be payable
in cash on each interest payment date, and additional cash interest may be payable, at RLJ Entertainment's discretion, under
certain circumstances. Any interest which is not paid in cash will be payable through the issuance of additional subordinated promissory
notes, or, at the holder's option, in shares of common stock of RLJ Entertainment valued at their market price at or about
the time of issuance of such common stock of RLJ Entertainment. The principal of the subordinated promissory notes will be due
and payable in a single payment on the earlier of the sixth anniversary of issuance or one year from the original stated maturity
date of RLJ Entertainment's senior secured debt, or upon a change of control of RLJ Entertainment. The subordinated promissory
notes will be subordinated to the prior payment in full of RLJ Entertainment's senior secured debt and may be further subordinated
to additional indebtedness which RLJ Entertainment may incur from time to time, subject to satisfaction of certain financial tests.
7
A copy of the form
of subordinated promissory note is attached as Exhibit A to the Preferred Stock Purchase Agreement filed with this Current Report
on Form 8-K as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the form of subordinated promissory
note is qualified in entirety by reference to the full text of the form of subordinated promissory note filed with this Current
Report on Form 8-K.
Stockholder Support Agreement
In connection with
the Merger Transaction, on the date of the Merger Agreement, RLJ also entered into a Stockholder Support Agreement (the "
Support
Agreement
") with JH Partners Evergreen Fund, LP, JH Investment Partners III, LP and JH Investment Partners GP Fund III,
LLC (the "
Image Stockholders
"), who collectively own approximately 70% of the outstanding shares of Image common
stock.
Pursuant to the terms
of the Support Agreement, each Image Stockholder agreed to vote all of such Image Stockholder's shares (i) in favor of the
approval and adoption of the Merger Agreement and approval of the Merger Transaction, (ii) against any action, agreement or transaction
or proposal (including any competing transaction) that would result in a breach of any covenant, representation or warranty or
any other obligation or agreement of Image under the Merger Agreement or that could result in any of the conditions to Image's
obligations under the Merger Agreement not being fulfilled, and (iii) in favor of any other matter necessary to the consummation
of the Merger Transaction considered and voted upon by the stockholders of Image.
Each Image Stockholder
also agreed not to sell, transfer or dispose of or otherwise encumber any of the shares of the common stock of Image that such
Image Stockholder owns or enter into a voting arrangement that is inconsistent with the terms of the Support Agreement. Each Image
Stockholder further agreed not to solicit any competing transaction or participate in any discussions regarding a superior proposal.
The Support Agreement
and the obligations of the Image Stockholders under the Support Agreement automatically terminate upon the earlier to occur of
(i) the consummation of the Merger Transaction and (ii) the termination of the Merger Agreement in accordance with its
terms.
A copy of the Support
Agreement is filed with this Current Report on Form 8-K as Exhibit 10.2 and is incorporated herein by reference. The foregoing
description of the Support Agreement is qualified in its entirety by reference to the full text of the Support Agreement filed
with this Current Report on Form 8-K.
8
Acorn Purchase Agreement
Stock Purchase
On the date of the Merger Agreement,
concurrently with the execution of the Merger Agreement, RLJ, Acorn, the Acorn Shareholders and Peter Edwards, as the Shareholder
Representative entered into the Acorn Purchase Agreement. Pursuant to the Acorn Purchase Agreement, the Acorn Shareholders will
sell all of the issued and outstanding shares of capital stock of Acorn, par value $0.01 per share, to RLJ (the "
Acorn
Transaction
" and, together with the Merger Transaction and the Preferred Stock Purchase Transaction, the "
Transactions
").
Consideration
The aggregate purchase
price to be paid to the Acorn Shareholders is comprised of (i) $101,818,343 in cash, plus an amount equal to the aggregate
transaction costs incident to the negotiation, preparation or consummation of the acquisition by Acorn Productions Limited, a wholly
owned subsidiary of Acorn, of Agatha Christie Limited (except for those transaction costs funded from working capital of Acorn
or any Acorn subsidiary), (ii) 1,000,000 newly issued shares of common stock of RLJ Entertainment and (iii) newly issued
warrants to purchase 1,000,000 shares of the common stock of RLJ Entertainment. The cash portion of the purchase price to be paid
to the Acorn Shareholders at closing will be reduced by the (i) transaction costs incurred by Acorn and Acorn's subsidiaries
since January 1, 2012 in connection with the Acorn Transaction, including the payments required to be made to cancel the outstanding
options to purchase shares of capital stock of Acorn's subsidiaries and to buy out the minority holders of Acorn's
subsidiaries; (ii) the amount required to repay Acorn's SuntTrust Bank senior term loan and to repay the principal amount
of certain subordinated notes issued by Acorn; and (iii) $5,000,000 (an indemnification escrow, which amount will be released
from escrow within 3 days of the 18-month anniversary of the closing, less any amounts paid to or claimed by RLJ prior to the 18-month
anniversary of the closing). The cash purchase price will be subject to a post-closing adjustment based upon the closing net working
capital of Acorn.
Representations and
Warranties
Acorn has made customary
representations and warranties in the Acorn Purchase Agreement, including, among other things, its (and certain of its subsidiaries')
capital structure and organization, financial condition and business, operations, absence of conflicts or violations, licenses
and other intellectual property rights and assets. Similarly, RLJ has made customary representations and warranties in the Acorn
Purchase Agreement relating to, among other things, its organization, capitalization, financial statements, and RLJ's public
filings with the SEC.
The Acorn Shareholders
have made customary representations and warranties relating to beneficial ownership and absence of encumbrances, organization and
enforceability.
9
Conditions to Completion
of the Acorn Transaction
Consummation of the
Acorn Transaction is subject to customary conditions, including the expiration or termination of the waiting period under the United
States Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Consummation of the
Acorn Transaction is also subject to other conditions, including (i) the consummation of Merger Transaction and (ii) the absence
of any order prohibiting or restraining the Acorn Transaction.
Additionally, RLJ's
obligation to close the Acorn Transaction is conditioned upon, among other things, (i) the accuracy of Acorn's representations
and warranties in the Acorn Purchase Agreement and performance by Acorn of its covenants and agreements in the Acorn Purchase Agreement,
(ii) no material adverse change of Acorn, (iii) RLJ having an aggregate of at least $92,000,000 available in cash and (iv) RLJ
having received evidence that, immediately prior to the closing of the Acorn Transaction, Acorn will have purchased the minority
interests in two of its foreign subsidiaries that are currently held by third parties.
Acorn's obligation
to close the Acorn Transaction is also conditioned upon, among other things, (i) the accuracy of RLJ's representations and
warranties in the Acorn Purchase Agreement and performance by RLJ of its covenants and agreements in the Acorn Purchase Agreement,
(ii) no material adverse change of RLJ and (iii) certain current directors and officers of RLJ, Image and Acorn being the directors
and/or officers of RLJ Entertainment as of the consummation of the Acorn Transaction.
The Acorn Purchase
Agreement contemplates that the parties will use all commercially reasonable efforts to do all things necessary, proper or advisable
to consummate the Acorn Transaction.
Indemnification by
Acorn Shareholders
Pursuant to the terms
of the Acorn Purchase Agreement, the Acorn Shareholders must indemnify and reimburse RLJ and its affiliates for all losses and
claims, including third party claims, arising out of: (i) any breach of the Acorn Purchase Agreement or the other transaction
documents by the Acorn Shareholders, Acorn or Acorn's subsidiaries; (ii) any of Acorn or Acorn's subsidiaries'
transaction costs not listed on the transaction costs spreadsheet as costs to be deducted from the purchase price; (iii) any
incentive payment obligations; (iv) severance payment obligations not disclosed; (v) the granting, exercise, transfer
or cancellation of any Acorn or Acorn subsidiary stock purchase rights on or after the date of the Acorn Purchase Agreement; (vi) any
third party claim arising out of any actions of Acorn or Acorn's subsidiaries or any of their affiliates on or prior to the
closing date; and (vii) any fraud of Acorn or Acorn's subsidiaries.
Each of Acorn, Acorn's
subsidiaries and the Acorn Shareholders waived any right to any amount held in the Trust Account, and they have agreed not to make
any claim against any fund in the Trust Account. Each Acorn Shareholder also waived, effective as of the date of the Acorn Purchase
Agreement and as of the closing date, any and all claims against Acorn or Acorn's subsidiaries or any present or former director,
officer, employee or agent of Acorn or Acorn's subsidiaries.
10
Termination of the
Acorn Purchase Agreement and Termination Fee
The Acorn Purchase
Agreement may be terminated prior to the consummation of the Acorn Transaction by mutual consent of the parties. In addition, the
Acorn Purchase Agreement may be terminated: (i) by either party (A) if the Acorn Transaction has not closed by November
22, 2012; (B) if the consummation of the Acorn Transaction becomes illegal or otherwise prohibited by law; (C) in the event
of a material breach of a representation, warranty, covenant, or agreement by the other party, if such breach is not cured within
fifteen business days after notice of such material breach by the non-breaching party; (D) if the Merger Agreement is not approved
by the stockholders of either RLJ or Image; and (ii) by RLJ (A) if the Merger Agreement is terminated for any reason;
or (B) if the estimated net working capital of Acorn as of the closing is more than $5,000,000 less than the agreed upon working
capital target amount specified in the Acorn Purchase Agreement.
If the Acorn Purchase
Agreement is terminated (i) because the Acorn Transaction has not closed by November 22, 2012 (and, at the time of such termination,
RLJ does not have an aggregate of at least $92,000,000 in cash), (ii) by Acorn because of RLJ's material breach, (iii) by
RLJ because the Merger Agreement is terminated for any reason, or (iv) by either RLJ or Acorn because the Merger Agreement
is not approved by the stockholders of either RLJ or Image, then RLJ must pay Acorn a $1,000,000 termination fee, as liquidated
damages.
A copy of the Acorn
Purchase Agreement is filed with this Current Report on Form 8-K as Exhibit 2.2 and is incorporated herein by reference. The foregoing
description of the Acorn Purchase Agreement is qualified in entirety by reference to the full text of the Acorn Purchase Agreement
filed with this Current Report on Form 8-K.
Forward-Looking Statements
This Current Report on Form 8-K may include "forward looking statements" within the meaning of the "safe harbor"
provisions of the United Stated Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified
by the use of words such as "anticipate", "believe", "expect", "estimate", "plan",
"outlook", and "project" and other similar expressions that predict or indicate future events or trends
or that are not statements of historical matters. Investors are cautioned that such forward looking statements with respect to
revenues, earnings, performance, strategies, prospects and other aspects of the businesses of RLJ, RLJ Entertainment, Image, Acorn
and the combined group after completion of the proposed Transactions are based on current expectations that are subject to risks
and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such
forward looking statements. These factors include, but are not limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger Agreement, the Preferred Stock Purchase Agreement, or the Acorn
Purchase Agreement; (2) the outcome of any legal proceedings that may be instituted against RLJ, Image or others following
announcement of the Merger Agreement, the Acorn Purchase Agreement and the Transactions; (3) the inability to complete the
Merger Transactions due to the failure to obtain approval of the stockholders of RLJ or Image; (4) delays in obtaining, adverse
conditions contained in, or the inability to obtain necessary regulatory approvals required to complete the Transactions; (5) the
risk that the proposed Transactions disrupt current plans and operations as a result of the announcement and consummation of the
Transactions described herein; (6) the ability to recognize the anticipated benefits of the proposed Transactions; (7) costs
related to the proposed Transactions; (8) changes in applicable laws or regulations; (9) the possibility that Image or
Acorn may be adversely affected by other economic, business, and/or competitive factors; and (10) other risks and uncertainties
indicated from time to time in filings with the SEC by RLJ, RLJ Entertainment or Image.
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Investors are referred to the most recent
reports filed with the SEC by RLJ and Image. Investors are cautioned not to place undue reliance upon any forward-looking statements,
which speak only as of the date made, and RLJ undertakes no obligation to update or revise the forward-looking statements, whether
as a result of new information, future events or otherwise.
Additional Information
RLJ Entertainment intends to file with
the SEC a Registration Statement on Form S-4, which will include a joint preliminary proxy statement of RLJ and Image and a prospectus
in connection with the proposed Transactions. RLJ and Image will mail a definitive proxy statement and other relevant documents
to the stockholders of the respective companies. Stockholders of RLJ and Image and other interested persons are advised to read,
when available, the joint preliminary proxy statement, and amendments thereto, and definitive proxy statement in connection with
RLJ's and Image's solicitation of proxies for the special meeting to be held to approve the Merger Transaction because
these proxy statements will contain important information about RLJ, Image, Acorn and the Transactions. The definitive proxy statement
will be mailed to stockholders of RLJ and Image as of a record date to be established for voting on the Merger Transaction. Stockholders
will also be able to obtain copies of the registration statement and the joint proxy statement/prospectus, without charge, once
available, at the SEC's Internet site at http://www.sec.gov or by directing a request to: Lisa Warner Pickrum at 301.280.7703
or RLJA@rljcompanies.com.
Participants in the Transaction
RLJ Entertainment, RLJ, Image and their
respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders
of RLJ and Image in connection with the proposed Transactions. Information regarding the officers and directors of RLJ is available
in RLJ's annual report on Form 10-K for the year ended December 31, 2011, which has been filed with the SEC. Information
regarding the officers and directors of Image is available in Image's annual report on Form 10-K/A for the year ended March 31,
2011, which has been filed with the SEC. Additional information regarding the interests of such potential participants will also
be included in the Registration Statement on Form S-4 (and will be included in the definitive proxy statement/prospectus for the
proposed business combination) and the other relevant documents filed with the SEC.
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Disclaimer
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of
a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits
2.1*
Agreement and Plan of Merger, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and
Image Entertainment, Inc.
2.2*
Stock Purchase Agreement, dated as of April 2, 2012, by and among RLJ Acquisition, Inc., Acorn
Media Group, Inc., the shareholders of Acorn Media Group, Inc. and Peter Edwards, as the Shareholder Representative.
10.1
Preferred Stock Purchase Agreement, dated as of April 2, 2012, by and between RLJ Acquisition,
Inc. and the holders of the shares of Series B Preferred Stock of Image Entertainment, Inc.
10.2
Stockholder Support Agreement, dated as of April 2, 2012, by and between RLJ Acquisition, Inc.
and JH Partners Evergreen Fund, LP, JH Investment Partners III, LP and JH Investment Partners GP Fund III, LLC.
________________
*
Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation
S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities
and Exchange Commission upon its request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RLJ Acquisition, Inc.
Date: April 6, 2012
By:
/s/ H. Van Sinclair
Name:
H. Van Sinclair
Title:
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit No.
Description
2.1*
Agreement and Plan of Merger, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and Image Entertainment, Inc.
2.2*
Stock Purchase Agreement, dated as of April 2, 2012, by and among RLJ Acquisition, Inc., Acorn Media Group, Inc., the shareholders of Acorn Media Group, Inc. and Peter Edwards, as the Shareholder Representative.
10.1
Preferred Stock Purchase Agreement, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and the holders of the shares of Series B Preferred Stock of Image Entertainment, Inc.
10.2
Stockholder Support Agreement, dated as of April 2, 2012, by and between RLJ Acquisition, Inc. and JH Partners Evergreen Fund, LP, JH Investment Partners III, LP and JH Investment Partners GP Fund III, LLC.
________________
*	Certain of the exhibits and schedules to this Exhibit have
been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of all omitted
exhibits and schedules to the Securities and Exchange Commission upon its request.
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