EXHIBIT
10.45
SETTLEMENT AGREEMENT AND MUTUAL
RELEASE
This Settlement Agreement and General
Release (hereinafter “Agreement”) is made this ___ day
of May 2009 between the Farmatek IC VE DIS TIC, LTD. STI
(“Farmatek”) and Oskiyan Hamdemir, on the one hand, and
Baywood International, Inc. (“Baywood”) and Nutritional
Specialties, Inc. (“NSI”), on the other
hand.
RECITALS
A.
On or about April 3, 2006, NSI and
Farmatek executed an Exclusive Distribution Contract under which
Farmatek agreed to serve as the exclusive distributor of
NSI’s products in the territory of Turkey.
B.
By letter dated August 13, 2007, NSI gave
Farmatek thirty days written notice of its decision to cancel the
Exclusive Distribution Contract.
C.
On or about December 28, 2007 filed an
action for breach of contract, breach of the implied covenant of
good faith and fair dealing, unjust enrichment, and unfair business
practices in Orange County Superior Court entitled, Farmatek IC
VE DIS TIC, LTD. STI. V. Nutritional Specialties, Inc. dba
Lifetime, Baywood International, Inc., and Does 1 through 25,
inclusive , Case No. 00100814 (the
“Action”).
D.
In or about October, 2007,
Farmatek’s president, Oskiyan Hamdemir, applied for and
obtained trademarks for the names of some of the private label
products NSI produced exclusively for Farmatek, including products
that Farmatek distributed and sold in Turkey under the
parties’ Exclusive Distribution Contract.
E.
On or about October 15, 2008, Farmatek
sent a warning letter to NSI, demanding that NSI cease selling and
marketing the following products which Farmatek claimed it
possessed registered trademarks: Alphadell, Alphamax, Argimax,
Carvital, CLA Max, Genesis, Glucosol, HareCare, JSF, Multifem,
MultiMen, Promax, Regulx, and Water X (collectively, “the
Trademark Names”).
F.
The parties wish to resolve all possible
disputes between them relating to the Action and the Trademark
Names, whether known or unknown, and to provide for a general
release of all such claims except as otherwise provided
herein.
TERMS OF
AGREEMENT
In consideration of the mutual covenants
and promise herein contained, and for good and valuable
consideration, the receipt and sufficiency of which are herby
acknowledged, it is agreed:
1.
Payment . For the execution of this Agreement by the
Parties, Baywood and NSI shall pay to Farmatek the total sum of
$250,000. This amount shall be paid in 12 months pursuant to
the following schedule:
1
a.
payment of $50,000 within 10 days of the
execution of this Agreement;
b.
payment of $75,000 by September 15,
2009;
c.
payment of $75,000 by December 15, 2009;
and
d.
a final payment of $50,000 by March 15,
2010.
As an incentive to provide early payment,
Baywood and NSI’s total obligation under this paragraph will
be reduced by Ten Thousand Dollars ($10,000) if Baywood and NSI
make all the required payments by September 30, 2009. All
payments are to be made by international electronic wire transfer
payable to Farmatek and sent to:
Bank: Turkiye Is Bankasi
Branch #: 1228
Account #: 52176
IBAN: TR62 0006 4000 0021 2280 0521
76
SWIFT: ISBKTRIS
2.
Impact of Nonpayment
. Except as provided in Paragraph
3, should Baywood and NSI fail to pay the amounts set forth in
Paragraph 1 of this Agreement, and if not paid in full within
fifteen (15) business days of a written demand by Farmatek,
Farmatek may, in addition to its other remedies, upon written
notice to Baywood and NSI, file the Stipulated Judgment attached as
Exhibit A.
3.
Marketing and Sale of Products under
the Trademarked Names .
Baywood and NSI represent and warrant it no longer
manufactures products under the Trademarked Names for distribution
in Turkey and agree that they will not do so in the future, except
as otherwise provided in this Agreement. Farmatek and Mr.
Hamdemir acknowledge and agree that Baywood, NSI, and its current
Turkish distributor may advertise, market, distribute, and sell in
Turkey any products under the Trademarked Names that Baywood, NSI,
or their Turkish distributor currently have in inventory or which
are currently held by an Turkish pharmacy but only until August 30,
2009.
After August 30, 2009, Baywood, NSI and
its current Turkish distributor will and shall stop any, every and
all advertising, marketing, distribution and sale in Turkey of all
products under the Trademarked Names. This Agreement applies
solely to the Trademarked Names and no other names.
Except in the event that Baywood, NSI,
its/their Related Persons, or their Turkish distributor breaches
the terms of this agreement with respect to payments or the
Trademarked Names, Farmatek, Mr. Hamdemir, and any Related Persons
agree that they will not take action against Baywood, NSI, their
Turkish distributor to enforce any rights Farmatek or Mr. Hamdemir
possesses with respect to the Trademarked Names and will not
initiate, threaten to initiate or cause to be initiated either
civil or criminal proceedings against Baywood, NSI or their Turkish
distributor in connection with their past or permitted future
manufacture, marketing, advertising, distribution, or sale of
products under the Trademarked Names.
2
Except in the event that Baywood, NSI
its/their Related Persons, or their Turkish distributor breaches
the terms of this agreement with respect to payments or the
Trademarked Names, Farmatek, Mr. Hamdemir, and any Related Persons
agree that they will not initiate, threaten to initiate or cause to
be initiated any action against any Turkish pharmacy or entity
possessing, advertising, offering for sale and/or selling any
products under the Trademarked Names. In the event that
Farmatek or Mr. Hamdemir violates the terms of this Paragraph,
Baywood and/or NSI will have no obligation to make any further
payments to Faramatek under Paragraph 1 of this Agreement and may
seek damages against Faramtek and/or Mr. Hamdemir arising out of
any violation of this paragraph.
If any Trademarked Names become
invalidated, expires, non-renewed or otherwise loses trademark
protection in Turkey such that third-parties become free to use the
Trademarked Name then Baywood, NSI and their Related Parties shall
be likewise free to use the Trademarked Names, without penalty or
restriction. Baywood, NSI and their Related Parties, however
warrant and agree that they or their Turkish distributor will not
initiate, participate, threaten to initiate or cause to be
initiated any action, petition or proceedi
