Contract
EXHIBIT
99.1
SETTLEMENT AGREEMENT AND
GENERAL, MUTUAL RELEASE
This
Settlement Agreement and General, Mutual Release (“Agreement”) between Xxxxxxx
X. Xxxxxxx (“Xxxxxxx”) and EDCI Holdings, Inc., Entertainment Distribution
Company, Inc., Entertainment Distribution Company, LLC, Entertainment
Distribution Company (USA), LLC (hereinafter referred to collectively as the
“EDC Companies”) and Xxxxxx X. Xxxxxxx, Xx. (hereinafter referred to
as “Xxxxxxx” individually and collectively, with the EDC Companies, as “the EDC
Parties”) is made as of the date this Agreement is signed by Xxxxxxx and the EDC
Parties (collectively referred to as the “Parties”).
WHEREAS,
certain of the EDC Companies filed a complaint against Xxxxxxx, which is
presently pending in the United States District Court, Southern District of New
York, Case No. 1:09-cv-03880 BSJ-THK (the “New York Lawsuit”), and Xxxxxxx filed
a complaint against the EDC Parties, which is presently pending in the United
States District Court, Southern District of Indiana, Case No. 1:09-cv-00579
WTL-DML (the “Indiana Lawsuit”), and collectively referred to as the
“Lawsuits”;
WHEREAS,
Xxxxxxx denies the allegations in the New York Lawsuit and denies that he is
liable to the EDC Parties thereto, and the EDC Parties deny the allegations in
the Indiana Lawsuit and deny that they are liable to Xxxxxxx;
WHEREAS,
Xxxxxxx and the EDC Parties have reached a full and final settlement of their
disputes; and
WHEREAS,
Xxxxxxx and the EDC Parties mutually desire to resolve all of their
disputes.
NOW
THEREFORE, in consideration of the foregoing, and of the promises and mutual
covenants herein contained and execute comprehensive mutual releases of all
claims, the EDC Parties and Xxxxxxx agree as follows:
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1.
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WITHDRAWAL
OF NOTICES AND RESIGNATION – Xxxxxxx hereby withdraws his notice of
good reason dated as of April 13, 2009. The EDC Companies
hereby withdraw their notice of termination of Xxxxxxx dated as of April
13, 2009. Accordingly, the EDC Companies and Xxxxxxx
acknowledge that Xxxxxxx remains an employee of the EDC Companies as of
this date. Xxxxxxx agrees to voluntarily resign, and the EDC
Companies agree to accept such voluntary resignation, effective the
business day following full execution of this
Agreement.
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2.
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SETTLEMENT
PAYMENT - In consideration for Xxxxxxx’x agreement to all of the
terms, conditions and promises in this Agreement, the EDC Companies agree
to: (i) Pay Xxxxxxx and his attorneys
one-time, lump sum gross consideration of Three Hundred Ten Thousand
Dollars and no cents ($310,000.00) (the “Settlement Payment”), payable in
two checks (or via direct deposit) as follows: (i) one check made payable
to Xxxxxxx based on a gross amount of Two Hundred Ten Thousand Dollars
($210,000.00), resulting in a net payment amount of One Hundred Forty-One
Thousand, One Hundred Thirty- Four Dollars and Eighty Eight Cents
($141,134.88) after the withholdings and deductions for Xxxxxxx’x
contributions toward life insurance for the periods between April 14, 2009
and December 17, 2009 as set forth on Exhibit A, in accordance with the
Form W-4 provided by Xxxxxxx to the EDC Companies on December
2, 2009; (ii) a check in the amount of One Hundred Thousand ($100,000.00)
made payable to XxXxxxx & XxXxxxx LLC, in accordance with the Form W-9
provided by XxXxxxx & XxXxxxx LLC to the EDC Companies on December 2,
2009, with issuance of a Form 1099 to XxXxxxx & XxXxxxx
LLC. The EDC Companies will make the withholdings and payments
set forth on Exhibit A to the appropriate parties set forth on such
Exhibit. These sums (the “Settlement Payment”) are the sole
financial component of the settlement among the Parties, including but not
limited to costs and attorneys' fees incurred. The EDC
Companies agree to deliver the checks to Xxxxxxx’x attorneys (or via
direct deposit) on December 16, 2009, following delivery to the EDC
Companies’ attorneys of (a) this Agreement, executed with Xxxxxxx’x
original signature and the date of execution, and (b) a Joint Stipulation
of Dismissal With Prejudice for both Lawsuits, signed by Xxxxxxx’x
attorney.
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3.
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BENEFITS
COOPERATION
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(a)
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Xxxxxxx
acknowledges receipt of written confirmation from Unum Life Insurance
Company of America (“Unum”) of the reinstatement of Xxxxxxx to the group
life insurance plan of the EDC Companies, retroactive to April 13, 2009,
in the following amounts (the “Life Insurance
Coverage”):
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EE
LIFE
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EX
LIFE
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EE
AD&D
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STD
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LTD
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RT
LIFE
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COVERAGE
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175,000
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75,000
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250,000
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2,500
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20,833
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PREMIUM
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$45.50
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$19.50
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$7.50
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$72.50
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$66.67
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Xxxxxxx
also acknowledges receipt of the Portability and Conversion Applications from
Unum (the “Roll Applications”). The EDC Companies will provide to
Xxxxxxx application forms with the Employer sections completed prior to
execution of this Agreement. The EDC Companies agree to reasonably
cooperate with Xxxxxxx and Unum to permit Xxxxxxx to apply to port or convert his Life
Insurance Coverage in accordance with the Roll Applications, provided that the
EDC Companies shall not be required to incur any direct or indirect costs as a
result; and
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(b)
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The
EDC Companies will cooperate in making continuation coverage available to
Xxxxxxx in accordance with the federal law known as COBRA (“COBRA”) based
on a termination date in accordance with Paragraph 1 above, at Xxxxxxx’x
sole cost, including the payment by Xxxxxxx of any and all back-premiums
for the period between April 14, 2009 and the date of his COBRA election
becoming effective. Xxxxxxx acknowledges he is not entitled to
any COBRA subsidy payments related to the American Recovery and
Reinvestment Act (ARRA) of 2009).
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4.
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PUBLIC AND SEC
FILINGS
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(a)
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The
Parties agree that a Form 8-K and accompanying press release will be filed
with the SEC within four (4) business days of the execution of this
Agreement in the form attached as Exhibit
B.
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(b)
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The
EDC Companies agree that following the 8-K filing in accordance with 4(a)
of this Agreement: (i) the EDC Companies will not make any future public
filings or SEC filings mentioning Xxxxxxx and concerning any events
related to Xxxxxxx’x involvement with the EDC Companies which occurred
before the date of execution of this Agreement, and (ii) the EDC Companies
will not re-file any previously filed materials mentioning Xxxxxxx in any
way; except, in each case, unless reasonably required to do so by law or
regulation, and if such disclosure is required, will make reasonable
efforts to allow Xxxxxxx to review and provide input in a timely manner
before making such a disclosure, provided that in no event will Xxxxxxx
will have a veto over any content,
however.
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(c)
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Xxxxxxx
agrees not to directly or indirectly make any public filings or SEC
filings mentioning Xxxxxxx in any
way.
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5.
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TAX
LIABILITY – Xxxxxxx agrees that he shall be liable for the payment
of all federal and state taxes which may be due as the result of the
consideration received in the described payment in paragraph 2 above, and
that such payment is made for the settlement of disputed claims as set
forth herein. Xxxxxxx represents that he shall pay such taxes
at the time and in the amount required by law. In addition,
Xxxxxxx agrees fully to defend, indemnify and hold the EDC Released
Parties, harmless from any liability for payment of taxes, penalties,
withholding obligations and interest that are required of him by any
government agency at any time as the result of the payment of the
consideration set forth herein.
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6.
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DISMISSAL
OF LAWSUIT – Xxxxxxx represents that, other than the Lawsuits, he
is not a party in any pending administrative charge, lawsuit, civil action
or claim of any kind against the EDC Released Parties. The EDC
Parties represent that, other than the Lawsuits, the EDC Released Parties
are not a party in any pending administrative charge, lawsuit, civil
action or claim of any kind against Xxxxxxx. The EDC Companies agree to
promptly dismiss the New York Lawsuit with prejudice, without costs, and
waiving all rights of appeal, and further agrees to take all steps
reasonably necessary to facilitate the dismissal with prejudice of the
Lawsuit. Xxxxxxx agrees to promptly dismiss the Indiana Lawsuit with
prejudice, without costs, and waiving all rights of appeal, and further
agrees to take all steps reasonably necessary to facilitate the dismissal
with prejudice of the Lawsuit.
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7.
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SUFFICIENCY
OF CONSIDERATION – Xxxxxxx agrees that the Settlement Payment is
good and valuable consideration for the general release and the other
promises and terms in this Agreement and that it is in addition to
anything of value to which he is already entitled. Xxxxxxx
understands and agrees that he is not eligible for or entitled to any
payments, wages, bonuses, payments for accrued but unused vacation,
benefits or other remuneration of any kind from the EDC Released Parties,
except as provided in this
Agreement.
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8.
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XXXXXXX
RELEASE – Xxxxxxx and his immediate family members, heirs,
executors, administrators, successors, assigns and agents, in each case to
the extent that Xxxxxxx is able to exercise control over such entities
(collectively the “Xxxxxxx Releasing Parties”) hereby release, hold
harmless and forever discharge each of the EDC Parties and each of their
respective direct or indirect divisions, affiliates, parents,
subsidiaries, operating companies, and insurers, and the respective
officers, directors, employees, agents and affiliates of each of those
aforementioned entities in their individual and corporate capacities as
applicable, and the predecessors, successors and assigns of all of the
aforementioned parties (collectively, the “EDC Released Parties”), from
any and all causes of action, lawsuits, proceedings, complaints, charges,
debts, contracts, judgments, damages, claims, obligations or liabilities
of any kind (including, without limitation, those set forth in the
following sentence) against the EDC Released Parties, whether known or
unknown, which the Xxxxxxx Releasing Parties ever had, now have or may
have in the future (except as otherwise specifically stated in this
Agreement), due to any matter whatsoever including, without limitation,
relating to Xxxxxxx’x employment, any employment contract among Xxxxxxx
and any of the EDC Released Parties, the resignation of Xxxxxxx’x
employment from the EDC Released Parties, the termination of Xxxxxxx’x
employment with the EDC Released Parties, any statements or communications
previously made by any of the EDC Released Parties, and/or any
compensation and/or benefits with or from the EDC Released Parties
(collectively, the “Xxxxxxx Released Claims”). The Xxxxxxx
Released Claims include, but are not limited to: claims for compensation
(including salary, wages, bonuses, benefits, severance or termination
(whether by the EDC Companies or Xxxxxxx, with or without cause or good
reason) or change of control payments and bonuses and any other incentive
arrangements) allegedly due or owing; claims for unused, unpaid vacation;
claims for unreimbursed business expenses; claims for attorneys’ or court
fees; claims sounding in contract or implied contract; claims sounding in
tort; claims arising under common law, civil law, equity, or federal,
state, or local statutes or ordinances, including but not limited to: the
Fair Labor Standards Act; Title VII of the Civil Rights Act of 1964, as
amended, Sections 1981 through 1988 of Title 42 of the United States Code,
COBRA, the National Labor Relations Act, the Family and Medical Leave Act;
the Age Discrimination in Employment Act, the Employee Retirement Income
Security Act (“ERISA”), the Immigration Reform Control Act, the Americans
with Disabilities Ac, the Occupational Safety and Health Act, the Indiana
Wage Claim Statute and the Indiana Wage Payment Statute, state statutes
governing the payment of wages, discrimination in the workplace, or any
other statute or laws governing the employer-employee relationship; claims
that any of the Released Parties violated any other federal, state or
local statute, law, regulation or ordinance; any claim of unlawful
discrimination of any kind; any public policy, contract, tort (including
without limitation defamation or libel), or common law claim; any claim
that was or could have been asserted in the Lawsuits; and any claim for
costs, fees, or other expenses including attorney’s fees incurred in such
matters.
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9.
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THE
EDC PARTIES’ RELEASE – The EDC Parties and each of their respective
direct or indirect divisions, affiliates, parents, subsidiaries, operating
companies, and insurers, and the respective officers, directors,
employees, agents and affiliates of each of those aforementioned entities
in their individual and corporate capacities as applicable, and the
predecessors, successors and assigns of all of the aforementioned parties,
in each case to the extent that any of the EDC Parties are able to
exercise control over such entities (collectively the “EDC Releasing
Parties”) hereby release and forever discharge Xxxxxxx and his immediate
family members and his agents (collectively the “Xxxxxxx Released
Parties”) from any and all causes of action, lawsuits, proceedings,
complaints, charges, debts, contracts, judgments, damages, claims,
obligations, or liabilities of any kind (including, without limitation,
those set forth in the following sentence) against the Xxxxxxx Released
Parties, whether known or unknown, which the EDC Releasing Parties ever
had, now have, or may have in the future (except as otherwise specifically
stated in this Agreement), due to any matter whatsoever, including,
without limitation, relating to Xxxxxxx’x employment, any employment
contract among Xxxxxxx and any of the EDC Released Parties, the
resignation of Xxxxxxx’x employment from the EDC Released Parties, the
termination of Xxxxxxx’x employment with the EDC Released Parties, and or
any statements or communications previously made by the Xxxxxxx Released
Parties (collectively, the “EDC Released Claims”). The EDC
Released Claims include, but are not limited to: claims for attorneys’ or
court fees; claims sounding in contract or implied contract; claims
sounding in tort; claims arising under common law, civil law, equity, or
federal, state, or local statutes or ordinances, including, but limited
to, ERISA; any public policy, contract, tort (including without limitation
defamation or libel), or common law claim; any claim that was or could
have been asserted in the Lawsuits; and any claim for costs, fees, or
other expenses including attorney’s fees incurred in such matters.
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10.
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COVENANT
NOT TO XXX – Xxxxxxx agrees not to file or initiate a lawsuit in
any court or initiate an arbitration proceeding asserting any of the
Xxxxxxx Released Claims against any of the EDC Released
Parties. Xxxxxxx further agrees that he will not permit himself
to be a member of any class in any court or in any arbitration proceeding
seeking relief against the EDC Released Parties based on claims released
by this Agreement or assist any other parties in any claims of any nature,
including without limitation claims of the same nature as those released
by Xxxxxxx pursuant to this Agreement, that such parties may have against
the EDC Released Parties, and that even if a court or arbitrator rules
that he may not waive a claim released by this Agreement, he will not
accept or be entitled to any money damages or other relief in connection
with any other action or proceeding asserting any of the EDC Released
Claims against any of the EDC Released Parties. Xxxxxxx agrees
to reimburse the EDC Parties for any legal fees that the EDC Parties incur
as a result of any breach of this paragraph by Xxxxxxx. The EDC
Parties agree not to file or initiate a lawsuit in any court or initiate
an arbitration proceeding asserting any of the EDC Released Claims against
any of the Xxxxxxx Released Parties or assist any other parties in any
claims of any nature, including without limitation claims of the same
nature as those released by the EDC Parties pursuant to this Agreement,
that such parties may have against the Xxxxxxx Released
Parties. The EDC Parties agree to reimburse Xxxxxxx for any
legal fees that Xxxxxxx incurs as a result of any breach of this paragraph
by the EDC Parties.
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11.
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CONFIDENTIALITY
- Xxxxxxx certifies that he has returned to the EDC Companies any and all
confidential and/or proprietary information and all other materials,
documents or property belonging to the EDC Companies, including without
limitation manuals, keys, equipment, identification cards and access cards
belonging to the EDC Companies (together, the “EDC Confidential
Information”), and (ii) not retained any copies of any EDC Confidential
Information. For purposes of this Agreement, “EDC Confidential
Information” does not include information or documents that are publicly
filed or otherwise generally available to the public. XxXxxxx
and XxXxxxx LLC shall destroy all EDC Confidential Information in its
possession, except to the extent XxXxxxx and Xxxxxxx LLC are reasonably
required to keep any EDC Confidential Information in order to comply with
its malpractice insurance requirements, which information shall be kept
strictly confidential and not shared with any other parties except to the
extent required by law. Employee acknowledges and remains bound
by any confidentiality agreements or obligations applying to Employee
pursuant to any agreement of policy of the Company applicable to
Employee.
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12.
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RELEASE
OF RESTRICTIONS ON EMPLOYMENT – The EDC Companies release Xxxxxxx
from any and all restrictions on Xxxxxxx’x future employment, including
without limitation any non-competition provisions arising from the sale of
certain assets of Entertainment Distribution Company (USA) to Sony DADC
U.S. Inc.
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13.
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NONADMISSION
OF WRONGDOING – Xxxxxxx and the EDC Parties agree this Agreement
does not constitute an admission by the EDC Parties or Xxxxxxx of any of
the matters alleged in the Lawsuits or of any violation by the EDC Parties
or Xxxxxxx of any federal, state or local law, ordinance or regulation, or
of any violation of any policy or procedure, or of any liability or
wrongdoing whatsoever. Neither this Agreement nor anything in
this Agreement shall be construed to be or shall be admissible in any
proceeding as evidence of liability or wrongdoing by Xxxxxxx or the EDC
Released Parties. This Agreement may be introduced, however, in
any proceeding to enforce the
Agreement.
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14.
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WAIVER
OF DAMAGES – Nothing herein is intended to or shall interfere with
Xxxxxxx’x right to participate in a proceeding with any appropriate
federal, state or local government agency enforcing federal or state
discrimination laws and/or cooperating with said agency in its
investigation. Xxxxxxx, however, shall not be entitled to
receive any relief, recovery or monies in connection with any complaint or
charge brought against any of the EDC Released Parties, without regard as
to who brought any such complaint or
charge.
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15.
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GOVERNING
LAW – This Agreement shall be governed by and performed in
accordance with the laws of the State of Indiana without regard to its
conflict of laws provision.
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16.
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COUNTERPARTS
– This Agreement may be executed in counterparts and each counterpart will
be deemed an original.
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17.
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REVIEW
OF AGREEMENT – Xxxxxxx understands and acknowledges that he has
been provided a reasonable period within which to consider this Agreement
and to review it with an attorney of his
choosing.
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18.
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SECTION
HEADINGS – Section headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning of any
provision herein.
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19.
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SEVERABILITY
– Should any term or provision of this Agreement be declared illegal,
invalid or unenforceable by any court of competent jurisdiction and if
such provision cannot be modified to be enforceable, such provision shall
immediately become null and void, leaving the remainder of this Agreement
in full force and effect. The language of all parts of this
Agreement shall in all cases be construed as a whole, according to its
fair meaning, and not strictly for or against any of the
Parties.
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20.
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ENTIRE
AGREEMENT - This Agreement sets forth the entire agreement between
the Parties hereto and fully supersedes any and all prior and/or
supplemental understandings, whether written or oral, between the Parties
concerning the subject matter of this Agreement, including, without
limitation, the employment agreement dated October 3, 2008 between certain
of the EDC Companies and Xxxxxxx. Xxxxxxx acknowledges that he
has not relied on any representations, promises or agreements of any kind
made to him in connection with his decision to accept the terms of this
Agreement, except for the representations, promises and agreements
herein. Any modification to this Agreement must be in writing
and signed by Xxxxxxx and the EDC
Parties.
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IN
WITNESS WHEREOF, the parties knowingly and voluntarily executed this Agreement
and General Release as of the date set forth below.
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XXXXXXX
X. XXXXXXX
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ENTERTAINMENT
DISTRIBUTION COMPANY, INC.
ENTERTAINMENT
DISTRIBUTION COMPANY, LLC
ENTERTAINMENT
DISTRIBUTION COMPANY (USA), LLC
BY: /s/ Xxxxxxx X. Xxxxxxx
BY: /s/ Xxxxxx X. Xxxxxx
XXXXXXX
X. XXXXXXX
TITLE: Chairman & Chief
Executive Officer
DATE: 12-16-09 DATE: 12-16-09
XXXXXX
X. XXXXXXX, XX.
BY: /s/
Xxxxxx X. Xxxxxxx,
Xx.
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XXXXXX
X. XXXXXXX, XX.
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DATE:
12-16-09
APPROVED
AS TO FORM:
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XxXxxxx
& XxXxxxx LLC
By: /s/ Xxxxxxxx X.
XxXxxxx
Xxxxxxxx
X. XxXxxxx, #18604-49
Xxxxxxxxxxx
X. Stake, #27356-53
0000
Xxxxx Xxxxxxxxxx Xxxx.
Xxxxxxxxxxxx,
XX 00000
Telephone: 000-000-0000
Attorneys
for Xxxxxxx X. Xxxxxxx
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Ogletree,
Deakins, Xxxx, Xxxxx & Xxxxxxx, P.C.
By: /s/ Xxxxxx X.
Xxxxxxxx
Xxxxxx
X. Xxxxxxxx, #18836-49
Xxxxx
X. XxXxxxxxx, # 16788-32
000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx,
XX 00000
Telephone: 000-000-0000
Attorneys
for EDCI Holdings, Inc., Entertainment Distribution Company, Inc.,
Entertainment Distribution Company, LLC, Entertainment Distribution
Company (USA), LLC and Xxxxxx X. Xxxxxxx,
Xx.
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