EXHIBIT 10.11
SETTLEMENT AGREEMENT AND GENERAL RELEASE
THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE (the "Agreement")
is entered into as of this 11th day of June 1997 by and between
BMG Music, d/b/a BMG Entertainment ("BMG"), 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, and Wanderlust Interactive, Inc., 000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Owner"), (collectively, the
"Parties") with respect to the agreement dated as of May 15, 1996
between the Parties (the "Distribution Agreement") in connection
with the distribution of Owner's Product(s) entitled "Pink
Panther Passport To Peril" (referred to in the Distribution
Agreement as Pink Panther Intelligent Fun and Games Number 1 and
hereinafter referred to as Owner's Product(s) #1). Except as
otherwise provided herein, all terms defined in the Distribution
Agreement and used herein shall have the same meanings herein as
in the Distribution Agreement.
WITNESSETH
WHEREAS, BMG extended to Owner a Guarantee(s) that sixty thousand
(60,000) units of Owner's Product(s) #1 would be distributed
within two (2) year period following the initial commercial
release date for Owner's Product(s) (such release occurred on
October 1, 1996);
WHEREAS, Owner agreed to establish a "net price" for Owner's
Product(s) #1 which is fair and competitive;
WHEREAS, BMG does not consider the "net price" established by
Owner to be a price which is fair and competitive;
WHEREAS, BMG and Owner have discussed alternative "net price";
WHEREAS, Owner is unwilling to establish a "net price" for
Owner's Product(s) #1 at any of the "net prices" considered by
BMG to be a fair and competitive price;
WHEREAS, such "net price" impacts the Guarantee(s) dispute has
arisen between Owner and BMG regarding the Guarantee(s)
("Dispute");
WHEREAS, the Parties wish to avoid the expense of defending any
action that might be brought against each other regarding the
Dispute by settling their differences on an amicable basis and
fully and finally resolving the Dispute and any related
controversy.
1. NOW THEREFORE, in consideration of the mutual promises
herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
(a) Immediately following the full execution of the Agreement,
BMG shall pay to Owner the sum of One Hundred Seventy Five
Thousand ($175,000) Dollars in full and final settlement and
discharge of any outstanding disputes between the Parties in
connection with the Distribution Agreement including, without
limitation, the Guarantee Shortfall ("Settlement Dollars").
Promptly following the full execution of this Agreement, BMG
shall wire transfer the payment to Owner in accordance with
Owner's instructions.
(b) (i) In the Territory, BMG shall continue to have the right
to (A) sell and distribute at any "net price" established by BMG
(in its sole discretion) units of Owner's Product(s) #1 which
have been delivered by Owner to the Warehouse for sale and
distribution in the Territory as of the date hereof (including
BMG's existing inventory (as of such date) of Owner's Product(s)
#1 and any BMG returns inventory of Owner's Product(s) #1 on and
after such date) ("Initial Inventory"); and (B) manufacture, sell
and distribute (at any "net price" established by BMG (in its
sole discretion)) up to an additional twenty five thousand
(25,000) units of Owner's ("Additional Inventory"), provided that
the aggregate number of Initial Inventory and Additional
Inventory units sold and distributed by BMG do not exceed fifty
thousand (50,000) and provided further that the sale and
distribution of any unit of Owner's Product(s) #1 which has been
previously sold, distributed and returned shall count as one (1)
unit sold and distributed. The aggregate number of units of
Owner's Product(s) #1 sold and distributed by BMG shall not
exceed fifty thousand (50,000) units ("Excess Units") unless the
Parties shall first have negotiated (in good faith) a fair and
competitive royalty payable by BMG to Owner in connection with
Net Sales of only the Excess Units.
(ii) If BMG elects to exercise its right to manufacture the
Additional inventory, Owner upon request, shall promptly deliver
or
cause to be delivered to BMG (at BMG's cost and expense) (A) the
Master(s) required by BMG to manufacture the Additional
Inventory; and (B) all materials required by BMG to print the
applicable containers, other packaging materials, graphics, user
guide booklets and inserts (four color separations) which
comprise Owner's Product(s) #1.
(c) Except as otherwise contemplated herein with respect to the
Settlement Dollars and a royalty in connection with the
distribution of Excess Units, BMG shall no longer have any
obligation to account, or make any payments, to Owner. Owner
shall have no obligation to reimburse BMG for any of the costs
and expenses incurred by BMG, on Owner's behalf, with respect to
the Initial Inventory.
(d) For good and valuable consideration (receipt of which is
hereby acknowledged), Owner hereby assigns, sells, conveys and
transfers to BMG all right, title and ownership interest in and
to Initial Inventory and the Additional Inventory delivered to
the Warehouse and the proceeds from the sale and distribution of
same ("Transfer") and Owner warrants and represents that Owner
possesses the full right to effect the Transfer free from any and
all encumbrances, liens and other claims by third parties.
2. The Distribution Agreement and the Term are terminated as of
the date first written hereinabove, provided, however, that BMG
shall continue to have the right to sell and distribute Initial
Inventory and Additional Inventory in the manner contemplated
herein and all of Owner's warranties, representations and
indemnifications which are contemplated to survive the expiration
or termination of the Term will continue in full force effect.
3. Owner acknowledges and agrees that BMG has fully performed
its obligations to Owner pursuant to the Distribution Agreement,
including, without limitation, with respect to the payment to
Owner of any and all compensation of any kind whatsoever pursuant
to the Distribution Agreement and that Owner is not entitled to
receive any other payments and/or compensation in connection with
the Distribution Agreement or any other agreement (except this
Agreement) or understanding with BMG in connection with the
subject matter of the Distribution Agreement.
4. In consideration of the amount set forth in Paragraph 1(a)
above and the release contained in Paragraph 5 below, Owner, for
itself and for anyone acting on its behalf, fully, irrevocably
and unconditionally releases and discharges BMG, its
predecessors, successors, parents, subsidiaries, affiliates and
assigns, and their respective representatives, directors,
officers, shareholders, agents and employees (collectively, "BMG
Releases") from any and all claims of any kind whatsoever,
whether known or unknown in any federal, state or local court,
arbitral forum or federal, state or local administrative agency,
which "Owner Releases" (as defined below) now has, ever had, or
hereafter may have against any of the BMG Releases by reason of
any act, failure to act, transaction, event or occurrence prior
to the date of this Agreement, including, without limitation, any
obligation arising out of or otherwise in connection with the
Distribution Agreement and/or the subject matter thereof.
5. In consideration of the release contained in Paragraph 4
above, BMG, for itself and for anyone acting on its behalf,
fully, irrevocably and unconditionally releases and discharges
Owner, its predecessors, successors, parents, subsidiaries,
affiliates and assigns, and their respective representatives,
directors, officers, shareholders, agents and employees
(collectively "Owners's Releases") from any and all claims of any
kind whatsoever, whether known or unknown, in any federal, state
or local court, arbitral forum or federal, state or local
administrative agency, which BMG Releases now has, ever had, or
hereafter may have against any of Owner's Releases by reason of
any act, failure to act, transaction, event or occurrence prior
to the date of this Agreement, including, without limitation, any
obligation arising out of or otherwise in connection with the
Distribution Agreement and/or the subject matter thereof.
6. Each Party recognizes and agrees that the making of and
signing of this Agreement are not intended to and do not
constitute or imply an admission of liability or wrongdoing by
the other Party.
7. Neither Party shall (a) disclose the terms of this
Agreement, except (i) to comply or to obtain compliance with this
Agreement or (ii) to its legal, financial or tax advisers, or (b)
issue, cause, or to the extent within its control, permit to be
issued or cooperate with the issuance of any article, memorandum,
release, interview, publicity or statement, whether oral or
written, of any kind, to any individual, the public, the press or
the media, which is any way concerns this Agreement and/or the
subject matter hereof. In the event either Party does not comply
with this Paragraph 7, then the other Party shall have no
adequate remedy at law and shall be able to enforce this
Paragraph 7 by injunction and such other relief as may be just
and proper.
8. The provisions of this Agreement are severable. If any of
its terms are deemed unenforceable, the remaining provisions
shall remain in effect. Further, this Agreement will be
construed and enforced in accordance with the laws of the State
of New York applicable to contracts negotiated, executed and
performed entirely within the State of New York; provided,
however, that any choice-of-law rules shall not apply. Only a
State or Federal court of competent jurisdiction in the State of
New York, County of New York shall have exclusive jurisdiction
over any dispute arising out of or in connection with this
Agreement, and the Parties hereby consent to the personal
jurisdiction of such court and waive any objection based on venue
or forum conveniens.
9. a) This Agreement may be executed in counterparts and by
different Parties hereto on separate counterparts, but all such
counterparts together shall constitute one and the same
Agreement. For purposes of this Agreement, facsimile signatures
shall be deemed to be original. This Agreement may only be
modified in a writing signed by all parties; provided that the
terms of this Paragraph 9 shall apply to any such modification.
b) This Agreement contains the entire understanding between
the Parties and supersedes all prior, oral and written
agreements, understandings, commitments and practices with
respect to the content hereof.
10. Each Party, for itself, has carefully read and fully
understands all of the terms of this Agreement, including,
without limitation, that this Agreement constitutes a full and
complete waiver and general release of all claims, that such
Party has been given a sufficient period of time within which to
review this Agreement, including, without limitation, with an
attorney, and to the extent such Party desires, such party has
done so; that such party hereby waives any specific period for
the review and/or revocation of this Agreement; that this
Agreement will become effective when signed by all Parties
hereto; and that such Party has signed this Agreement
voluntarily, without duress, coercion or undue influence.
WHEREFORE, the parties hereto have executed this Agreement as of
the date first stated above.
WANDERLUST INTERACTIVE, INC. BMG MUSIC
By: s/ Xxx Xxxxx By: s/ X. Xxxxx
Date: June 26, 1997 Date: June 26, 1997
WP51\CDKIDZ\SETT-AGR.897
