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EXHIBIT 10.7
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
PLEASE READ CAREFULLY
THIS DOCUMENT CONTAINS A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.
This Settlement Agreement and Mutual Release ("Agreement") is
entered into by and among plaintiff Rogue Studios, Inc. ("Rogue") and defendants
Xxx Xxxxx, III and Xxx Xxxxx, III dba Xxxxx Engineering Company (together,
"Xxxxx"). Rogue and Xxxxx are hereinafter collectively referred to as the
"Parties".
RECITALS
A. On or about March 18, 1998, Rogue filed an action in the Los
Angeles County Superior Court against Xxxxx alleging breach of contract,
tortious breach of contract, fraud, conversion, constructive trust and common
counts bearing Case No. SC 051 695 (the "Action").
B. It is the desire of the Parties to resolve all disputes
underlying or in any way connected with or related to the Action and to release
one another, their principals, agents, heirs, attorneys, representatives,
assigns, and insurance carriers, their agents and employees, from any and all
rights, claims, demands, and damages of any kind, known or unknown, existing or
arising in the future, resulting from or related to any and all liability
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in connection with any such disputes.
AGREEMENT
IN CONSIDERATION of the promises and covenants contained in this
Agreement, the Parties agree as follows:
1. Upon execution of the Agreement, Xxxxx will cause 47,568
shares of the restricted Common Stock of Adrenalin Interactive, Inc. (formerly
known as Wanderlust Interactive, Inc.) ("Adrenalin") to be issued by Adrenalin
to Rogue and 23,784 shares of the restricted Common Stock of Adrenalin to be
issued by Adrenalin to Rogue's attorney in this Action, Xxxxxxx Xxxxxx Saleman
("Xx. Xxxxxxx").
2. Upon execution of the Agreement and issuance of the aggregate
of 71,352 shares of Adrenalin's restricted Common Stock (collectively the
"Shares") to Rogue and to Xx. Xxxxxxx, Rogue will execute and deliver to Xxxxx a
Request For Dismissal without prejudice of the Action. Xxxxx will thereafter
cause the Request For Dismissal to be filed and each party will bear its own
costs and attorney's fees.
3. The certificates representing the Shares shall bear the
following legend on the face or backside thereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD
TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
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4. Following the issuance of the Shares to Rogue and Xx. Xxxxxxx,
Xxxxx will make a good faith effort to cause the restrictions on the resale of
the Shares to be removed by means of the registration of the Shares under and
pursuant to the provisions of the Securities Act of 1933, as amended (the "1933
Act"), and all applicable state securities laws.
5. If, for any reason, Xxxxx'x effort to cause the Shares to be
registered for resale under the 1933 Act and all applicable state securities
laws fails, the Shares issued to Rogue and to Xx. Xxxxxxx will be returned to
Xxxxx.
6. In the event of such failure to cause the Shares to be
registered for resale under the 1933 Act and all applicable state securities
laws, Xxxxx will have ninety (90) days from such date to issue a cashiers check
payable to the order of Rogue and Xx. Xxxxxxx in the amount of $82,500 plus 10%
interest on such amount from such date until actually paid.
7. If Xxxxx fails to cause the Shares to be registered for resale
under the 1933 Act and all applicable state securities laws and fails to pay the
$82,500 plus interest within the requisite time frame, Rogue shall have the
right to refile the Action against Xxxxx.
8. If, at anytime before the expiration of thirty (30) days
following the effective date of the registration of the resale of the Shares
under the 1933 Act and all applicable state securities laws, Adrenalin files any
bankruptcy proceeding, Rogue shall have the right to return, and cause Saleman
to return, all, but not less than all, of the Shares and
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to refile the Action against Xxxxx.
9. The statute of limitations with respect to any claim asserted
in the Action shall be tolled from the execution of the Agreement until the
earliest of the following contingent events:
(a) expiration of thirty (30) days following the effective
date of the registration for the resale of the Shares under the
1933 Act and all applicable state securities laws;
(b) payment of $82,500 plus 10% interest thereon is
made to Rogue; or
(c) Rogue refiles the Action against Xxxxx as permitted by
the terms of this Agreement.
10. If and when Xxxxx either causes the Shares issued to Rogue
and to Xx. Xxxxxxx to be registered for resale under the 1933 Act and all
applicable state securities laws or pays to Rogue the sum of $82,500 plus the
required interest, the dismissal of the Action will be deemed, and agreed to be,
a dismissal with prejudice. Such agreement will be confirmed by letter from Xx.
Xxxxxxx to counsel for Xxxxx, Xx. Xxxxxxx Xxxxxxxxx.
11. Except as to the rights and obligations provided herein, and
subject to the performance by the Parties of their respective obligations as
described in Paragraphs 1-10 above, the Parties hereby release and forever
discharge one another and their respective
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principals, agents, heirs, attorneys, representatives, assigns, and their
insurance carriers, their agents and employees, of and from any and all claims,
demands, sums of money, actions, rights, causes of action, obligations and
liabilities of every kind or nature whatsoever which they have had, or claim to
have had, or now have, or now claim to have, whether or not such claims arose
out of, or were, or are in any manner connected with the facts recited above or
referred to in the Action. Further, except as to the rights and obligations
provided herein, the Parties hereby release and discharge one another and their
respective principals, agents, heirs, attorneys, representatives, assigns, and
their insurance carriers, their agents and employees, from any and all claims,
demands, sums of money, actions, rights, causes of action, obligations and
liabilities of every kind or nature whatsoever which they hereafter may have or
claim to have had arising out of or in any manner connected with the facts
recited above or referred to in the Action, including, but not limited to, a
cause of action for declaratory relief, breach of contract, alter ego,
fraudulent conveyance, breach of the implied covenant of good faith and fair
dealing, negligent misrepresentation, conspiracy, fraud, deceit, intentional
infliction of emotional distress, negligent infliction of emotional distress,
breach of fiduciary duty, breach of statutory duties, malicious prosecution,
abuse of process, misuse of civil process, and all damages, general,
compensatory, punitive and/or exemplary which may arise therefrom.
12. The Parties hereby declare and represent that they understand
and agree that this settlement is a compromise of doubted and disputed claims,
and is not to be construed as an admission of liability on the part of any
person released hereby, and any
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liability is expressly denied.
13. In executing this Agreement, the Parties represent and
certify that they do so with full knowledge of any and all rights which they
have and that they do not rely, and have not relied, on any representations made
by the other Party, or a representative of the other Party, with regard to this
Agreement or the basis thereof. Each Party assumes the risk of any mistake of
fact on its part in connection with the true facts involved herein and with
regard to any facts which are now unknown by him/her. In this connection, all
rights under Section 1542 of the California Civil Code are hereby expressly
waived by the Parties. Such statute provides as follows:
"A general release does not extend to claims which
the creditor does not know of 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."
14. Thus, notwithstanding the provisions of Section 1542, and for
the purpose of implementing a full and complete Agreement and discharge, the
Parties expressly acknowledge that this Agreement is intended to include in its
effect, without limitation, all claims which any party does not know or suspect
to exist in its favor at the time of the execution hereof, and that this
Agreement contemplates the extinguishment of any such claim or claims.
15. Other than the attorney fees of Xx. Xxxxxxx, the Parties
represent that they have not heretofore assigned or transferred, or purported to
assign or transfer, to any
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person or entity, any claim referred to in this Agreement or any portion thereof
or interest therein.
16. This Agreement is intended to formalize an agreement between
the Parties that was reached amicably. Each party acknowledges that there have
been no threats or duress leading to the execution of this Agreement.
Furthermore, each Party has had the opportunity to consult with counsel
concerning the scope and effect of this Agreement.
17. Should any litigation be brought to enforce the provisions of
this Agreement, or any rights or duties arising under this Agreement, the
prevailing party in such litigation shall be entitled to recover its attorneys'
fees and costs reasonably incurred in such litigation.
18. This Agreement is made and entered into in the State of
California, and shall in all respects be interpreted, enforced and governed
under the laws of the State of California. The language of all parts of this
Agreement shall in all cases be construed as a whole, according to its fair
meaning, and not strictly for or against any Party.
19. Should any provisions of this Agreement be declared or
determined by any Court to be illegal or invalid, the validity of the remaining
parts, terms or provisions shall not be affected thereby, and said illegal or
invalid part, term or provisions shall be deemed not to be a part of this
Agreement.
20. This Agreement sets forth the entire agreement between the
Parties hereto, and fully supersedes any and all prior agreements or
understandings between the Parties pertaining to the subject matter of this
Agreement.
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21. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
DATED: June 17, 1998
ROGUE STUDIOS, INC.
By: /s/ XXXXX XXXXXXXXXX
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Its: President
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DATED: June 17, 1998
XXX XXXXX, III
By: /s/ XXX XXXXX, III
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DATED: June 17, 1998
XXX XXXXX, III DBA XXXXX
ENGINEERING COMPANY
By: /s/ XXX XXXXX, III
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Its: Sole Proprietor
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APPROVED AS TO FORM AND CONTENT:
LAW OFFICES OF
XXXXXXX XXXXXX SALEMAN
By: /s/ XXXXXXX XXXXXX SALEMAN
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Xxxxxxx Xxxxxx Saleman
Attorneys for Rogue Studios, Inc.
XXXXX & XXXXXXXXXX
By: /s/ XXXXXXX XXXXXXXXX
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Xxxxxxx Xxxxxxxxx
Attorneys for Xxx Xxxxx, III and
Xxx Xxxxx, III dba Xxxxx Engineering
Company
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