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Exhibit 10.13
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement (the "Settlement
Agreement") is entered into this 31st day of January 1997, between Pharmhouse
Corp. ("Pharmhouse"), Rx "Realty Corp. ("Rx Realty"), their respective
affiliates and successors (jointly and severally the "Pharmhouse Entities") and
▇.▇. ▇▇▇▇▇▇▇▇▇ Co. and Woolworth Corporation and their respective affiliates and
successors (collectively "Woolworth").
WHEREAS, pursuant to an asset purchase agreement dated April 13, 1995,
as amended on April 28, 1995, (the "Asset Purchase Agreement"), Pharmhouse, as
of and on April 28, 1995, (the "Closing Date") acquired, inter alia, inventory,
fixtures and through the acquisition of the stock of Rx Realty, leases relating
to twenty-four "deep discount" drug stores which Woolworth had previously
operated under the name "The Rx Place"; and
WHEREAS, except as otherwise provided herein, the parties intend that
the Purchase Agreement shall continue in full force and effect; and
WHEREAS, on or about January 11, 1996, Pharmhouse filed a complaint
(the "Complaint") in the Supreme Court of the State of New York, County of New
York (the "Court") under Index No. 60021/96, styled Pharmhouse Corp. ▇.
▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇. ▇▇▇▇▇▇▇▇▇ Co. (the "Action"); and
WHEREAS, in or about February 1996, Woolworth demanded and commenced
arbitration (the "Arbitration") of certain matters with Pharmhouse pursuant to
the Asset Purchase Agreement, before a partner of the accounting firm of Coopers
& ▇▇▇▇▇▇▇ LLP pursuant to the Commercial Rules of the American Arbitration
Association; and
WHEREAS, pursuant to the terms of the Asset Purchase Agreement,
Pharmhouse issued to Woolworth three (3) notes (collectively, the "Notes"); the
First Note was payable within nine (9) months of the Closing Date (and was
prepaid in part); the Second Note is payable within twenty-four (24) months of
the Closing Date; and the Third Note is payable within thirty-six (36) months of
the Closing Date. As of December 28, 1996, there was due under the Notes the
principal amount of $8,234,954 ("Outstanding Principle") and accrued interest in
the amount of $1,586,384 ("Outstanding Interest"); and
WHEREAS, Pharmhouse and Woolworth deny any and all claims asserted
against them by the other; and
WHEREAS, Pharmhouse and Woolworth wish to resolve all of the
differences between and among them without the need for further litigation or
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arbitration and without such settlement constituting any admission of wrongdoing
by any party;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1. Pharmhouse Releases
As material consideration for the execution of this Settlement
Agreement and the transactions described herein, the Pharmhouse Entities hereby
release and forever discharge Woolworth in accordance with the terms and
provisions of the Release annexed hereto as Exhibit "A" hereof and incorporated
herein in its entirety (the "Pharmhouse Release") and subject to the terms and
conditions of this Settlement Agreement, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ hereby release and forever discharge Woolworth in accordance
with the terms and provisions of the Release annexed hereto as Exhibit "B"
hereof and incorporated herein in its entirety (the "Individual Releases") and
subject to the terms and conditions of this Settlement Agreement. The Pharmhouse
Release and the Individual Releases shall be executed simultaneously with the
execution of this Settlement Agreement.
2. Woolworth Release
As material consideration for the execution of this Settlement
Agreement and the transactions described herein, Woolworth hereby releases and
forever discharges the Pharmhouse Entities, including ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in accordance with terms and provision of the
Release annexed hereto as Exhibit "C" and incorporated herein in its entirety
(the "Woolworth Release") and subject to the terms and conditions of this
Settlement Agreement. The Woolworth release shall be executed by Woolworth
simultaneously with the execution of this Settlement Agreement.
3. Settlement
Upon receipt by Woolworth of the executed Pharmhouse Release, the
executed Individual Releases of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ in favor of Woolworth, and a copy of the Stipulation of Discontinuance
with Prejudice, executed by counsel of record, Woolworth will immediately
deliver to Pharmhouse the Woolworth Release and the letter discontinuing the
Arbitration and the First Note and Second Note marked cancelled (however, the
First Note and the Second Note shall be delivered to Pharmhouse on or before
February 4, 1997). Notwithstanding that the Woolworth Release releases, among
other matters, certain of the obligations of Pharmhouse with respect to
Outstanding Principle and all of the Outstanding Interest, one million dollars
($1,000,000) of outstanding principle of the Third Note (the "Remaining
Outstanding Principle") shall remain an obligation of Pharmhouse. In connection
therewith, the terms and conditions of payment of the
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Third Note are modified as follows: The Third Note shall not bear any interest,
premium, penalty or other finance charge payable by Pharmhouse to Woolworth from
and after the execution of this Settlement Agreement. The payment of the
Remaining Outstanding Principle shall be subject to the express condition that
if Pharmhouse does not: (a) liquidate substantially all of its assets or (b)
cease to conduct substantially all of its operations (other than by reason of
any merger, consolidation or sale of all or substantially all of its assets with
or to any other affiliated third party) or (c) file for bankruptcy (any one or
more of which events constitute a "Default Event") on or before eighteen (18)
months from the date of this Settlement Agreement, i.e. July 30, 1998 (the
"Forgiveness Date"), Woolworth shall be deemed to have irrevocably forgiven the
obligation of Pharmhouse to pay all or any portion of the Remaining Outstanding
Principle evidenced by the Third Note, and provided, further, that pending the
Forgiveness Date and absent the occurrence of an intervening Default Event,
Woolworth hereby covenants to stand still and not ▇▇▇ Pharmhouse or otherwise
take any action to collect or enforce or pursue Woolworth's rights or claim with
regard to the Remaining Outstanding Principle on the Third Note and that,
assuming no Default Event prior to the Forgiveness Date, Woolworth will
surrender the Third Note to Pharmhouse for cancellation on the close of business
of the Forgiveness Date. Upon the occurrence of a Default Event, the Remaining
Outstanding Principle shall be paid to Woolworth within ten (10) days without
further demand by Woolworth.
4. Lease Assignment
The Pharmhouse Entities hereby agree to reassign to Woolworth and
Woolworth hereby agrees to accept said reassignment from the Pharmhouse Entities
of Store #▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "Reassigned
Lease"), upon the following terms and conditions:
(a) The reassignment of said Reassigned Lease to Woolworth shall become
effective upon the surrender of possession by the Pharmhouse Entities to
Woolworth of the demised premises which are the subject of the Reassigned Lease,
said surrender of possession by the Pharmhouse Entities to take place not later
that May 31, 1997. The foregoing reassignment shall be automatic and without the
need for any further documentation to evidence such reassignment; provided,
however, that at the request of either party hereto, Woolworth and the
Pharmhouse Entities shall execute and deliver to the other a declaration or
letter confirming the same. With respect to the Reassigned Lease, the parties
agree that in addition to the terms and conditions herein, the Terms and
Conditions to the Lease Assignment set forth in Exhibit "D" hereto are
incorporated herein and made a part of this reassignment;
(b) Effective as of February 1, 1997 and continuing until surrender of
the premises which is the subject of the Reassigned Lease, Woolworth shall make
payments to accommodate the payment of current rent and other fixed monthly sums
payable to landlord in accordance with the attached schedule set forth in
Exhibit "E" hereto by wire transfer or other method directly to the landlord. In
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addition to the accommodation payment of current rent and other fixed monthly
sums payable to landlord as set forth in Exhibit "E", Woolworth shall reimburse
the Pharmhouse Entities for additional occupancy costs with respect to the
demised premises relating to periods on or before February 1, 1997 and up to May
31, 1997 as set forth on Exhibit "F" hereto. Woolworth will reimburse such costs
upon receipt by Woolworth of reasonable third-party invoices rendered in the
ordinary course of business received from the Pharmhouse Entities.
Notwithstanding the foregoing to the contrary, Woolworth shall have no
obligation to reimburse the Pharmhouse Entities for any utility payments made or
to be made by the Pharmhouse Entities directly to the utility company serving
the demised premises;
(c) With respect to the payment of percentage rent, the percentage rent
breakpoint shall be adjusted by multiplying the breakpoint by a fraction, the
numerator of which shall be the number of days of the lease year in which the
Pharmhouse Entities are in occupancy and the denominator of which shall be 365
days. If the Pharmhouse Entity's sales are in excess of the adjusted breakpoint,
the Pharmhouse Entities shall pay percentage rent to Woolworth at the surrender
date of possession. The Pharmhouse Entities agree to retain all records in their
possession relevant to the determination of such percentage rent and to make the
same available for inspection by Woolworth and/or landlord under the Reassigned
Lease until such time as the records are no longer required to be maintained
under the terms of the lease. In this regard, the Pharmhouse Entities shall
deliver to Woolworth within ten (10) days of the surrender date of the premises,
all of the documentation required under the applicable lease with respect to any
tenant's obligation to pay percentage rent.
(d) If a party hereto makes a payment on account of any item for which
it is entitled to reimbursement by the other party under this paragraph 4, such
reimbursement shall be made within thirty (30) days after the reimbursing
party's receipt of a reasonable third-party invoices rendered in the ordinary
course of business (which includes mutually satisfactory evidence of payment)
from the other party for such amount. If a party receives a credit or payment on
account of any such item to which the other party is entitled, the receiving
party shall pay to the other party the amount of such credit or payment within
thirty (30) days after the receiving party's receipt thereof;
(e) As and when premises are surrendered, the Pharmhouse Entities shall
surrender and vacate the demised premises of the Reassigned Lease to Woolworth
in broom clean condition. At their expense, the Pharmhouse Entities shall remove
from the demised premises of the Reassigned Lease all signs, inventory,
equipment, merchandise and fixtures and shall repair all damage caused by the
removal. The Pharmhouse Entities shall not remove leasehold alterations,
additions or improvements made to the demised premises or any other items which
are the property of the landlord, unless required to be removed pursuant to the
terms of the Reassigned Lease. At their expense, the Pharmhouse Entities shall
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perform prior to the surrender of the premises all repairs and maintenance
required by tenant under the terms of the Reassigned Lease;
(f) The Pharmhouse Entities shall permit Woolworth and its
representatives, upon notice to the Pharmhouse Entities, to have reasonable
access to the demised premises at all times from the period February 1, 1997
through the surrender date of the premises;
(g) Upon Woolworth's request, and only upon Woolworth's request, and
following the full execution and delivery of this Settlement Agreement, the
Pharmhouse Entities shall deliver to the landlord under the Reassigned Lease,
not withstanding that the giving of such notice may constitute a default under
the Reassigned Lease, a notice stating that the Pharmhouse Entities intend to
(i) discontinue operations at the demised premises; and (ii) reassign the
Reassigned Lease to Woolworth;
(h) The Pharmhouse Entities, while in possession of each of the demised
premises hereunder, shall be permitted to retain all proceeds of inventory and
asset sales received in connection therewith;
5. Redelivered Lease
With respect to store #3044, Essex Green Shopping Center, West Orange,
New Jersey (hereinafter referred to as the "Redelivered Lease"), the parties
hereby agree as follows:
(a) The Redelivered Lease will be tendered and redelivery will become
effective simultaneously with the execution of this Settlement Agreement, and
the Pharmhouse Entities will thereby quit claim all their right, title and
interest with respect to the Redelivered Lease and the premises. With respect to
the Redelivered Lease the parties agree that in addition to the terms and
conditions herein, the Terms and Conditions of the Lease Assignment set forth in
Exhibit "D" hereto are incorporated herein and made a part of this redelivery of
lease;
(b) With respect to that certain litigation pending in the Superior
Court of New Jersey, Chancery Division, Essex County, Docket No. C-243-96,
styled The Mutual Life Insurance Company of New York v. ▇.▇. ▇▇▇▇▇▇▇▇▇ Co. and
Pharmhouse Corp. (the "Lease Litigation"), commencing simultaneously with the
execution of this Settlement Agreement, Woolworth shall appoint ▇▇▇▇▇▇, ▇▇▇▇ and
▇▇▇▇▇▇ LLP, at Woolworth's expense, to defend the Pharmhouse Entities in the
Lease Litigation. The Pharmhouse Entities agree to cooperate with Woolworth in
defending said Lease Litigation;
(c) The Pharmhouse Entities agree to surrender the premises under the
terms and conditions set forth in Section 4(e) and 4(f) above on the earlier of
the (i) 65 days of this Settlement Agreement or (ii) a court order. From and
after February
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1, 1997, the Pharmhouse Entities shall have no obligation to pay, or reimburse
Woolworth for any rent or other occupancy costs payable to landlord under the
Lease;
(d) After the effective date of the redelivery, and during the period
of the Pharmhouse Entities' occupancy, the Pharmhouse Entities agree to abide by
all terms and conditions of the lease and shall indemnify and hold Woolworth
harmless from and against any and all liabilities, losses, damages, claims,
costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) suffered or incurred by Woolworth (except for claims advanced by the
landlord of the Redelivered Leasehold premises that the Pharmhouse Entities were
not properly in possession of the premises and except as set forth in the second
sentence of paragraph 5 (c) above) arising as a result of the Pharmhouse
Entities' occupancy after the date hereof, and
(e) If Woolworth makes a payment to the landlord of store #3044
relating to occupancy costs relating to the period of May 1, 1995 through
January 31, 1997, the Pharmhouse Entities shall reimburse Woolworth for such
payment within thirty (30) days in accordance with paragraph 4(d) of this
Settlement Agreement.
(f) The Pharmhouse Entities, while in possession of each of the demised
premises hereunder, shall be permitted to retain all proceeds of inventory and
asset sales received in connection therewith;
6 Option Leases
With respect to stores #▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇; #▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇;
#▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ ▇▇▇▇; #▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇; and #3035, Carousel Commons, Syracuse, New York, (individually
an "Option Lease" and collectively the "Option Leases"), the Pharmhouse Entities
and Woolworth hereby agree that the Pharmhouse Entities shall continue to
operate each of the demised premises in accordance with the terms of the leases
referenced in this paragraph 6, upon the following terms and conditions:
(a) Effective as of February 1, 1997 and continuing through and
including July 31, 1997, Woolworth shall make payments to accommodate the
payment of current rent and other fixed monthly sums payable to landlord for
each of the Option Leases in accordance with the attached schedule set forth in
Exhibit "E" hereto. In addition to the accommodation of rent and other fixed
monthly sums payable to landlord as set forth in Exhibit "E", Woolworth shall
reimburse the Pharmhouse Entities for additional occupancy costs relating to
periods on or after February 1, 1997 and up to July 31, 1997 as set forth on
Exhibit "F" hereto. Woolworth will reimburse such costs upon receipt by
Woolworth of reasonable third-party invoices rendered in the ordinary course of
business received from the Pharmhouse Entities. Notwithstanding the foregoing to
the contrary, Woolworth shall have no obligation to
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reimburse the Pharmhouse Entities for any utility payments made or to be made by
the Pharmhouse Entities directly to the utility company serving any of the
demised premises;
(b) After May 31, 1997, the Pharmhouse Entities shall have the option
to surrender possession and reassign an Option Lease to Woolworth if the store
did not show a store operating a profit during the four (4) month period ending
May 31, 1997 as calculated by the Pharmhouse Entities (the "Profitability
Test"). In such a case, the Pharmhouse Entities will provide to Woolworth a
statement and breakdown of the Pharmhouse Entities' calculation of
profitability. If the Profitability Test has not been satisfied with respect to
one or all of the Option Leases, the Pharmhouse Entities shall have the option
to surrender possession and reassign such Option Lease to Woolworth. The option
to surrender shall be exercisable up to and including July 31, 1997;
(c) Notwithstanding anything contained in paragraph 6(b) to the
contrary, Woolworth shall, at any time and for any reason whatsoever, have the
right to terminate the Pharmhouse Entities' possession and require a
reassignment of any or all of the Option Leases, by giving the Pharmhouse
Entities written notice of its desire that the Pharmhouse Entities surrender
possession and reassign the lease(s) and the Pharmhouse Entities shall reassign
as provided herein;
(d) If either the Pharmhouse Entities, pursuant to paragraph 6(b), or
Woolworth, pursuant to paragraph 6(c), elects to terminate the Pharmhouse
Entities' possession of the demised premises under an Option Lease and reassign
said lease to Woolworth, the reassignment shall be effective upon surrender of
possession by the Pharmhouse Entities ninety (90) days from the date the
Pharmhouse Entities give notice pursuant to paragraph 6(b) above or one hundred
twenty (120) days after Woolworth gives a notice pursuant to paragraph 6(c)
above. With respect to each such assignment, such reassignment shall be
automatic and without the need for any further documentation to evidence such
reassignment; provided, however, that at the request of either party hereto,
Woolworth and the Pharmhouse Entities shall execute and deliver to the other a
declaration or letter confirming the same. The parties agree that, in addition
to the terms and conditions herein, the Terms and Conditions of the Lease
Assignment set forth in Exhibit "D" hereto are incorporated herein and made a
part hereof;
(e) As and when the premises are surrendered, the Pharmhouse Entities
shall surrender and vacate the demised premises of the Option Leases to
Woolworth in broom clean condition. At their expense, the Pharmhouse Entities
shall remove from the demised premises of each Option Lease all signs,
inventory, equipment, merchandise and fixtures and shall repair all damage
caused by the removal. The Pharmhouse Entities shall not remove leasehold
alterations, additions or improvements made to the demised premises or any other
items which are the property of the landlord, unless required to be removed
pursuant to the terms of the
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Option Lease. At their expense, the Pharmhouse Entities shall perform prior to
the surrender date all repairs and maintenance required by tenant under the
terms of the Option Lease;
(f) The Pharmhouse Entities, while in possession of each of the demised
premises hereunder, shall be permitted to retain all proceeds of inventory and
asset sales received in connection therewith;
(g) Paragraphs 4(c), 4(d) and 4(f) above, as pertaining to the
reassignment of the Reassigned Lease, shall apply with the same force and effect
to the Option Leases; and
(h) Upon Woolworth's request, and only upon Woolworth's request, and
following the full execution and delivery of this Settlement Agreement , the
Pharmhouse Entities shall deliver to any or all of the landlords under an Option
Lease, if applicable, notwithstanding that the giving of such notice may
constitute a default under the respective Option Lease, a notice stating that
the Pharmhouse Entities intend to (i) discontinue operations at such demised
premises; and (ii) reassign such Option Lease to Woolworth.
7. Delivered Leases
As of the date hereof, all of the twenty-four (24) leases acquired by
the Pharmhouse Entities from Woolworth, shall each be individually deemed a
"Delivered Lease" as defined in Section "8.3(d)" of the Asset Purchase Agreement
and collectively, the "Delivered Leases". As to stores #3012 and #3039, the
Pharmhouse Entities will execute subleases from Woolworth to the Pharmhouse
Entities in form and substance mutually acceptable to Woolworth and the
Pharmhouse Entities will cooperate with Woolworth in obtaining the consent of
each landlord. Woolworth shall have no further obligation pursuant to section
"8.3" to indemnify the Pharmhouse Entities with respect to the Delivered Leases.
8. Notice of Default - Right to Cure
The Pharmhouse Entities hereby agree that in the event that they
default in the performance of any obligation under the remaining seventeen (17)
leases acquired by the Pharmhouse Entities, the Pharmhouse Entities will
promptly notify Woolworth of any default in which case Woolworth shall have the
right to cure said default pursuant to the terms and conditions of the
respective lease. Following Woolworth's cure of such default, which shall occur
only following 3 business days notice to Pharmhouse of its intent to cure the
Pharmhouse Entities' default, the Pharmhouse Entities may reimburse Woolworth
for the amounts paid to the landlord on account of the cure, and the Pharmhouse
Entities' right to occupancy of the premises shall be unaffected. In the event
the Pharmhouse Entities fail to reimburse Woolworth within ten (10) days of a
demand, the Pharmhouse Entities shall immediately, upon demand, reassign such
lease to Woolworth and vacate and surrender possession of the premises
attributable to such lease to Woolworth
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pursuant to sections 4(f), 6(d) and 6(e) and the Terms and Conditions set forth
in Exhibit D hereto. In this regard, the Pharmhouse Entities acknowledge that
Woolworth will suffer irreparable injury for which there would be no adequate
remedy at law; that Woolworth would be entitled to an injunction to compel the
reassignment of the lease and the restitution of the premises to Woolworth; and
that the Pharmhouse Entities will not oppose a motion for such injunctive
relief. Notwithstanding anything to the contrary above, if the Pharmhouse
Entities advise Woolworth that they dispute a claimed default and commence
litigation against landlord re: same, Woolworth shall not be entitled to cure
the default if the Pharmhouse Entities obtain a court order enjoining
termination of the lease during the pendency of the litigation.
9. Rental Payments Reconciliation
The Pharmhouse Entities shall pay to Woolworth all unpaid rents, less
offsets, as set forth in Exhibit "G" within one hundred and twenty days (120) of
the execution of the Settlement Agreement. If the Pharmhouse Entities fail to
pay to Woolworth any portion of the unpaid rents provided for in this paragraph,
Woolworth shall have the right to set-off such unpaid amounts against any
payments undertaken by Woolworth and provided for in this Settlement Agreement
including any rent or occupancy costs set forth in Exhibits E and F hereto.
10. No Admission of Liability
Nothing contained in this Settlement Agreement shall be construed as to
constitute an admission by any party hereto of liability or of the truth or
falsity of any of the allegation or any claims or defenses alleged or set forth
in the Complaint or subsequent pleadings filed by any party to the Action or the
Arbitration commenced by Woolworth, nor shall any provision or statement in any
such pleading in the Action or Arbitration be construed as to constitute an
admission that any party has violated any of the laws of the United States, the
State of New York, or any other state. To the contrary, Woolworth and Pharmhouse
expressly deny each and all of the allegations and claims made against each of
them in the Action or Arbitration.
11. (a) Dismissal of the Pending Action. In order to dismiss the
above-described litigation, Woolworth and Pharmhouse will direct their
respective attorneys of record to execute a Stipulation of Discontinuance in the
form annexed hereto as Exhibit "H" hereof, which execution shall occur.
Contemporaneously with the execution of the Settlement Agreement, Pharmhouse's
attorneys will cause the Stipulation of Discontinuance to be filed with the New
York Supreme Court and will thereafter promptly notify the Appellate Division,
First Department, in which a related appeal is pending, of the settlement.
(b) Dismissal of the Pending Arbitration. Contemporaneously
with execution of this Settlement Agreement, Woolworth shall deliver to the
American Arbitration Association a letter and such other documentation as the
American
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Arbitration Association shall require withdrawing, with prejudice, all claims
asserted in its demands for arbitration or which were directed to be arbitrated
per court order.
12. Service ▇▇▇▇. ▇▇▇▇▇▇▇▇▇ hereby extends the term of Pharmhouse's
license to use of the service ▇▇▇▇ "THE RX PLACE", U.S. Service ▇▇▇▇
Registration Number 1,408,996, for a period of three (3) years from the
expiration date set forth in the Asset Purchase Agreement pursuant to the terms
and conditions thereof. Pharmhouse has the right to extend the term for an
additional one year period upon ninety (90) days written notice prior to the
expiration of the term as extended herein.
13. Amendment and No Oral Modification. This Settlement Agreement may
not be changed orally but only by a written agreement signed by each party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
14. Waiver. Compliance with any provision hereof my be waived only by a
written document signed by the parties to this Settlement Agreement. No exercise
of, or failure to exercise any right hereunder, and no partial or single
exercise of any such right, shall operate as a waiver or otherwise affect such
exercise or any other exercise, of that or any other right, it being understood,
except as otherwise specifically provided herein, that all such rights and all
remedies therefore are intended to be cumulative and not exclusive.
15. Consent to Jurisdiction and Specific Performance. The parties
hereto acknowledge and agree that irreparable damage would result in the event
any of the provisions of this Settlement Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
each party to the Settlement Agreement shall be entitled to seek an injunction
to prevent breaches of this Settlement Agreement and to specifically enforce the
terms and provisions hereof in an action instituted in the Supreme Court of the
State of New York, County of New York, in addition to any other remedy to which
such party may be entitled, at law or in equity.
16. Voluntary and Knowing Execution. Each of the parties to this
Settlement Agreement acknowledges that is has received independent legal advice
from its attorneys with respect to the advisability of entering into this
Settlement Agreement. Each of the parties to this Settlement Agreement
acknowledges that this Settlement Agreement is made and executed by and of its
own free will; that it knows all of the relevant facts and its rights in
connection therewith; and that it has not been improperly influenced or induced
to make this settlement as a result of any act or action on the party of any
party or employee, agent, attorney or representative of any party to this
Settlement Agreement.
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17. Confidentiality. The provisions of this Settlement Agreement shall
not be disclosed to any third party, except in the ordinary course of business
and except to the extent required by applicable laws including, without
limitation, applicable federal securities laws, and except as necessary to
implement an effectuate the terms and provisions of this Settlement Agreement.
Nothing contained herein shall affect the obligation of any party hereto to
respond to any disclosure compelled by subpoena or other such legal process or
compulsion. The parties agree that beyond the issuance of the press release by
Pharmhouse attached as Exhibit "I" hereof or as mutually agreed upon, neither
party shall issue a press release concerning the fact of or the terms and
conditions of this Settlement Agreement.
18. Ownership of Claims. The parties hereto each represent and warrant
that they are the owners of all of the claims set forth in the Complaint and the
subsequent pleadings filed in Action or Arbitration that no other person has or
has had any interest in said claims, and that they each have the sole right to
execute this Settlement Agreement as the owner of said claims contained in the
Complaint and in the subsequent pleadings of the Action and Arbitration.
19. Construction. All words used in this Settlement Agreement shall be
construed to include the plural, as well as the singular number, and words used
in the present tense shall include the future as well as the present, and words
used in the masculine gender shall include the feminine and neuter gender. As
all parties have participated in the preparation of this Settlement Agreement,
should any provision in the Settlement Agreement require judicial
interpretation, the court interpreting or construing such provision shall not
apply a presumption that such provision shall be more strictly construed against
the party who drafted such provision. Captions to paragraphs and sections of
this Settlement Agreement have been included solely for the sake of convenient
reference and are not intended to control the significance of the respective
paragraphs and sections.
20. Notice. All notices, requests and other communications in
connection herewith shall be in writing (including fax) and delivered or faxed
to the following address (notice shall be effective upon fax or delivery):
(1) if to Woolworth:
Woolworth Corporation
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇ ▇▇▇▇▇▇, Esq.
General Counsel
Fax No: (▇▇▇)▇▇▇-▇▇▇▇
11
12
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No: (▇▇▇)▇▇▇-▇▇▇▇
(2) if to Pharmhouse:
Pharmhouse Corp.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax No: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No. (▇▇▇)▇▇▇-▇▇▇▇
21. Entire Agreement. This Settlement Agreement and the Releases and
Exhibits set forth the entire understanding of the parties with respect to the
subject matter hereto; provided, however, that, except as expressly set forth in
this Settlement Agreement and such Releases and exhibits, all of the provisions
of the Asset Purchase Agreement shall remain in full force and effect.
22. Severability. If any provision of this Settlement Agreement shall
be determined to be prohibited or unenforceable, such prohibition or
unenforceability shall not invalidate or render unenforceable any other
provision of this Settlement Agreement except to the extent that any such
prohibition or determination of enforceability shall materially alter or affect
the substantive provisions hereof in favor or against any of the parties hereto.
23.Governing Law. This Settlement Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without
reference to New York choice of law principles.
24. Successors and Assigns. This Settlement Agreement, and the exhibits
annexed hereto, shall be binding on the parties, their successors in interest,
administrators or assigns.
12
13
25. Counterparts. This Settlement Agreement may be executed in
counterparts, each of which shall be considered to be an original instrument.
ENTERED into as of the date set forth above:
PHARMHOUSE CORP. ▇.▇. ▇▇▇▇▇▇▇▇▇ CO.
By: _________________ By: _________________
Title: Title:
RX REALTY CORP. WOOLWORTH CORPORATION
By: _________________ By: __________________
Title: Title:
13
14
EXHIBIT A
RELEASE
TO ALL PERSONS TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT:
Pharmhouse Corp. and Rx Realty Corp., on behalf of each of them and
their respective officers, directors and agents, and their respective affiliates
and subsidiaries, as RELEASORS, in consideration of the sum of TEN DOLLARS
($10.00), and other good and valuable consideration received from ▇.▇. ▇▇▇▇▇▇▇▇▇
Co. and Woolworth Corporation as RELEASEES, receipt of which is hereby
acknowledged, releases and discharges the RELEASEES, the RELEASEES' parents,
subsidiaries, affiliates, predecessors, successors, and assigns or their
officers, directors, employees, agents and representatives from all actions,
causes or actions, suits, debts, dues, sums of money accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents, executions, claims
and demands whatsoever, in law, admiralty or equity which against the RELEASEES,
the RELEASORS, the RELEASORS' parents, subsidiaries, affiliates, predecessors,
successors and assigns, and their officers, directors, shareholders,
administrators, servants, employees, attorneys, agents, heirs, executors,
administrators, partners, joint ventures, or any committee or other arrangement
of creditors organized with respect to the affairs of RELEASORS ever had, now
have, or hereafter can, shall, or may have, including but not limited to, claims
which were asserted or claims and defenses which could have been asserted, in an
action in the Supreme Court of the State of New York, County of New York, under
Index No. 600121/96, styled Pharmhouse Corp. ▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇.
▇▇▇▇▇▇▇▇▇ Co., from the beginning of the world to the day of the date of this
RELEASE. Nothing in this RELEASE shall affect or release the obligations created
in the MUTUAL RELEASE AND SETTLEMENT AGREEMENT.
Except as modified by the MUTUAL RELEASE AND SETTLEMENT AGREEMENT, all
the provisions of the Asset Purchase Agreement between the parties dated April
13, 1995 shall remain in full force and effect and this RELEASE shall not effect
the parties' obligations thereunder.
Whenever the text hereof requires, the use of the singular number shall
include the appropriate plural number as the text of the within instrument may
require.
This RELEASE may not be changed orally.
14
15
IN WITNESS WHEREOF, the RELEASORS has hereunder set RELEASORS' hand and
seal on this, the _____ day of __________ 199_.
PHARMHOUSE CORP.
By: __________________
Title:
RX REALTY CORP.
By: ___________________
Title:
Sworn to me before this
_____ day of ___________, 199_
______________________________
Notary Public
15
16
EXHIBIT B
RELEASE
TO ALL PERSONS TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, individually and
jointly, as RELEASORS, in consideration of the sum of TEN DOLLARS ($10.00), and
other good and valuable consideration received from ▇.▇. ▇▇▇▇▇▇▇▇▇ Co. and
Woolworth Corporation as RELEASEES, receipt of which is hereby acknowledged,
releases and discharges the RELEASEES, the RELEASEES' parents, subsidiaries,
affiliates, predecessors, successors and assigns, and their officers, directors,
employees, agents and representatives from all actions, causes or actions,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, claims and
demands whatsoever, in law, admiralty or equity which against the RELEASEES, the
RELEASORS', the RELEASORS' parents, subsidiaries, affiliates, predecessors,
successors and assigns, and their officers, directors, shareholders,
administrators, servants, employees, attorneys, agents, heirs, executors,
administrators, partners, joint ventures, or any committee or other arrangement
of creditors organized with respect to the affairs of RELEASORS ever had, now
have, or hereafter can, shall, or may have, including but not limited to, claims
which were asserted or claims and defenses which could have been asserted, in an
action in the Supreme Court of the State of New York, County of New York, under
Index No. 600121/96, styled Pharmhouse Corp. ▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇.
▇▇▇▇▇▇▇▇▇ Co. from the beginning of the world to the day of the date of this
RELEASE. Nothing in this RELEASE shall affect or release the obligations created
in the MUTUAL RELEASE AND SETTLEMENT AGREEMENT.
Except as modified by the MUTUAL RELEASE AND SETTLEMENT AGREEMENT, all
the provisions of the Asset Purchase Agreement dated April 13, 1995 shall remain
in full force and effect and this RELEASE shall not affect the parties'
obligations thereunder.
Whenever the text hereof, requires, the use of the singular number
shall include the appropriate plural number as the text of the within instrument
may require.
This RELEASE may not be changed orally.
IT WITNESS WHEREOF, the RELEASORS have hereunder set RELEASORS' hand
and seal on this, the _____ day of ______________, 199 _.
16
17
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________
Sworn to before me this
_____ day of ______________, 199_
__________________________
Notary Public
17
18
EXHIBIT C
RELEASE
TO ALL PERSONS TO WHOM PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT:
▇.▇. ▇▇▇▇▇▇▇▇▇ Co. and Woolworth Corporation, on behalf of themselves,
their respective parents, affiliates and subsidiaries, as RELEASORS, in
consideration of the sum of TEN DOLLARS ($10.00), and other good and valuable
consideration received from Pharmhouse Corp., Rx Realty Corp., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as RELEASEES, receipt of which is hereby
acknowledged, releases and discharges the RELEASEES, the RELEASEES' parents,
subsidiaries, affiliates, predecessors, successors and assigns, and their
officers, directors, employees, agents and representatives from all actions,
causes of actions, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents, executions, claims
and demands whatsoever, in law, admiralty, or equity, which against the
RELEASEES, the RELEASORS, the RELEASORS' parents, subsidiaries, affiliates,
predecessors, successors and assigns, and their officers, directors,
shareholders, administrators, servants, employees, attorneys, agents, heirs,
executors, administrators, partners, joint ventures, or any committee or other
arrangement of creditors organized with respect to the affairs of RELEASORS ever
had, now have, or hereafter can, shall, or may have relating to (i) the
arbitration commenced by RELEASORS before the American Arbitration Association
in New York City, (ii) the action commenced by Pharmhouse in the Supreme Court
of the State of New York, County of New York under Index No. 60021/96, styled
Pharmhouse Corp. ▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇. ▇▇▇▇▇▇▇▇▇ Co. and (iii) the
outstanding principal and interest due and owing pursuant to the Notes (except
as to the Third Note and the Remaining Outstanding Principal thereof as set
forth in the MUTUAL RELEASE AND SETTLEMENT AGREEMENT) from the beginning of the
world to the day of the date of this RELEASE except here shall be no limitation
and this is intended as and shall be a general release as to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Nothing in this RELEASE shall affect or
release the obligations created in the MUTUAL RELEASE AND SETTLEMENT AGREEMENT.
Except as modified by this RELEASE and the MUTUAL RELEASE AND
SETTLEMENT AGREEMENT, all of the provisions of the Asset Purchase Agreement
among the parties, dated April 13, 1995 shall remain in full force and effect
until the RELEASE shall not affect the parties' obligations thereunder.
18
19
Whenever the text hereof requires, the use of the singular number shall
include the appropriate plural number as the text of the within instrument may
require.
This RELEASE may not be changed orally.
IN WITNESS WHEREOF, the RELEASORS have hereunder set RELEASORS' hand
and seal on this , the _____ day of _____________, 199_.
▇.▇. ▇▇▇▇▇▇▇▇▇ CO.
By: _________________
Title:
WOOLWORTH CORPORATION
By: __________________
Title:
Sworn to before me this
_____ day of _________, 199_
_______________________
Notary Public
19
20
EXHIBIT D
TERMS AND CONDITIONS OF ASSIGNMENT OF LEASE UNDER MUTUAL RELEASE AND
SETTLEMENT AGREEMENT
1. Pharmhouse or Rx Realty (together "Assignor") re-assigns and transfers to
▇.▇. ▇▇▇▇▇▇▇▇▇ Co. ("▇▇▇▇▇▇▇▇▇") all of its right, title and interest as the
tenant under the Leases pursuant to and described in the Mutual Release and
Settlement Agreement.
2. For each lease assignment that becomes effective, Woolworth accepts said
re-assignment and transfers and agrees to pay, perform and observe all of the
obligations of the tenant under the Lease accruing from and after the effective
date of the Assignment as determined under the Mutual Release and Settlement
Agreement.
3. Assignor hereby represents and warrants to Woolworth that (i) Assignor is the
sole owner of the interest of the tenant under the Leases, free and clear of all
liens, encumbrances and other matters, with the exception of liens or other
encumbrances by Congress Financial Corporation and McKesson Corporation as their
interests exist, (ii) the Leases have not been amended, supplemented, or
otherwise changed by Pharmhouse (except as expressly set forth above), (iii) to
the best of Assignor's knowledge , the Leases are in full force and effect, (iv)
to the best of Assignor's knowledge, Assignor is not in default in the
performance of any of the obligations of the tenant under the Leases, (v)
Assignor has not received any notice from Landlord that they are in default
under the Leases with the exceptions of locations 3044 (▇.▇▇▇▇▇▇), 3026 (▇▇▇▇▇▇)
and 3035 (Syracuse), locations where landlords have not accepted lease
assignments to Assignor, and (vi) to the best of Assignor's knowledge, landlord
is not in default in the performance of any of their obligations under the
Leases.
4. Assignor shall indemnify and hold Woolworth harmless from and against any all
liabilities, losses, damages, claims, costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) suffered or incurred by
Woolworth (except to the extent they are suffered or incurred as a result of
Woolworth's direction to deliver a notice as set forth in paragraph 4(g) or 6(h)
or failure to direct the Assignor to give notice to be delivered pursuant to
paragraph 4(g) or 6(h) arising out of resulting from a material breach by
Assignor or any of the representations and warranties set forth in paragraph 3
above and for any obligations of the tenant under the Leases relating to periods
on or before the day immediately preceding the date of the effective date of the
assignment as intended by the Settlement Agreement, and for any additional
percentage rent, if any, due under the appropriate lease for periods of
Assignor's occupancy.
20
21
5. Woolworth shall indemnify and hold Assignor harmless from and against any all
liabilities, losses, damages, claims, costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) suffered or incurred by
Assignor and arising out of or resulting from any obligations of the tenant
under the Leases relating to periods on or after the effective date of the
assignment as intended by the Settlement Agreement, including without
limitation, any claim by landlord that any assignment of lease is not permitted,
and including any damage sustained by the Pharmhouse Entities as the result of a
notice directed to be sent by Woolworth pursuant to paragraph 4(g) of 6(h) or
which Woolworth failed to direct the Assignor to give notice pursuant to
paragraph 4(g) or 6(h) except if the same, in whole or in part, arises out of or
results from a material breach by Assignor of any of the representations and
warranties set forth in paragraph 3 above.
21
22
Exhibit E
Monthly Fixed Payments
Store Monthly Fixed Payments
▇ ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ $23,308.00
▇ ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇, ▇▇ $17,360.00
3 Store #▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ $23,790.75
▇ ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇, ▇▇ $23,168.29
▇ ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇, ▇▇ $23,706.08
▇ ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ $48,432.00
22
23
EXHIBIT F
ADDITIONAL OCCUPANCY COSTS(1)
Store Additional Occupancy Costs
1. Store #▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ $ 3,538.00
2. Store #▇▇▇▇
▇▇▇▇▇▇, ▇▇ $11,437.00
3. Store #▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ $ 3,975.25
4. Store #3025
Clay, NY $ 6,338.21
5. Store #▇▇▇▇
▇▇▇▇▇▇, ▇▇ $ 7,761.92
6. Store #▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ $ 0
(1) Additional Occupancy Costs are stated in approximate amount and subject to
adjustment based on actual and reasonable third-party invoices prepared in the
ordinary course of business and received by Woolworth. Additional Occupancy
Costs are: real estate taxes, water and sewer charges, landlord's, insurance,
merchant dues and common area maintenance charges.
23
24
EXHIBIT G
AMOUNTS DUE WOOLWORTH RELATED TO RENTS AND OTHER OFFSETS(1)
RENTAL/OTHER PAYMENTS DUE TO WOOLWORTH THROUGH 1/31/97:
STORE #3012 - LEVITTOWN, PA 86,577.50
STORE #3039 - NEWBURGH, NY 253,012.77
STORE #3044 - ▇.▇▇▇▇▇▇, NJ 109,145.79 448,736.06
----------
RENT ACCOMMODATION:
▇▇▇▇▇ #▇▇▇▇ - ▇▇▇▇ ▇▇▇▇, ▇▇ (11,653.99)
STORE #▇▇▇▇ - ▇▇▇▇▇▇, ▇▇ (▇,▇▇▇.▇▇)
▇▇▇▇▇ #▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇, ▇▇ (11,895.38)
STORE #3025 - CLAY, NY (11,589.15)
STORE #3026 - DEWITT, NY (11,853.04)
STORE #3035 - SYRACUSE, NY (24,216.23) (79,887.77)
----------
SCHOOL TAXES DUE TO PHARMHOUSE(2)
STORE #3015 - ALBANY, NY (16,239.74)
STORE #3029 - HARRISBURG, NY (5,098.74)
STORE #3025 - CLAY, NY (9,841.21) (31,179.70)
-----------
CAM CREDITS DUE PHARMHOUSE (3,185.10)
US HEALTHCARE CHECKS DUE TO WOOLWORTH 24,285.18
US HEALTHCARE CHECKS DUE TO PHARMHOUSE (16,064.44)
VIDEO COUPON REDEMPTION DUE PHARMHOUSE (147,843.40)
-----------
TOTAL AMOUNT DUE WOOLWORTH THROUGH 1/31/97 $194,860.83
===========
----------------
(1) Preliminary settlement amount - subject to current audit and future video
coupon redemptions by Pharmhouse to be agreed upon at a future date.
(2) Represents school tax expenses prepaid by Pharmhouse related to the period
1/15/97 through 6/30/97.
24
25
EXHIBIT H
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
PHARMHOUSE CORP., INDEX NO: 600121/96
Plaintiff,
-against - STIPULATION OF
DISCONTINUANCE WITH
WOOLWORTH CORPORATION and F.W. PREJUDICE
WOOLWORTH CO.
Defendants
IT IS HEREBY STIPULATED AND AGREED by and between the undersigned, the
attorneys of record for all parties to the above entitled action, that whereas
no party hereto is an infant, incompetent person for whom a committee has been
appointed or conservatee and no person not a party has an interest in the
subject matter of the action, the above entitled action be, and the same hereby
is discontinued with prejudice, and without costs to either party as against the
other. This stipulation may be filed without further notice with the Clerk of
the Court.
Dated: New York, New York
January 31, 1997
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ LLP ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
---------------------- --------------------------
Attorneys for Plaintiff Attorneys for Defendants
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇)▇▇▇-▇▇▇▇ (▇▇▇)▇▇▇-▇▇▇▇
25
26
EXHIBIT I
PHARMHOUSE PRESS RELEASE
PHARMHOUSE AND WOOLWORTH SETTLE ACTION
Pharmhouse Corp. and Woolworth Corporation have resolved all claims between them
arising from the sale of certain assets of the Rx Place division of Woolworth to
Pharmhouse in April 1995.
As part of the agreement, Woolworth has forgiven certain debt and agreed to
accommodate Pharmhouse with respect to certain stores.
This was a negotiated agreement and no party conceded any claims asserted
against the other.
26
27
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No: (▇▇▇)▇▇▇-▇▇▇▇
(2) if to Pharmhouse:
Pharmhouse Corp.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax No: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No. (▇▇▇)▇▇▇-▇▇▇▇
21. Entire Agreement. This Settlement Agreement and the Releases and
Exhibits set forth the entire understanding of the parties with respect to the
subject matter hereto; provided, however, that, except as expressly set forth in
this Settlement Agreement and such Releases and exhibits, all of the provisions
of the Asset Purchase Agreement shall remain in full force and effect.
22. Severability. If any provision of this Settlement Agreement shall
be determined to be prohibited or unenforceable, such prohibition or
unenforceability shall not invalidate or render unenforceable any other
provision of this Settlement Agreement except to the extent that any such
prohibition or determination of enforceability shall materially alter or affect
the substantive provisions hereof in favor or against any of the parties hereto.
23.Governing Law. This Settlement Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without
reference to New York choice of law principles.
24. Successors and Assigns. This Settlement Agreement, and the exhibits
annexed hereto, shall be binding on the parties, their successors in interest,
administrators or assigns.