Main Document Page of Scott F. Gautier (State Bar No. ) SGautier@RobinsKaplan.com Kevin D. Meek (State Bar No. 0) KMeek@RobinsKaplan.com Century Park East, Suite 00 Los Angeles, CA 00 Telephone: 0 00 Facsimile: 0 00 Attorneys for Debtor and Debtor in Possession 0 UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA DIVISION In re: NG DIP INC. (f/k/a Nasty Gal Inc.), a California corporation, Debtor and Debtor in Possession. Case No. :-bk--bb Chapter DEBTOR S NOTICE OF MOTION AND MOTION FOR AUTHORITY TO COMPROMISE WITH ISLAND PACIFIC SYSTEMS, INC.; DECLARATION OF JOE SCIROCCO IN SUPPORT THEREOF [No hearing required Local Bankruptcy Rule 0-(o)] 00.
Main Document Page of 0 TO THE HONORABLE SHERI BLUEBOND, UNITED STATES BANKRUPTCY JUDGE, AND OTHER INTERESTED PARTIES: PLEASE TAKE NOTICE that, pursuant to Rule 0 of the Federal Rules of Bankruptcy Procedure, and Local Rule 0-, NG DIP Inc. (f/k/a Nasty Gal Inc.) (the Debtor ), the debtor and debtor in possession in the above-captioned chapter case, hereby moves the Court (the Motion ) for an order approving a compromise with Island Pacific Systems, Inc. ( Island Pacific ). During the time period in which the Debtor conducted its business, a key component of its operations was software licensed from Island Pacific that integrated all of the Debtor s essential processes into one system, commonly referred to as an Enterprise Resource Planning system (the ERP System ). The Debtor entered into three separate agreements with Island Pacific regarding the ERP System: (i) a Software License Agreement; (ii) a Software Support Agreement; and (iii) a Hosting/Managed Services Agreement (collectively, the ERP Agreements ). The Debtor contends that, following the commencement of this chapter case, Island Pacific contacted the Debtor and asserted that it would unilaterally terminate the Debtor s access to its ERP System unless the Debtor paid all current and future license fees under the ERP Agreements. The Debtor thereafter initiated an adversary proceeding alleging that Island Pacific s actions violated the automatic stay (the Adversary ), and obtained a preliminary injunction that enjoined Island Pacific from further interfering with the Debtor s rights under the ERP Agreements. As a result of Island Pacific s actions, the Debtor s bankruptcy estate (the Estate ) incurred approximately $,0 in legal fees and expenses, which the Debtor asserts should be paid by Island Pacific pursuant to section (h) of the Bankruptcy Code. To avoid, among other things, the costs, risk and uncertainties of further litigation regarding the Adversary, the parties have agreed to the settlement which is memorialized in the Settlement Agreement attached as Exhibit to the Declaration of Joe Scirocco in the Motion (the Settlement Agreement ). Pursuant to the Settlement Agreement, Island Pacific agrees to waive its right to file any claim against the Estate, including but not limited to any claim based on 00. --
Main Document Page of rejection damages, in exchange for dismissal of the Adversary. The Debtor believes that the Settlement Agreement is fair and equitable and in the best interests of its Estate, and therefore requests that the Court approve the proposed settlement, and the sufficiency of notice contained herein. 0 PLEASE TAKE FURTHER NOTICE that the Motion is based upon this Notice of Motion and Motion, the annexed memorandum of points and authorities, the Declaration of Joe Scirocco (the Scirocco Declaration ), the records and files in this chapter case, and such additional evidence and argument as may be presented at or before the hearing on the Motion. PLEASE TAKE FURTHER NOTICE that pursuant to Local Bankruptcy Rule 0- (o), any party objecting to the Motion may request a hearing on the Motion. The deadline for filing and serving a written opposition and request for a hearing is days after the date of service of this notice, plus an additional days if you were served by mail, electronically, or pursuant to F. R. Civ. P. ()(b)()(d), (E), or (F). If you fail to comply with this deadline, the Court may treat such failure as a waiver of your right to oppose the Motion and may grant the Motion without further hearing and notice. If you do not have any objection to this Motion, you need not take further action. DATED: August, Date of Service: August, By: /s/ Kevin D. Meek Scott F. Gautier Kevin D. Meek Attorneys For Debtor and Debtor In Possession Island Pacific asserts that it incurred in excess of $,000 in damages from the Debtor s rejection of the ERP Agreements. 00. --
Main Document Page of Scott F. Gautier (State Bar No. ) SGautier@RobinsKaplan.com Kevin D. Meek (State Bar No. 0) KMeek@RobinsKaplan.com Century Park East, Suite 00 Los Angeles, CA 00 Telephone: 0 00 Facsimile: 0 00 Attorneys for Debtor and Debtor in Possession 0 In re: NG DIP INC. (f/k/a Nasty Gal Inc.), a California corporation, Debtor and Debtor in Possession. UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA DIVISION Case No. :-bk--bb Chapter DEBTOR S MOTION FOR AUTHORITY TO COMPROMISE WITH ISLAND PACIFIC SYSTEMS, INC.; DECLARATION OF JOE SCIROCCO IN SUPPORT THEREOF [No hearing required Local Bankruptcy Rule 0-(o)] 00.
Main Document Page of I. INTRODUCTION 0 During the time period in which the Debtor conducted its business, a key component of its operations was software licensed from Island Pacific Systems Inc. ( Island Pacific ) that integrated all of the Debtor s essential processes into one system, commonly referred to as an Enterprise Resource Planning system (the ERP System ). The Debtor entered into three separate agreements with Island Pacific regarding the ERP System: (i) a Software License Agreement; (ii) a Software Support Agreement; and (iii) a Hosting/Managed Services Agreement (collectively, the ERP Agreements ). Following the commencement of this chapter case, Island Pacific contacted the Debtor and asserted that it would unilaterally terminate the Debtor s ERP System unless the Debtor paid all current and future license fees under the ERP Agreements. The Debtor thereafter initiated an adversary proceeding alleging that Island Pacific s actions violated the automatic stay (the Adversary ), and obtained a preliminary injunction that enjoined Island Pacific from further interfering with the Debtor s rights under the ERP Agreements. The Debtor s bankruptcy estate (the Estate ) incurred approximately $,0 in legal fees and expenses as a result of the dispute with Island Pacific, which sum the Debtor asserts should be paid by Island Pacific. To avoid, among other things, the costs, risk and uncertainties of further litigation, the parties have agreed to a settlement whereby Island Pacific waives its right to file any claim against the Debtor s bankruptcy estate, including any proof of claim based on post-petition damages for rejection of the ERP Agreements, in exchange for dismissal of the Adversary (the Settlement Agreement ). For the reasons set forth herein, the Debtor believes that the proposed compromise is in the best interest of the bankruptcy estate and its creditors, and the Court should grant the Motion. 00. - -
Main Document Page of II. JURISDICTION AND VENUE The Court has jurisdiction to consider this matter pursuant to U.S.C. and. This matter relates to the administration of the Debtor s bankruptcy estate (the Estate ) and is accordingly a core proceeding pursuant to U.S.C. (b). Venue for this matter is proper in this Court pursuant to U.S.C. 0 and 0. The statutory predicates for the relief sought herein are section of the Bankruptcy Code and Rule 0(a) of the Federal Rules of Bankruptcy Procedure. 0 III. STATEMENT OF FACTS Background:. The Debtor was a leading lifestyle brand promoting professionally curated fashion merchandise. A significant percentage of the Debtor s sales were derived from online purchases.. A key component of the Debtor s operations was software licensed from Island Pacific, commonly referred to as an Enterprise Resource Planning system (the ERP System ). The software license agreement between Island Pacific and the Debtor, dated September, (the License Agreement ), granted the Debtor a perpetual nonexclusive license for the use of the ERP System (the Software License ).. The Debtor entered into two other agreements with Island Pacific contemporaneously with the License Agreement the Software Support Agreement and the Hosting Agreement/Managed Services Agreement.. The Software Support Agreement provided software support for the ERP System such as access to a support personnel help-desk and updates to software. The Hosting Agreement provided that Island Pacific would host, monitor and main the ERP system. 00. - -
Main Document Page of 0. On or about November, (the Petition Date ), the Debtor filed a voluntary petition for relief under chapter of title of the United States Code (the Bankruptcy Code ), commencing the above-captioned chapter case (the Bankruptcy Case ).. The Debtor contends that, on or about January,, Island Pacific contacted the Debtor and asserted that it would unilaterally terminate the Debtor s ERP System unless the Debtor paid all current and future license fees under the License Agreement.. On or about January,, in response to Island Pacific s assertions, the Debtor filed a complaint against Island Pacific in the Debtor s Bankruptcy Case, commencing the adversary proceeding entitled Nasty Gal Inc. v. Island Pacific Systems, Inc., Adv. No. :-ap- 00-BB (the Adversary ). The Adversary alleges claims against Island Pacific for injunctive relief and damages.. On or about January,, the Bankruptcy Court entered a Temporary Restraining Order against Island Pacific (the TRO ), finding that Island Pacific s actions violated the automatic stay pursuant to U.S.C., and enjoining Island Pacific from further interfering with the Debtor s rights under the License Agreement, Software Support Agreement, and Hosting Agreement. 0. On February,, the Bankruptcy Court entered a preliminary injunction against Island Pacific, extending the relief set forth in the TRO until entry of a final order in the Debtor s Bankruptcy Case (the Preliminary Injunction ).. The Debtor s bankruptcy estate (the Estate ) has incurred at least $,0 in legal fees and expenses in the Adversary as a result of Island Pacific s actions. The Debtor asserts that Island Pacific should pay such fees and expenses incurred by the Estate (the Fees Claim ). But for this Settlement Agreement, the Debtor would have filed a motion in the Adversary seeking attorney s fees and costs from Island Pacific.. Island Pacific asserts that it is entitled to a claim against the Estate for rejection damages exceeding $,000 pursuant to section of the License Agreement (the Rejection Damages ). 00. - -
Main Document Page of 0 The Proposed Settlement:. In light of the disputes between the Debtor and Island Pacific regarding the Adversary, the Fees Claim, and the Rejection Damages, as well as the potential for incurring additional administrative costs, the Debtor and Island Pacific have reached a compromise, subject to Court approval, that resolves any remaining dispute between the parties, and avoids the need for any further litigation. A true and correct copy of the Settlement Agreement is attached as Exhibit to the Declaration of Joe Scirocco and incorporated herein by this reference.. Without limiting the terms of the Settlement Agreement, the Settlement Agreement provides: a. Island Pacific waives any right to file a proof of claim against the Estate, including but not limited to, any proof of claim based on the Rejection Damages. b. In exchange, the Debtor shall dismiss the Adversary, with prejudice, no later than fourteen () days after the effective date set forth in the Settlement Agreement. c. The Parties shall bear their own fees and costs in the Adversary. d. Upon satisfaction of all obligations hereunder, the License Agreement, Software Support Agreement, and Hosting Agreement shall be deemed rejected pursuant to section of the Bankruptcy Code and of no further effect. e. The Parties exchange mutual releases. IV. LEGAL ARGUMENT A. The Court Should Approve the Settlement Agreement Pursuant to FRBP 0 Because The Agreement Is In The Best Interests Of The Estate. Bankruptcy courts may, after the filing of a motion and with notice and the opportunity to request a hearing provided to the estate s creditors, approve a compromise or settlement. FRBP 0(a). The Ninth Circuit has long recognized that [t]he bankruptcy court has great latitude in approving compromise agreements. Woodson v. Fireman s Fund Ins. Co. (In re Woodson), F.d 0, (th Cir. ). The purpose underlying a settlement agreement is to avoid the expenses and burdens that are associated with litigating deeply contested and questionable 00. - -
Main Document Page of 0 claims. Martin v. Kane (In re A & C Properties), F.d, 0- (th Cir. ). Accordingly, in approving a settlement agreement, the court need not conduct an exhaustive investigation of the claims sought to be compromised. See United States v. Alaska Nat l Bank (In re Walsh Constr., Inc.), F.d, (th Cir. ). Rather, it is sufficient that the court find that the settlement is fair and equitable, negotiated in good faith and reasonably believed to be the best compromise negotiable under the circumstances. See In re A & C Properties, F.d at. In determining whether to approve a compromise pursuant to FRBP 0, the Ninth Circuit Court of Appeals has identified four factors that indicate whether the settlement is fair and equitable: () the probability of success in the litigation; () the difficulties, if any, to be encountered in the matters of collection; () the complexity of the litigation involved, and the expense, inconvenience, and delay necessarily attending it; and () the paramount interest of the creditors and a proper deference to their reasonable views. See In re A & C Properties, F.d at. Consideration of these factors does not require the court to determine whether a settlement presented is the best one that could possibly have been achieved. Rather, the court need only canvas the issues to determine whether the settlement falls below the lowest point in the zone of reasonableness. Newman v. Stein, F.d, (d Cir. ); In re Pacific Gas & Electric Co., 0 B.R., (Bankr. N.D. Cal. 0). Here, the Settlement Agreement should be approved because it is in the best interests of creditors, as it consensually resolves the Debtor s Adversary against Island Pacific and will result in Island Pacific s waiving its right to file any proof of claim against the Estate, including a potentially significant claim based on the Rejection Damages. B. The Settlement Agreement Was Negotiated In Good Faith And Is Reasonably Believed To Be The Best Compromise Under The Facts The Settlement Agreement was the result of good faith and arm s-length negotiations between the Debtor, on the one hand, and Island Pacific, on the other hand, undertaken in an effort to resolve efficiently and effectively the dispute between the parties without further litigation and without any additional cost to or payments from the Debtor or its Estate. The 00. - -
Main Document Page 0 of 0 Settlement Agreement is the best compromise negotiable under the circumstances and in the best interest of the estates because, pursuant to the Settlement Agreement, Island Pacific waives its rights to file a claim against the Debtor s Estate in exchange for dismissal of the Adversary and an exchange of mutual releases. The Settlement Agreement will enable the Debtor to focus is time and resources on administering its Estate for the benefit of creditors and constituents. C. The Agreement Is Fair And Equitable The factors promulgated by the Ninth Circuit in In re A & C Properties to establish that a compromise is fair and equitable all favor approval of the Settlement Agreement. The facts in the Debtor s bankruptcy case demonstrate that, after considering: (a) the probability of success in the litigation, (b) the difficulties in collecting on a judgment, (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attendant to litigation, and (d) the paramount interest of the estates creditors, the terms of the Settlement Agreement are fair and equitable, and approval of the Settlement Agreement is in the best interest of the estates. (i) The Probability Of Success Is Uncertain. As stated above, there is a dispute between the parties as to whether the Estate is entitled to recover from Island Pacific the fees and costs that the Debtor incurred in the Adversary. The Debtor contends that Island Pacific s threat to unilaterally terminate the Debtor s use of its ERP System was a willful violation of the automatic stay, and thus the Estate is entitled to fees and costs under section (h) of the Bankruptcy Code. See In re Del Mission Ltd., F.d (th Cir. ). Island Pacific disputes the Debtor s assertions and contends that its actions did not willfully violate the automatic stay. As a result, litigating this dispute would require the filing of several substantive motions, discovery, and attendance at several Court proceedings. While the Debtor believes it has a strong prospect success in prevailing against Island Pacific, should litigation be required, there is a risk of loss and there would be litigation expense and its attendant delay. Moreover, the Debtor believes that the costs required in successfully litigating its Fees Claim against Island Pacific would be significant and result in a lesser net recovery to the Estate than the waiver of Island Pacific s claim for Rejection Damages under the Settlement Agreement, further supporting Court approval of the Settlement 00. - -
Main Document Page of Agreement. (ii) Difficulties In Collection. The Debtor does not believe that collection is an issue in this matter, as Island Pacific possesses resources sufficient to pay the Fees Claim. (iii) Further Litigation Is Likely To Be Complex, Expensive, Inconvenient And Delay The Efficient Administration Of Debtor s Bankruptcy Case. 0 Absent approval of the Settlement Agreement, the disputes between the parties likely would result in the need to litigate and to resolve multiple legal and factual issues through litigation and motion practice. The disputes involve factual issues of regarding the ERP Agreements and Island Pacific s conduct prior to the Adversary, as well as legal issues regarding violations of the automatic stay. Consequently, the dispute may require significant factual discovery, including document production and depositions of multiple parties. Because of the complexity of the issues and the fact-intensive nature of the disputes, complete litigation and resolution of the claims and disputes between the Debtor and Island Pacific likely would take several months to complete, resulting in significant expense to the estates and possible delay in the Debtor s administration of its Estate. (iv) The Settlement Agreement Is In The Best Interest Of Creditors. The paramount interest of creditors strongly weighs in favor of approving the Settlement Agreement. Pursuant to the Settlement Agreement, the Debtor s Estate will receive a release from Island Pacific of all claims it has asserted against the Estate, as well as a waiver of Island Pacific s rights to file a proof of claim against the Debtor s Estate. As stated above, the Debtor believes that the costs required in successfully litigating its Fees Claim against Island Pacific would be significant and result in a lesser net recovery to the Estate than the waiver of Island Pacific s claim for Rejection Damages under the Settlement Agreement, further demonstrating that the Settlement Agreement is in the best interest of creditors. Based upon the foregoing, the Debtor believes that the settlement set forth in the Settlement Agreement is fair and reasonable and in the best interests of the Estate. 00. - -
Main Document Page of V. CONCLUSION WHEREFORE, the Debtor respectfully requests that the Court enter an order:. granting the Motion;. approving and authorizing the Debtor to enter into the Settlement Agreement;. authorizing the Debtor to execute all documents and to take any action reasonably necessary to effectuate the Settlement Agreement;. approving the sufficiency of the notice of the Motion; and. granting such other and further relief as this Court may deem just and proper. 0 Dated: August, By: /s/ Kevin D. Meek Scott F. Gautier Kevin D. Meek Attorneys For Debtor and Debtor In Possession 00. - -
Main Document Page of 0 DECLARATION OF JOE SCIROCCO I, Joe Scirocco, declare as follows:. I am the President and Chief Restructuring Officer of NG DIP Inc. (f/k/a Nasty Gal Inc.) (the Debtor ), a California corporation, and I am authorized to submit and I make this declaration ( Declaration ) on behalf of the Debtor in connection with the Debtor s Motion For Authority To Compromise With Island Pacific Systems, Inc. (the Motion ). Unless otherwise provided, capitalized terms used in this Declaration shall have the same meaning as set forth in the Motion.. Except as otherwise noted herein, I have personal knowledge of the facts presented in this Declaration, or have reviewed the Debtor s books, records and information referred to herein that were prepared and maintained by the advisors and employees engaged by the Debtor at my direction. If called as a witness to do so, I could competently testify thereto.. Attached hereto, marked as Exhibit, and incorporated herein by this reference is a true and correct copy of the settlement agreement as executed by all parties thereto, subject to the approval of this Court (the Settlement Agreement ), which is the subject of the Motion.. Without limiting the terms of the Settlement Agreement, the Settlement Agreement provides that: a. Island Pacific waives any right to file a proof of claim against the Estate, including but not limited to, any proof of claim based on the Rejection Damages. b. In exchange, the Debtor shall dismiss the Adversary, with prejudice, no later than fourteen () days after the effective date set forth in the Settlement Agreement. c. The Parties shall bear their own fees and costs in the Adversary. d. Upon satisfaction of all obligations hereunder, the License Agreement, Software Support Agreement, and Hosting Agreement shall be deemed rejected pursuant to section of the Bankruptcy Code and of no further effect. e. The Parties exchange mutual releases.. I am familiar with the settlement reflected in the Settlement Agreement. I believe that the Settlement Agreement is fair and reasonable and in the best interests of the Estate for the 00.
Main Document Page of reasons set forth in the Motion. I declare under penalty of perjury that the foregoing is true and correct. Executed this th day of August, at Los Angeles, California. Joe Scirocco 0 00.
Main Document Page of Exhibit 0 00.
Main Document Page of SETTLEMENT AGREEMENT This Settlement Agreement (this Settlement Agreement ) is entered into by and between NG DIP Inc. (f/k/a Nasty Gal Inc.), a California corporation (the Company or Debtor ), and Island Pacific Systems, Inc. ( Island Pacific ), a California corporation. The Company and Island Pacific may hereinafter be referred to individually as a Party and collectively as the Parties. RECITALS A. The Company was a leading lifestyle brand promoting professionally curated fashion merchandise. B. A key component of the Company s operations was software licensed from Island Pacific, commonly referred to as an Enterprise Resource Planning system (the ERP System ). C. The software license agreement between Island Pacific and the Company, dated September, (the License Agreement ), granted the Company a perpetual nonexclusive license for the use of the ERP System (the Software License ). D. The Company entered into two other agreements with Island Pacific contemporaneously with the License Agreement the Software Support Agreement and the Hosting Agreement/Managed Services Agreement. E. The Software Support Agreement provided software support for the ERP System such as access to a support personnel help-desk and updates to software. The Hosting Agreement provided that Island Pacific would host, monitor and main the ERP system. F. On or about November, (the Petition Date ), the Company filed a voluntary petition for relief under chapter of title of the United States Code (the Bankruptcy Code ). The Company s bankruptcy case is titled In re NG DIP, Inc. (f/k/a Nasty Gal Inc.), and is currently pending in the United States Bankruptcy Court for the Central District of California (the Bankruptcy Court ) as case number :-bk--bb (the Bankruptcy Case ). G. The Debtor contends that, on or about January,, Island Pacific contacted the Company and asserted that it would unilaterally terminate the Company s ERP System unless the Company paid all current and future license fees under the License Agreement. H. On or about January,, in response to Island Pacific s assertions, the Company filed a complaint against Island Pacific in the Company s Bankruptcy Case, commencing the adversary proceeding entitled Nasty Gal Inc. v. Island Pacific Systems, Inc., Adv. No. :-ap- 00-BB (the Adversary ). The Adversary alleges claims against Island Pacific for injunctive relief and damages. I. On or about January,, the Bankruptcy Court entered a Temporary Restraining Order against Island Pacific (the TRO ), finding that Island Pacific s actions violated the 0. -- EXHIBIT
Main Document Page of automatic stay pursuant to U.S.C., and enjoining Island Pacific from further interfering with the Company s rights under the License Agreement, Software Support Agreement, and Hosting Agreement. J. On February,, the Bankruptcy Court entered a preliminary injunction against Island Pacific, extending the relief set forth in the TRO until entry of a final order in the Debtor s Bankruptcy Case (the Preliminary Injunction ). K. The Company s bankruptcy estate (the Estate ) has incurred at least $,0 in legal fees and expenses in the Adversary as a result of Island Pacific s actions. The Company asserts that Island Pacific should pay such fees and expenses incurred by the Estate (the Fees Claim ). But for this Settlement Agreement, the Company would have filed a motion in the Adversary seeking attorney s fees and costs from Island Pacific. L. Island Pacific asserts that it is entitled to a claim against the Estate for rejection damages exceeding $,000 pursuant to section of the License Agreement (the Rejection Damages ). M. Following good faith, arm s length and rigorous negotiations, and to avoid the expense, delay and distraction of litigation regarding the Parties respective claims, the Parties desire to resolve the disputes between and among them, subject to the terms and conditions as hereinafter set forth. NOW, THEREFORE, in consideration of the mutual terms and covenants to be performed by each of the Parties hereto, and subject to approval of this Agreement by the Bankruptcy Court, the Parties hereby agree as follows: TERMS AND CONDITIONS. Recitals Acknowledged. The foregoing recitals are true and correct to the best of the Parties knowledge, and are hereby adopted by the Parties.. Bankruptcy Court Approval. The terms of this Agreement, and the effectiveness thereof, are subject to the approval of the Bankruptcy Court, after the Parties compliance with the notice and hearing requirements of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the Local Bankruptcy Rules.. Effective Date. This Agreement shall become effective on the first business day following the th calendar day after entry of an order in the Bankruptcy Case approving this Agreement on which no stay of the Order is in effect (the Order ), unless the Order expressly provides that the Order shall be effective and enforceable immediately upon entry, in which case the Agreement shall become effective on the date of entry of the Order (the Effective Date ).. Settlement. Island Pacific waives any right to file a proof of claim against the Estate, including but not limited to, any proof of claim based on the Rejection Damages. In exchange, the Company shall dismiss the Adversary, with prejudice, no later than fourteen () 0. -- EXHIBIT
Main Document Page of days after the Effective Date.. Rejection. Upon satisfaction of all obligations hereunder, the License Agreement, Software Support Agreement, and Hosting Agreement shall be deemed rejected pursuant to section of the Bankruptcy Code and of no further effect.. Mutual Release of Claims. On the Effective Date, the Parties shall have no further obligations under this Settlement Agreement and, on behalf of themselves and their respective representatives, agents, attorneys, predecessors, successors, insurers, administrators, heirs, beneficiaries, executors, lenders, advisors, employees, and assigns, and all other persons claiming by, through or under them hereby irrevocably, unconditionally and forever release and discharge each other and each of the Parties respective current and former trustees, beneficiaries, officers, board members, directors, agents, employees, members, attorneys, representatives, insurers, predecessors and successors in interest from any and all manner of past, present or future actions or causes of action, liens, encumbrances, claims, damages, rights, obligations, liabilities, debts, accounts, judgments, demands, costs and expenses of every kind and description whatsoever, whether known or unknown, suspected or unsuspected, fixed or contingent, arising under or related to the License Agreement, Software Support Agreement, Hosting Agreement, Fees Claim, or the Adversary; provided, however, that this release does not release any claims, liabilities, obligations, or causes of action arising from or relating to any Party s failure to comply with this Settlement Agreement.. Unknown Claims. The Parties acknowledge that they have investigated to their complete satisfaction all facts and potential claims released under Paragraph above which they may have against each other and that there is a risk that after the execution of this Settlement Agreement they will discover, incur, or suffer such claims which were unknown or unanticipated at the time this Settlement Agreement is executed, and if known on the date of execution and delivery, may have materially affected their decision to execute this Settlement Agreement. The Parties acknowledge and agree that the reason for the mutual release above is that they are assuming the risk of such unknown claims, and agree that this Settlement Agreement applies thereto. In connection herewith, the Parties expressly waive and relinquish the benefits of Section of the California Civil Code, which section reads as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.. Entire Agreement. This Settlement Agreement constitutes the final and entire agreement between the Parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, agreements and understandings of the Parties, whether oral or written, with respect to such subject matter. No supplementation, modification or waiver of this Settlement Agreement shall be binding unless executed in writing and signed by the Party to be bound thereby.. Binding on Successors. This Settlement Agreement shall be binding upon and inure to the benefit of the successors, assigns, heirs, executors, administrators, etc. of each of 0. -- EXHIBIT
Main Document Page of the Parties. 0. Assignments or Delegation of Rights. No Party hereto may assign any of their rights or delegate any of their duties hereunder without the prior written consent of the other Party hereto, and any such assignment or delegation without the prior written consent of such other Party shall be void ab initio.. Jurisdiction and Venue. Any action to enforce this Settlement Agreement must be brought in the United States Bankruptcy Court, Central District of California, in the Company s bankruptcy case. Either Party may move to re-open the Bankruptcy case, if necessary, for the purpose of seeking to enforce this Settlement Agreement. In any such action, the prevailing party shall recover reasonable attorney s fees and costs. This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law principles of the State of California, except where the Bankruptcy Code and Bankruptcy Rules provide the basis for the action or the issue requires application of Federal law. The Parties each hereby waive their right to trial by jury, if any, in connection with any such legal action. The Parties consent to entry of a final judgment or order by the Bankruptcy Court as a core matter.. Modification. This Settlement Agreement may be modified only by a writing executed by the Party to this Settlement Agreement against whom enforcement of such modification is sought.. Further Assurances. The Parties shall take all further acts and sign all further documents including, without limitation, assignments, bills of sale, endorsements and similar documents, necessary or convenient to effectuate the purpose of this Settlement Agreement.. Signature and Execution. A signed copy of this Settlement Agreement shall have the same force and effect as the original. This Settlement Agreement may be executed in counterparts, each of which is deemed to be an original, but such counterparts together shall constitute one and the same instrument.. Full Authority To Sign Agreement. Any individual signing this Settlement Agreement on behalf of any Party hereto expressly represents and warrants to each other Party hereto that he or she has full authority and power to do so and to bind such Party hereto.. No Admissions or Ratifications. Nothing set forth in this Settlement Agreement constitutes an admission or ratification by any Party herein of the validity of the other Party s position.. No Penalty for Drafting Agreement. No provision of this Settlement Agreement shall be interpreted for or against any Party because that Party or its legal representative drafted this Settlement Agreement.. Parties To Bear Own Costs. Each party shall be responsible for the payment of its own costs, attorneys fees, and all other expenses in connection with negotiation, preparation, execution and approval of this Settlement Agreement. Notwithstanding the foregoing, if legal action is necessary to enforce the terms of this Settlement Agreement, the 0. -- EXHIBIT
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Main Document Page of /s/ Angela Matsuoka Date Printed Name Signature June
Main Document Page of Served Via U.S. Mail Special Notice Mert Beraze Paloma Street Los Angeles, CA 00 Equal Opportunity Clothiers, Inc. Eliza Ghanooni, Esq. 0 Avenue of the Stars, Suite 0 Los Angeles, CA 00 Shoemagoo, LLC Dennis J. Wickham, Esq. SELTZER CAPLAN McMAHON VITEK A Law Corporation 0 B Street, Suite 00 San Diego, California 0 Malte Farnaes, Esq. Farnaes & Lucio, P.C. Encinitas Blvd., Suite 0 Encinitas, CA Liquidating Trustee for NG DIP, Inc. Amanda Demby Province, Inc. 0 Corporate Circle, Suite 0 Henderson, NV 0