Termination Agreement and Release - Foothill Capital Corp. and The 3DO Co.
Termination Agreement and Release
This Termination Agreement and Release (this "Agreement") is made this
8th day of April, 2002, by and between, on the one hand, the lenders identified
on the signature pages hereof (the "Lenders") and FOOTHILL CAPITAL CORPORATION,
a California corporation, as the arranger and administrative agent for the
Lenders (in such capacity, "Agent"; and together with the Lenders, the "Lender
Group"), and, on the other hand, THE 3DO COMPANY, a California corporation
("Borrower"), THE 3DO COMPANY, a Delaware corporation ("Parent"), and 3DO
EUROPE, LTD., a company incorporated under the laws of England ("UK Sub")
(Parent and UK Sub are hereinafter collectively referred to as the
"Guarantors").
This Agreement is entered into with reference to the following:
A. On or about April 6, 2000, the Lender Group, on the one hand, and
Borrower and the Guarantors, on the other hand, entered into that certain Loan
and Security Agreement (the "Loan Agreement") and other related Loan Documents
(as that term is defined in the Loan Agreement, and all other capitalized terms
not defined in this Agreement shall have the meanings ascribed to such terms in
the Loan Agreement), pursuant to which the Lender Group extended certain
financial accommodations to Borrower, and Borrower granted in favor of Agent,
for the benefit of the Lender Group, a security interest in and liens on
substantially all of Borrower's assets.
B. On or about April 6, 2000, each of the Guarantors executed in favor of
and delivered to Agent, for the benefit of the Lender Group, certain guaranties,
guarantor security agreements, and other pledges of collateral in connection
with the financial accommodations to Borrower under the Loan Documents.
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C. The Loan Agreement matures on April 6, 2002.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the parties hereto acknowledges and agrees as follows.
1. Lender Group Expenses. On or before 11:00 a.m., Los Angeles time, on
April 5, 2002 (the "Payoff Date"), Borrower shall pay to Agent, for the benefit
of the Lender Group, in cash the aggregate amount of $37,880.69 (the "Payoff
Amount"), subject to adjustment as set forth in this Paragraph 1, consisting of:
(a) $50.69 in respect of accrued and unpaid interest through and including April
5, 2002, (b) $1,250.00 in respect of the amount payable for the unused line fee
that was due on April 1, 2002, (c) $1,500.00 in respect of the amount payable
for the loan servicing fee that was due on April 1, 2002, (d) $80.00 in respect
of the amount payable for wire fees, and (e) the amount of $35,000 in respect of
reasonably anticipated Lender Group Expenses to be incurred by the Lender Group
from and after the Payoff Date (the "Payoff Reserve"). In the event that the
Payoff Amount is not received by Agent on or before the Payoff Date, the Payoff
Amount shall increase by $312.50 for each twenty-four hour period thereafter. As
of the date hereof, the Agent's Account contains approximately $33,658 of
Borrower's cash Collections. Borrower and the Lender Group agree that the Payoff
Amount may be satisfied by (i) Agent's retention of an amount equal to $33,658
from Borrower's cash Collections, plus (ii) a cash payment from Borrower in an
amount equal to $4,222.69. Within 90 days of the date of this Agreement, Agent
shall transfer to Borrower the unused portion, if any, of the Payoff Reserve.
2. Termination of Obligations Other Than Indemnity. The Lender Group,
Borrower, and each of the Guarantors acknowledge and agree that upon Agent's
receipt of (a) a
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fully executed counterpart of this Agreement signed by the Lender Group,
Borrower, and each of the Guarantors, and (b) the Payoff Reserve, all of the
Obligations under the Loan Documents shall be terminated and satisfied in full;
provided, however, that (A) all Obligations to indemnify each Indemnified Person
under Section 11.3 of the Loan Agreement and to reimburse the Lender Group for
Lender Group Expenses shall remain in full force and effect, and (B) to the
extent that any payments or proceeds (or any portion thereof) received by Agent
or any Lender shall be subsequently invalidated, declared to be fraudulent or a
fraudulent conveyance or preferential, set aside or required to be repaid to a
trustee, receiver, debtor-in-possession or any other party under any bankruptcy
law, state or federal law, common law or equitable cause, then to the extent
that the payment or proceeds is rescinded or must otherwise be restored by Agent
or such Lender, as applicable, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, the Obligations or part thereof which
were intended to be satisfied shall be revived and continue to be in full force
and effect, as if the payment or proceeds had never been received by Agent or
such Lender, as applicable, and this Agreement shall in no way impair the claims
of the Lender Group with respect to the revived Obligations.
3. Termination of Loan Documents. Borrower and each of the Guarantors
hereby confirm that the commitment of the Lender Group to extend credit under
the Loan Agreement and the other Loan Documents is terminated as of the Payoff
Date, and, as of the Payoff Date, the Lender Group has no further obligation to
extend credit to Borrower.
4. Release of Collateral. Agent, on behalf of the Lender Group, will,
as promptly as practicable:
a. Execute and deliver any Uniform Commercial Code termination
statements that (i) Borrower and Guarantors reasonably may request to
release, as
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of record, the financing statements previously filed by Agent, on
behalf of the Lender Group, with respect to the Obligations, and (ii)
at Agent's election, Borrower and Guarantors prepare;
b. Execute and deliver any and all other lien releases and other
similar discharge or release documents (and if applicable, in
recordable form) that (i) Borrower and Guarantors reasonably may
request to release, as of record and without any recourse,
representation, or warranty, the security interests and all other
notices of security interests and liens previously filed by Agent, for
the benefit of the Lender Group, with respect to the Obligations, and
(ii) at Agent's election, Borrower and Guarantors prepare;
c. Return (without recourse, representation or warranty) to
Borrower and Guarantors (or any one of them that Agent selects) any and
all pledged stock certificates and related stock powers previously
delivered to Agent, for the benefit of the Lender Group, in connection
with the Loan Documents.
5. Representations or Warranties. The Lender Group makes no
representation or warranty with respect to the state of title to any collateral
securing the Obligations. Borrower and each of the Guarantors represent and
warrant that each has the power and authority to enter into this Agreement.
6. Additional Documents. The Lender Group shall execute and deliver to
or for Borrower and Guarantors, at Borrower's and Guarantors' sole expense, such
additional documents (that, at Agent's election, Borrower and Guarantors
prepare) and shall provide additional information as Borrower and Guarantors may
reasonably require to carry out the terms of this Agreement.
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7. Acknowledgments of Borrower and Guarantors. Borrower and each of the
Guarantors (a) acknowledge and agree that the release in paragraph 10 hereof
shall not release Borrower and Guarantors of the Obligations arising from the
indemnity provisions under Section 11.3 of the Loan Agreement and from the
Obligations to pay for Lender Group Expenses under the Loan Agreement, and (c)
confirm their agreement to the terms and provisions of this Agreement by
returning to Agent a signed counterpart of this Agreement.
8. Conditions. The obligations of the Lender Group under this Agreement
are subject to the fulfillment, to the satisfaction of the Lender Group, of the
following conditions precedent: (a) Agent shall have received a counterpart of
this Agreement duly executed by each of the parties hereto; and (b) Agent shall
have received the Payoff Reserve on the Payoff Date.
9. Released Matters. The claims released pursuant to this Agreement
(the "Released Claims") include all claims between the Lender Group, on the one
hand, and Borrower and each of the Guarantors, on the other hand, including but
not limited to principal, interest, charges, fees, together with any and all
other claims, demands, obligations, liabilities, indebtedness, responsibilities,
disputes, breaches of contract, breaches of duty or any relationship, acts,
omissions, misfeasance, malfeasance, cause or causes of action (whether at law
or in equity), debts, sums of money, accounts, compensations, contracts,
controversies, promises, damages, costs, rights of offset, losses and expenses,
of every type, kind, nature, description or character, known and unknown,
whensoever arising and occurring at any time up to and through the date hereof,
whether known or unknown, suspected or unsuspected, liquidated or unliquidated,
matured or unmatured, fixed or contingent, which in any way arise out of, are
connected with or relate to the Loan Documents.
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10. Release by Borrower and Guarantors. Borrower and each of the
Guarantors, and their respective predecessors, successors and assigns, hereby
fully, finally, irrevocably, forever and unconditionally release, discharge and
acquit Agent, each of the Lenders, and each of Agent's and the Lenders'
officers, employees and agents, from all Released Claims, except for the rights
and obligations under this Agreement.
11. Release by Lender Group of Borrower and each of the Guarantors.
Each member of the Lender Group and each of its predecessors, successors and
assigns, hereby fully, finally, irrevocably, forever and unconditionally
release, discharge and acquit Borrower and each of the Guarantors from all
Released Claims, except for the obligations of Borrower and each of the
Guarantors under this Agreement, under the indemnity provisions in Section 11.3
of the Loan Agreement, and under the Loan Agreement to reimburse the Lender
Group for Lender Group Expenses.
12. Waiver of Statutory Benefits. The parties intend that the
foregoing releases shall be effective as a full and final accord and
satisfaction of Released Claims, and each of the parties hereby agrees,
represents and warrants that the matters released herein are not limited to
matters which are known or disclosed. In this connection, each of the parties
hereby agrees, represents and warrants that it realizes and acknowledges that
(a) factual matters now existing and unknown to it may have given or may
hereafter give rise to Released Claims which are presently unknown, unsuspected,
unliquidated, unmatured and/or contingent, (b) such Released Claims may be
unknown, unsuspected, unliquidated, unmatured and/or contingent due to
ignorance, oversight, error, negligence or otherwise, and (c) if such Released
Claims had been known, suspected, liquidated, matured and/or unconditional, such
party's decision to enter into this release may have been materially affected.
Each party further agrees, represents and
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warrants that this release has been negotiated and agreed upon in view of these
realizations. Nevertheless, each party granting a release hereby intends to
release, discharge, and acquit the parties receiving a release of and from any
such unknown, unsuspected, unliquidated, unmatured and/or contingent Released
Claims which are in any way set forth in or related to the matters identified
hereinabove. EACH PARTY HEREBY EXPLICITLY WAIVES ALL RIGHTS UNDER AND ANY
BENEFITS OF ANY COMMON LAW OR STATUTORY RULE OR PRINCIPLE WITH RESPECT TO THE
RELEASE OF SUCH CLAIMS, INCLUDING, WITHOUT LIMITATION, SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A 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.
EACH PARTY AGREES THAT NO SUCH COMMON LAW OR STATUTORY RULE OR PRINCIPLE,
INCLUDING SECTION 1542 OF THE CALIFORNIA CIVIL CODE, SHALL AFFECT THE VALIDITY
OR SCOPE OR ANY OTHER ASPECT OF THIS RELEASE.
13. Further Assurances. From time to time, at the request of any party
hereto and without further consideration, the other parties will execute and
deliver to such requesting party such documents and take such other action as
such requesting party may reasonably request in order to consummate more
effectively the releases contemplated hereby, including without limitation,
Agent promptly shall execute and deliver to Borrower and the Guarantors any
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documents prepared by and tendered by Borrowers and Guarantor required to give
notice of or effectuate the release by Agent, for the benefit of the Lender
Group, of its security interests in the property of Borrower and the Guarantors,
including but not limited to Uniform Commercial Code termination statements and
filings with the U.S. Trademark Office.
14. No Assignment. Each of the parties hereto agrees, represents, and
warrants that such party has not voluntarily, by operation of law or otherwise,
assigned, conveyed, transferred or encumbered, either directly or indirectly, in
whole or in part, any right to or interest in any of the Released Claims.
15. Choice of Law; Severability. This Agreement shall be governed by
and construed in accordance with the laws of the State of California as applied
to agreements among parties resident therein. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
16. Advice of Counsel. Each party has had advice of independent
counsel of its own choosing in negotiations for and the preparation of this
Agreement, has read this Agreement in full and final form, and has had this
Agreement fully explained to it to its satisfaction.
17. No Third Party Beneficiaries. This Agreement is executed for the
parties hereto, and no other person, corporation, partnership, individual or
other entity not a party to this Agreement shall have any rights herein as a
third party beneficiary or otherwise, except to the extent expressly and
specifically provided herein.
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18. Counterparts. This Agreement may be executed in duplicates and
counterparts, which, taken together, will be deemed and serve as an original. In
addition, the parties agree that their authorized representatives may bind them
to the terms of this Agreement with signatures exchanged by fax, and each
duplicate faxed signature copy shall be deemed to be an original of this
Agreement.
19. Entire Agreement. This is the entire Agreement between the parties
with respect to this matter. There are no other agreements or understandings,
written or oral, express or implied.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized representatives.
Dated: April 8, 2002 FOOTHILL CAPITAL CORPORATION, a
California corporation, as Agent and the Lender
By: /s/ Sheri Fenenboch
Name: ____________________________________
Its: Vice President
Dated: April 8, 2002 THE 3DO COMPANY, a California corporation,
as Borrower
By: /s/ James Alan Cook
Name: ____________________________________
Its: Executive Vice President
[signatures continue]
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Dated: April 8, 2002 THE 3DO COMPANY, a Delaware corporation,
as Guarantor
By: /s/ James Alan Cook
Name: _________________________________
Its: Secretary
Dated: April 8, 2002 3DO EUROPE, LTD., a company organized under
the laws of England, as Guarantor
By: /s/ James Alan Cook
Name: _________________________________
Its: Director
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