Vivid Entertainment, which paid $1 million to an unidentified source for the video, will hand over nearly $5 million to Kardashian and stop distributing the tape by the end of next month.
Kardashian filed a lawsuit against Vivid Entertainment in February, claiming the firm's intention to distribute the video violated her "right to privacy."
Vivid Entertainment's co-chairman tells Web site TMZ.com, "We are pleased that Kim has dropped her legal action against us. We met with her several times and finally reached a financial arrangement that we both feel is fair."
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