diff --git a/release/amd64/mk-vmimage.sh b/release/amd64/mk-vmimage.sh
index 6ee148248cd5..b3ffd232f848 100755
--- a/release/amd64/mk-vmimage.sh
+++ b/release/amd64/mk-vmimage.sh
@@ -32,7 +32,7 @@
 # $FreeBSD$
 #
 
-PATH="/bin:/usr/bin:/sbin:/usr/sbin"
+PATH="/bin:/usr/bin:/sbin:/usr/sbin:/usr/local/bin:/usr/local/sbin"
 export PATH
 
 usage_vm_base() {
@@ -58,16 +58,25 @@ usage() {
 }
 
 panic() {
-	rc="${1}"
-	shift 1
 	msg="${@}"
 	printf "${msg}\n"
 	if [ ! -z "${mddev}" ]; then
 		mdconfig -d -u ${mddev}
 	fi
+	case ${cmd} in
+		vm-base)
+			# If the vm-base target fails, the vm-image target
+			# cannot possibly succeed.  Touch the .TARGET file
+			# so it is not attempted.
+			touch vm-image
+			;;
+		*)
+			# FALLTHROUGH
+			;;
+	esac
 	# Do not allow one failure case to chain through any remaining image
 	# builds.
-	exit 0
+	return 1
 }
 
 vm_create_baseimage() {
@@ -96,7 +105,7 @@ vm_create_baseimage() {
 	cd ${WORLDDIR} && \
 		make DESTDIR=${DESTDIR} \
 		installworld installkernel distribution || \
-		panic 1 "\n\nCannot install the base system to ${DESTDIR}."
+		panic "\n\nCannot install the base system to ${DESTDIR}."
 	chroot ${DESTDIR} /usr/bin/newaliases
 	echo '# Custom /etc/fstab for FreeBSD VM images' \
 		> ${DESTDIR}/etc/fstab
@@ -111,7 +120,7 @@ vm_create_baseimage() {
 			# This should never happen.  But, it has happened.
 			msg="Cannot umount(8) ${DESTDIR}\n"
 			msg="${msg}Something has gone horribly wrong."
-			panic 1 "${msg}"
+			panic "${msg}"
 		fi
 		sleep 1
 	done
@@ -141,11 +150,11 @@ vm_create_vmdisk() {
 	if [ -z "${mkimg_version}" ]; then
 		msg="Cannot determine mkimg(1) version.\n"
 		msg="${msg}Cannot continue without a known mkimg(1) version."
-		panic 0 "${msg}"
+		panic "${msg}"
 	fi
 
 	if ! mkimg --formats 2>/dev/null | grep -q ${FORMAT}; then
-		panic 0 "'${FORMAT}' is not supported by this mkimg(1).\n"
+		panic "'${FORMAT}' is not supported by this mkimg(1).\n"
 	fi
 
 	case ${FORMAT} in
diff --git a/release/i386/mk-vmimage.sh b/release/i386/mk-vmimage.sh
index 6ee148248cd5..b3ffd232f848 100755
--- a/release/i386/mk-vmimage.sh
+++ b/release/i386/mk-vmimage.sh
@@ -32,7 +32,7 @@
 # $FreeBSD$
 #
 
-PATH="/bin:/usr/bin:/sbin:/usr/sbin"
+PATH="/bin:/usr/bin:/sbin:/usr/sbin:/usr/local/bin:/usr/local/sbin"
 export PATH
 
 usage_vm_base() {
@@ -58,16 +58,25 @@ usage() {
 }
 
 panic() {
-	rc="${1}"
-	shift 1
 	msg="${@}"
 	printf "${msg}\n"
 	if [ ! -z "${mddev}" ]; then
 		mdconfig -d -u ${mddev}
 	fi
+	case ${cmd} in
+		vm-base)
+			# If the vm-base target fails, the vm-image target
+			# cannot possibly succeed.  Touch the .TARGET file
+			# so it is not attempted.
+			touch vm-image
+			;;
+		*)
+			# FALLTHROUGH
+			;;
+	esac
 	# Do not allow one failure case to chain through any remaining image
 	# builds.
-	exit 0
+	return 1
 }
 
 vm_create_baseimage() {
@@ -96,7 +105,7 @@ vm_create_baseimage() {
 	cd ${WORLDDIR} && \
 		make DESTDIR=${DESTDIR} \
 		installworld installkernel distribution || \
-		panic 1 "\n\nCannot install the base system to ${DESTDIR}."
+		panic "\n\nCannot install the base system to ${DESTDIR}."
 	chroot ${DESTDIR} /usr/bin/newaliases
 	echo '# Custom /etc/fstab for FreeBSD VM images' \
 		> ${DESTDIR}/etc/fstab
@@ -111,7 +120,7 @@ vm_create_baseimage() {
 			# This should never happen.  But, it has happened.
 			msg="Cannot umount(8) ${DESTDIR}\n"
 			msg="${msg}Something has gone horribly wrong."
-			panic 1 "${msg}"
+			panic "${msg}"
 		fi
 		sleep 1
 	done
@@ -141,11 +150,11 @@ vm_create_vmdisk() {
 	if [ -z "${mkimg_version}" ]; then
 		msg="Cannot determine mkimg(1) version.\n"
 		msg="${msg}Cannot continue without a known mkimg(1) version."
-		panic 0 "${msg}"
+		panic "${msg}"
 	fi
 
 	if ! mkimg --formats 2>/dev/null | grep -q ${FORMAT}; then
-		panic 0 "'${FORMAT}' is not supported by this mkimg(1).\n"
+		panic "'${FORMAT}' is not supported by this mkimg(1).\n"
 	fi
 
 	case ${FORMAT} in