(d) Reimbursement for the out of pocket expenses Employee has incurred for COBRA continuationpayments made for the months of April, May and June 2009 for medical and dental insurancecontinuation coverage for himself and his dependents. This payment shall be made by the Company toEmployee within ten (10) days of Employee’s submission to the Company of documentationdemonstrating the out of pocket expenses incurred by Employee; and(e) The full amount of COBRA continuation coverage for Employee’s and his dependents’ medicaland dental insurance for twelve (12) months, beginning on July 1, 2009 and ending June 30, 2010;provided that Employee is eligible for COBRA and properly elects such continuation coverage. Suchpayment shall be made directly by the Company to the applicable insurance provider.3. Withholdings. The payments set forth in Section 2(a), (b), and (c) shall besubject to all applicable federal, state and local withholdings. All of the payments made toEmployee set forth in Section 2 shall be delivered to Employee by the Company via personal deliveryor overnight mail, to Employee’s last known address of record, on the date(s) described above. Inaddition, the parties hereby agree that it is their intention that all payments or benefitsprovided under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, asamended (the “Code”) and this Agreement shall be interpreted accordingly. Employee hereby isadvised to seek independent advice from Employee’s tax advisor(s) with respect to the applicationof Section 409A of the Code to any payments under this Agreement. Notwithstanding the foregoing,the Company does not guarantee the tax treatment of any payments or benefits under this Agreement,including without limitation under the Code, federal, state or local laws.4. Warranty. Employee acknowledges and agrees that the Separation Pay and Benefitsprovided to Employee under the terms of this Agreement are in addition to anything of value towhich Employee is otherwise entitled and that Employee would not receive the Separation Pay andBenefits except for Employee’s decision to sign this Agreement and to fulfill the promises setforth herein. Employee further acknowledges that, other than the Separation Pay and Benefits, hehas received all wages, accrued but unused vacation pay, equity interests and other benefits duehim as a result of his employment with and termination from the Company.5. Release of Known and Unknown Claims By Employee. In exchange for the SeparationPay and Benefits set forth in Section 2 above, and in consideration of the further agreements andpromises set forth herein, Employee agrees unconditionally and forever to release and discharge theCompany including the Company’s current and former officers, directors, shareholders, employees,representatives, attorneys and agents, as well as all of their predecessors, parents, subsidiaries,affiliates, successors in interest and assigns (collectively, the “Releasees”) from any and allclaims, actions, causes of action, demands, rights, or damages of any kind or nature which Employeemay now have, or ever have, whether known or unknown, including any claims, causes of action ordemands of any nature arising out of or in any way relating to Employee’s employment with, ortermination from the Company on or before the date Employee signs this Agreement.
 
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This release specifically includes, but is not limited to, any claims for fraud; breach ofcontract; breach of implied covenant of good faith and fair dealing; inducement of breach;interference with contract; wrongful or unlawful discharge or demotion; violation of public policy;assault and battery; invasion of privacy; intentional or negligent infliction of emotionaldistress; intentional or negligent misrepresentation; conspiracy; failure to pay wages, benefits,vacation pay, severance pay, attorneys’ fees, or other compensation of any sort; wrongfultermination; retaliation; wrongfuldemotion; discrimination or harassment on any basis protected by federal, state or local lawincluding, but not limited to age, race, color, sex, gender identity, national origin, ancestry,religion, disability, handicap, medical condition, marital status, and sexual orientation; anyclaim under Title VII of the Civil Rights Act of 1964, as amended, the Americans with DisabilitiesAct, the Age Discrimination in Employment Act, as amended by the Older Workers Benefit ProtectionAct, the California Fair Employment and Housing Act, or Section 1981 of Title 42 of the UnitedStates Code; violation of any safety and health laws, statutes or regulations; or any otherwrongful conduct, based upon events occurring prior to the date of execution of this Agreement.Employee further agrees knowingly to waive the provisions and protections of Section 1542 ofthe California Civil Code, which reads:A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWOR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HERSETTLEMENT WITH THE DEBTOR.The parties intend this release by Employee to be a full and comprehensive general releasewaiving and releasing all claims, demands, and causes of action, known or unknown, to the fullestextent permitted by law. Nothing in this Agreement is intended to nor shall it be interpreted torelease any claim under California Labor Code Section 2802 or any other claim which, by law, maynot be released.6. Additional Representations and Warranties By Employee. Employee represents thatEmployee has no pending complaints or charges against the Releasees, or any of them, with any stateor federal court, or any local, state or federal agency, division, or department based on anyevent(s) occurring prior to the date Employee signs this Agreement. Employee further representsthat Employee will not in the future, file, participate in, encourage, instigate or assist in theprosecution of any claim, complaints, charges or in any lawsuit by any party in any state orfederal court against the Releasees, or any of them, unless such aid or assistance is ordered by acourt or government agency or sought by compulsory legal process, claiming that the Releasees, orany of them, have violated any local, state or federal laws, statutes, ordinances or regulationsbased upon events occurring prior to the execution of this Agreement. Nothing in this Agreementshall be construed as prohibiting Employee from making a future claim with the Equal EmploymentOpportunity Commission or any similar state agency including, but not limited to the CaliforniaDepartment of Fair Employment and Housing; provided, however, that should Employee pursue such anadministrative action against the Releasees, or any of them, to the maximum extent allowed by law,Employee agrees and acknowledges that Employee will not seek, nor shall Employee be entitled torecover, any monetary damages from any such proceeding.7. Knowing and Voluntary. Employee represents and agrees that, prior to signing thisAgreement, Employee has had the opportunity to discuss the terms of this Agreement with legalcounsel of his choosing. Employee further represents and agrees that he is entering into thisAgreement knowingly and voluntarily. Employee affirms that no promise was made to cause him toenter into this Agreement, other than what is promised in this Agreement. Employee furtherconfirms that he has not relied upon any statement or representation by anyone other than what isin this Agreement as a basis for his decision to sign this Agreement.
 
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8. Knowing and Voluntary Waiver of Age Discrimination Claim. Employee expresslyacknowledges:**•** that he has been provided twenty-one (21) days to consider this Agreement;**•** that he was informed in writing to consult with counsel regarding thisAgreement;**•** that he has consulted with counsel regarding this Agreement;**•** that to the extent Employee has taken fewer than twenty-one (21) days toconsider this Agreement, Employee acknowledges that he had sufficient time to consider theAgreement and to consult with counsel and that he does not desire additional time;**•** that he was informed that the Agreement is revocable by Employee for a periodof seven (7) calendar days following his execution of this Agreement;**•** that any revocation must be in writing, must specifically revoke thisAgreement, and must be received by the Company (attn: Jeff Framer) prior to the eighthcalendar day following the execution of this Agreement;**•** that Employee understands that if he revokes this Agreement, he will notreceive the Separation Pay and Benefits; and**•** that this Agreement becomes effective, enforceable and irrevocable on theeighth calendar day following Employee’s execution of this Agreement provided that Employeedoes not revoke the Agreement.9. Release of Known and Unknown Claims by the Company. In exchange for the agreementsand promises set forth herein, the Company agrees unconditionally and forever to release anddischarge Employee from any and all claims, actions, causes of action, demands, rights, or damagesof any kind or nature which it may now have, or ever had, whether known or unknown, including, butnot limited to, any claims, causes of action or demands of any nature arising out of or in any wayrelating to Employee’s employment with, or separation from the Company on or before the date of theexecution of this Agreement. This release specifically includes, but is not limited to, any claimsfor fraud; breach of contract; breach of implied covenant of good faith and fair dealing;inducement of breach; interference with contract; assault and battery; invasion of privacy;intentional or negligent infliction of emotional distress; intentional or negligentmisrepresentation; conspiracy; or any other wrongful conduct, based upon events occurring prior tothe date of execution of this Agreement.The Company further agrees knowingly to waive the provisions and protections of Section 1542of the California Civil Code, which reads:A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TOEXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUSTHAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
 
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The parties intend this release by the Company to be a full and comprehensive general releasewaiving and releasing all claims, demands, and causes of action, known or unknown, to the fullestextent permitted by law. Nothing in this Agreement is intended to nor shall it be interpreted torelease any claim which, by law, may not be released.10. No Admission of Liability. By entering into this Agreement, neither the Companynor Employee suggests or admits to any liability to one another (except for the covenants herein)or that they violated any law or any duty or obligation to one another or to any other person orentity.11. Confidentiality. Employee represents, warrants and agrees that neither he nor anyof his agents or representatives either has already disclosed or publicized nor will at any time inthe future disclose or publicize, or cause or permit to be disclosed or publicized, the existenceof this Agreement, any of the terms of this Agreement, or the facts underlying this Agreement, toany person, corporation, association or governmental agency or other entity except: (1) to theextent necessary to report income to appropriate taxing authorities; (2) to members of Employee’simmediate family; (3) in response to an order of a court of competent jurisdiction or subpoenaissued under the authority thereof; (4) in response to any inquiry or subpoena issued by a state orfederal governmental agency; provided, however, that notice of receipt of such judicial order orsubpoena shall be immediately communicated by Employee to the Company telephonically, and confirmedimmediately thereafter in writing, so that the Company will have the opportunity to assert whatrights it has to non-disclosure prior to Employee’s response to the order, inquiry or subpoena; (5)as needed to enforce the Agreement; (6) as needed in any action or proceeding between the Companyand Employee; (7) to his attorneys, accountants and tax advisors; and (8) as may otherwise berequired by law. However, notwithstanding the provisions of Paragraph 11, hereof, Employee may,without breaching this Agreement, respond to inquiries by stating that his situation with theCompany has been “resolved.” Employee further represents, warrants and agrees that he has to datemaintained and will continue to maintain all non-public information regarding the Releasees, or anyof them, as strictly confidential and has not disclosed and shall not disclose such information toany person or entity or cause such information to be disclosed to any person or entity, eitherdirectly or indirectly, specifically or generally.12. Cooperation. Employee agrees to consult with the Company regarding on-goingmatters that commenced during Employee’s employment with the Company and, within reasonable limits,to cooperate with the Company in connection with disputes between the Company and third parties(including, but not limited to, current or former employees) when requested by the Company. Thiscooperation may include, but is not limited to, conferring with and assisting the Company inpreparatory work in litigation matters, providing factual information to the Company, and givingdepositions and testimony in judicial and administrative proceedings. Employee agrees that he willnot be paid by the Company for his cooperation, except that the Company will reimburse Employee forhis reasonable out-of-pocket expenses incurred in connection therewith, provided that such expensesare approved in advance by the Company.13. No Disparagement. Employee represents, warrants and agrees that on and after thedate Employee signs this Agreement he has not disparaged or made derogatory or negative commentsnor will he at any time in the future disparage or make derogatory or negative comments to anythird party (including but not limited to employees of the Company) concerning the Releasees, orany of them at any time. Nothing in this Section shall preclude Employee from testifyingtruthfully in any deposition or judicial or administrative proceeding. Moreover, nothing in thisSection applies to communications to Employee’s immediate family or communications to hisattorneys, or to pleadingsor other documents in any proceeding to enforce this Agreement, or in any judicial,administrative or arbitral proceedings where such information is relevant or discoverable.
 
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14. Return of Property. By signing below, Employee represents and warrants that hehas returned to the Company all of the Company’s property, documents (hard copy or electronicfiles), and information prior to signing this Agreement, he has not nor will he copy or transferany Company information, nor will he maintain any Company information after the Termination Date.15. Non-Solicitation of Employees. Employee agrees that he will not, either alone orjointly with any other person or entity, whether as principal, partner, agent, shareholder,director, employee, consultant or otherwise, at any time during a period of one (1) year followingthe Termination Date, directly or indirectly solicit the employment or engagement of any person whois, at the time of the solicitation, employed by the Company or any affiliated entity in anycapacity, whether or not such person would commit any breach of his or her contract of employmentby reason of his or her leaving the service of the Company or any affiliated entity.16. Assignment. The Company may assign this Agreement and/or any of its rights orprivileges hereunder, in one or more assignments, and this Agreement shall inure to the benefit ofall such successors and assigns.17. Governing Law. This Agreement shall be governed by the laws of the State ofCalifornia as applied to agreements made and wholly to be performed in California. This Agreementshall be enforceable in the Los Angeles County Superior Court pursuant to California Code of CivilProcedure Section 664.6. The prevailing party in any action to enforce the terms of this Agreementshall be entitled to reasonable attorneys’ fees and costs incurred in connection with theenforcement of the Agreement.18. Entire Agreement. This Agreement constitutes the entire understanding between theparties with respect to its subject matter, superseding all prior agreements and understandings,written or oral, with respect to its subject matter; provided, however that this agreement shallnot be deemed to supersede the Company’s Code of Conduct and/or any agreements between the Companyand Employee with respect to the protection of the Company’s confidential, proprietary and/or tradesecret information all of which survives. This Agreement may not be amended or modified, nor anyprovision hereof waived, other than by a writing signed by Employee and an authorizedrepresentative of the Company.19. Ambiguities. The general rule that ambiguities are to be construed against thedrafter shall not apply to this Agreement. In the event that any language of this Agreement isfound to be ambiguous, all parties shall have the opportunity to present evidence as to the actualintent of the parties with respect to any such ambiguous language.20. Severability. If any sentence, phrase, paragraph, subparagraph or portion of thisAgreement is found to be illegal or unenforceable, such action shall not affect the validity orenforceability of the remaining sentences, phrases, paragraphs, subparagraphs or portions of thisAgreement.21. Each of the parties hereto warrants and represents to the other that they have notpreviously assigned or transferred any of the claims released herein.
 
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22. Counterparts. This Agreement may be executed in one or more counterparts, each ofwhich shall be deemed an original, all of which together shall constitute one and the sameinstrument. Facsimile or pdf copy of this Agreement (or facsimile or pdf signature) shall bedeemed an original.**PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.****THE UNDERSIGNED AGREE TO THE TERMS OF THIS AGREEMENT AND VOLUNTARILY ENTER INTO IT WITH THEINTENT TO BE BOUND THEREBY.**     Dated:      June 11, 2009 /s/ DAVID BORSHELL   David Borshell     Dated:      June 11, 2009 Image Entertainment, Inc.      /s/ JEFF M. FRAMER   By: Jeff M. Framer   Title: President  
 
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