Exhibit 10.23
SETTLEMENT AGREEMENT AND RELEASE
This SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is made and executed
as of September 26, 1996 by and between Paramount Pictures Corporation, a
Delaware corporation ("Paramount"), and Odyssey Distributors, Ltd., a California
corporation ("Odyssey"), with reference to the following facts:
RECITALS
A. On or about August 19, 1992, Paramount and Odyssey reached an agreement
(the "Distribution Agreement") with respect to the motion picture entitled
"XXXXX XXXXXX'X WUTHERING HEIGHTS" (the "Picture").
B. Pursuant to the Distribution Agreement, Paramount granted to Odyssey
certain distribution rights for the Picture in a specified territory and for a
limited term (the "Distribution Rights") in consideration for Odyssey's
agreement to make certain payments to Paramount (the "Payment Obligations").
C. Odyssey has failed to perform the Payment Obligations while alleging
certain issues in connection with the Picture, resulting in a dispute between
the parties (the "Dispute").
D. Paramount and Odyssey now desire to settle forever the Dispute and all
issues and claims relating to the Picture.
ACCORDINGLY, in consideration of the foregoing recitals, the promises
contained herein, and other good and valuable consideration, receipt of which is
hereby acknowledged, Paramount and Odyssey stipulate and agree as follows:
TERMS AND CONDITIONS
1. Picture Licenses
(a) Odyssey represents and warrants that the only licenses it has
entered into with respect to the Distribution Rights are those set forth
in Schedule 1 attached to this Agreement and incorporated herein by this
reference (the "License Agreements"), that Schedule 1 is true and correct
in all respects concerning the License Agreements and that Odyssey has not
distributed or exploited in any other manner the Distribution Rights.
(b) Odyssey hereby assigns, transfers and conveys to Paramount all
of its right, title and interest in and to the License Agreements,
including, without limitation, all of its rights and entitlements to
receive payments (currently due and to become due in the future) pursuant
to the License Agreements. Notwithstanding the foregoing,
Odyssey shall remain responsible for all representations, warranties,
covenants and agreements under the License Agreements and nothing herein
shall in any way obligate Paramount to perform or guarantee performance
under such License Agreements. Furthermore, Odyssey hereby agrees to
indemnify and hold the Paramount Parties (as hereinafter defined) harmless
from any claims of licensees or third parties in connection with the
License Agreements. Notwithstanding the foregoing, Paramount agrees to
continue to grant to Odyssey non-exclusive access to the Picture physical
materials necessary for Odyssey to perform its obligations (at its own
expense) under such License Agreements.
(c) The rights granted by Odyssey to licensees pursuant to the
License Agreements shall be referred to herein as the "Licensed Rights"
and shall terminate in all respects upon the earlier of expiration or
termination of each respective License Agreement. All Distribution Rights
other than the Licensed Rights shall be referred to herein as the
"Remaining Rights".
2. Conveyance of Remaining Rights to Paramount
(a) Odyssey hereby assigns, transfers and conveys to Paramount all
of its right, title and interest in and to the Remaining Rights, and
hereby agrees and confirms that it shall not, and shall have no further
right to, license or otherwise exploit the Remaining Rights.
(b) In furtherance of the foregoing assignment, transfer and
conveyance. Odyssey agrees to deliver to Paramount, contemporaneous with
the execution of this Agreement, an executed Short Form Assignment in the
form of Exhibit "A" attached hereto and incorporated herein by this
reference.
3. Odyssey Payments
(a) Odyssey hereby agrees to pay, or cause to be paid, to Paramount
all amounts paid by licensees from and after the date hereof pursuant to
the License Agreements. In connection with the foregoing agreement,
Odyssey further agrees to send to each of the licensees of the License
Agreements an executed Notice of Assignment in the form of Exhibit "B"
attached hereto and incorporated herein by this reference, and to use its
best efforts to obtain from each of said licensees an executed Acceptance
and Acknowledgment in the form of Exhibit "B".
(b) Odyssey hereby agrees that in the event that Paramount has not
received at least $500,000 in payments from the License Agreements by
January 15, 1997, as contemplated by Paragraph 3(a) above, Odyssey shall
pay to Paramount any such deficit amount so that Paramount will have
received a total of at least $500,000 by January 15, 1997. Odyssey's
payment of the foregoing amount must be received by Paramount no later
than January 15, 1997.
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(c) All payments to be made to Paramount pursuant to this Paragraph
3 shall be made by wire transfer to the following bank account:
Bank of America
Assubel Xxxxxxxx
Xxxxxxxxxxxxxxxxxx 000
X-0000 Xxxxxxx
Xxxxxxx
Attention: Xx. X. Xxxxxxx
Credit: Paramount Pictures International
Account No.: 000-0000000-00
Reference: "XXXXX XXXXXX'X WUTHERING HEIGHTS"
4. Guarantee Agreement
As security for the performance of Odyssey's obligations under this
Agreement, Odyssey agrees to deliver to Paramount a Guarantee Agreement,
executed by Communications & Entertainment Corp., in the form of Exhibit
"C" attached hereto and incorporated herein by this reference.
5. Releases
(a) Except for Paramount's obligation to provide non-exclusive
access to Picture physical materials as contemplated by Paragraph 2(b) of
this Agreement, Odyssey hereby fully and completely releases and
discharges Paramount and all of its officers, directors, shareholders,
subsidiaries, affiliates, agents, employees, partners, successors, heirs,
executors, personal representatives, assigns, attorneys, and all persons
and entities operating on their behalf (the "Paramount Parties"), from
absolutely any and all claims, demands, sums of money, actions, rights,
causes of action, obligations and liabilities of any kind or nature
whatsoever, known or unknown, suspected or unsuspected, which Odyssey now
has, ever had, or hereafter may have or assert it has, by reason of any
matter or thing whatsoever, that arise out of, are connected in any way
with, or relate in any manner whatsoever, directly or indirectly, to the
following: the subject matter of this Agreement; any of the matters, acts,
events or occurrences alleged or referred to in the Dispute; and any
contract, agreement or settlement between Odyssey and Paramount, including
the Distribution Agreement.
(b) Except for obligations created by this Agreement and any
documents delivered pursuant hereto, Paramount hereby fully and completely
releases and discharges Odyssey and all of its officers, directors,
shareholders, subsidiaries, affiliates, agents, employees, partners,
successors, assigns, attorneys, and all persons and entities operating on
their behalf, from absolutely any and all claims, demands, sums of money,
actions, rights, causes of action, obligations and liabilities, of any
kind or nature whatsoever, known or unknown, suspected or unsuspected,
which Paramount now has, ever had, or hereafter may have or assert it has,
by reason of any matter or thing whatsoever, that arise out of, are
connected in any way with, or relate in any
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manner whatsoever, directly or indirectly, to the following: the subject
matter of this Agreement; any of the matters, acts, events or occurrences
alleged or referred to in the Dispute; and any contract, agreement or
settlement with Odyssey, including the Distribution Agreement.
(c) General Nature and Scope of Releases
With respect to the claims and rights released as between Odyssey
and Paramount, as described hereinabove, it is understood and agreed that
this Agreement and the releases herein extend to all claims of every
nature and kind whatsoever, known or unknown, suspected or unsuspected,
and the parties expressly waive all rights under California Civil Code
Section 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR.
Odyssey and Paramount understand that the facts with respect to this
Agreement may hereafter turn out to be other than and different from the
facts now known to them or believed by them to be true, and each party
expressly assumes the risk of the facts turning out to be different and
agrees that this Agreement shall be in all respects effective and not
subject to termination or rescission by reason of any such difference in
facts.
6. Security Interest
(a) Without limiting or exhausting any of Paramount's rights under
this Agreement, including, without limitation, Paramount's rights under
the Guarantee Agreement referred to in Paragraph 4, Odyssey hereby grants
Paramount a security interest (the "Security Interest") in and to all of
Odyssey's right, title and interest in the Picture, including, without
limitation, in and to the License Agreements, and all products and
proceeds therefrom, all for the purpose of providing security to Paramount
for the representations, warranties, covenants and agreements of Odyssey
hereunder.
(b) Odyssey hereby agrees to execute and deliver to Paramount all
such agreements, financing statements and instruments, including, without
limitation, a Copyright Mortgage and Assignment and Grant of Security
Interest in the form of Exhibit "D" attached hereto and incorporated
herein by this reference, as Paramount shall require in order to further
evidence, effect, perfect and protect the Security Interest.
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7. Assignment of Claims
Each party warrants and represents that it has not assigned or in
any way conveyed, transferred or encumbered all or any portion of the
claims or rights covered by this Agreement.
8. Independent Legal Advice
Each party acknowledges, warrants and represents that it has sought
independent legal advice with respect to the advisability of entering into
this Agreement and the meaning and effect of all aspects of the Agreement,
and executes this Agreement with full knowledge of all rights which it may
have. Each party represents that it enters into this Agreement freely,
knowingly and voluntarily, and that the execution and delivery of the
Agreement is not the result of any fraud, duress, mistake or undue
influence whatsoever.
9. Construction of Agreement
Each party acknowledges that it has had an opportunity to review and
revise this Agreement, and the normal rule of construction to the effect
that ambiguities in an agreement are to be resolved against the drafting
party shall not apply to the interpretation of this Agreement.
10. Severability
In the event that any provision of this Agreement or any portion
hereof is held by a court of competent jurisdiction to be unenforceable or
invalid, the validity and enforceability of the enforceable portions of
any such provision and of the remaining provisions shall not be adversely
affected.
11. Survival of Agreement
The terms, conditions and obligations of this Agreement shall
survive the date of this Agreement.
12. Governing Law
This Agreement shall be construed in accordance with, and governed
by, the laws of the State of California applicable to agreements to be
wholly performed therein and by the federal laws of the United States of
America.
13. Entire Agreement
This Agreement (including its schedule and exhibits) is the only,
sole, entire and complete agreement relating in any way to the subject
matter hereof. No statements, promises or representations have been made
by either party hereto, or relied upon by
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either party, and no consideration has been offered, promised, expected or
held out other than as is expressly provided herein. In the negotiation
and execution of this Agreement, each party has been represented by
counsel of its own selection.
14. Headings
The various headings in this Agreement are inserted for convenience
only and shall not be deemed to be a part of or in any manner affect this
Agreement or any provision hereof.
15. Attorneys' Fees and Costs
(a) Except as otherwise expressly provided for herein, each party
expressly agrees that, for purposes of this Agreement, all parties shall
bear their own costs, including attorneys' fees, regarding the disputes
compromised by this Agreement, including every aspect of the Dispute and
the preparation, review and execution of this Agreement.
(b) In any action or proceeding filed to enforce or interpret the
terms of this Agreement or to recover damages for breach thereof, the
prevailing party shall be entitled to recover reasonable attorneys' fees
and other costs of suit in addition to any other relief granted by the
Court.
16. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have approved and executed this Agreement
as of the date hereinabove set forth.
Dated: 12/6/96 ODYSSEY DISTRIBUTORS, LTD.,
a California corporation
By: /s/ ILLEGIBLE
------------------------------------
Dated: 12/10/96 PARAMOUNT PICTURES CORPORATION,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
------------------------------------
XXXXX XXXXX
Senior Vice President
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GUARANTEE AGREEMENT
This Guarantee Agreement is entered into as of September 26, 1996, by
Communications & Entertainment Corp., a Nevada corporation ("Guarantor"), in
favor of Paramount Pictures Corporation, a Delaware corporation ("Beneficiary").
For good and valuable consideration, the receipt, value and adequacy of which
Guarantor hereby acknowledges, Guarantor hereby agrees as follows, and for
valuable consideration, the receipt, value and adequacy of which Beneficiary
hereby acknowledges, Beneficiary hereby agrees as follows:
1. Concurrently herewith Beneficiary and Odyssey Distributors, Ltd., a
California corporation ("Obligor") which is a wholly-owned subsidiary of
Guarantor, are entering in that certain Settlement Agreement and Release of even
date herewith (the "Settlement Agreement"), pursuant to the terms of which,
inter alia, Obligor has made certain representations, warranties, covenants and
agreements, including, without limitation, its agreement to pay or cause the
payment of certain sums to Beneficiary in respect of sub-distribution of that
certain motion picture "XXXXX XXXXXX'X WUTHERING HEIGHTS" (the "Guaranteed
Obligations").
2. Guarantor hereby irrevocably guarantees performance, in accordance with
the terms and conditions of the Settlement Agreement, of the Guaranteed
Obligations, and hereby agrees to indemnify Beneficiary from any damages or
losses it may sustain by reason of any failure of Obligor to perform any of the
Guaranteed Obligations. To the extent the Guaranteed Obligations require the
payment of money, this Guarantee Agreement constitutes a guarantee of payment
when due and not merely of collection, and is not conditioned upon any attempt
to collect from Obligor or any other party. Payment by Guarantor pursuant to
this Guarantee Agreement of any amount owed by reason of the Guaranteed
Obligations shall be due and payable, and Guarantor shall pay such amount not
later than ten days after notice from Beneficiary to Guarantor that Obligor has
failed to pay such amount on the terms of the Settlement Agreement.
3. If Obligor fails to perform any of the Guaranteed Obligations,
Beneficiary may take such action as it deems appropriate, either legal or
equitable, and in connection therewith name Guarantor as a party in any such
action.
4. The liability of Guarantor hereunder shall be absolute, unconditional,
irrevocable and continuing irrespective of any lack of validity or
enforceability of the Settlement Agreement or any other agreement or instrument
relating thereto, and irrespective of any modification, amendment or waiver of
or any consent to depart from the Settlement Agreement or any other agreement or
instrument relating thereto. This Guarantee Agreement shall continue to be
effective or be reinstated, as the case may be, if any payment of any of the
Guaranteed Obligations is rescinded or otherwise must be returned upon any
insolvency, bankruptcy, reorganization or similar event. Guarantor hereby agrees
that it shall not be released from any of its obligations hereunder by any act
or circumstance whatsoever which might be deemed a legal or equitable discharge,
release, defense or basis for claim of exoneration of a guarantor
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or surety. Guarantor waives any and all notices that may be required by law or
otherwise, including diligence, notice of acceptance and any other notice with
respect to the Guaranteed Obligations and this Guarantee Agreement, and waives
any requirement that Beneficiary give any notice, or exercise or exhaust any
right, power or remedy otherwise available to Beneficiary before enforcing its
rights hereunder.
5. Each payment payable by Guarantor to Beneficiary hereunder shall be
made without any set-off or counterclaim and free and clear of and without
deduction for any taxes or withholdings of any kind, except that, if Guarantor
is compelled to make any such deduction or withholding, then Guarantor shall pay
to Beneficiary such additional amount, if any, as shall be necessary to result
in the same net payment to Beneficiary as would have been due from Obligor
pursuant to the Settlement Agreement if Obligor were making such payment.
6. This Guarantee Agreement shall be governed by the laws of the State of
California with the same force and effect as if fully executed and to be fully
performed therein. Guarantor submits to the exclusive jurisdiction of the Courts
of California (state or federal) with respect to any action or proceeding based
upon or resulting from this Guarantee Agreement.
7. By execution and delivery of this Agreement, Guarantor accepts for
itself and in connection with its assets, generally and unconditionally, the
exclusive jurisdiction of the courts referred to in Paragraph 6 hereof, and
irrevocably agrees to be bound by any judgment rendered thereby, in connection
with this Guarantee Agreement. Guarantor hereby irrevocably designates and
appoints Xxxxxx Xxxxxx, Esq. at 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or such other person or persons as may hereafter be elected by
Guarantor as its agent to receive on its behalf service of all process in any
such proceedings in any court. Such service (if delivered or mailed in
accordance with the provisions of Paragraph 8 hereof and, if mailed, mailed with
return receipt requested) is hereby acknowledged by Guarantor to be effective
and binding service of process upon Guarantor in every respect. A copy of any
such process so served shall be mailed by registered mail, return receipt
requested, to Guarantor at any address or addresses designated by it in
Paragraph 8 hereof; provided, however, that any failure to mail such copy shall
not affect the validity of such service of process. If any agent appointed by
Guarantor refuses to accept service of process as contemplated thereby or
otherwise, Guarantor hereby agrees that service of process upon it by mail
addressed to Communications & Entertainment Corp. at 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, shall constitute sufficient notice.
8. Any notice hereunder, and any service of process under Paragraph 7
hereof, shall be deemed given on the first to occur of the following: (i) on the
date it is delivered (or if that date is not a day on which commercial banks are
open for business in the city specified in the address for a notice provided by
the recipient (a "Local Business Day"), or if delivered after the close of
business on a Local Business Day, on the first following day that is a Local
Business Day) when delivered personally against receipt, or (ii) on the second
Local Business Day after being sent by overnight courier, or (iii) on the day
when transmittal confirmation received is sent by telecopy (or if that day is
not a Local Business Day, or if after the close of business on a Local Business
Day, on the first following day that is a Local Business Day),
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provided that a copy of such notice is concurrently delivered personally against
receipt or sent by overnight courier, or (iv) on the third Local Business Day
after the date mailed by registered or certified, first class mail to the
parties at the following address (or to such other addresses as a party may have
specified by notice given to the other parties hereto pursuant to this
provision):
To: Communications & Entertainment Corp.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
with a courtesy copy to:
Odyssey Distributors, Ltd.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
To: Paramount Pictures Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
with a courtesy copy to:
Paramount Pictures Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
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EXECUTED as of the date first above written.
COMMUNICATIONS & ENTERTAINMENT CORP.,
a Nevada corporation
By: /s/ ILLEGIBLE
----------------------------------
Its: CEO
-----------------------------
Accepted and Agreed to:
PARAMOUNT PICTURES CORPORATION,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
------------------------------
XXXXX XXXXX
Its: Senior Vice President
--------------------------
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STATE OF NEW YORK )
COUNTY OF NEW YORK )
On December 5, 1996, before me, Xxxxxx Xxxxxx, a Notary Public, personally
appeared Xxxxxxx Xxxxxxxxx.
[X] personally known to me, OR
[_] proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged that he/she executed the same in his/her capacity, and that by
his/her signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxx Xxxxxx
---------------------------
Signature of Notary
XXXXXX X. XXXXXX
Notary Public, State of New York
No. 4607176
Qualified In Suffolk County
Term Expires July 31, 1997
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