Document:

EXHIBIT 10.7
                                                                    ------------

                              SETTLEMENT AGREEMENT

            THIS AGREEMENT ("Agreement") made on this 30th day of December, 2003
by and between Chattem, Inc. ("Chattem") and its directors, officers,
shareholders, agents, employees, assigns and persons and entities acting
through, under or on behalf of any of them and any and all persons or entities
named as insureds or alleged to be an insured, and Admiral Insurance Company
("Admiral") and its directors, officers, shareholders, agents and employees and
persons and entities acting through, under or on behalf of any of them.

            WHEREAS, Admiral issued Commercial Liability Policy No. A98AG05748
("1998 Policy") and Commercial Liability Policy No. A99AG07865 (the "1999
Policy"), including the Supplemental Extended Reporting Period pertaining to the
1999 Policy (the 1998 Policy, 1999 Policy and the Supplemental Extended
Reporting Period collectively are referred to as the "Policies"); and

            WHEREAS,Chattem has asserted that Admiral is responsible to pay and
indemnify Chattem (the "Coverage Claim") pursuant to the Policies for certain
claims in which third-parties assert that they have suffered injury as a result
of their ingestion of Chattem's Dexatrim product ("Dexatrim Claims"); and

            WHEREAS, there is a dispute between Chattem and Admiral with respect
to the nature and extent of the obligations of Admiral under the Policies to
defend and indemnify Chattem with respect to the Dexatrim Claims; and

            WHERE AS, the Coverage Claim is a subject of pending litigation
involving Chattem and Admiral in an action entitled Kemper Indemnity Ins. Co. V.
Chattem, Inc., et al., United States District Court, Eastern District at
Tennessee at Chattanooga, TN No. 1:03-CV264 (hereinafter "Pending Litigation");
and

            WHEREAS, other insurers of Chattem are parties in the Pending
Litigation and have asserted or may assert claims sounding in tort,
contribution, indemnity and/or equitable subrogation among themselves and
against Admiral with respect to the Dexatirm Claims; and

            WHEREAS, the parties believe that it is in their mutual interest to
reach an amicable resolution with respect to all doubtful and disputed claims
for which there are bonafide issues in controversy, including but not limited to
the Coverage Claim and claims related to Dexatrim and the issues raised in the
Pending Litigation, without admission or adjudication of any issue of fact or
law, and to resolve all past, present or future disputes relating to any of the
obligations of Admiral to Chattem under the Policies.

            NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, Chattem and Admiral hereby
agree as follows:

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     1.   In full and final settlement of the Coverage Claim, Admiral will pay
          Chattem $2,085,000.00 which is intended to represent (i) the total
          available settlement funds for the Supplemental Extended Reporting
          Period referred to above ($885,000.00) as well as (ii) the total
          reserves established and maintained by Admiral in connection with the
          Policies referenced above ($1,200,000.00) for the settlement and
          resolution of individual claims asserted against Chattem in the
          underlying tort litigation, which may include the payment of any and
          all reasonable costs of defense which may be incurred by Chattem from
          December 6, 2003 forward. In no event, however, shall Admiral be
          liable for the payment of any attorneys fees or costs after December
          5, 2003. Such payment shall be made by wire transfer of five business
          days' notice from Chattem as required to fund the global settlement
          and/or individual settlements of the Dexatrim claims against Chattem.
          The payment shall be paid to Chattem no later than December 31, 2003
          and shall be paid into dedicated accounts as follows, which are
          designated for the settlement of individual claims or for funding of
          the global settlement: i) $1,200,000.00 to Account #0034195173:
          Admiral Insurance Settlement Account for Chattem Inc's PPA, Product
          Liability Cases, Claims Reported Prior to 5/31/01; and ii) $885,000.00
          to Account #0034195181: Admiral Insurance settlement Account for
          Chattem, Inc's PPA Liablility Cases, Claims Reported After 5/31/01.

     2.   Chattem does hereby forever fully and completely covenant not to sue
          for, and fully and completely releases Admiral from any and all claims
          and /or liability under the Policies for any and all claims, demands,
          rights, causes of action or liabilities under the Policies for any and
          all claims, demands, rights, causes of action or liabilities arising
          out of any past, present or future claim which it has or may have, now
          or in the future, known or unknown, for damages and costs of any kind,
          including punitive or other legal, statutory, common law,
          extra-contractual, and/or equitable relief, or for costs and expenses
          arising from or related to any and all claims whether past, present or
          future and which directly or indirectly relate to the Policies,
          including any and all claims of Chattem for reimbursement under the
          Policies and/or for a defense and/or the payment of reasonable
          attorneys fees and defense costs under the Policies or in anyway
          related to the handling of and/or negotiation of Chattem's claim
          against Admiral.

     3.   Chattem will DEFEND AND INDEMNIFY Admiral against any and all suits
          and/or claims which have been made or which could be made in the
          future by General Star Indemnity Company, Kemper Indemnity Insurance
          Company and/or Interstate Fire & Casualty Company that allege that
          Admiral improperly negotiated and/or settled Chattem's claims, if any,
          against Admiral. Further, Chattem, will DEFEND AND INDEMNIFY Admiral
          against any and all claims and/or suits by any person or entity
          claiming by, through, under or on behalf of any of the reference
          Admiral Policies, and further with respect to any claims attempting to
          oblige Admiral

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          for the future payment of attorneys fees and/or reasonable costs of
          defense in any manner inconsistent with this Agreement.

          This indemnity provision does not apply 1) any claims asserted in
          connection with the 1998 Policy, and 2) direct actions brought by or
          on behalf of individual claimants in the Dexatrim tort litigation.

          Should a claim be made against Admiral for any obligation recited in
          this paragraph 3, Admiral agrees to so notify Chattem. Admiral
          acknowledges that Chattem has the right to compromise and settle such
          claim(s) as Chattem deems appropriate, at Chattem's sole cost and
          expense.

     4.   Admiral is responsible for all fees, costs and expenses it has
          incurred on its behalf only or may in the future incur on its behalf
          only, in connection with the litigation captioned Kemper Indemnity
          Ins. Co. v.Chattem, Inc., et al/., Docket No. 1:03-CV-264 (E.D. Tenn),
          Including the claims potentially to be asserted by Interstate Fire &
          Casualty Company.

     5.   Notwithstanding the agreements contained within paragraph 4 above,
          Admiral agrees to reasonably cooperate, at its own expense, with
          Chattem and its attorneys in its defense of the claim referenced in
          paragraph 4 above, including reasonably making its underwriters and
          claims representatives available for interviews and/or depositions,
          and providing to Chattem the non-privileged portions of its claims and
          underwriting files pertaining to the Policies, including any and all
          materials concerning phenylpropanolamine. Chattem acknowledges and
          agrees that all of Admiral's obligations and/or duties with respect to
          defense or indemnification of claims against Chattem are as of
          December 5, 2003 and by the payment of the settlement funds referenced
          above legally concluded and ended, however, Admiral reserves the
          right, at its sole discretion and cost, to participate and cooperate
          with Chattem and Chattem's attorneys in the evaluation and settlement
          of the individual claims brought against Chattem. Chattem agrees and
          covenants that the settlement funds referenced above shall be used
          solely to negotiate and settle individual tort claims against Chattem
          in connection with the underlying Dexatrim litigation pending against
          it.

     6.   Admiral covenants not to sue Chattem, Chattem's insurers or any other
          entity to recover the payment set forth in paragraph 1 above, or any
          other costs or expenses incurred by Admiral in connection with the
          Dexatrim claims against Chattem.

     7.   Admiral is responsible for the payment of all reasonable costs of
          defense incurred by or on behalf of Chattem for Dexatrim claims
          covered under the Policies up through and including December 5, 2003.
          Admiral will reasonably cooperate with Chattem's Dexatrim litigation
          defense counsel

<PAGE>

          (Miller & Martin) to effectuate the efficient conclusion of Admiral's
          defense obligations and to timely and efficiently support any
          substitution of counsel. Chattem acknowledges that the advancement of
          the monies referenced above toward the settlement of the underlying
          Dexatrim tort claims pending against it terminates any further or
          continuing obligation for Admiral in connection with the payment of
          reasonable attorneys fees and costs of defense, and Chattem
          acknowledges its responsibility for the payment of its attorneys fees
          and costs of defense beginning December 6, 2003.

     8.   Chattem makes this Settlement Agreement and Release on behalf of
          itself and all persons or entities insured under the Policies and/or
          claiming by, under or through Chattem, and the release will apply to
          Admiral and its agents, attorneys, employees, insurers, and
          reinsurers.

     9.   This Agreement will be construed pursuant to Tennessee law, without
          regard to Tennessee conflicts of law principles.

     10.  This Agreement shall be binding upon and inure to the benefit of the
          parties hereto. Nothing in this Agreement is intended nor shall it be
          construed to confer any benefit whatsoever on any persons other than
          the parties. By entering into this Agreement, Chattem expressly does
          not release, compromise or waive its claims against any other
          insurance companies that issued its policies of insurance and reserves
          its rights to pursue any claim for coverage against other insurance
          companies.

     11.  This Agreement does not constitute an admission by Admiral of an
          obligation to defend or indemnify Chattem with respect to any Policies
          or any claim.

     12.  This Agreement shall not be admissible in any legal proceeding except
          to enforce its terms.

     13.  Each of the parties has participated in the drafting of this Agreement
          after consulting with counsel. Therefore, the language of this
          Agreement shall not presumptively be construed in favor or against
          either party.

     14.  This Agreement represents the entire understanding between the parties
          and, without limitation, the parties expressly agree that any previous
          communications, correspondence, or agreements are not to be employed
          to construe this Agreement. Any other provisions of this Agreement to
          the contrary notwithstanding, this Agreement can only be modified by a
          writing signed by both parties and this provision cannot be orally
          waived.

     15.  Chattem and Admiral respectively warrant and represent that they are
          authorized to enter into this Agreement on their own behalf and on
          behalf of their respective shareholders, directors, officers,
          employees, and agents, assigns and all persons or entities acting
          through or under any of them and that

<PAGE>

          they respectively have the authority to bind such persons and entities
          to the terms of this Agreement. Chattem and Admiral also represent and
          warrant that the persons whose signatures are affixed hereto are
          authorized to sign this Agreement on behalf of their respective
          corporations and have the legal authority to bind their respective
          corporations hereto.

     16.  If any terms or provisions of this Agreement other than the provisions
          of paragraphs 1-7 or the application of any term or provision other
          than the provisions of paragraphs 1-7 of this Agreement to any person
          or circumstances, shall, to any extent be invalid or unenforceable,
          the remainder of this Agreement, or the application of such term of
          provision to persons or circumstances other than those as to which it
          is held invalid or unenforceable, shall not be affected thereby, and
          each such provision of this Agreement shall be valid and be
          enforceable to the fullest extent permitted by the law.

     17.  This Agreement shall be executed in two (2) duplicate originals, with
          Chattem to retain one (1) original and Admiral to retain one (1)
          original.

<PAGE>

            IN WITHNESS WHEREOF, the parties, by their duly authorized
representatives, affix their signatures hereto.

                                                    Chattem, Incorporated

                                                    BY:
                                                       -------------------------
                                                    Alec Taylor II
                                                    President

            THE STATE OF TENNESSEE
            COUNTY OF HAMILTON

                  BEFORE ME, the undersigned authority, on this day personally
                  appeared Alec Taylor, II known to me to be the person whose
                  name is subscribed to the foregoing instrument, and
                  acknowledge to me that he signed the same for the purposes
                  and consideration therein expressed.

                  GIVEN under my hand and seal of office, this the 29th day of
                  December, 2003

                                 Notary public in and for the state of Tennessee

            My commission, expires
            February 7, 2006

<PAGE>

                                                  ADMIRAL INSURANCE COMPANY

                                                  BY:
                                                     --------------------------
                                                  Daniel A. MacDonald
                                                  Senior Vice President,
                                                  Admiral Insurance Company

            THE STATE OF NEW JERSEY
            COUNTY OF CAMDEN

                  BEFORE ME, the undersigned authority, on this day personally
                  appeared Daniel A. Macdonald known to me to be the person
                  whose name is subscribed to the foregoing instrument, and
                  acknowledge to me that he signed the same for the purposes
                  and consideration therein expressed.

                  GIVEN under my hand and seal of office, this the 23rd day of
                  December, 2003

                                Notary public in and for the state of New Jersey

            My commission, expires
            February 5,2007Exhibit 10

                            Exhibit 10.1

                         PROPERTY EXTENSION

               LAKEFIELD VENTURES, INC.

           50 LIBERTY STREET WEST, SUITE 880 RENO NEVADA 89501  

                              

Peter Hawley

169 Perrault Avenue Val D'or Quebec, Canada

December 31, 2003

ATTENTION : Peter Hawley 

RE: Kayla Property Claims

 Dear Sir,

Pursuant to an option agreement dated as of April 15, 2002, Peter Hawley ("PH") granted to Lakefield Ventures, Inc., an option to acquire an interest in the Property (the "Agreement*') This letter confirms that in and for the sum of $ 1000 Cdn., the receipt of which is hereby agreed,  and to amend the terms of the Agreement by deleting the reference to -December 31, 2003" in section 2 l(C) and inserting "December 31, 2004" and further by deleting the reference to "December 31, 2004" in section 2 1(D and inserting "December 3I, 2005". and further by deleting the reference to "December 31, 2003 in section 11 ( D) and inserting "December 31, 2004" The remainder of the Agreement shall remain in full force and effect.

Yours truly,

LAKEFIELD VENTURES, INC.

Per /S/ Michael Iverson

Michael Iverson, President

The above is hereby confirmed and agreed as of the date first above written. 

Per /S/ Peter Hawley 

Peter Hawley

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