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Unedited press release follows:
EDCI Holdings, Inc. Announces Sale of Entertainment Distribution Company GmbH
NEW YORK, (Thursday), December 1, 2011 — EDCI Holdings, Inc. (PINK SHEETS: EDCI) (the “Company” or “EDCI”), today announced the following developments related to its majority investment in Entertainment Distribution Company, LLC (“EDC”).
On November 30, 2011, EDC’s wholly owned subsidiary, Entertainment Distribution Company Netherlands Holdings B.V. (the “Seller”) signed and closed a Share Purchase Agreement (the “Agreement”) with Aegis GmbH (the “Purchaser”) for the sale and assignment of the Seller’s shares in Entertainment Distribution Company GmbH (“EDC GmbH”), a European provider of supply chain services to the optical disc market, to the Purchaser. Combined, the three Managing Directors of EDC GmbH have a controlling interest in the Purchaser.
Pursuant to the Agreement, the Purchaser will pay to the Seller a total purchase price of $15.0 million, $8.85 million which was paid at closing and $6.15 million to be paid no later than December 31, 2012 and no earlier than June 30, 2012. The second installment shall accrue interest at a rate of 5% from the closing of the agreement until the actual payment date. The second installment is also secured by a pledge of certain assets of the Purchaser.
The Agreement provides for a six month indemnity period, in an amount not to exceed the purchase price received. However, the indemnity is limited and only covers representations and warranties related to the Seller’s ownership of, and ability to sell, the shares.
As a result of the sale, EDC and its subsidiaries are no longer engaged in the manufacture and distribution of compact discs (CDs).
Prior to making any additional distributions to its shareholders, EDC and EDCI will evaluate any potential reserves related to this agreement and other potential reserves at EDC, and expects to provide an update as to the plan for any future distributions in early 2012.
About EDCI Holdings, Inc.
EDCI Holdings, Inc. (PINK SHEETS: EDCI) is engaged in carrying-out its Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”), which was approved by EDCI’s stockholders on January 7, 2010. EDCI is also the majority equity-holder of Entertainment Distribution Company, LLC (“EDC”).