SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (hereinafter the "Agreement") is
entered into as of this 09 day of May, 1997, by and between
Paradigm Medical Industries, Inc., a Delaware corporation (the
"Company) and the Estate of X.X. Xxxxxxxx (the "Estate").
RECITALS
WHEREAS, on November 25, 1996, the Company was served with
a Summons and Complaint in an action styled Xxxxxxxx Associates
and X.X. Xxxxxxxx v. Paradigm Medical Industries, Inc., No. 96
Civ. 8545, which was commenced in the United States District
Court for the Southern District of New York against the Company
by Xxxxxxxx Associates and X.X. Xxxxxxxx ("Xxxxxxxx");
WHEREAS, the claims asserted in the Complaint are based
upon a March 31, 1995 agreement between Xxxxxxxx Associates and
the Company (the "March 31, 1995 Agreement") in which Xxxxxxxx
Associates agreed to obtain $5,000,000 to $8,000,000 in
capitalization for the Company prior to December 31, 1995 in
exchange for the right to purchase a 5% equity position in the
Company for $25,000 and the payment of $3,000 per month for a
period of 36 months, as well as additional services Xxxxxxxx
Associates alleges it performed for the Company;
WHEREAS, the Company contends that Xxxxxxxx Associates did
not obtain the required capitalization for the Company prior to
December 31, 1995 nor was there any agreement for payment by the
Company to Xxxxxxxx Associates or Xxxxxxxx for services Xxxxxxxx
Associates and Xxxxxxxx contend they performed for the Company;
WHEREAS, Xxxxxxxx passed away on November 28, 1996, and the
Estate is to be substituted for Xxxxxxxx as a plaintiff party to
the Action;
WHEREAS, on January 29, 1997, the Company filed a Motion to
Transfer, or in the Alternative, to Dismiss for Improper Venue or
Lack of Personal Jurisdiction, together with a supporting
memorandum;
WHEREAS, on April 4, 1997, Judge Xxxxxxx Xxxxx of the
United States District Court for the Southern District of New
York granted the Company's motion to transfer the Action to the
United States District Court for the District of Utah; and
WHEREAS, the Company and the Estate desire to dismiss the
Complaint with prejudice and settle all potential claims,
disputes or actions, known or unknown, which the Estate or heirs
of the Estate may have against the Company;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
AGREEMENT
1. Payment. The Company agrees to pay the Estate One
Thousand Five Hundred Dollars ($1,500) each month for 36 months
and to pay Five Thousand Dollars ($5,000) as reimbursement for
legal expenses. The one time payment of Five Thousand Dollars
($5,000) to the Estate for legal expenses shall be paid on May
16, 1997, or on the date of execution of this Agreement,
whichever is later. The monthly payments to the Estate shall
commence on May 16, 1997, or on the date of execution of this
Agreement, whichever is later, and shall he payable at the first
of each month thereafter for a total of 36 consecutive months.
If the Company does not make a monthly payment within ten (10)
days of the date the payment is due and payable hereunder, the
Company shall be in default, and interest shall accrue on the
unpaid amounts at the rate of ten percent (10%) per annum.
2. Dismissal of Action. Contemporaneous with the
execution of this Agreement, the Estate shall submit to the court
a Stipulation and Order for Dismissal with Prejudice.
3. Entire Agreement. This Agreement constitutes the
entire agreement of the parties. No modification or amendment of
this Agreement shall be of any force or effect unless in writing
and executed by all of the parties to this Agreement. The
provisions of this Agreement shall survive the closing of the
settlement and this Agreement.
4. No Assignment of Rights. Xxxxxxxx Associates and the
Estate represent, warrant and covenant that they have not
assigned or transferred any of their rights to any claims,
disputes, losses, demands, actions, causes of action, damages,
compensation, costs, fees, expenses, contracts, covenants,
obligations, debts and liabilities related to the Action and/or
transactions between the Company and Xxxxxxxx or Xxxxxxxx
Associates or both, and that they are lawfully entitled to make
this settlement and receive the satisfaction described herein.
5. Successors and Assigns. This Agreement shall be
binding on, and shall inure to the benefit of, the parties to
this Agreement and their respective legal representatives,
successors and assigns as well as heirs of the Estate.
6. Costs and Fees. Except as otherwise specified in
this Agreement, each party agrees to bear its own costs, expenses
and attorneys, fees incurred in connection with or relating to
this Agreement. However, in the event any dispute or contest
shall arise hereunder or any party shall breach or fail to
perform or discharge any of its obligations hereunder, the party
to this Agreement who shall prevail in litigation concerning any
such dispute, contest or failure to perform or discharge, shall
be entitled to an award against the losing party of reasonable
attorney's fees and other costs incurred by said prevailing
party.
7. Release of All Claims. The Estate hereby fully
releases the Company and its officers, directors, employees,
attorneys and agents of each, every and all claims of every kind
and nature which the Estate and heirs of the Estate ever had or
now have, or may have, and which arose, accrued, or which may
hereafter arise or accrue, including but not limited to those
claims asserted in the Complaint. The Estate hereby represents,
warrants and agrees that no claim, right, cause of action or
demand is reserved and that this Agreement waives and releases
the Company and its officers, directors, employees, attorneys and
agents of and from any and all claims, damages, demands, costs,
expenses and causes of action, compensation of every kind and
nature, to which the Estate and heirs of the Estate may be
entitled or which the Estate and heirs of the Estate may have in
the future as a result of any events which have occurred,
including but not limited to those claims and causes of action
asserted in the Complaint.
8. Indemnification of Claims. The Estate hereby agrees
to indemnify and hold the Company and its officers and directors
harmless from and against any and all claims, demands, rights,
causes of action, and other liabilities and obligations of every
kind and nature which Xxxxxxxx Associates and Xxxxxxxx ever had
or now have, or may have, and which arose, accrued, or which may
hereafter arise or accrue, including but not limited to those
claims and causes of action asserted in the Complaint.
9. Binding Effect. This Agreement is binding on each of
the undersigned parties, including its respective successors,
representatives, affiliates, agents and assigns, as well as the
heirs of the Estate.
10. Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof, nor the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall constitute one and the
same agreement, and when taken together this Agreement shall
become effective when one or more counterparts have been signed
by each of the parties hereto and delivered by facsimile to the
other parties hereto.
12. Governing Law. This Agreement, to the extent
permitted by applicable law, shall be governed by and construed
in accordance with the laws of the State of Utah applicable to
contracts entered into and to be performed within said State.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
PARADIGM MEDICAL INDUSTRIES, INC.
By: Xxxxxx X. Xxxxxx
Its: CEO
ESTATE OF X.X. XXXXXXXX
By: Xxxx X. Xxxxxxxxxxx
Its: Executor 5/09/97
