Image Entertainment (DISK) Notifies Nyx Acquisitions of Termination of the Merger Agreement

March 4, 2009 8:27 AM EST

Image Entertainment, Inc. (NASDAQ: DISK) announced that it has notified Nyx Acquisitions, Inc. that it has elected to terminate the agreement and plan of merger, dated November 20, 2008, due to Nyx's failure to pay an additional $500,000 to Image under the terms of the amended merger agreement. Under the amendment, entered into on February 27, 2009, Nyx, an affiliate of Q-Black, LLC, agreed to pay Image an additional $500,000 to secure an increased business interruption fee of $2.3 million. In return, Image agreed to extend the closing until March 20, 2009.

Nyx continues to be in breach of the amended merger agreement as a result of its failure to deliver the additional $500,000. Contrary to Nyx's stated intention made on Monday, March 2 to cure this breach by 5:00 p.m. on Tuesday, March 3, Nyx failed to do so. Image Entertainment will demand that Q-Black, LLC promptly pay Image Entertainment the balance of the $2.3 million business interruption fee pursuant to Q-Black's guarantee of the fee.

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