EXHIBIT
99.27


To: Board
of Directors, EDCI Holdings, Inc.
 From:
Michael W. Klinger, Chief Financial Officer
 Date:
April 13, 2009
  I am
writing today pursuant to my October 3, 2008, Letter Agreement with EDCI
Holdings, Inc. (“Company”) to provide notice to the Board of Directors of recent
events which qualify as “Good Reason” for me to terminate my employment
following the applicable notice period and receive the severance pay and
benefits provided for in my Letter Agreement.
  In the
past 90 days, the following events have occurred, each of which independently
constitutes Good Reason for me to terminate my employment 90 days from now,
unless the Company cures these breaches:
  
 • On or
about March 8, 2009, Chief Executive Officer Robert L. Chapman, Jr., ordered
that Kyle E. Blue, a Senior Manager reporting to me, would take over my
responsibility for preparing presentations to the Board of Directors and Audit
Committee of the Board of Directors.  These are important
responsibilities which, in my experience at the Company, had always been
responsibilities of the Chief Financial Officer.
  • Since
on or about March 10, 2009, the Company has owed me a Transaction Bonus payment
in the amount of $25,000.00 because of my role in closing the Sony deal. As of
today’s date, this Transaction Bonus has not been paid.
  • On or
about March 24, 2009, Mr. Chapman reorganized the Office of Chief Financial
Officer without my input or consent.  As part of this forced
reorganization, certain material duties and responsibilities of the CFO were
reassigned to my subordinate employees, Kyle Blue and Mike Nixon. My prior
duties and responsibilities which were reassigned include, but are not limited
to, external reporting, investor/creditor relations, and controller functions.
These are important responsibilities which, in my experience at the Company, had
always been responsibilities of the Chief Financial Officer.
  • On or
about March 31, 2009, Mr. Chapman ordered that I was no longer to participate on
the Q4 2008 Investor Conference Call on behalf of the Company.  After
the third draft of the script and agenda for the March 31, 2009, Q4 2008
Investor Call, Mr. Chapman removed my name from the script and replaced me with
my subordinate, Kyle Blue.  In my experience at the Company,
participation in quarterly investor calls had always been a key responsibility
of the Chief Financial Officer.
  
  • In
connection with removing me from the script for the Q4 2008 Investor Conference
Call, Mr. Chapman assigned me the role of “fact checker” by asking me to
personally review and verify the financial data included in the script and
associated press release.  In my experience at the Company, the role
of “fact checker” had not been handled by the CFO position.
  • On or
about April 13, 2009, Mr. Chapman excluded me from participation in follow up
investor calls with key investors to further discuss the Q4 2008 financial
data.  Again, Mr. Chapman included my subordinate, Kyle Blue, in my
place.  Throughout my tenure as Chief Financial Officer at the
Company, I had routinely handled such calls myself, including during the first
quarter of 2009.  In my experience at the Company, participation in
follow up investor calls had always been a key responsibility of the Chief
Financial Officer.
  • On or
about March 10, 2009, Mr. Chapman notified me that I was no longer authorized to
communicate directly with the Company’s outside auditors, Ernst & Young.
Throughout my tenure as Chief Financial Officer at the Company, I had routinely
handled such communications myself, including during the first quarter of 2009
up to the date of Mr. Chapman’s notification. In my experience at the Company,
communications with the Company’s outside auditors had always been a key
responsibility of the Chief Financial Officer.
  • On or
about March 10, 2009, Mr. Chapman notified me that I was no longer authorized to
communicate with Wachovia Bank on behalf of the Company.  Throughout
my tenure as Chief Financial Officer at the Company, I had routinely handled
such communications myself, including during the first quarter of 2009 up to the
date of Mr. Chapman’s notification.  In my experience at the Company,
communications with the Company’s bankers had always been a key responsibility
of the Chief Financial Officer.
  • On or
about March 10, 2009, Mr. Chapman began communicating directly with my
subordinate employees without my knowledge or consent concerning matters which
had previously fallen within my job duties and responsibilities. For example,
Mr. Chapman instructed my subordinate to go out and find new outside auditors
for the Company.  Throughout my tenure as Chief Financial Officer at
the Company, I had routinely handled outside auditors, including during the
first quarter of 2009 up to the date of Mr. Chapman’s notification. In my
experience at the Company, the selection of the Company’s outside auditors had
always been a key responsibility of the Chief Financial Officer.
  • On or
about March 10, 2009, Mr. Chapman began communicating directly with my
subordinate employees without my knowledge or consent
   
 concerning
matters which had previously fallen within my job duties and responsibilities.
Another example includes Mr. Chapman instructing my subordinate to research and
identify sites for relocation of the Fishers, Indiana offices. Throughout my
tenure as Chief Financial Officer at the Company, I had routinely handled
research and decision making concerning office space and other significant
procurements.  In my experience at the Company, the selection and
negotiation of lease terms for the Company’s office space had always been a key
responsibility of the Chief Financial Officer.
  •  On or
about the end of February 2009, Mr. Chapman began excluding me from Company
conference calls addressing financial planning and analysis, accounting, SEC
reporting, and matters related to treasury, tax, information technology, risk
management, procurement, and investor relations. Throughout my tenure as Chief
Financial Officer at the Company, I had routinely participated in these types of
calls.  In my experience at the Company, financial planning and
analysis, accounting, SEC reporting, and matters related to treasury, tax,
information technology, risk management, procurement, and investor relations had
always been a key responsibility of the Chief Financial Officer or Chief
Operating Officer.
  •  Since
March 31, 2009, Mr. Chapman has not processed my expense reports seeking
reimbursement for expenses incurred in the course and scope of my
employment.  The Company now owes me approximately $10,000.00 in
expense reimbursements.
  •  On or
about April 4, 2009, I requested vacation time off for spring break. Mr. Chapman
would not authorize my requested vacation time unless two of my subordinates
agreed to allow me this vacation time.
 
 These
specific events constitute material breaches by the Company of my Letter
Agreement dated October 3, 2008.  These specific events further
constitute material diminutions by the Company of my authority, duties, and
responsibilities with the Company as specified in my Letter
Agreement.  Pursuant to my Letter Agreement with the Company, I am
providing the Board of Directors with written notice of the events which
constitute “Good Reason”, and am further providing notice that, unless the
Company cures these events within thirty (30) days of today’s date, I intend to
terminate from employment within ninety (90) days of today’s
date.