SETTLEMENT AND RELEASE AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of the __ day of ________,
2001, between Cheshire Distributors, Inc., a Delaware corporation, having an
address at 0000 Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Company"),
_____________________________________________________________ (the "Creditor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is indebted to the creditor in the amount of
___________ (the "Outstanding Balance ");
WHEREAS, the Company has requested that upon a cash payment of
$___________ (the "Cash Payment") to Creditor and the issuance by the Company to
Creditor of ___________ shares of the Company's common stock (the "Shares"), the
Outstanding Balance be deemed paid and satisfied in full;
WHEREAS, the Creditor is willing to accept the Cash Payment and Shares
in full satisfaction of the Outstanding Balance; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which the parties hereto hereby acknowledge, the parties hereto
hereby agree as follows:
1. Cash Payment. As a condition of the foregoing settlement,
upon full execution of this Agreement, the Company shall make the Cash Payment
to Creditor, representing a reduction of the amounts due to Creditor by Company
under the Outstanding Balance.
2. Issuance of Shares. As a condition of the foregoing
settlement, upon full execution of this Agreement, the Company shall issue the
Shares to Creditor.
3. Satisfaction and Release. Upon payment of the Cash Payment
and the delivery of the Shares to Creditor, the Company shall have no further
obligation or liability to Creditor, and the Company and its Chairamn, Chief
Executive Officer, officers, directors, affiliates and agents and their heirs,
successors and assigns shall therewith be released of any and all liability or
obligations to Creditor of any nature.
4. Consequences of Bankruptcy. In the event that the Company is
placed into an involuntary or voluntary bankruptcy proceeding, the Creditor
agrees hereby that it votes in favor of a plan of reorganization or liquidation
of the Company (the "Plan") which provides for the same percentage and prorata
amount of cash payment and common stock issuance as provided in this Agreement
to be paid to all creditors in the same class as the Creditor. Notwithstanding
the foregoing, this Section 4 shall only be operative in a bankruptcy if
two-thirds in dollar amount and more than one-half in number of the current
outstanding creditors of the Company in the same class and status as the
Creditor have entered into Settlement and Release Agreements similar to this
Agreement that provide for a settlement and compromise of their claim in the
same percentage as agreed by the Creditor prior to the filing of any such
bankruptcy petition.
Settlement and Release Agreement
Page 2
5. Authority. Creditor warrants that no other person or entity
has claimed or now claims any interest in the subject of this Agreement, and
that Creditor has the sole right and exclusive authority to execute this
Agreement and to receive the aforesaid consideration and that he has not sold,
assigned or otherwise transferred to any other person or entity, any claim,
lien, demand, cause of action, obligation, damage or liability covered hereby.
6. Miscellaneous. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, agents, employees, attorneys, successors, devisees and assigns.
The recitals in this Agreement shall form a substantive part of this Agreement.
This Agreement may not be changed or terminated orally nor may any of its
provisions be waived except by an agreement in writing signed by the party to be
charged. If any term or provision of this Agreement shall be held to be invalid,
illegal or unenforceable in any respect or under any circumstances, the
remainder of this Agreement and the application thereof to other circumstances
shall not be affected and shall be enforceable to the fullest extent permitted
by law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first written above.
CHESHIRE DISTRIBUTORS, INC. CREDITOR:
By:____________________________ ____________________________
Name: Gilad Gat Name:
Title: Vice President Title:
