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Case 1:11-cv-00702-RJS Document 49

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SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This SETTLEMENT AGREEMENT AND MUTUAL RELEASE ("Agreement") is entered into effective as of October 4, 2011 (the "Effective Date") by and among Julian Weissman, an individual, and Julian Weissman Fine Art, LLC (collectively "Weissman"), Glafira Rosales, an individual, and Glafira Rosales Fine Art LLC (collectively, "Rosales"), Killala Fine Art Limited ("Killala"), the Dedalus Foundation, Inc. ("Dedalus") and the Dedalus Foundation, Inc. d/b/a Robert Motherwell Catalogue Raisonne Project (collectively, "Dedalus") (all collectively, the "Parties").
RECITALS

A. WHEREAS, on February 1, 2011, Killala filed a complaint (the "Complaint") against Weissman and Dedalus in the United States District Court for the Southern District of New York, case number 11-civ-0702 (the "Action"); B. WHEREAS, the Complaint alleges eight causes of action against Weissman related to the sale of a painting, "Spanish Elegy," identified by Dedalus and herein as "Spanish Elegy 1953.P.24"; WHEREAS, the Complaint alleges one cause of action against Dedalus in C. connection with Killala's purchase of Spanish Elegy 1953.P.24; WHEREAS, on May 4, 2011, Dedalus answered the Complaint and filed D. crossclaims against Julian Weissman; E. WHEREAS on May 9, 2011, Weissman answered the Complaint;

F. WHEREAS, on July 22, 2011, Dedalus re-filed its answer to the Complaint and amended its crossclaims against Julian Weissman and filed a Third Party Complaint against Glafira Rosales (the "Dedalus Crossclaims" and "Dedalus' Third Party Complaint"); G. WHEREAS, the Dedalus Crosselaims assert claims against Weissman with respect to Spanish Elegy 1953.P.24, Spanish Elegy 1953.P.10 and Spanish Elegy 1953.P.18; WHEREAS, on July 22,2011, Dedalus asserted third party claims against Rosales H. with respect to Spanish Elegy 1953.P.24, Spanish Elegy 1953.P.10, Spanish Elegy 1953.P.18, Spanish Elegy 1955.P.8 and Spanish Elegy 1953.P.14; I. WHEREAS, on July 22, 2011, Weissman amended its answer to the Complaint and asserted two crossclaims for contribution and indemnification against Dedalus; J. WHEREAS, on July 28, 2011, Weissman filed a third party complaint against Rosales asserting two claims for contribution and indemnification; and

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WHEREAS, the Parties wish to avoid the further expense and uncertainty K. associated with litigation and thus wish to settle this dispute in advance of trial.

AGREEMENT
NOW, THEREFORE, in consideration of the undertakings set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows: 1. Each of the undersigned represents and warrants that it is authorized to enter into this Agreement and that any required consents, authorizations or approvals have been obtained. 2. Weissman shall pay $650,000 to Hughes Hubbard & Reed LLP on behalf of Killala by bank check from Citibank delivered simultaneously with the exchange of executed copies of this Agreement and Mutual Release. 3. Rosales shall pay $165,221.04 to Dedalus by bank check from Bank of America and Weissman shall pay to Dedalus $34,778.96 by bank check from Citibank, for a combined total payment to Dedalus of $200,000 delivered simultaneously with the exchange of executed copies of this Agreement and Mutual Release. 4. Rosales shall pay $600,000 to Weissman by bank check from Citibank delivered simultaneously with the exchange of executed copies of this Agreement and Mutual Release. 5. Within ten (10) days of the effective date of this Agreement, Dedalus, through its attorneys Pryor Cashman LIP will indelibly mark the back of Spanish Elegy 1953.P.24 with an unalterable stamp that reads: "AFTER PHYSICAL EXAMINATION AND FORENSIC TESTING, THE ROBERT MOTHERWELL CATALOGUE RAISONNE PROJECT OF THE DEDALUS FOUNDATION, INC., HAS DETERMINED THAT THIS PAINTING IS NOT AN AUTHENTIC WORK BY ROBERT MOTHERWELL BUT A FORGERY." 6. Within ten (10) days of the effective date of this Agreement, Killala, through its attorneys Hughes Hubbard & Reed LLP ("HER"), will secure Spanish Elegy 1953.P.24 in escrow for a period not to exceed six months after the execution of this Agreement, pending the receipt of lawful process, if any. Thereafter, Killala will make Spanish Elegy 1953.P.24 available for pick up by Weissman at the offices of HER, One Battery Park Plaza, New York, New York, and Weissman will thereafter make Spanish Elegy 1953.P.24 available for pick up by Rosales. 7. For purposes of this Agreement, "Affiliated Parties" means, (a) in the case of an individual, such individual's spouse, beneficiaries, heirs, executors, administrators, agents, representatives, companies, employees, employers, attorneys, successors, assigns, and any other persons or entities who may claim through any one or all of them, and (b) in the case of a trust or an entity, such trust or entity's trustees, beneficiaries, companies, owners, employees, parents, subsidiaries, officers, board members, directors, managers, agents, representatives, attorneys, predecessors, successors, assigns, and any other persons or entities who may claim through any one or all of them.

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8. Each of: (a) Weissman and its Affiliated Parties (collectively "Weissman Parties" and each a "Weissman Party"), (b) Rosales and its Affiliated Parties (collectively "Rosales Parties" and each a "Rosales Party"), (c) Killala and its Affiliated Parties (collectively "Killala Parties" and each a "Killala Party") and (d) Dedalus and its Affiliated Parties (collectively "Dedalus Parties" and each a "Dedalus Party") does hereby completely release and forever discharge and covenant not to sue or otherwise institute any civil legal action, claim, arbitration, or administrative proceeding (except with respect to the enforcement of this Agreement), whether individually or as a member of a class, against the Weissman Parties, Rosales Parties, Killala Parties and the Dedalus Parties, and all persons acting by, through, under or in concert with any of them, with respect to all matters, claims, rights, demands, contracts, torts, debts, obligations, causes of action and liabilities of any nature whatsoever, in law, equity or otherwise, whether or not known, suspected or claimed, which the Weissman Parties, Rosales Parties, Killala Parties, and/or Dedalus Parties have had, now have, or in the future may have arising from or relating to Spanish Elegy 1953.P.24, from the beginning of time through the Effective Date, including but not limited to any claims that they could have asserted in the Action (the "Release"); and the Parties understand and agree that this Release is a full and fmal release, applying not only to all claims which are presently known, anticipated or disclosed to the Parties but also to all such claims, rights, demands, actions, and obligations as defmed herein which are presently unknown, unanticipated and undisclosed to them arising from or related to Spanish Elegy 1953.P.24; provided however, that with regard to Spanish Elegy 1953.P.10, Spanish Elegy 1953.P.18, Spanish Elegy 1955.P.8 and Spanish Elegy 1953.P.14, the Release defined above shall also apply, EXCEPT if any third party shall assert any action, allegation, proceeding, investigation, claim or demand against Dedalus concerning Spanish Elegy 1953.P.10, Spanish Elegy 1953.P.18, Spanish Elegy 1955.P.8 and/or Spanish Elegy 1953.P.14, then in such instance this Release shall not apply and (a) Dedalus shall have the right to assert any and all claims, defenses, remedies and damages against any person, including Weissman and Rosales, such that the statutes of limitations shall have been tolled and Dedalus in such instance shall have any and all rights, claims, damages and remedies as against Weissman and Rosales that Dedalus has or had as of the Effective Date of this Agreement without limitation by statutes of limitation, laches, estoppel, waiver, acquiescence and/or consent and (b) Weissman and Rosales will be entitled to any and all legal and/or equitable defenses they have or had as of the Effective Date. Dedalus represents and warrants that as of the Effective Dates, it knows of no actual or threatened action, allegation, proceeding, claim or demand by a third party concerning Spanish Elegy 1953.P.10, Spanish Elegy 1953.P.18, Spanish Elegy 1955.P.8 and/or Spanish Elegy 1953.P.14. 9. If any Weissman Party, Rosales Party, Killala Party or Dedalus Party commences any suit, action, or proceeding in violation of this Agreement, or otherwise violates paragraph 6 herein, then that party shall defend, indemnify and hold harmless such Weissman Party, Rosales Party, Killala Party or Dedalus Party, as applicable, from any liabilities, claims, demands, damages, costs, expenses and attorneys' fees incurred by such party, as applicable, in connection therewith. Each of the Parties and Affiliated Parties hereto represent and warrant to each other that there has been no assignment or other transfer (or any purported assignment or other transfer) of any interest in any dim, debt, liability, demand, obligation, cost, expense, damage, action or cause of action which he, she, it or they may have against any other Party and each of them which is released herein. If any Party or Affiliated Party breaches the representation and warranty in the preceding sentence, it agrees to indemnify, defend, protect and hold harmless any other Party against any claim, debt, liability, demand, obligation, cost, expense (including but not
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limited to attorneys' fees incurred), damage, action or cause of action based on, arising out of or in connection with that breach. 10. The Parties understand and agree that the Release set forth in this Agreement does not apply to any claims, obligations, rights or duties arising under this Agreement. 11. In the event of the commencement or continuation of any suit, action or proceeding in violation of this Agreement, this Agreement may be pleaded as a complete defense to any such action and may be asserted by way of counterclaim or cross-claim in such action. 12. The Parties understand and agree that the covenants, representations and warranties contained in this Agreement are material inducements to each of the Parties for making this Agreement; the Parties further understand and agree that for the breach thereof, a non-breaching party will be entitled to pursue any and all legal and equitable remedies, including, but not limited to, the right to recover damages and/or seek injunctive relief. The prevailing party in any legal or equitable action to enforce this Agreement shall be entitled to reimbursement of any costs and attorneys' fees incurred in enforcing this Agreement. 13. Should any portion of this Agreement be declared or be determined by any court or arbitrator of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and shall retain full force and effect, and such illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement to the most limited extent necessary to make all other terms and provisions enforceable. 14. This Agreement represents the entire agreement between the Parties and supersedes all prior negotiations, representations or agreements between and among the Parties, whether oral or written or implied, arising from or relating to Spanish Elegy 1953.P.24, Spanish Elegy 1953.P.10, Spanish Elegy 1953.P.18, Spanish Elegy 1955.P.8 and Spanish Elegy 1953.P.14 with the exception that any prior agreement that may exist between Weissman and Rosales with respect to, concerning or arising out of Spanish Elegy 1953.P.10, Spanish Elegy 1953.P.18, Spanish Elegy 1955.P.8 and Spanish Elegy 1953.P.14 shall be unaffected by this Agreement; Any such prior agreement between Weissman and Rosales concerning or arising out of Spanish Elegy 1953.P.10, Spanish Elegy 1953.P.18, Spanish Elegy 1955.P.8 and Spanish Elegy 1953.P.14 shall not affect or prejudice any rights, interests, claims, remedies or damages of Dedalus or Killala. This Agreement may be amended only by a written agreement signed by all Parties hereto 15. This Agreement is entered into and shall be governed by the laws of the State of New York without giving effect to that body of law pertaining to conflict of laws. 16. Any dispute arising out of, in connection with or relating to this Agreement shall be brought in the state or federal courts in New York, New York. The United States District Court for the Southern District of New York shall have continuing jurisdiction over this Agreement. All Parties hereto waive any objection to any party's assertion of venue in or jurisdiction of such courts.

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17. This Agreement may be executed in counterparts, each of which shall be deemed to be an original. Facsimile or PDF copies of the original signatures shall be sufficient to bind the Parties to this Agreement. 18. Counsel for each party has reviewed and has had an opportunity to revise this Agreement, and, accordingly, the Parties agree that any rule of construction to the effect that any ambiguities are to be construed or resolved against the drafting party shall not be applied in the interpretation of this Agreement. 19. EACH OF THE PARTIES ACKNOWLEDGES AND AGREES THAT HE, SHE OR IT HAS, AT ALL TIMES IN CONNECTION WITH THE NEGOTIATION, PREPARATION, REVIEW AND REVISION OF THIS AGREEMENT, BEEN AFFORDED A REASONABLE PERIOD OF TIME TO REVIEW THIS AGREEMENT AND TO BE REPRESENTED BY COUNSEL OF HIS, HER OR ITS OWN CHOOSING, THAT HE, SHE OR IT HAS READ AND UNDERSTANDS THIS AGREEMENT, THAT HE, SHE OR IT IS FULLY AWARE OF THIS AGREEMENT'S CONTENTS AND OF ITS LEGAL EFFECT, THAT THE PRECEDING PARAGRAPHS REPRESENT THE FULL CONSIDERATION FOR THIS AGREEMENT, THAT ALL AGREEMENTS AND UNDERSTANDINGS BETWEEN THE PARTIES ARE EMBODIED AND EXPRESSED HEREIN, ARISING FROM OR RELATING TO SPANISH ELEGY 1953.P.24, SPANISH ELEGY 1953.P.10, SPANISH ELEGY 1953.P.18, SPANISH ELEGY 1955.P.8 AND SPANISH ELEGY 1953.P.14, AND THAT HE, SHE OR IT ENTERS INTO AND AFFIXES HIS, HER OR ITS SIGNATURE TO THIS AGREEMENT VOLUNTARILY AND WITHOUT COERCION BASED UPON HIS, HER OR ITS OWN JUDGMENT, AND NOT IN RELIANCE UPON ANY REPRESENTATIONS OR PROMISES MADE BY THE OTHER PARTIES, EXCEPT THOSE CONTAINED HEREIN. 20. Each of the Parties hereto has the requisite legal power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed by each of the signatories hereto, and this Agreement constitutes the valid and binding obligation of each signatory hereto.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed this Agreement effective as of the day and year first above written.

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JUL WEISSMAN, an individual

GLAFIRA ROSALES, an individual GLAFIRA ROSALES FINE ART LLC By: Name: Its:

KILLALA FINE ART LIMITED By: Name: Its:

THE DEDALUS FOUNDATION, INC. By: Name: Its:

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IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed this Agreement effective as of the day and year first above written.

JULIAN WEISSMAN, an individual JULIAN WEISSMAN FINE ARTS By: Name: Its:

6,C4/1GLAFIRA OSALE individual GLAFIRA ROSALES FJL T LLC By: Name: Its:

KILLALA FINE ART LIMITED By: Name: Its:

THE DEDALUS FOUNDATION, INC. By: Name: Its:

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IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed this Agreement effective as of the day and year first above written.

JULIAN WEISSMAN, an individual JULIAN WEISSMAN FINE ARTS By: Name: Its:

GLAFIRA ROSALE:S, an individual GLAFIRA ROSALES FINE ART LW By: Name: Its:

K1LLALA FINE ART LIMITED By: Name: Its: f'g

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THE DEDALUS FOUNDATION, INC. By: Name: Its:

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IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed this Agreement effective as of the day and year first above written.

JULIAN WEISSMAN, an individual

JULIAN WEISSMAN FINE ARTS By: Name: Its:

GLAF1RA ROSALES, an individual

GLAFIRA ROSALES FINE ART LLC By: Name: Its:

KILLALA FINE ART LIMITED By: Name: Its:

THE DEDALUS FOUNDATION, INC. By: Name: Its:

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THE DEDALUS FOUNDATION, INC: D/B/A ROBERT MOTHERWELL CATALOGUE RAISON NE PROJECT

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