EXHIBIT 10.47
MUTUAL RELEASES AND SETTLEMENT AGREEMENT
It is hereby agreed by and among the parties herein as follows:
1.0 PARTIES & EFFECTIVE DATE OF SETTLEMENT
1.1 This Settlement Agreement is entered into between and among
Plaintiff Warner Bros. Entertainment Inc. ("Plaintiff), on the one hand, and
Defendant Interplay Entertainment Corporation, ("Defendant"), on the other hand.
The above parties are sometimes referred to in this Settlement Agreement as "the
Parties." This Settlement Agreement is effective as of October 13,2003.
2.0 Background Facts
This Settlement Agreement is made in light of the following facts:
2.1 On or about October 9, 2003, Plaintiff filed a Complaint
captioned WARNER BROS. ENTERTAINMENT INC. V. INTERPLAY ENTERTAINMENT
CORPORATION, AND DOES 1 THROUGH 20, INCLUSIVE, Los Angeles County Superior
Court, case no. BC 303844. Defendant has not filed an Answer. The case referred
to in this paragraph is referred to herein as the "Action."
2.2 The Action arises from Defendant's default on a certain
Amended and Restated Secured Convertible Promissory Note, dated as of April
30,2002 ("Promissory Note") with an original principal sum of Two Million
Dollars ($2,000,000.00). Said Promissory Note was secured by certain collateral
as defined in a certain Security Agreement, dated as of April 30,2002, (the
"Security Agreement")
3.0 Purpose of this Settlement Agreement
3.1 This Settlement Agreement is entered into in good faith by the
Parties to settle all rights, duties, claims, accounts and liabilities between
and among them in relation to all claims arising from or relating in any way to
any and all facts, issues, claims, causes of action and defenses raised by the
Action referenced in paragraph 2.1 above. The settlement evidenced
by this Settlement Agreement is not to be deemed an admission of liability or an
admission of the merit or lack of merit of any claims released herein.
3.2 In light of the foregoing, the Parties have agreed to settle
and finally resolve the Action by payment to Warner Bros. of the remaining
principle in the amount of $1,333,333.34 plus interest pursuant to the terms of
a Stipulated Judgment as described below, mutual releases, and a dismissal of
the Action with prejudice.
4.0 Agreements and Undertakings
4.1 EXECUTION OF STIPULATION FOR ENTRY OF JUDGMENT
4.1.1 Concurrently with the execution of this Settlement
Agreement, the Parties herein shall execute a Stipulation for Entry of Judgment.
A true and correct copy of this Stipulation for Entry of Judgment is attached
hereto as Exhibit "A" and incorporated herein as though set forth in full. This
Stipulation will not be filed with the Court except in the event of a default by
Defendant as described below.
4.2 PAYMENT BY DEFENDANT
In light of the foregoing and in consideration for the
contingent agreement of Plaintiff to dismiss its Complaint against Defendant
with prejudice as set forth in P. 4.4.1 below, Defendant agrees and stipulates
as follows:
4.2.1 Defendant will pay to Plaintiff the sum of One
Million Three Hundred Thirty-Three Thousand, Three Hundred Thirty-Three Dollars
and Thirty-Four cents ($1,333,333.34) plus interest as follows:
PAYMENT DUE DATE PRINCIPLE INTEREST TOTAL
- ---------------- --------- -------- -----
October 31,2003 $87,222.23 112,777.77 200,000.00
November 28,2003 $415,370.37 6,230.56 421,600.93
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198-75 SETTLEMENT AGREEMENT
December 31,2003 $415,370.37 4,153.70 421,600.93
January 30, 2004 $415,370.37 2,076.85 419,524.07
4.2.1 All payments set forth above shall be made payable to
"Warner Bros. Entertainment Inc." and mailed to Plaintiff at 4000 Warner Blvd.,
Burbank, California, 91522, Attn: General Counsel.
4.3 DEFAULT BY DEFENDANT
4.3.1 If Defendant fails to make any of the payments within
five (5) days of the dates specified above, Defendant will be in default of this
Settlement Agreement. Plaintiff may give Defendant written notice of such
default, sent by facsimile and first class mail to Interplay Entertainment
Corp., 16815 Von Karman Avenue, Irvine, California, 92606, Attn: Corporate
Counsel.
4.3.2 If the payment has not been made within five (5) days
from the date of sending of such default notice, as set forth in P. 4.3.1 above,
Defendant will be in default under this Settlement Agreement, and Plaintiff can
file the Stipulation for Entry of Judgment, in the form of Exhibit "A" hereto by
EX PARTE Application. The Stipulated Judgment will be entered against Defendant
in the amount of $1,457,444.45, less any payments made pursuant to the
Settlement Agreement. Interest shall accrue on the Stipulated Judgment at the
rate of 10% per annum, calculated from the date the Stipulated Judgment is
entered and until the date the Stipulated Judgment is paid in full.
4.3.3 Once the Stipulated Judgment is entered, Plaintiff
may record the Stipulated Judgment and proceed with any available legal remedy
to collect the Stipulated Judgment including enforcement of its right under the
Promissory Note and the Security Agreement dated as of April 30, 2002. Plaintiff
will be entitled to recover all actual attorneys' fees and costs incurred in
enforcing the Stipulated Judgment.
4.4 DISMISSAL BY PLAINTIFF
4.4.1 Within twenty (20) days of the receipt of the final
payment specified above, Plaintiff agrees to file with the Clerk of the Superior
Court a request for dismissal with prejudice of the Complaint.
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198-75 SETTLEMENT AGREEMENT
5.0 RELEASES
5.1 Except as explicitly set forth in this Settlement Agreement,
and with the exception of any and all remedies authorized by law with respect to
this Settlement Agreement, Interplay Entertainment Corp., and each and all of
its successors in interest, predecessors in interest, parent companies,
divisions, affiliates, subsidiaries, partners, officers, directors,
shareholders, employees, heirs, assigns, beneficiaries, agents and
representatives, will, and hereby do, release, discharge and covenant not to sue
Warner Bros. Entertainment, Inc. and its successors in interest, predecessors in
interest, parent companies, subsidiaries, affiliates, divisions, officers,
directors, shareholders, partners, representatives, insurers, heirs, assigns,
beneficiaries, attorneys, employees and agents, and each of them, from any and
all claims, losses, debts, charges, damages, demands, obligations, causes of
action, lawsuits, liabilities, breaches of duty, misfeasance, malfeasance,
promises, controversies, contracts, judgments, awards, penalties, costs, and
expenses, of whatever nature, type, kind, description or character, whether
known or unknown, which have ever existed or which do exist, arising from or
relating in any way to any and all facts, issues, claims, causes of action and
defenses raised by or in, or that could have been raised by or in, the Action
referenced in P. 2.1.
5.2 Except as explicitly set forth in this Settlement Agreement,
and with the exception of any and all remedies authorized by law with respect to
this Settlement Agreement, and contingent on compliance by Interplay with the
obligations set forth in paragraph 4.2 herein, Warner Bros. Entertainment Inc.,
and each and all of its successors in interest, predecessors in interest, parent
companies, divisions, affiliates, subsidiaries, partners, officers, directors,
shareholders, employees, heirs, assigns, beneficiaries, agents and
representatives, will, and hereby do, release, discharge and covenant not to sue
Interplay Entertainment Corp. and its successors in interest, predecessors in
interest, parent companies, subsidiaries, affiliates, divisions, officers,
directors, shareholders, partners, representatives, insurers, heirs, assigns,
beneficiaries, attorneys, employees and agents, and each of them, from any and
all claims, losses, debts, charges, damages, demands, obligations, causes of
action, lawsuits, liabilities, breaches of duty, misfeasance, malfeasance,
promises, controversies, contracts, judgments, awards, penalties,
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198-75 SETTLEMENT AGREEMENT
costs, and expenses, of whatever nature, type, kind, description or character,
whether known or unknown, which have ever existed or which do exist, arising
from or relating in any way to any and all facts, issues, claims, causes of
action and defenses raised by or in, or that could have been raised by or in,
the Action referenced in P. 2.1.
6.0 Matters Not Released Herein
6.1 Notwithstanding anything else in this Settlement Agreement to
the contrary, the Parties hereto do not release any matters relating to
adherence to and the enforcement of this Settlement Agreement. Nor does Warner
Bros, release any of its rights under the Promissory Note, including its
conversion rights, or its rights under the Security Agreement, both of which
remain in full force and effect until Interplay has satisfied its obligations
under the Promissory Note in full.
7.0 Waiver of Rights Under Civil Code Section 1542
7.1 The Parties declare that they understand the full nature,
extent, and import of Section 1542 of the California Civil Code and of this
entire Settlement Agreement, and have sought and obtained the advice of counsel
with respect to that statute and this Settlement Agreement. Accordingly, with
respect to the released matters, the Parties hereby waive and relinquish any and
all rights or benefits that they may have under the provisions of Section 1542
of the California Civil Code, which reads as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in its favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
7.2 In connection with this waiver and relinquishment, each of the
Parties acknowledges that it may later be discovered that there are facts in
addition to or different from those that it now knows or believes to be true
with respect to the subject matter of this Settlement Agreement. The Parties
also recognize the possibility that, in the future, damages may be suffered
related to the subject matter of this Settlement Agreement that are not
currently known. Fully recognizing these possibilities, it is the Parties'
intention to fully, finally, and forever settle
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198-75 SETTLEMENT AGREEMENT
and release all disputes and differences, known or unknown, suspected or
unsuspected, that now exist, may exist, or heretofore have existed with respect
to the released matters. In furtherance of this intention, the releases given in
this Settlement Agreement, once effective, shall be and shall remain in effect
as a full and complete general release of the released matters notwithstanding
the discovery or existence of such additional or different facts or damages. The
Parties agree that this Settlement Agreement shall not be subject to termination
or rescission by virtue of any difference in facts.
8.0 WARRANTIES OF AUTHORITY AND NONASSIGNMENT
8.1 Each of the Parties to this Settlement Agreement warrants that
said Party has full authority to enter into this Settlement Agreement, to make
the Releases set forth in this Settlement Agreement, and to enter into the
undertakings and obligations set forth in this Settlement Agreement. The Parties
hereby warrant that they have not assigned their respective claims to any other
party or person.
8.2 Each of the Parties to this Settlement Agreement hereby
warrants and represents that the person executing this Settlement Agreement on
its behalf is fully authorized to do so, and that the authorized agents of each
Party have taken all steps required by law or the Parties' bylaws to grant the
signatory said authority.
9.0 FURTHER REPRESENTATIONS AND WARRANTIES
9.1 In entering into this Settlement Agreement, the Parties
represent and warrant that they have fully discussed and reviewed all aspects of
this Settlement Agreement with their counsel; that they have carefully reviewed
and understand all of the provisions of this Settlement Agreement; and that they
are freely, knowingly, and voluntarily entering into this Settlement Agreement
without any form of duress.
10.0 PERFORMANCE OF AGREEMENT
10.1 The Parties each agree to do all the things necessary or
convenient to carry out and effectuate the terms of this Settlement Agreement,
and agree not to do or fail to do anything, directly or indirectly, that will
interfere with the terms and conditions thereof.
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11.0 CONTINUING JURISDICTION
11.1 The Parties agree and acknowledge that, pursuant to California
Code of Civil Procedure Section 664.6, the Los Angeles County Superior Court
shall retain continuing jurisdiction over this action for the purpose of
enforcing any and all terms of this Settlement Agreement. Any breach of any
provision of this Settlement Agreement shall be subject to appropriate relief,
as determined by the Court, and any Party may institute an action with the Court
for enforcement of any provision of this Settlement Agreement. In the event that
any such action for enforcement of this Settlement Agreement becomes necessary,
the prevailing Party shall be entitled to its reasonable attorney's fees and
costs.
12.0 SUCCESSORS IN INTEREST
12.1 This Settlement Agreement, including the Releases herein
contained, shall be binding upon and inure to the benefit of each of the Parties
hereto and each of their successors in interest, including heirs, assigns, and
beneficiaries.
13.0 MUTUALLY DRAFTED SETTLEMENT AGREEMENT
13.1 Each of the Parties hereto has been fully and competently
represented by counsel of its own choosing in the negotiations and drafting of
this Settlement Agreement. Accordingly, the Parties agree that the rule of
construction of contracts resolving any ambiguities against the drafting Party
shall be inapplicable to this Settlement Agreement. Further, each Party hereto
acknowledges that it has read this entire Settlement Agreement and fully
understands its terms, conditions and effects.
14.0 CALIFORNIA LAW
14.1 All questions with respect to the construction of this
Settlement Agreement, and the rights and liabilities of the Parties hereto,
shall be governed by the laws of the State of California, and venue shall lie in
Los Angeles County.
15.0 ENTIRE AGREEMENT
15.1 This Settlement Agreement contains the entire agreement of the
Parties and may not be modified or amended except by a further document in
writing and signed by the
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198-75 SETTLEMENT AGREEMENT
Parties. None of the Parties is relying upon any promise, representation or
statement not contained within this Settlement Agreement.
16.0 HEADINGS
16.1 Section Headings are for convenience only and are not part of
the Settlement Agreement.
17.0 COUNTERPARTS
17.1 The Parties may execute this Settlement Agreement in
counterparts, each one of which will be an original or the equivalent thereof.
Signatures by facsimile are binding, and the Parties will exchange duplicate
original signatures promptly after execution of this Agreement.
18.0 SEVERABILITY
18.1 If any provision in this Settlement Agreement is held by a
Court of competent jurisdiction to be invalid, void or unenforceable for
whatever reason, the remaining provisions not so declared shall nevertheless
continue in full force and effect without being impaired in any manner
whatsoever.
19.0 GENDER AND NUMBER
19.1 Wherever the context so requires, the singular shall include
the plural; the plural shall include the singular; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
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198-75 SETTLEMENT AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have agreed to and executed this
Settlement Agreement.
DATED: October 23, 2003 INTERPLAY ENTERTAINMENT CORP.,
a Delaware corporation
By: /s/ Phil Adam
-----------------------
Name: Phil Adam
Its: President
DATED: October 31, 2003 WARNER BROS. ENTERTAINMENT INC.,
a Delaware Corporation
APPROVED AS TO FORM: By: /s/ John A. Schulman
-----------------------
DATED: October 28, 2003 Name: John A. Schulman
Its: Exec. VP & General Counsel
CALDWELL, LESLIE, NEWCOMBE & PETTIT
A Professional Corporation Christopher G.
Caldwell Joan Mack
By /s/ Joan Mack
-----------------------
JOAN MACK
Attorneys for WARNER BROS.
ENTERTAINMENT, INC.
DATED:October 23, 2003
By /s/
-----------------------
Attorneys for INTERPLAY
ENTERTAINMENT CORP.
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198-75 SETTLEMENT AGREEMENT
1 CALDWELL, LESLIE, NEWCOMBE & PETTIT
CHRISTOPHER G. CALDWELL, State Bar No. 106790
2 JOAN MACK, State Bar No. 180451
A Professional Corporation
3 1000 Wilshire Blvd., Suite 600
Los Angeles, California 90017
4 Telephone: (213) 629-9040
5 Facsimile: (213) 629-9022
6 Attorneys for Plaintiff WARNER BROS.
ENTERTAINMENT INC.
7
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 FOR THE COUNTY OF LOS ANGELES
10
11 WARNER BROS. ENTERTAINMENT INC., Case No. BC 303844
12 Plaintiff,
V. STIPULATION FOR ENTRY OF JUDGMENT
13 INTERPLAY ENTERTAINMENT CORPORATION,
a Delaware corporation, and
14 DOES 1-20,
15
16 Defendants.
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28 EXHIBIT C
CALDWELL,
LESLIE,
NEWCOMBE
&PETTIT
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IT IS HEREBY STIPULATED by and between Plaintiff Warner Bros.
Entertainment Inc. ("Plaintiff"), on the one hand, and Defendant Interplay
Entertainment Corporation, ("Defendant"), on the other hand, that judgment may
be entered in the above-captioned action without further order or further notice
of hearing in favor of Plaintiff and against Defendant, as follows:
1. The Parties hereto have provided for payment by Defendant to
Plaintiff per that certain Settlement Agreement dated as of October 13, 2003
(the "Settlement Agreement"), as follows: Defendant will pay to Plaintiff(l) Two
Hundred Thousand Dollars ($200,000.00) on or before October 31, 2003; (2) Four
Hundred Twenty-One Thousand Six Hundred Dollars and Ninety-Three Cents
($421,600.93) on or before November 28,2003; (3) Four Hundred Nineteen Thousand
Five Hundred Twenty-Four Dollars and Seven Cents ($419,524.07) on or before
December 31, 2003; and (4) Four Hundred Seventeen Thousand Four Hundred
Forty-Seven Dollars and Twenty-Two Cents ($417,447.22) on or before January
30,2004. Should a default occur under the terms of the Settlement Agreement,
Plaintiff is entitled to recover against Defendants a judgment in the amount of
One Million Four Hundred Fifty-Eight Thousand Five Hundred Seventy-Two Dollars
and Twenty-Two Cents ($ 1,458,572.22), as set forth in the Settlement Agreement,
less credit for any amounts paid pursuant to the terms of the Settlement
Agreement. Simple interest at the rate of 10% per annum shall accrue on the
unpaid principal balance of the judgment calculated from the date the unpaid
amount became due.
2. Plaintiff and Defendant agree that the Stipulated Judgment in
the form attached hereto as Exhibit "1" may be filed with the Court if Defendant
fails to comply with the payment terms of the Settlement Agreement.
3. The Stipulated Judgment referred to herein shall be entered
and become final for all purposes upon entry of judgment, and Defendant
expressly waives any right it may have to appeal therefrom.
4. Defendant waives notice of hearing re entry of judgment and
agrees that Stipulated Judgment can be entered on an EX PARTE application of
Plaintiff supported by a declaration setting forth the amount of the Stipulated
Judgment.
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STIPULATION FOR JUDGMENT
5. In the event the Stipulated Judgment is entered against
Defendant, Plaintiff is entitled to costs and actual attorneys' fees incurred in
obtaining and enforcing the Stipulated Judgment against the party or parties
against whom judgment is entered, the amount of which may be established by
Plaintiff in the declaration submitted in support of any EX PARTE application to
enter judgment. Such costs shall include, but shall not necessarily be limited
to, all items listed under Section 1033.5(a) and Section 1033.5(b) of the
California Code of Civil Procedure in effect on the date of this Settlement
Agreement.
6. The terms and conditions of this Stipulation shall be
enforceable under Code of Civil Procedure ss. 664.6, and the Los Angeles County
Superior Court shall retain continuing jurisdiction over this action for the
purpose of enforcing any and all terms of the Stipulation and Settlement
Agreement.
IT IS SO STIPULATED.
DATED: October 23,2003
INTERPLAY ENTERTAINMENT CORP.
DATED: October 31,2003
WARNER BROS. ENTERTAINMENT INC
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APPROVED AS TO FORM:
DATED: October 23, 2003 By: /s/
---------------------------
Attorneys for INTERPLAY
ENTERTAINMENT CORP.
DATED: October 28, 2003
CALDWELL, LESLIE, NEWCOMBE & PETTIT
A Professional Corporation CHRISTOPHER G.
CALDWELL JOAN MACK
By /s/ Joan Mack
---------------------------
Attorneys for WARNER BROS.
ENTERTAINMENT INC.
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STIPULATION FOR JUDGMENT