LIMITED TREASURES SETTLEMENT AGREEMENT



 







 





EXHIBIT 10.12








 






SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

________________________________________________________________________________________x

GRAND TOYS INTERNATIONAL, INC.,





				
	 	Plaintiff,	 	Index No. 600798/01






-against-





				
	DANIEL ATKINS, MARK ATKINS, TERESA ATKINS, 

DOUGLAS ATKINS, AND BRUCE MINOR,	 	STIPULATION OF SETTLEMENT











				
	Defendants.	 	
	________________________________________________________________________________________x
	 	





WHEREAS:




     A.     Plaintiff initiated a motion against defendants for summary judgment in
lieu of complaint (“Motion”) based upon guaranties executed by each of the
individual defendants for the corporate entity Limited Treasures, Inc.
(“Limited”);



     B.     The defendants have collectively interposed opposition to the Motion,
having alleged various defenses on behalf of the individual defendants;



     C.     Plaintiff and defendants have agreed on various adjournments of the
Motion while the parties have discussed resolution of their differences;



     D.     The parties hereto desire to amicably resolve their differences and set
forth their understanding in this Stipulation of Settlement;



     NOW, IT IS HEREBY STIPULATED AND AGREED by and between plaintiff and the
defendants as follows:









 


 

     1.     The plaintiff’s claims against Limited and the individual defendants
are hereby settled in the sum of $775,000 (the “Settlement Obligation”) which
the defendants hereby agree to pay or cause to be paid to plaintiff as follows:










 





     (a)     The sum of $7,500 per month for six consecutive months beginning on
June 30, 2001, payable on the last day of each month;



     (b)     The sum of $21,124.23 per month for forty-two (42) consecutive months
beginning December 31, 2001, payable on the last day of each month, all as set
forth on the amortization schedule annexed hereto as Exhibit A.



     (c)     Each monthly payment is due to be received by plaintiff at its
address, attention Ms. Tania M. Clarke, 1710 Transcanadian Highway, Dorval,
Quebec H9P lH7 Canada on the due date for that payment, which is the last day
of each month. Payment shall be made by either wire transfer or courier
service.



     2.     The Settlement Obligation shall bear interest at the rate of nine (9%)
per annum which has been calculated into the amortization table annexed hereto
as Exhibit A.



     3.     During the payment term of the Settlement Obligation, plaintiff shall
be entitled to maintain its existing security interest in assets of Limited and
Defendants as set forth in the documents (a) annexed as Exhibits A through F,
inclusive, to the Motion, and (b) as set forth in paragraph 18, footnote 2 of
the affidavit of R. Ian Bradley annexed to the Motion.



     4.     Each of the individual defendants shall execute a consent to judgment
in the form annexed hereto as Exhibit B, to be held in escrow by Piper Marbury
Rudnick & Wolfe LLP, counsel for plaintiff , subject to the terms and
conditions of this Stipulation of Settlement.



     5.     In the event the defendants fail to make any monthly payment as set
forth in this Stipulation of Settlement, then counsel for plaintiff shall give
written notice thereof by facsimile transmission to the defendants as a group,
attn: Daniel Atkins and Douglas Atkins (c/o Limited at (916) 859-7050) with a
simultaneous copy to M. David Graubard, Esq., by facsimile transmission at
(212) 681-1601, plus telephonic notice to M. David Graubard, Esq. at (212)
681-1600. Telephonic notice shall be sufficient if a











 






message is left on any
mechanical answering device in the office of Kera & Graubard, counsel for the
defendants.



     (a)     Defendants shall have seven (7) calendar days (including weekends and
holidays) to cure such default.



     (b)     In the event defendants, or any one of them, fail to cure such
default; then counsel for plaintiff shall be entitled to release the consent
judgment from escrow without any further notice whatsoever, and to use that
judgment as plaintiff sees fit to enforce collection; provided that the
judgment amount shall be reduced by all payments made hereunder prior to such
uncured default; and this action may be re-opened and restored to the Court’s
calendar for the sole purpose of entering the consent judgment.



     6.     Defendants shall have the right to pre-pay any monthly installment
without penalty.



     (a)     In the event defendants pay the entire then-outstanding balance due on
the Settlement Obligation on June 30, 2002, then the then outstanding amount of
the Settlement Obligation shall be reduced to the sum of $450,000.



     (b)     In the event defendants pay the entire then-outstanding balance due on
the Settlement Obligation on December 31, 2002, then the then outstanding
amount of the Settlement Obligation shall be reduced to the sum of $425,000.



     7.     The parties hereto acknowledge that they have each consulted their
respective counsel with regard to the terms and conditions of this Stipulation
of Settlement.



     8.     Upon full and complete payment of the Settlement Obligation, then the
following shall occur:



     (a)     Plaintiff and each of the individual defendants shall exchange general
releases;



     (b)     The original consent judgment shall be returned by counsel for the
plaintiff to counsel for the defendants;











 






     (c)     Any and all claims that plaintiff may have against Limited shall be
deemed paid, and plaintiff and Limited shall exchange general releases.



     (d)     The stock of Limited owned by the individual defendants that is held
by plaintiff shall be returned to the individual defendants.



     (e)     Any and all liens plaintiff has on the assets of Limited shall be
deemed terminated, and plaintiff shall execute the appropriate documents in
connection with such release of liens.



     9.     Upon the execution of this Stipulation of Settlement by all parties,
the above entitled action shall be discontinued by the execution of a
Stipulation of Discontinuance in a form annexed hereto as Exhibit C, which
shall be filed with the Clerk of this Court.


Dated: New York, New York

June 28, 2001



	 	 	 	 	 
	 	GRAND TOYS INTERNATIONAL, INC.

Plaintiff

	



	 
	 
	 	By
	 	 	/s/ R. Ian Bradley

R. Ian Bradley, President

 	 
	


	 	 
	 	 	 
	 	 	 
	 



PIPER MARBURY RUDNICK & WOLFE LLP

Attorney for Plaintiff

	 	 	 	 	 
	



	By
	 	/s/ Joseph G. Finnerty, III, Esq.

	 	

Joseph G. Finnerty, III, Esq.

Attorneys for Plaintiff

1251 Avenue of the Americas

New York, NY 10020

(212) 835-6000

(212) 835-6001 Fax








	 	 	 
	



	 	/s/ Daniel Atkins

DANIEL ATKINS













 









	 	 	 
	 	/s/ Mark Atkins

MARK ATKINS
	 
	 
	 	/s/ Theresa Atkins

THERESA ATKINS
	 
	 
	 	/s/ Douglas Atkins

DOUGLAS ATKINS
	 
	 
	 	/s/ Bruce Minor

BRUCE MINOR







KERA & GRAUBARD

	 	 	 	 	 
	



	By
	 	/s/ M. David Graubard

	 	
M. David Graubard

240 Madison-Avenue, 7th fl

New York, NY 10016

(212) 681-1600

(212) 681-1601 Fax


















 






Doug Atkins 06-26-2001
Pg 1




	 	 	 	 	 
	Compounding period... :
	 	Monthly

	Nominal annual rate:
	 	 	9.000	%
	Effective annual rate:
	 	 	9.381	%
	Periodic rate:
	 	 	0.7500	%
	Equivalent daily rate:
	 	 	0.02466	%







CASH FLOW DATA



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Event
	 	Date
	 	Amount
	 	#
	 	Period
	 	End-date

	1
	 	Loan	 	 	06/30/01	 	 	 	775,000.00	 	 	 	1	 	 	 	 	 	 	 	 	 
	2
	 	Payment	 	 	06/30/01	 	 	 	7,500.00	 	 	 	6	 	 	Monthly	 	 	11/30/01	 
	3
	 	Payment	 	 	12/30/01	 	 	 	21,124.23	 	 	 	42	 	 	Monthly	 	 	05/30/05	 







AMORTIZATION SCHEDULE — Normal amortization



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pmt
	 	Date
	 	Payment
	 	Interest
	 	Principal
	 	Balance

	Loan
	 	 	06-30-2001	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	775,000.00	 
	1
	 	 	06-30-2001	 	 	 	7,500.00	 	 	 	0.00	 	 	 	7,500.00	 	 	 	767,500.00	 
	2
	 	 	07-31-2001	 	 	 	7,500.00	 	 	 	5,756.25	 	 	 	1,743.75	 	 	 	765,756.25	 
	3
	 	 	08-31-2001	 	 	 	7,500.00	 	 	 	5,743.17	 	 	 	1,756.83	 	 	 	763,999.42	 
	4
	 	 	09-30-2001	 	 	 	7,500.00	 	 	 	5,730.00	 	 	 	1,770.00	 	 	 	762,229.42	 
	5
	 	 	10-31-2001	 	 	 	7,500.00	 	 	 	5,716.72	 	 	 	1,783.28	 	 	 	760,446.14	 
	6
	 	 	11-30-2001	 	 	 	7,500.00	 	 	 	5,703.35	 	 	 	1,796.65	 	 	 	758,649.49	 
	7
	 	 	12-30-2001	 	 	 	21,124.23	 	 	 	5,689.87	 	 	 	15,434.36	 	 	 	743,215.13	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	2001 
	 	totals	 	 	66,124.23	 	 	 	34,339.36	 	 	 	31,784.87	 	 	 	 	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	8
	 	 	01-30-2002	 	 	 	21,124.23	 	 	 	5,574.11	 	 	 	15,550.12	 	 	 	727,665.01	 
	9
	 	 	02-28-2002	 	 	 	21,124.23	 	 	 	5,457.49	 	 	 	15,666.74	 	 	 	711,998.27	 
	10
	 	 	03-30-2002	 	 	 	21,124.23	 	 	 	5,339.99	 	 	 	15,784.24	 	 	 	696,214.03	 
	11
	 	 	04-30-2002	 	 	 	21,124.23	 	 	 	5,221.61	 	 	 	15,902.62	 	 	 	680,311.41	 
	12
	 	 	05-30-2002	 	 	 	21,124.23	 	 	 	5,102.34	 	 	 	16,021.89	 	 	 	664,289.52	 
	13
	 	 	06-30-2002	 	 	 	21,124.23	 	 	 	4,982.17	 	 	 	16,142.06	 	 	 	648,147.46	 
	14
	 	 	07-30-2002	 	 	 	21,124.23	 	 	 	4,861.11	 	 	 	16,263.12	 	 	 	631,884.34	 
	15
	 	 	08-30-2002	 	 	 	21,124.23	 	 	 	4,739.13	 	 	 	16,385.10	 	 	 	615,499.24	 
	16
	 	 	09-30-2002	 	 	 	21,124.23	 	 	 	4,616.24	 	 	 	16,507.99	 	 	 	598,991.25	 
	17
	 	 	10-30-2002	 	 	 	21,124.23	 	 	 	4,492.43	 	 	 	16,631.80	 	 	 	582,359.45	 
	18
	 	 	11-30-2002	 	 	 	21,124.23	 	 	 	4,367.70	 	 	 	16,756.53	 	 	 	565,602.92	 
	19
	 	 	12-30-2002	 	 	 	21,124.23	 	 	 	4,242.02	 	 	 	16,882.21	 	 	 	548,720.71	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	2002
	 	totals	 	 	253,490.76	 	 	 	58,996.34	 	 	 	194,494.42	 	 	 	 	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	20
	 	 	01-30-2003	 	 	 	21,124.23	 	 	 	4,115.41	 	 	 	17,008.82	 	 	 	531,711.89	 
	21
	 	 	02-28-2003	 	 	 	21,124.23	 	 	 	3,987.84	 	 	 	17,136.39	 	 	 	514,575.50	 



















 




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	22
	 	 	03-30-2003	 	 	 	21,124.23	 	 	 	3,859.32	 	 	 	17,264.91	 	 	 	497,310.59	 
	23
	 	 	04-30-2003	 	 	 	21,124.23	 	 	 	3,729.83	 	 	 	17,394.40	 	 	 	479,916.19	 
	24
	 	 	05-30-2003	 	 	 	21,124.23	 	 	 	3,599.37	 	 	 	17,524.86	 	 	 	462,391.33	 
	25
	 	 	06-30-2003	 	 	 	21,124.23	 	 	 	3,467.93	 	 	 	17,656.30	 	 	 	444,735.03	 
	26
	 	 	07-30-2003	 	 	 	21,124.23	 	 	 	3,335.51	 	 	 	17,788.72	 	 	 	426,946.31	 
	27
	 	 	08-30-2003	 	 	 	21,124.23	 	 	 	3,202.10	 	 	 	17,922.13	 	 	 	409,024.18	 
	28
	 	 	09-30-2003	 	 	 	21,124.23	 	 	 	3,067.68	 	 	 	18,056.55	 	 	 	390,967.63	 



















 





Exhibit A



Doug Atkins 06-26-2001 Pg 2




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pmt
	 	Date
	 	Payment
	 	Interest
	 	Principal
	 	Balance

	29
	 	 	10-30-2003	 	 	 	21,124.23	 	 	 	2,932.26	 	 	 	18,191.97	 	 	 	372,775.66	 
	30
	 	 	11-30-2003	 	 	 	21,124.23	 	 	 	2,795.82	 	 	 	18,328.41	 	 	 	354,447.25	 
	31
	 	 	12-30-2003	 	 	 	21,124.23	 	 	 	2,658.35	 	 	 	18,465.88	 	 	 	335,981.37	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	2003
	 	totals	 	 	253,490.76	 	 	 	40,751.42	 	 	 	212,739.34	 	 	 	 	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	32
	 	 	01-30-2004	 	 	 	21,124.23	 	 	 	2,519.86	 	 	 	18,604.37	 	 	 	317,377.00	 
	33
	 	 	02-29-2004	 	 	 	21,124.23	 	 	 	2,380.33	 	 	 	18,743.90	 	 	 	298,633.10	 
	34
	 	 	03-30-2004	 	 	 	21,124.23	 	 	 	2,239.75	 	 	 	18,884.48	 	 	 	279,748.62	 
	35
	 	 	04-30-2004	 	 	 	21,124.23	 	 	 	2,098.11	 	 	 	19,026.12	 	 	 	260,722.50	 
	36
	 	 	05-30-2004	 	 	 	21,124.23	 	 	 	1,955.42	 	 	 	19,168.81	 	 	 	241,553.69	 
	37
	 	 	06-30-2004	 	 	 	21,124.23	 	 	 	1,811.65	 	 	 	19,312.58	 	 	 	222,241.11	 
	38
	 	 	07-30-2004	 	 	 	21,124.23	 	 	 	1,666.81	 	 	 	19,457.42	 	 	 	202,783.69	 
	39
	 	 	08-30-2004	 	 	 	21,124.23	 	 	 	1,520.88	 	 	 	19,603.35	 	 	 	183,180.34	 
	40
	 	 	09-30-2004	 	 	 	21,124.23	 	 	 	1,373.85	 	 	 	19,750.38	 	 	 	163,429.96	 
	41
	 	 	10-30-2004	 	 	 	21,124.23	 	 	 	1,225.72	 	 	 	19,898.51	 	 	 	143,531.45	 
	42
	 	 	11-30-2004	 	 	 	21,124.23	 	 	 	1,076.49	 	 	 	20,047.74	 	 	 	123,483.71	 
	43
	 	 	12-30-2004	 	 	 	21,124.23	 	 	 	926.13	 	 	 	20,198.10	 	 	 	103,285.61	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	2004
	 	totals	 	 	253,490.76	 	 	 	20,795.00	 	 	 	232,695.76	 	 	 	 	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	44
	 	 	01-30-2005	 	 	 	21,124.23	 	 	 	774.64	 	 	 	20,349.59	 	 	 	82,936.02	 
	45
	 	 	02-28-2005	 	 	 	21,124.23	 	 	 	622.02	 	 	 	20,502.21	 	 	 	62,433.81	 
	46
	 	 	03-30-2005	 	 	 	21,124.23	 	 	 	468.25	 	 	 	20,655.98	 	 	 	41,777.83	 
	47
	 	 	04-30-2005	 	 	 	21,124.23	 	 	 	313.33	 	 	 	20,810.90	 	 	 	20,966.93	 
	48
	 	 	05-30-2005	 	 	 	21,124.23	 	 	 	157.30	 	 	 	20,966.93	 	 	 	0.00	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	2005
	 	totals	 	 	105,621.15	 	 	 	2,335.54	 	 	 	103,285.61	 	 	 	 	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 
	Grand totals
	 	 	 	 	 	 	932,217.66	 	 	 	157,217.66	 	 	 	775,000.00	 	 	 	 	 
	 
	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 















 







SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

________________________________________________________________________________________x

GRAND TOYS INTERNATIONAL, INC.,





				
	 	Plaintiff,	 	Index No. 600798/01






-against-





				
	DANIEL ATKINS, MARK ATKINS, TERESA ATKINS, 

DOUGLAS ATKINS, AND BRUCE MINOR,	 	CONSENT JUDGMENT








				
	Defendants.	 	
	________________________________________________________________________________________x
	 	







     WHEREAS, on February 15, 2001, plaintiff Grand Toys International, Inc.
(“Grand Toys”) moved this Court for summary judgment in lieu of complaint,
pursuant to CPLR § 3213 (the “Motion”);



     WHEREAS, defendants Daniel Atkins, Mark Atkins, Teresa Atkins, Douglas
Atkins, and Bruce Minor (“defendants”) served answering papers on counsel for
Grand Toys and counsel for Grand Toys thereafter served and filed reply papers;
and



     WHEREAS, the parties now stipulate and agree that the amount set forth
below is due and owing to Grand Toys by defendants, jointly and severally,
under the various personal guaranties of defendants sued upon in this action;



     NOW THEREFORE,











 





     IT IS ORDERED, ADJUDGED AND DECREED that plaintiff Grand Toys shall have
judgment in its favor and against defendants, jointly and severally, in the
amount of Seven
Hundred Seventy Five Thousand Dollars ($775,000.00), which shall bear interest
from the date of this Judgment at the applicable statutory rate for
post-judgment interest.



	 	 	 
	Dated:
	New York, New York
	 
	 	
 
	 





	 	 	 
	PIPER MARBURY RUDNICK &

WOLFE LLP

1251 Avenue of the Americas

	 	KERA & GRAUBARD

240 Madison Avenue

7th Floor
	New York, New York 10020

(212) 835-6000

	 	New York, New York 10016

(212) 681-1600
	 
	 
	



	/s/ Joseph G. Finnerty III
	 	/s/ M. David Graubard

	By: Joseph G. Finnerty III

M Aaron M. Katz

	 	By: M. David Graubard
	



	 
	



	Attorneys for Plaintiff Grand Toys

International, Inc.

	 	Attorneys for Defendants






	 	 	 
	 	/s/ Daniel Atkins

DANIEL ATKINS
	 
	 	/s/ Mark Atkins

MARK ATKINS
	 
	 	/s/ Theresa Atkins

THERESA ATKINS
	SO ORDERED:
	
 	/s/ Douglas Atkins

DOUGLAS ATKINS
	 
	/s/ 
	/s/ Bruce Minor

BRUCE MINOR


















 





SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

________________________________________________________________________________________x

GRAND TOYS INTERNATIONAL, INC.,





				
	 	Plaintiff,	 	Index No. 600798/01






-against-





				
	DANIEL ATKINS, MARK ATKINS, TERESA ATKINS, 

DOUGLAS ATKINS, AND BRUCE MINOR,	 	STIPULATION DISCONTINUING

ACTION WITH PREJUDICE









				
	Defendants.	 	
	________________________________________________________________________________________x
	 	








     IT IS HEREBY STIPULATED AND AGREED by and between the undersigned, the
attorneys of record for all parties to the above entitled proceeding, that
whereas no party hereto is an infant or 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 proceeding, the above entitled proceeding
be, and the same hereby is discontinued with prejudice, subject to the terms of
conditions of the Stipulation of Settlement between the plaintiff and
defendants dated June 1 2001, and without costs to either party as against the
other. This stipulation may be filed without further notice with the Clerk of
the Court.

	 	 	 
	Dated: 	 	New York, New York

June    , 2001




	 	 	 	 	 
	 	 	 	 PIPER MARBURY RUDNICK & WOLFE LLP

Attorneys for Plaintiff

	 
	 
	 	By	 	/s/ Joseph G. Finnerty, III, Esq.
	 		 	

	 		 	
Joseph G. Finnerty, III, Esq.

1251 Avenue of the Americas

New York, NY 10020

(212) 835-6000

(212) 835-6001 Fax





KERA & GRAUBARD

Attorneys for Defendants
	 
	 
	 	By	 	/s/ M. David Graubard
	 		 	

	 		 	
M. David Graubard

240 Madison-Avenue, 7th floor

New York, NY 10016

(212) 681-1600

(212) 681-1601 Fax