Document:

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 FaxLIMITED AMENDMENT TO STIPULATION OF SETTLEMENT

 

EXHIBIT 10.13

 

AMENDMENT TO STIPULATION OF SETTLEMENT

     THIS AMENDMENT TO STIPULATION OF SETTLEMENT (“Amendment”) is entered into
as of the          day of June, 2003 among GRAND TOYS INTERNATIONAL, INC.
(“GRAND”), and DANIEL ATKINS, MARK ATKINS, TERESA ATKINS, DOUGLAS ATKINS and
BRUCE MINOR (collectively, the “Defendants”).

RECITALS

         A.     Grand and Defendants entered into that certain Stipulation of
Settlement dated as of June 28, 2001 pursuant to which Grand and Defendants,
inter alia, stipulated and agreed to: (i) the settlement of all claims of Grand
against Limited Treasures, Inc. (“Limited”) and the Defendants for the sum of
$775,000 (the “Settlement Obligation”) and; (ii) the terms upon which the
Defendants would satisfy the Settlement Obligation (the “Payment Terms”).

         B.     Defendants are in default of the Payment Terms under the Stipulation of
Settlement.

         C.     Upon the terms and subject to the conditions herein, Grand and
Defendants desire amicably to resolve finally any and all disputes between or
among themselves that have arisen, or may arise, related to the Settlement
Obligation and Payment Terms.

NOW, THEREFORE, in consideration of the above recitals and of the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Grand and the Defendants hereby agree as follows:

1.     Ratification of Settlement Obligation. The total amount of principal and
interest due and owing under the Stipulation of Settlement as of March 31,
2003, was $497,310.59. Defendants irrevocably and unconditionally acknowledge
that, except as modified and amended hereby, the Stipulation of Settlement is
in full force and effect and constitutes the valid, legal and binding
obligations of Defendants and, except as modified hereby, the terms of the
Stipulation and Settlement shall apply to this Amendment and are incorporated
herein by reference.

2.     Amendment of Stipulation of Settlement.

(a)     Section 1(b) of the Stipulation of Settlement is amended in full to read as
follows:

          “(i)     The sum of $15,000 per month for a period of twenty-six (26)
consecutive months beginning on April 30, 2003, payable on the last day of each
month, all as set forth on the revised amortization schedule annexed hereto as
Annex B; and

          (ii)     The balance of $165,789.34, payable on May 30, 2005.”

 

 

(b)     Section 2 of the Stipulation of Settlement shall be amended in full to read
as follows:

         “(i)     The Settlement Obligation shall bear interest at the rate of
nine percent (9%) per annum through March 31, 2003.

         (ii)     Commencing as of April 30, 2003, the Settlement Obligation shall bear
interest at the rate of six percent (6%) per annum which has been calculated
into the revised amortization table annexed hereto as Annex B.”

     3.     Acknowledgments of the Defendants. Defendants acknowledge and agree
as follows:

         (a)     Reaffirmation of Recitals. Recitals A through C are true and
correct as of the date hereof, and form an integral part of this
Amendment.

         (b)     Modification; No Waiver or Novation. Except as expressly set forth
herein, this Amendment shall not constitute: (i) a waiver, release, amendment,
or modification of, or agreement to forbear from exercising any rights,
remedies, or causes of action which Grand may possess as of the date hereof or
which arise or accrue after the date hereof, which arise out of, under or with
respect to this Amendment, the Stipulation of Settlement or any document
executed in connection therewith, other than as expressly set forth herein;
(ii) an agreement to negotiate with one or more of the Defendants; (iii) an
agreement to amend or modify the Stipulation of Stipulation; or (iv) a course
of conduct or course of dealing relating to any one or more of the above.

         (c)     Liens. Defendants acknowledge and agree that until the satisfaction
of the Payment Obligations, Grand’s liens in certain assets of Defendants and
Limited will continue to be valid, binding and enforceable liens which secure
Defendants’ obligations under the Stipulation of Settlement and this Amendment.

         (d)     No Defenses. Defendants do not have, nor shall have, any defense,
counterclaim, offset, claim or demand which could be asserted to reduce or
eliminate all or any part of any of their obligations under the Stipulation of
Settlement and this Amendment, or which could be asserted to mitigate or excuse
any defaults by Defendants in the payment or the performance of their
obligations. Defendants will not assert any presently existing cause of
action, claim, or demand against Grand, for any matter arising out of or in
connection with the Stipulation of Settlement and this Amendment.

     4.     Miscellaneous.

         (a)     This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute
one and the same instrument.

         (b)     Except as specifically amended hereby, the terms and provisions of
the Stipulation of Settlement are, and shall remain, in full force and effect.
In the event of a conflict between the terms of the Stipulation of Settlement
and this Amendment, this Amendment shall control.

         (c)     This Amendment is the result of negotiations between Defendants and
Grand, and has (to the extent deemed necessary by each party) been reviewed by
their respective counsel, and is the product of the efforts of all parties. No
party’s involvement in the preparation of this

 

 

Amendment for the convenience of
all parties shall be construed against such party solely by virtue of such
preparation.

         (d)     This Amendment shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, excluding conflict of laws
principles that would cause the application of laws of any other jurisdiction.

         (e)     The headings of the Sections hereof are for convenience only and
without substantive meaning, and shall not be used in interpreting any
provision of this Amendment.

         (f)     This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment by facsimile transmission
shall be effective as delivery of a manually executed counterpart thereof.

         (g)     Any provision of this Amendment may be amended by a written
instrument signed by Defendants and Grand.

         (h)     Each party acknowledges that no other party, nor any agent or
attorney of any party, has made any promise, representation or warranty
whatsoever, express or implied, not expressly contained herein, concerning the
subject matter hereto so as to induce such party to execute this Amendment, and
each party acknowledges that he has not executed this Amendment in reliance
upon any promise, representation or warranty not contained herein.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.

	 	 	 	 	 
	GRAND TOYS INTERNATIONAL, INC.
	 	 
	 
	By:
	 	/s/ Tania M. Clarke
	 	/s/ Daniel Atkins
	 	 	
	 	

	Name:
	 	Tania M. Clarke	 	DANIEL ATKINS
	Title:
	 	Executive VP and CFO	 
	
	 	 	 	/s/ Mark Atkins
	

	 	 	 	

	

	 	 	 	MARK ATKINS
	 
	

	 	 	 	/s/ Teresa Atkins
	

	 	 	 	
 
	

	 	 	 	TERESA ATKINS
	 
	

	 	 	 	/s/ Douglas Atkins
	

	 	 	 	
 
	

	 	 	 	DOUGLAS ATKINS
	 
	

	 	 	 	/s/ Bruce Minor
	

	 	 	 	
 
	

	 	 	 	BRUCE MINOR

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