EXHIBIT 10.7
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Agreement"), entered into
this
[ ] day of March, 1998 by and between PENTECH INTERNATIONAL,
INC.,
having an office at 000 Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000,
(hereinafter refereed to respectively as "Plaintiff"), on the one
hand, and XXXXXX & XXXXXX L.L.P., having an office at 1185 Avenue
of the Americas, Xxx Xxxx, Xxx Xxxx 00000 and XXXXX X. XXXXXXXX
(hereinafter refereed to respectively as "Defendants"), on the
other hand.
W I T N E S E T H
WHEREAS, Plaintiff commenced an action Defendants in the
Supreme Court of the State of New York, County of New York, Index
No. 1100222/97 ("Action"), asserting in its complaint
("Complaint"), dated June 4, 1997, various claims against
Defendants; and
WHEREAS, Defendants filed their verified answer ("Answer"),
dated July 25, 1997, denying any and all liability to Plaintiff
and
asserting affirmative defenses against Plaintiff; and
WHEREAS, the parties have conducted extensive discovery,
including, but not limited to, (i) review of transcripts,
documents
and other materials from related proceedings, and (ii)
depositions
and document discovery in the Action; and
WHEREAS, Plaintiff and Defendants have determined that it is
in their mutual interests to amicably resolve all disputes among
the parties and to settle the Action on the terms and conditions
set forth herein; and
WHEREAS, settlement negotiations have taken place between
Plaintiff and Defendants, through their respective attorneys, and
the terms of this of this Agreement have been reached through
arm's-length negotiations conducted by the said attorneys; and
WHEREAS, this Agreement compromises the matters set forth in
the Complaint and Answer which are disputed both as to validity
and
amount; and
NOW, THEREFORE, in consideration of the mutual promises and
obligations contained herein, it is agreed that each and every
claim and factual allegation embraced within the scope of the
Complaint and Answer, or which might have been alleged by reason
of
any matter or transaction referred to in the Complaint or Answer,
or which arises out of or under the facts and circumstances set
forth therein, shall be dismissed on the merits with prejudice
and
be settled and compromised upon the following terms and
conditions:
1. On behalf of Defendants, $1,250,000 U.S. Dollars shall
be
paid to Plaintiff. Such payment shall be made on or before April
3, 1998 by check made payable to Pentech International, Inc. and
Xxxxxx, Xxxxx & Gallanty LLP, as attorneys.
2. In consideration of the aforesaid payment and clearance
thereof, the promises and obligations contained herein, and other
good and value consideration:
(i) The Plaintiff and its respective affiliates,
subsidiaries, principals, partners, parent companies, directors,
officers, shareholders, attorneys, agents, employees, associates,
heirs, executors, administrators, successors, predecessors,
assigns, other representatives and any and all other related and
affiliated companies and individuals (hereinafter together
refereed
to as the "Plaintiff's Entities") shall release and discharge
Defendants and their respective affiliates, subsidiaries,
principals, partners, parent companies, directors, officers,
shareholders, attorneys, agents, employees, associates, heirs,
executors, administrators, successors, predecessors, assigns,
other
representatives, and all other related and affiliated companies
and
individuals (hereinafter together refereed to as "Defendants'
Entities") from all actions, causes of action, claims, suits,
debts, accounts, contracts, controversies, agreements, promises,
damages, disciplinary complaints, administrative remedies,
conflicts of interest and demands whatsoever, in law or equity,
which against the Defendants and Defendants' Entities the
Plaintiff
or Plaintiff's Entities ever had, now have or hereafter can,
shall
or may have for, upon or by reason of any matter, cause to thing
whatsoever from the beginning of the world to the day of the date
of this Agreement, except for the rights and obligations set
forth
in this Agreement, all pursuant to the general release in the
form
annexed hereto as Exhibits "A," which shall be duly executed by
the
Plaintiff;
(ii) The Defendants and the Defendants' Entities shall
release and discharge the Plaintiff and Plaintiffs' Entities from
all actions, cause of action, claims, suits, debts, accounts,
contracts, controversies, agreements, promises, damages,
disciplinary complaints, administrative remedies, conflicts of
interest and demands whatsoever, in law or equity, which against
the Plaintiff or Plaintiff's Entities, the Defendants or
Defendants' Entities ever had, now have or hereafter can, shall
or
may have for, upon or by reason of any matter, cause or thing
whatsoever from the beginning of the world to the day of the date
of this Agreement, except for the rights and obligations set
forth
in this Agreement, all pursuant to the general releases in the
forms annexed hereto as Exhibit "B," which shall be duly executed
by the Defendants;
(iii) A purpose and intent of this Agreement is to
preclude the Defendants and Defendants' Entities, on the one
hand,
and the Plaintiff and Plaintiff's Entities, on the other, and any
entities owned, controlled, or managed by them respectively, from
ever asserting a claim, complaint or lawsuit against the other
arising from any matter whatsoever up to the date of this
Agreement
once the payment is made and cleared pursuant to paragraph 1 of
this Agreement;
(iv) Plaintiff hereby agrees to indemnify and hold
harmless the Defendants and Defendants' Entities from any claim
interposed against Defendants and/or Defendants' Entities which
arises out of the legal services performed and provided by the
Defendants as set forth in the Complaint, and Plaintiff further
agrees to indemnify Defendants and Defendants' Entities by
reducing
the amount of any judgement obtained by Plaintiff against any
other
judgement defendant ("Judgement Defendant"), or by releasing or
giving a satisfaction for so much of such judgement, to the
extent
necessary to eliminate any such Judgement Defendant's right to
recover against Defendants and/or Defendants' Entities on any
claim
which arises out of the legal services performed and provided by
the Defendants as set forth in the Complaint; and
(v) Plaintiff hereby agrees that any settlement
agreement entered into by Plaintiff and/or Plaintiff's Entities
with any individual or entity having a pending, potential or
future
claim against Defendants and/or Defendants' Entities which arises
out of the legal services performed and provided by the
Defendants
as set forth in the Complaint shall contain a covenant and
agreement by such individual or entity not to enforce, xxx for,
or
collect upon any such claim that such individual or entity may
have
against Defendants and/or Defendants' Entities.
3. This Agreement is not intended to be a resolution on
the
merits and is made solely to resolve the differences between the
parties and as a result of a business decision of the parties
made
in light of the expense and inconvenience of continuing to
litigate
the Action.
4. The parties hereto acknowledge that this Agreement is
not
intended to be, and shall not be, construed as an admission that
Defendants have breached any agreement, obligation, duty,
disciplinary rule, ethical consideration or contract relating to
or
owed to Plaintiff, or engaged in any wrongdoing or misconduct,
professional or otherwise, or incurred any liability of any kind.
5. Neither this Agreement nor any of its terms and
conditions, nor any negotiations or proceedings with respect to
the
subject matter of this Agreement shall be offered or received
into
evidence or be admissible in any trial or any proceeding
involving
Plaintiff, Defendants, or any other party or person, except for
the
purpose of obtaining enforcement of the Agreement.
6. The terms and conditions of this Agreement ant the
documents produced during the litigation of the Action are and
shall be deemed to be confidential, and shall not be disclosed to
any non-party by Plaintiff, Defendants or their respective
experts,
agents, or attorneys except (1) pursuant to subpoena or court
order; (2) to the extent that, in the opinion of counsel,
disclosure thereof is necessary to comply with applicable law
and/or the obligations of Plaintiff as a public company; (3) to
their accountants, auditors, and attorneys; or (4) to obtain
enforcement of the provisions of this Agreement. The Agreement
and
any related documents (except the Stipulation of Dismissal
referred
to in paragraph 12 below) shall not be filed with the court or,
if
filed, shall be filed under seal. If asked about the status of
the
action or the claims asserted therein, except as set forth above,
Plaintiff, Defendants and their respective attorneys and agents
agree to state only that the differences between the parties have
been resolved satisfactorily. In order to facilitate the purpose
of this paragraph and Plaintiff and Defendants and their
respective
attorneys agree to use their best efforts to return to the other
party all transcripts of depositions of party witnesses taken in
the Action in their possession and to return all documents in
their
respective possession, including copies made thereof, produced by
the other party in response to discovery requests during the
course
of the Action within forty-five (45) days after the execution of
this Agreement. Nothing in this Agreement shall prohibit any
party
from disclosing the fact of the settlement to any third party.
7. This Agreement contains the entire understanding and
agreement between the parties hereto and supersedes all prior
verbal and written communications between the parties and their
counsel with regard to the subject matter addressed herein; it is
not subject to any condition not provided for herein and there
are
no other collateral or oral agreements among the parties.
8. This Agreement may not be modified, terminated or
discharged orally; any agreement purporting to change the terms
hereof must be in writing, signed by each party hereto.
9. This Agreement shall be constructed in accordance with,
and governed by, the substantive laws of the State of New York,
without giving effect to conflicts of laws principles.
10. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall
be
considered an original, and may be signed and delivered by
facsimile, and all of which together shall constitute one and the
same document.
11. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs,
successors, administrators, representatives, shareholders,
partners, employees, successors, executors and assigns.
12. Upon the execution and exchange of the Agreement and
the
delivery and clearance of the settlement payment set forth, the
attorneys for the parties hereto shall execute and file a
Stipulation of Dismissal of the Action with prejudice with the
Supreme Court of the State of New York, County of New York, and
the
Plaintiff and Defendants shall each be provided with the releases
specified in Paragraph 2(i) and 2(ii) hereof. Nothing in any of
said releases shall excuse any party from its obligations under
the
Agreement itself.
13. The parties hereto and the representatives signing on
behalf of each hereby warrant and represent that they are
authorized to enter into this Agreement, and bind the parties to
the Agreement. The relevant corporate resolutions or powers of
attorney evidencing this authority have been drafted and duly
executed and are incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
PENTECH INTERNATIONAL, INC.
By: s/
XXXXXX & XXXXXX L.L.P.
By: s/
s/
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