SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (hereiinafter 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 uis 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 Diusmiss 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 dismi8ss 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 be 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
lliabilities 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 sdhall 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 hesreunder, 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 Coimpany 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 Compalint.
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
jurisdication 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 paraties 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.
Xxxxxx X. Xxxxxx
President Chief Executive Officer
ESTATE OF X.X. XXXXXXXX
Xxxx X. Xxxxxxxxxxx
Executor
5/09/97