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Exhibit
10.1
COMPROMISE SETTLEMENT
AND MUTUAL RELEASE AGREEMENT
This Compromise Settlement
and Mutual Release Agreement (“Agreement”) is dated
this 19th day of July, 2007 (“Effective Date”), by and
between the following parties (the “Parties”) upon the
terms and conditions stated herein:
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Path 1 Network Technologies,
Inc. (“Path 1”); 1
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Gryphon Master Fund, L.P.
(“GMF”); 2 and
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GSSF Master Fund, LP
(“GSSF”); 3
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RECITALS
WHEREAS, on or about
January 17, 2007, GMF and GSSF filed suit against Path 1,
alleging various causes of action as alleged in Cause
No. 3:06-cv-00107-C; Gryphon Master Fund, L.P., GSSF Master
Fund, LP, v. Path 1 Network Technologies, Inc. ; In The United
States District Court, For The Northern District Of Texas, Dallas
Division (the “Lawsuit”); and
WHEREAS, on or about
February 10, 2006, Path 1 answered the Complaint denying all
the allegations as alleged in the Lawsuit; and
WHEREAS, on or about
May 31, 2007 the Court granted a Temporary Restraining Order
against Path 1 preventing the sale of its assets and requiring the
Plaintiff to post a $50,000 bond (“Bond”); and then on
or about June 14, 2007, the Court granted the Permanent
Injunction leaving in place the Bond amount (the
“Injunction”); and
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1
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Path 1, as used herein, shall mean: Path 1 Network
Technologies, Inc. (i) in all capacities in which Path 1 could
have been sued or could have brought claims in the Lawsuit; and
(ii) Path 1’s current and former officers, directors,
employees, accountants, managers, partners, legal representatives,
attorneys, trustees, joint venturers, servants, agents, assigns,
successors, predecessors, subcontractors, lenders, stockholders,
all other persons or entities acting on Path 1’s behalf
whether authorized or not; and all other persons or entities,
natural or corporate, in privity with them.
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2
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GMF as used herein, shall mean: Gryphon Master Fund, L.P.,
(i) in all capacities in which GMF could have been sued or
could have brought claims in the Lawsuit; and (ii) GMF’s
current and former officers, directors, employees, accountants,
managers, partners, legal representatives, attorneys, trustees,
joint venturers, servants, agents, assigns, successors,
predecessors, subcontractors, all other persons or entities acting
on GMF’s behalf whether authorized or not; and all other
persons or entities, natural or corporate, in privity with them.
“Gryphon” shall collectively mean GMF and
GSSF.
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3
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GSSF as used herein, shall mean: GSSF Master Fund, L.P.,
(i) in all capacities in which GSSF could have been sued or
could have brought claims in the Lawsuit; and
(ii) GSSF’s current and former officers, directors,
employees, accountants, managers, partners, legal representatives,
attorneys, trustees, joint venturers, servants, agents, assigns,
successors, predecessors, subcontractors, all other persons or
entities acting on GSSF’s behalf whether authorized or not;
and all other persons or entities, natural or corporate, in privity
with them. “Gryphon” shall collectively mean GMF and
GSSF.
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| SETTLEMENT AGREEMENT |
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WHEREAS, the Parties hereby
make a full and final settlement of all matters and all causes of
action arising out of the facts and claims as set forth above by
entering into this Agreement as follows:
COMPROMISE SETTLEMENT
AND MUTUAL RELEASE AGREEMENT
For and in consideration of
the promises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1. Path 1 hereby agrees to
pay Gryphon One Hundred and Fifty Thousand Dollars ($150,000.00) as
partial consideration for which Gryphon agrees that all matters
arising out of the Lawsuit or the Laurus Transactions 4 will be, and are, finally compromised
and settled.
2. Release by GMF and
GSSF . GMF and GSSF, (collectively “Gryphon”) and
anyone claiming by, through or under Gryphon hereby irrevocably and
unconditionally releases, acquits, and forever discharges Path 1,
of and from any and all Claims 5 and
Damages 6
of any kind whatsoever
against Path 1 accruing prior to the Effective Date. Gryphon
acknowledges and agrees that the release set forth above is a
broad, general and unconditional release that should be liberally
construed and by virtue of same Gryphon does and intends to give up
any and all Claims, Damages, costs, rights or remedies Gryphon may
have against Path 1 accruing prior to the Effective Date,
including, but not limited to, those relating to or arising from
the Lawsuit. Notwithstanding anything contained herein, this
release shall not affect Gryphon’s rights as a preferred
stockholder of Path 1. Gryphon shall retain its preferred
stockholdings in Path 1, and except for the obligations and
covenants herein, shall retain all rights in connection with its
ownership of such stock in Path 1.
3. Release by Path 1 .
Path 1 and anyone claiming by, through or under Path 1 hereby
irrevocably and unconditionally releases, acquits, and forever
discharges Gryphon of and
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4
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The term “Laurus Transactions” shall mean the
Laurus Master Fund Unlimited transactions as complained of and set
forth in the Lawsuit.
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5
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The term “Claims” as used herein, shall mean
any and all theories of recovery of whatsoever type or nature,
whether known or unknown, accruing prior to the Effective Date,
whether contingent, prospective or matured, whether arising in
equity or in law, whether arising under the common law, any
contract, statute or otherwise, recognized by the law of any
jurisdiction and includes, but is not limited to, causes of action,
claims, debts, obligations, actions, demands, liabilities, suits,
and judgments.
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6
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The term “Damages” as used herein shall mean
any and all elements of relief or recovery of whatsoever nature,
whether known or unknown, recognized by the law of any jurisdiction
and includes, but not limited to, (i) actual damages (whether
direct, consequential, coincidental or otherwise) of every
description, such as breach of contract, fraud, personal injury,
emotional distress, reputational loss (i.e. libel and slander) and
economic loss; (ii) any other item of loss or injury;
(iii) statutory, treble, additional, multiple, penal,
exemplary and/or punitive damages; (iv) attorneys’ fees;
(v) prejudgment or post-judgment or other interest;
(vi) declaratory, injunctive and equitable relief;
(vii) expenses; (viii) expert witness fees; and
(ix) costs of court.
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| SETTLEMENT AGREEMENT |
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from any and all Claims and Damages of
any kind whatsoever
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