SETTLEMENT AGREEMENT
WHEREAS,
Xxxx Xxxxxxx (“Xxxxxxx”), Xxxxxxx XxXxxxx (“XxXxxxx”), and Xxxxxxx Xxxxxx
(“Xxxxxx”), commenced an action in the Supreme Court of New York, New York
County, against Digital Creative Development Corp., a Utah corporation, and
Digital Creative Development Corporation, a Delaware corporation, (collectively
“DCDC”), and others, Index No. 100192/03 (the “Action”); and
WHEREAS,
certain parties to the Action are now desirous of resolving their differences
without further litigation;
IT
IS
HEREBY AGREED, by and between the parties hereto, for good and valuable
consideration, this __ day of February, 2003 as follows:
1. The
Closing:
The
Closing shall occur simultaneous with the signing of this Settlement
Agreement. At the Closing, DCDC shall deliver to each Xxxxxxx, XxXxxxx and
Xxxxxx: (i) a bank or certified check in the amount of Five Thousand Dollars
($5,000); (ii) delivery of 240,000 shares of restricted common stock, no par
value, of International Microcomputer Software, Inc. (“IMSI”) (the “Stock”)
80,000 shares each to Xxxxxxx, XxXxxxx and Xxxxxx; (iii) three (3) Promissory
Notes (totaling $175,000.00), requiring DCDC to pay Xxxxxxx, XxXxxxx and Xxxxxx
$58,333.33 each, two (2) years from the date in which this Settlement Agreement
is executed. If the IMSI Stock referred to above is unrestricted and able to
be
traded on the open Market, and is above $2.00 on the date the Notes become
due,
DCDC shall have no obligation to pay the Notes, and said Notes shall become
null
and void (such date should coincide with the issue date of the Stock. If the
dates are not the same, for Stock sale purposes, the date on the certificate
shall prevail). Further, DCDC’s obligations on the Notes shall be
proportionately reduced if the IMSI Stock is below $2.00. (For example, if
the
stock price is $1.90 on said date, the $175,000.00 obligation shall be reduced
by $151,000.00 leaving an obligation of $24,000.00, requiring DCDC to pay
Xxxxxxx, XxXxxxx and Xxxxxx $8,000.00 each. If the stock price is $1.80 on
said
date, the Notes shall be reduced by $127,000.00 leaving an obligation due of
$48,000.00, requiring DCDC to pay Xxxxxxx, XxXxxxx and Xxxxxx $16,000.00 each,
etc.
1. Each
of
Xxxxxxx, XxXxxxx and Xxxxxx should be able to sell the IMSI Stock referred
to
above under Rule 144 beginning on the one year anniversary of the execution
of
this Settlement Agreement. The proceeds of such sales shall be credited against
the outstanding principal and interest of the Promissory Notes referred to
above; (iv) a duly executed General Release in the form annexed as Exhibit
A
(the “Release”); and (v) an executed Stipulation of Discontinuance with
prejudice in the form annexed as Exhibit C. At the Closing, Xxxxxxx, XxXxxxx
and
Xxxxxx shall deliver to DCDC: (i) a duly executed General Release in the form
annexed as Exhibit B and (ii) an executed Stipulation of Discontinuance in
the
Action in the form annexed as Exhibit C.
2.
Opinion
of Counsel:
On the
one year anniversary of this Settlement Agreement, and upon written request
by
Xxxxxxx, XxXxxxx and Xxxxxx, DCDC will instruct it’s counsel to issue an Opinion
Letter to sell the IMSI Stock referred to above.
3.
Termination
of Agreements:
Effective upon the Closing, the Settlement Agreement dated December, 2001
between Xxxxxxx, XxXxxxx and Xxxxxx and DCDC and Cineblast, Inc., and any
amendments thereto, and all agreements between Xxxxxxx, XxXxxxx and Xxxxxx
and
DCDC, or any of its wholly-owned subsidiaries, shall be deemed to be terminated.
There are no agreements between the parties hereto except as set forth in this
Settlement Agreement and no party shall have any rights as against the other
except as set forth herein.
4.
Mutual
General Release: The parties shall execute Mutual General Releases (attached
hereto as Exhibits A and B), and the pending litigation filed against DCDC
and
IMSI shall be dismissed upon payment of the above referenced $5,000.00, delivery
of the above referenced stock, and the execution of the above referenced
Notes.
5.
Representation
and Warranties:
X.
Xxxxxxx,
XxXxxxx and Xxxxxx represents that:
(i)
either or both are true and lawful owners of all claims covered by the Release
and have full power and authority to effectuate this agreement and its
Release;
(ii)
no
representations have been made by DCDC or any of its present or former officers,
directors, or any other person, regarding the Stock, its present or future
value, or IMSI’s, its financial condition or business prospects, or any matters
pertaining thereto;
(iii)
Xxxxxxx, XxXxxxx and Xxxxxx have been afforded an opportunity to conduct due
diligence regarding the Stock and is acquiring the Stock based solely upon
the
information available through IMSI’s public filings with the SEC and not upon
any information obtained from DCDC or any other party to this
Agreement;
(iv)
Xxxxxxx, XxXxxxx and Xxxxxx are acquiring the Stock for investment purposes
only
and not with any view toward, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the shares,
in contravention of any rules or regulations promulgated under the Securities
Act of 1933 as amended (“Securities Act”). Xxxxxxx, XxXxxxx and Xxxxxx
acknowledges that the Stock is not registered with the SEC for sale in the
public markets, and may not be sold, transferred, offered for sale, pledged,
hypothecated, or otherwise disposed of without registration under the Securities
Act, except pursuant to an exemption from registration available under the
Securities Act, and except in accordance with applicable provisions of state
securities laws.
(v)
No
representation has been made to Xxxxxxx, XxXxxxx and Xxxxxx by any person
concerning the availability of the Stock for resale in any manner other than
through an effective registration statement filed with the Securities and
Exchange Commission.
(vi)
This
agreement has been negotiated at arm’s length between the parties.
B.
DCDC
represents that:
(i) it
has
the full power and authority (corporate and other) to enter into and fully
perform
this agreement, which agreement has been approved by its Board;
(ii)
it
owns the IMSI Stock free and clear of all claims, liens and encumbrances and
has
fullpower and authority to transfer the Stock to Xxxxxxx, XxXxxxx and Xxxxxx
pursuant to this Agreement;
(iii)
DCDC has not assigned or transferred to any person (nor otherwise disposed
of)any
liability, claim or cause of action that is within the scope of those claims
that it has released.
6.
Additional
Covenants:
A.
Each
party hereto will not, for any reason, contradict or challenge the amount of
funds paid pursuant hereto or the number of shares comprising the Stock; each
acknowledges that this settlement comprises claims that are of uncertain value;
each assumes the risk of any error or miscalculation in assessing those
claims.
B.
Each
of Xxxxxxx, XxXxxxx and Xxxxxx, shall be barred from commencing any action
against any of the Releasees identified on Exhibit A hereto.
C.
Each
of the Releasees identified on Exhibit A hereto shall be barred from commencing
any action against Xxxxxxx, XxXxxxx and Xxxxxx.
D.
In the
event that any action is brought to enforce this Agreement, the prevailing
party
shall be entitled to recover their reasonable attorneys fees.
7.
Miscellaneous:
A.
No
further obligations shall exist with respect to any and all prior or outstanding
agreements or promises, written or oral, between Xxxxxxx, XxXxxxx and Xxxxxx,
on
the one hand, and DCDC, or any of its wholly-owned subsidiaries or past or
present officers or directors, on the other, other than any obligations created
pursuant to this Settlement Agreement.
B.
This
Settlement Agreement contains the complete agreement of the parties. In entering
into this Settlement Agreement, no party is relying upon any representation,
commitment, warranty, promise or other statement by any other party unless
expressly set forth in this Settlement Agreement.
C.
This
Settlement Agreement shall not be modified except in writing executed by all
parties.
D.
This
Settlement Agreement constitutes a compromise of disputed claims and is not
to
be interpreted or construed as an admission by any party of any wrongdoing
or
omission of any kind.
E.
If at
any time after the date of execution of this Settlement Agreement, any provision
of this Settlement Agreement is held to be illegal, void, or unenforceable,
that
provision will not have any effect on, and will not impair the enforceability
of, any other provision of this Settlement Agreement.
F.
The
parties agree not to engage in any form of conduct, or make any statement or
representation (whether written or oral), that disparages the other
party.
G.
The
parties represent and warrant that they have not assigned or transferred to
any
other party all or any portion or any claim released pursuant to this Settlement
Agreement.
H.
This
Settlement Agreement is binding upon, and shall inure to the benefit of, the
parties and their respective heirs, executors, administrators, successors and
assigns.
I.
The
Settlement Agreement shall be governed by the laws of the State of New York,
without regard to the conflict of laws principles of the State. Each party
agrees to submit to the exclusive jurisdiction of the Courts of New York, New
York County in any dispute arising out of or concerning this Settlement
Agreement.
J.
Each
person signing below represents that such person has the authority to bind
the
indicated principal.
K.
This
Settlement Agreement may be executed in counterparts.
L.
Each
party shall execute such additional documents, or take any further steps that
may be reasonably required to effectuate this Settlement Agreement.
__________________________________
XXXX
XXXXXXX
__________________________________
XXXXXXX
XXXXXXX
__________________________________
XXXXXXX
XXXXXX
CINEBLAST,
INC., a Delaware corporation
By:________________________________
DIGITAL
CREATIVE DEVELOPMENT CORPORATION, a Utah corporation
By:_________________________________
DIGITAL
CREATIVE DEVELOPMENT CORPORATION, a Delaware corporation
By:_________________________________
______________________________________
XXXXX
XXXXXXXX
______________________________________
XXXXXX
XXXX III
______________________________________
XXXX
XXXX
_______________________________________
SKULI
THORVALDSSON
________________________________________
XXXX
XXXXXX
________________________________________
SIGURDUR
XXX XXXXXXXXX
________________________________________
XXXXXX
XXXXXX
_______________________________________
XXXXXXX
XXXXXXXXXX
Exhibit
C
SUPREME
COURT OF THE STATE OF NEW YORK
COUNTY
OF
NEW YORK
------------------------------------------------------------------------X
XXXXXXX
XxXXXXX, XXXX XXXXXXX and :
XXXXXXX
XXXXXX, : Index
No.
100192/03
:
Plaintiffs, :
:
-
against
- :
:
:
DIGITAL
CREATIVE DEVELOPMENT :
CORPORATION,
a Delaware corporation; : STIPULATION
OF
DIGITAL
CREATIVE DEVELOPMENT : DISCONTINUANCE
CORPORATION,
a Utah corporation; :
INTERNATIONAL
MICROCOMPUTER :
SOFTWARE,
INC., a California corporation; :
:
Defendants. :
------------------------------------------------------------------------X
IT
IS
HEREBY STIPULATED AND AGREED, by the attorneys for the undersigned
parties
hereto that:
1. Plaintiffs
hereby discontinue the within action against all defendants, with prejudice,
and
with each party to bear its own costs, expenses and attorneys fees. Each
defendant herein, hereby waives and discontinues with prejudice any counterclaim
that might have been asserted in this proceeding.
2. No
party
hereto is an infant, incompetent person for whom a committee has been appointed
or conservatee and no person not a party has an interest in the subject matter
of the action.
Dated: February
__, 2003
LAW
OFFICES OF XXXXX X. XXXXXXXX
By:_____________________________
Xxxxxx
Xxxxxx Xxxxx
00
Xxxxxxx Xxxxxx
Xxxxx
Xxxxxx, XX 00000
(000)
000-0000
Attorneys
for Plaintiff
XXXXXX
XXXXXXXX FROME XXXXXXXXXX
&
XXXXXXX LLP
By:_______________________________
Xxxxxx
X.
Xxxxxxx
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
(000)
000-0000
Attorneys
for Defendants DCDC
INTERNATIONAL
MICROCOMPUTER SOFTWARE, INC.
By:______________________________
Xxxx
Xxxxx, General Counsel
00
Xxxxxxx Xxx
Xxxxxx,
XX 00000
(000)
000-0000
