BUSINESS NOTES FILM ROMAN WINS FUNDS IN DISPUTE.

Byline: - From Staff and Wire Services

Pentamedia Graphics paid Film Roman $350,000 to settle a contract dispute between the two companies, according to a filing with the Securities and Exchange Commission.

The settlement comes after North Hollywood-based Film Roman's demand for arbitration was submitted to Pentamedia on June 5.

Film Roman claims that India-based Pentamedia breached a stock purchase agreement and memorandum of understanding between the two companies.

Federal contracts go to local firms

Federal contracts totaling nearly $18 million were awarded last month to companies in and around the San Fernando Valley, the U.S. Department of Commerce and Department of Defense has announced.

Haskel International's Industrial Technologies Division in Burbank won a $470,000 contract from the Defense Industrial Supply Center, Philadelphia, for gaskets.

HRL Laboratories LLC in Malibu won a $9.76 million contract from the U.S. Space & Naval Warfare Systems Center, San Diego, for the research and development of a viable integrated electronics technology with the antimonide-based compound semiconductors family of materials.

Rockwell Science Center of Thousand Oaks won a $6.4 million contract from the Space & Naval Warfare Systems Center, San Diego, for research and development of a viable integrated electronics technology with the antimonide-based compound semiconductors family of materials.

Tele-Interpreters in Glendale won a $250,000 contract from the General Services Administration's Federal Supply Service, Auburn, Wash., for translation and interpretation services.

And Wright Barry Corp. of Burbank won a $93,925 contract from the Defense Industrial Supply Center, Philadelphia, for shock mounts.

Some buddy lists lost in MSN snarl

SEATTLE - A spokesman said Microsoft's MSN Messenger service was mostly restored Tuesday after a weeklong outage, but warned that some users might have lost their personal address books.

A technical glitch left about one-third of users disconnected or without access to the address books, called buddy lists or contact lists.

MSN Vice President Rick Bray said the outage caused some permanent damage and loss of lists. The exact number of customers affected was not given.

It was the second major outage this year for MSN Messenger, a free service for sending instant text messages across the Internet.

Intel halts sales of 900-MHz chip

SANTA CLARA - Intel Corp. stopped shipping a powerful chip for servers in April because of a flaw in its design, the company reported Tuesday. The problem has been fixed, and production is scheduled to resume next month.

The problem with the 900-megahertz Pentium 3 Xeon chip can cause servers to freeze up and temporarily stop working. No server users have been affected. The flaw was found in a lab by a customer in March.

Zany Brainy to sell assets to L.A. firm

The assets of Zany Brainy Inc., the troubled Pennsylvania-based toy retailer, will be sold for $115 million to Waterton Management LLC, a Los Angeles investment firm, Zany Brainy said Tuesday.

Zany Brainy, which operates 187 stores around the nation and 10 in the Philadelphia region, filed for bankruptcy in U.S. Bankruptcy Court in Wilmington on May 15, listing liabilities of $131 million and assets of $201 million.

The deal with Waterton must be approved by the court. A hearing is set for Aug. 10.

No store closings or layoffs are planned, and the chain's headquarters will remain in King of Prussia, Pa., said Thomas Vellios, Zany Brainy's chief executive officer.