ex10-4.htm


     

    Exhibit
      10.4

    
 

    ENTERTAINMENT
      DISTRIBUTION COMPANY, INC.

    


    


    


    December
      27, 2007

    


    
 

    Mr.
      Thomas Costabile

    158
      Brownstone Court

    Old
      Tappan, NJ 07675

    


    Dear
      Tom:

    


    Reference
      is hereby made to that certain Letter Agreement dated May 9, 2005 between you,
      Glenayre Electronics, Inc. and Entertainment Distribution Company, LLC (the
      “Employment Letter”) pursuant to which you were employed as an executive officer
      of Entertainment Distribution Company, LLC (the “Company”).  This
      letter shall serve as a supplement to the Employment Letter for purposes of
      confirming the agreements set forth herein.

    


    
      	
               

            	
              1.

            	
              Duties.  Pursuant
                to the Employment Letter, you were engaged as Executive Vice President
                and
                Chief Operating Officer of the Company.  Effective
                November 5, 2007, you were appointed to the additional position of
                President of the Company and will continue in your current position
                as
                Chief Operating Officer. 

            


    

    


    
      	
               

            	
              2.

            	
              Stay
                Bonus.  In addition to the compensation set forth in the
                Employment Letter, you will be entitled to a “stay bonus” in an amount
                equal to $100,000, payable in a lump sum, if you remain employed
                by the
                Company through November 1, 2008 or, in the event a Change in Control
                (as defined below) occurs prior to November 1, 2008, you remain
                employed by the Company or any successor to the Company following
                such
                Change in Control, through the 90 day anniversary of any such Change
                in Control.  If earned, the Company will pay you the stay bonus
                within two days after November 1, 2008.


            


    

    


    “Change
      in Control” means any of the
      following: (a) the acquisition, directly or indirectly after the date of this
      letter agreement, in one or a series of transactions, of 25% or more of the
      common stock of
      Entertainment Distribution Company, Inc. (“EDCI”) by any “person” as that term is defined
      in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended; (b)
      the
      consummation of a merger, consolidation, share exchange or similar transaction
      of EDCI or the
      Company with any other corporation,
      entity or group, as a result of which the holders of the voting capital stock
      of
EDCI or the
      Company immediately prior to such
      merger, consolidation, share exchange or similar transaction, as a group, would
      receive less than 50% of the voting capital stock of the surviving or resulting
      corporationor
      entity; (c) the
      consummation of an agreement providing for the sale or transfer (other than
      a
      security for obligations of EDCI or the
      Company) of


    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    substantially
      all the operating assets
      of EDCI or substantially
      all of the assets of the Company; (d) individuals
      who, as of the date
      hereof, constitute the Board of Directors of EDCI (the “Incumbent Board”) cease
      for any reason to constitute at least a majority of the Board of Directors
      of
      EDCI; provided, however, that any individual becoming a director subsequent
      to
      the date hereof whose election, or nomination for election by EDCI’s
      stockholders, was approved by a vote of at least a majority of the directors
      then comprising the Incumbent Board shall be considered as though such
      individual were a member of the Incumbent Board, but excluding, for this
      purpose, any such individual whose initial assumption of office occurs as a
      result of an actual or threatened election contest with respect to the election
      or removal of directors or other actual or threatened solicitation of proxies
      or
      consents by or on behalf of a Person other than the Board of Directors of EDCI
      or pursuant to a negotiated settlement with any such Person to avoid the threat
      of any such contest or solicitation.

    


    
      	
               

            	
              3.

            	
              Continuation
                of
                Employment Letter.  Except as modified by this
                supplemental letter, the Employment Letter shall continue in full
                force
                and effect in accordance with its terms.


            


    

    


    If
      the
      foregoing is acceptable to you, please sign where provided below.

    


     

    
      
        	 	
                ENTERTAINMENT
                  DISTRIBUTION COMPANY LLC

              	 
	 	 	 
	
                 

              	
                By:

              	/s/
                Jordan Copland 	 
	 	 	
                Title:

              	 Interim
                CEO	 


      



    
      	
            	
              
                ENTERTAINMENT
                  DISTRIBUTION COMPANY, INC.

              

            	 
	 	 	 
	
               

            	
              By:

            	/s/ Clarke Bailey 	 
	 	 	
              Title:

            	 Chairman	 


    

     

    
 

    AGREED:

     

    /s/
      Thomas
      Costabile                        


    THOMAS
      COSTABILE