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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 1)
PDK LABS, INC.
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(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
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(Title of Class of Securities)
6932393 10 2
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(CUSIP Number)
Connis O. Brown, III
Robert B. Lamm
Gunster, Yoakley & Stewart, P.A.
Broward Financial Centre, Suite 1400
500 East Broward Boulevard
Fort Lauderdale, Florida 33394
(954) 462-2000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
NOVEMBER 2, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act.
Page 1 of 10 Pages
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AMENDMENT NO. 1 TO
SCHEDULE 13D
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CUSIP No. 693293 10 2 Page 2 of 10 Pages
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1 NAMES OF REPORTING PERSONS Perry D. Krape
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
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NUMBER OF 7 SOLE VOTING POWER 205,488
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 205,488
REPORTING -------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 205,488
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.4%
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14 TYPE OF REPORTING PERSON IN
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Page 2 of 10 Pages
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AMENDMENT NO. 1 TO SCHEDULE 13D
This Amendment No. 1 amends and supplements the Statement on Schedule
13D filed with the Commission on December 15, 1999. The items of the Schedule
13D referred to below are amended and supplemented by the addition of the
information indicated.
Item 4. PURPOSE OF THE TRANSACTION is amended to include the following at the
end thereof:
In April 1996, the Company commenced an action against Mr. Krape in the
Supreme Court of the State of New York, Suffolk County, titled PDK LABS, INC. V.
KRAPE, Index No. 96-09841 (the "State Action"). The State Action alleged (1)
breach of contract, (2) unfair competition, (3) conversion, and (4) breach of
fiduciary duty. In August 1996, Mr. Krape filed a counterclaim against the
Company, Michael Krasnoff ("Krasnoff") and Ira Helman ("Helman"). In March 1999,
Mr. Krape filed amended counterclaims against the Company, Krasnoff and Helman
which alleged (1) misrepresentations, (2) omissions, (3) breach of fiduciary
duty, (4) that provisions of an employment agreement were unenforceable, (5)
breach of contract, (6) tortious interference with business relations, and (7)
unjust enrichment.
In October 1999, Mr. Krape commenced an action in the United States
District Court for the Eastern District of New York, titled KRAPE V. PDK LABS,
INC., ET AL., Case No. CV 99-6595 (DRH) (the "Derivative Action"). The
Derivative Action alleged (1) securities fraud, (2) common law fraud, (3)
violation of N.Y. Business Corporation Law section 349, (4) breach of fiduciary
duty, and (5) conspiracy.
On September 29, 2000, Mr. Krape commenced a second action in the
United States District Court for the Eastern District of New York entitled KRAPE
V. PDK LABS, INC. ET AL., Case No. CV-00-5873 (DRH). This action originally
included ten causes of action labeled both class action and individual
allegations. On or about October 15, 2000, the complaint was amended to include
only two claims by Mr. Krape, in his individual capacity, under Section 14 of
the Securities Exchange Act and state law breach of fiduciary duty. Both claims
sought to enjoin the November 8, 2000 shareholder vote regarding the proposed
merger of the Company with PDK Acquisition Corp. (the "Merger").
Without any admission of any allegation by any party to the above
lawsuits, each such party expressly denying any and all of the various
allegations, Mr. Krape agreed to settle these actions on terms that would
include Mr. Krape agreeing to vote all 205,488 shares of the Company's Common
Stock of which he has beneficial ownership in favor of the Merger. In addition,
and pursuant to other terms and conditions, if Mr. Krape has not received the
merger consideration by December 1, 2000, he has the right to put his shares to
Krasnoff and Krasnoff or his assignee(s) would have the right to call such
shares.
This description is not intended to be comprehensive in nature, and
is qualified in its entirety by reference to the Settlement Agreement, made as
of November 2, 2000, by and among Mr. Krape and PDK Labs, Inc., Michael
Krasnoff, Ira Helman, Reginald Spinello, Karine Hollander, Raveendra Nandigam
and PDK Acquisition Corp., attached hereto pursuant to Item 7 hereof and
incorporated by reference herein.
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Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER is amended to include the following at the
end thereof:
See Item 4 above.
Item 7. MATERIAL TO BE FILED AS EXHIBITS is amended to include the following at
the end thereof:
Settlement Agreement, made as of November 2, 2000, by and among Mr.
Krape and PDK Labs, Inc., Michael Krasnoff, Ira Helman, Reginald Spinello,
Karine Hollander, Raveendra Nandigam and PDK Acquisition Corp.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: November 7, 2000
/s/ Perry D. Krape
------------------
Perry D. Krape
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SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Agreement") is made as of the 2nd day of
November, 2000, by and among:
Perry D. Krape ("Krape")
AND
PDK Labs Inc. ("PDK Labs"), Michael Krasnoff ("Krasnoff"), Ira Helman
("Helman"), Reginald Spinello, Karine Hollander, Raveendra Nandigam and
PDK Acquisition Corp. (hereinafter, the "PDK Parties")
WITNESSETH
WHEREAS, Krape and the PDK Parties are parties to various lawsuits and
other actions in which each has asserted various claims and causes of actions
against each other (the "Cases");
WHEREAS, such Cases are styled PERRY D. KRAPE, ON BEHALF OF THE
SHAREHOLDERS OF PDK LABS, INC. V. PDK LABS, INC., MICHAEL KRASNOFF, RANDOLPH
PACE, REGINALD SPINELLO, HARTLEY BERNSTEIN, MICHAEL LULKIN, IRA HELMAN, ALAN
NOVICH, DONALD ZINMAN, DUNE HOLDINGS, INC., K.A.M. GROUP, INC., CARICO, INC.,
KARINE HOLLANDER, AND BERNSTEIN & WASSERMAN, LLP, CASE NO. CV 99 6595
(DRH)(ETB); PARR DEVELOPMENT COMPANY, INC. AND YAPHANK DEVELOPMENT COMPANY, INC.
V. PDK LABS, INC. AND PERRY D. KRAPE, CASE NO. 96-07465; PERRY D. KRAPE V. PDK
LABS, INC., REGINALD SPINELLO, KARINE HOLLANDER, RAVEENDRA NANDIGAM, IRA HELMAN,
LAWRENCE SIMON, THOMAS KEITH, DUNE HOLDINGS, INC., MICHAEL LULKIN, AND PDK
ACQUISITION CORP., CASE NO. CV 00-5873 (DRH) ,PDK LABS, INC. V. PERRY D.
KRAPE/PERRY D. KRAPE, INDIVIDUALLY AND ON BEHALF OF THE SHAREHOLDERS OF PDK
LABS, INC., A NEW YORK CORPORATION V. PDK LABS, INC., A NEW YORK CORPORATION,
MICHAEL KRASNOFF AND IRA HELMAN, CASE NO. 96-9841 AND HELMAN V. KRAPE, CASE
NO.00011310(09);
WHEREAS, Krape and the PDK Parties desire to resolve all claims,
litigation, causes of action and obligations between them under the terms and
conditions herein contained, which resolution and settlement shall not
constitute an admission of any allegations by any party hereto, each such party
expressly denying any and all of the various allegations but recognizing that
settlement of their claims is in their mutual interests so as to end time
consuming and expensive litigation.
NOW, THEREFORE, in consideration of the mutual premises and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and in full settlement and release of all claims and actions, the
parties agree to settle under the following terms:
1. SETTLEMENT OF CLAIMS AND PAYMENTS TO KRAPE. Krape agrees to settle
his various direct claims in exchange for the releases contemplated herein
together with the payment of the sum of $2,100,000 calculated as follows: (1)
Krasnoff and Helman will pay Krape, in cash, the amount of $1,500,000 in
settlement of the breach of fiduciary duty and other claims relating to Krape's
interest in PDK Labs, and (2) Krape will settle all other claims against the PDK
Parties for a total payment of $600,000, which amount shall be evidenced by PDK
Labs' installment note (the "Installment Note") which shall be payable in 16
equal quarterly installments of $37,500,
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commencing on January 1, 2001. The Installment Note shall be in the form
attached hereto as EXHIBIT 1 and shall provide that so long as PDK Labs is not
in default under the note, no interest shall be payable under the Installment
Note. In the event of any default, interest shall be due and payable on the
entire outstanding principal balance, from the original date of the Installment
Note until paid, at LIBOR plus five percent. The Installment Note may be prepaid
without penalty. Krape expressly acknowledges that none of the consideration to
be paid to him under this Agreement is being paid in consideration of the claims
asserted by Krape derivatively on behalf of PDK Labs.
2. SALE OF SHARES IN PDK. In addition to settlement of the foregoing
claims and causes of action, and at the express request of, and in consideration
for the participation in this settlement of, Krasnoff, Krape agrees to vote his
205,488 shares of common stock in PDK Labs (the "Shares") in favor of the
proposed merger of PDK Labs with PDK Acquisition Corp. (the "Merger") at the
shareholder meeting presently scheduled for November 8, 2000 (the "Shareholder
Meeting") or at any adjourned or rescheduled shareholder meeting with respect to
the Merger. In the event that Krape has not received the merger consideration of
$5.00 per share for his Shares by December 1, 2000, Krape shall have the right
to put all (but not less than all) of his Shares to Krasnoff at the price of
$5.00 per share (the "Put") and Krasnoff (or his assignee(s)) shall have the
absolute right to purchase the Shares at that price (the "Call"). In the event
(i) the Merger has not been consummated and the merger consideration has not
been paid to Krape on or before January 8, 2001 and (ii) neither the Put nor the
Call has been exercised and consummated by January 8, 2001, Krasnoff shall pay
to Krape an additional $200,000 in consideration for his consent to the Merger
and Krape shall sell to Krasnoff (or his assignee) all of Krape's shares in PDK
Labs for $5.00 per share (or such higher per share amount as finally approved in
the Merger), which sale shall close not later than 60 days after January 8,
2001. Upon such sale, Krape shall assign to Krasnoff his rights to any merger
consideration up to the amount paid by Krasnoff for the shares and Krasnoff
shall pay to Krape any merger consideration in excess of the amounts paid by
Krasnoff for Krape's shares. Krape represents that he is the sole legal and
beneficial owner of, and has good title to, the Shares, free and clear of any
mortgages, claims, liens, rights of first refusal or similar rights, security
interests, options, pledges or encumbrances of any kind whatsoever and that the
Shares are not subject to any prior sale, transfer or assignment.
3. MUTUAL RELEASES. The parties shall exchange the following releases.
A. In exchange for the promises made by Krape contained in this
Settlement, the PDK Parties agree to generally release, satisfy and forever
discharge Krape, his affiliates, officers, directors, employees, agents and
attorneys of and from all actions, claims and demands which the PDK Parties ever
had, may have had, or has against Krape to the date of this Settlement,
including but not limited such claims arising in the cases styled PERRY D.
KRAPE, ON BEHALF OF THE SHAREHOLDERS OF PDK LABS, INC. V. PDK LABS, INC.,
MICHAEL KRASNOFF, RANDOLPH PACE, REGINALD SPINELLO, HARTLEY BERNSTEIN, MICHAEL
LULKIN, IRA HELMAN, ALAN NOVICH, DONALD ZINMAN, DUNE HOLDINGS, INC., K.A.M.
GROUP, INC., CARICO, INC., KARINE HOLLANDER, AND BERNSTEIN & WASSERMAN, LLP,
CASE NO. CV 99 6595 (DRH)(ETB); PARR DEVELOPMENT COMPANY, INC. AND YAPHANK
DEVELOPMENT COMPANY, INC. V. PDK LABS, INC. AND PERRY D. KRAPE, CASE NO.
96-07465; PERRY D. KRAPE V. PDK LABS, INC., REGINALD SPINELLO, KARINE HOLLANDER,
RAVEENDRA NANDIGAM, IRA HELMAN, LAWRENCE SIMON, THOMAS KEITH, DUNE HOLDINGS,
INC., MICHAEL LULKIN, AND PDK ACQUISITION CORP., CASE NO. CV 00-5873 (DRH), PDK
LABS, INC. V. PERRY D. KRAPE/PERRY D. KRAPE, INDIVIDUALLY AND ON BEHALF OF THE
SHAREHOLDERS OF PDK LABS, INC., A NEW YORK CORPORATION V. PDK LABS, INC., A NEW
YORK CORPORATION, MICHAEL KRASNOFF AND IRA HELMAN, CASE NO. 96-9841 AND HELMAN
V. KRAPE, CASE NO.00011310(09). The PDK Parties further agree
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to execute and deliver separate general releases from each PDK Party in favor of
Krape in the form attached hereto as EXHIBIT 2 (the "PDK Releases").
B. In exchange for the promises made by the PDK Parties contained in
this Settlement, Krape agrees to generally release, satisfy and forever
discharge the PDK Parties, all parties to the Cases, and their respective
present or former affiliates, officers, directors, employees, consultants,
partners, members, family members, agents and attorneys of and from all actions,
claims and demands which Krape ever had, may have had, or has against the PDK
Parties to the date of the Settlement, including but not limited such claims
arising in the cases styled PERRY D. KRAPE, ON BEHALF OF THE SHAREHOLDERS OF PDK
LABS, INC. V. PDK LABS, INC., MICHAEL KRASNOFF, RANDOLPH PACE, REGINALD
SPINELLO, HARTLEY BERNSTEIN, MICHAEL LULKIN, IRA HELMAN, ALAN NOVICH, DONALD
ZINMAN, DUNE HOLDINGS, INC., K.A.M. GROUP, INC., CARICO, INC., KARINE HOLLANDER,
AND BERNSTEIN & WASSERMAN, LLP, CASE NO. CV 99 6595 (DRH)(ETB); PARR DEVELOPMENT
COMPANY, INC. AND YAPHANK DEVELOPMENT COMPANY, INC. V. PDK LABS, INC. AND PERRY
D. KRAPE, CASE NO. 96-07465; PERRY D. KRAPE V. PDK LABS, INC., REGINALD
SPINELLO, KARINE HOLLANDER, RAVEENDRA NANDIGAM, IRA HELMAN, LAWRENCE SIMON,
THOMAS KEITH, DUNE HOLDINGS, INC., MICHAEL LULKIN, AND PDK ACQUISITION CORP.,
CASE NO. CV 00-5873 (DRH); PDK LABS, INC. V. PERRY D. KRAPE/PERRY D. KRAPE,
INDIVIDUALLY AND ON BEHALF OF THE SHAREHOLDERS OF PDK LABS, INC., A NEW YORK
CORPORATION V. PDK LABS, INC., A NEW YORK CORPORATION, MICHAEL KRASNOFF AND IRA
HELMAN, CASE NO. 96-9841 AND HELMAN V. KRAPE, CASE NO.00011310(09). Krape
further agrees to execute and deliver separate general releases from Krape in
favor of each PDK Party and all parties to the Cases, in the form attached
hereto as EXHIBIT 3 (the "Krape Releases"), provided, however, that Krape's
release of any individual Releasee who is a defendant in the Derivative Action
(as that term is defined in the Krape Releases) shall become null and void if
said Releasee initiates any legal proceeding against Krape.
4. CLOSING OF SETTLEMENT AND DELIVERIES IN ESCROW.
A. DELIVERIES BY PDK INTO ESCROW. On or before November 6, 2000,
Krasnoff and Helman shall deliver into the escrow of Berlack, Israels & Liberman
LLP ("Berlack") the sum of $1,500,000 in cash and their executed releases, and
PDK shall deliver into the escrow of Berlack the Installment Note and the
remaining PDK Releases.
B. DELIVERIES BY KRAPE INTO ESCROW. On or before November 6, 2000,
Krape shall deliver into the escrow of Gunster, Yoakley & Stewart P.A.
("Gunster") a signed proxy, in the form annexed hereto as Exhibit 4, authorizing
the holder, at the holder's discretion, to vote in favor of the Merger (the
"Proxy"), together with stock endorsements and assignments to all of Krape's
shares in PDK Labs (the "Krape Stock Assignments") and the Krape Releases.
C. RELEASE OF ESCROWS. Upon receipt of certification from Berlack that
it is holding all of the items required under Paragraph A hereof (i.e.,
$1,500,000 cash, the Installment Note and the PDK Releases), Gunster shall
release the Proxy to Berlack for purposes of voting in favor of the Merger.
Immediately following the completion of the shareholders meeting on November 8,
2000 or on any adjourned date, Berlack shall deliver to Gunster the cash, the
Installment Note and the PDK Releases, and Gunster shall deliver to Berlack the
Krape Releases. At such time as both Berlack and Gunster have received the
respective funds and documents, both Berlack and Gunster shall be authorized to
disburse such items to their respective clients.
D. FAILURE OF CONSUMMATION OF MERGER. In the event the Merger is not
consummated and the merger consideration paid to Krape on or before January 8,
2001, or the Put or Call have not been exercised and consummated by that date,
then pursuant to Section 2 hereof,
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Krasnoff or his assigns shall deliver the amount due to Krape together with the
share purchase price for Krape's shares to Gunster. Upon receipt of such funds,
Gunster shall deliver to Krasnoff, or his assigns, the Krape Stock Assignments
and shall release the funds to Krape.
E. VOLUNTARY DISMISSALS. Upon release of the funds and documents set
forth in paragraph 4(C) above, the parties shall execute and deliver
stipulations of dismissal satisfaction to cause the immediate dismissal with
prejudice, and with each party bearing its own costs, with respect to each of
the Cases except for the derivative action captioned PERRY D. KRAPE, ON BEHALF
OF THE SHAREHOLDERS OF PDK LABS, INC. V. PDK LABS, INC., ET AL., 99 Civ. 6595
(DRH) (the "Derivative Action"). Upon consummation of the Merger or the sale of
stock to Krasnoff, Krape shall, within 5 business days, file a motion seeking
the dismissal with prejudice, and without costs, of the Derivative Action. The
PDK Parties will cooperate with Krape, to the extent reasonable, in the
prosecution of that motion.
F. FAILURE OF DELIVERIES. In the event either party fails to execute
and deliver the documents required under this Agreement, or to pay the required
funds, the parties expressly agree that the non-defaulting party may elect to
(1) seek specific enforcement of the terms and conditions of this Settlement or
(2) declare this Settlement null and void and thereafter seek to enforce any and
all rights, actions and causes of action as such party had prior to the
execution hereof.
5. ADDITIONAL TERMS AND CONDITIONS. The parties agree that the
following additional terms and conditions shall apply with respect to the sale
by Krape of his shares in PDK Labs and the settlement of his claims against the
PDK Parties:
A. SALE OR CAPITAL TRANSACTION BY PDK ACQUISITION. In the event that
PDK Acquisition completes the proposed acquisition of PDK Labs (the "Going
Private Transaction"), then, during the three (3) years following such
acquisition, Krape shall be paid an additional amount equal to twenty percent
(20%) of all amounts in excess of Twelve Million Five Hundred Thousand Dollars
($12,500,000.00) which Reginald Spinello, Karine Hollander and Raveendra
Nandigam (the "Management Group"), or their related parties and affiliates,
receive, directly or indirectly, from any sale, disposition, transfer,
conveyance or conversion of their interests in PDK Acquisition in any bona-fide
third party transactions. For purposes of this paragraph and paragraph B, below,
the terms "related parties" and "affiliates" shall mean the members of the
Management Group, PDK Labs, PDK Acquisition, any employees of or consultants to
PDK Labs or PDK Acquisition, any person or persons to whom a member of the
Management Group transfers shares in any transactions for less than full and
adequate consideration, or any person or entity of which the Management Group,
or any member, owns or controls a majority of the voting interests.
B. RIGHT OF FIRST REFUSAL. During the three (3) years after the
effective date of this Agreement, Krape shall have a right of first refusal with
respect to (i) in the event the Going Private Transaction is consummated, the
sale of any shares of PDK Acquisition whether by the Management Group or by PDK
Acquisition, or (ii) in the event the Going Private Transaction is not
consummated, with respect to any private sale of the Management Group's shares
in PDK Labs (directly or indirectly held); provided, however, that such right of
first refusal shall not apply to any sale or transfer of shares to any related
parties or affiliates, as defined above, if such related parties or affiliates
agree, in writing, that any subsequent sale or transfer of shares to a
third-party shall be subject to the terms and conditions of this Agreement. In
either event, if the holder or holders of the share receive a bona fide offer
for the sale of their stock which they wish to accept, they shall provide Krape
with a notice (the "Sale Notice") of their intention to sell or
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<PAGE> 9
otherwise transfer their shares. The Sale Notice will be sent by telecopy and
federal express to Connis O. Brown, III, at Gunster, Yoakley & Stewart, P.A.,
500 E. Broward Boulevard, Suite 1400, Ft. Lauderdale, Florida 33394, and will
contain the name of the proposed purchaser and the terms upon which the holders
propose to transfer their shares. At any time within ten (10) days after receipt
of the Sale Notice, Krape may, by giving written notice to the holders, elect to
purchase all, but not less than all, of the shares proposed to be transferred at
the price and on the terms contained in the Sale Notice. Such notice of election
to purchase shall also be accompanied by evidence of the deposit of twenty
percent (20%) of the purchase price in escrow with counsel to Krape in such
purchase. Closing on such transfer shall take place in accordance with the terms
contained in the Sale Notice but in no event earlier than twenty (20) days after
the time due for Krape's response to the Sale Notice. During such periods, the
selling shareholders shall cooperate with reasonable requests by Krape and his
advisors for review and due diligence in connection with the purchase by him.
Such right of first refusal shall also apply to any transactions pursuant to
which all the assets of PDK are to be sold or any transactions which would
otherwise give rise to a change in control of PDK. In addition to the foregoing,
during the period between November 2, 2003 and November 2, 2005, Krape shall
have a right of first refusal on the same terms set forth above, except that:
(i) Krape's notice of election to purchase shall be accompanied by evidence of
the deposit of fifty percent (50%) of the purchase price in escrow with counsel
to Krape; (ii) Krape shall be required to close on his acquisition no later than
thirty (30) days after the date of his notice of election; and (iii) Krape
expressly agrees that he shall forfeit fifteen percent (15%) of the total price
of the acquisition should he fail to close at that time (and Krape hereby
expressly and irrevocably instructs his counsel to remit that fifteen percent
(15%) amount to PDK on the thirty-first (31st) day after the date of Krape's
notice of election should the transaction not have closed by that date).
6. GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without giving effect to conflict of laws principles. Krape hereby irrevocably
and unconditionally consents to the jurisdiction of United States District Court
for the Eastern District of New York (or Supreme Court, Suffolk County, to the
extent that federal subject matter jurisdiction does not exist), in any action
or proceeding which may be brought under or in connection with this Agreement or
any of the transactions contemplated hereby or to enforce any covenant or
agreement contained herein. In the event any such action shall be brought
against Krape, Krape irrevocably waives any right he may have to raise any
objection to jurisdiction or to the lying of the venue thereof in Suffolk
County, New York or to claim any such suit or proceeding has been brought in an
inconvenient forum and agrees that service of process in any such action or
proceeding may be duly effected upon him, if not otherwise perfected, by service
by first class mail upon Perry D. Krape at 11522 State Road 84, No. 222, Davie,
Florida 33325.
7. CONFIDENTIALITY. Except as required by applicable law, it is agreed
by each party that the terms of this Settlement Agreement and the contents of
the discussions pertaining thereto between the parties shall remain
confidential.
8. FEES AND COSTS. Each party agrees to bear its own attorney's fees
and costs and not seek any attorney's fees or costs from the other party in
connection with the preparation and execution of this Agreement and the
Settlement Documents.
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<PAGE> 10
9. MULTIPLE ORIGINALS. This Agreement may be executed by the parties in
one or more counterparts and by electronic signature or facsimile with the same
effect as if all the parties had executed one original document.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first mentioned above.
KRAPE: THE PDK PARTIES:
KRAPE PDK LABS INC.
By:
---------------------------------- ----------------------------
Perry D. Krape Reginald Spinello, President
By:
----------------------------
Reginald Spinello, President
----------------------------
Reginald Spinello
----------------------------
Raveendra Nandigam
----------------------------
Karine Hollander
----------------------------
Michael Krasnoff
----------------------------
Ira Helman
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