EXHIBIT 10.57
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release ("Agreement") is entered into as of
the 25th day of August, 1999.
A. Parties
The parties to this Agreement are as follows:
1. Blitz Media Sales, L.L.C. dba Blitz Marketing, L.L.C.,
("Blitz"), on its own behalf and on behalf of all of its
agents, affiliates, subsidiaries and assigns, including, but
not limited to, Blitz. All of the terms of this Agreement
shall apply to and be binding on and for the benefit of Blitz,
and all of its agents, affiliates subsidiaries and assigns.
Execution of this Agreement by Blitz shall be deemed to
constitute execution by all of its affiliates and subsidiaries
as well.; and ,
2. National Boston Medical, Inc., on its own behalf and on behalf
of all of its agents, affiliates, subsidiaries and assigns,
including, but not limited to, FlexMarketing, Inc.
(collectively referred to as "NBMI"). All of the terms of this
Agreement by NBMI shall be deemed to constitute execution by
all of its affiliates and subsidiaries as well.
B. Recitals
1. Prior to the date hereof, Blitz and NBMI, had entered into a
written marketing agreement date November 19, 1998, all terms
of which are in full force and effect unless otherwise amended
herein, for the purpose of offering the sale of membership in
Blitz Marketing's Connections Discount Buying Service in
connection with customers responding to NBMI's nationally
broadcast infomercials selling Backstroke (hereinafter
referred to as the "Discount Services Contract" attached
hereto as Exhibit A and incorporated by reference).
2. On November 19, 1998, Blitz and NBMI, entered into a legally
binding oral agreement, all terms of which are in full force
and effect unless otherwise amended herein, for the purpose of
offering for sale Blitz Marketing's vitamin products to
customers responding to the Backstroke infomercial
(hereinafter referred to as the "Glucosamine Contract").
3. Blitz claims, inter alia, that NBMI has failed to perform
certain contractual terms, pursuant to the Discount Services
Contract. Blitz further claims that NBMI has damaged Blitz in
an amount exceeding four million two hundred thousand dollars
($4,200,000.00), in addition to attorneys fees and costs.
4. In reliance on the parties settling the disputes between them,
the execution of this Agreement and adherence to the terms of
this Agreement, Blitz has refrained from pursuing litigation
to redress NBMI's conduct.
5. In consideration of Blitz's agreement not to file suit against
NBMI, NBMI hereby agrees that:
a) NBMI represents and warrants that it is the process of
developing several new products and is in the process of
beginning production on a new Infomercial for a facial toning
device to be aired within 24 months of the execution hereof.
Further, NBMI represents that NBMI will run both the Blitz
Marketing/Paradise Value Discount Service program and the
Nutritional Supplement Program, memorialized and pursuant to
the terms of the agreement attached hereto as Exhibits "B" and
"C" respectively (hereinafter referred to as the "Programs").
Notwithstanding anything to the contrary contained herein,
NBMI agrees that the Programs, respectively, shall be
presented to every customer that places an order per the terms
of the applicable contract for a minimum of fifty two (52)
weeks; provided that, no week shall count toward the fifty two
(52) week minimum in which the media expenditure ("media
expenditure") shall be defined as the dollar amount of
television media time purchased for a respective Program) for
each such respective Program is less than one hundred thousand
dollars ($100,000.00) for that week. In the event that the
fifty two (52) week minimum requirement is not satisfied
during the time that the facial toning Infomercials are aired,
if at all, it is understood that NBMI agrees to continue to
run the programs on any other Infomercials it is airing at the
time, without limitation, until such time that the fifty two
(52) week minimum requirements are satisfied.
b) The payout terms for the Discount Service Contract shall be
$12.50 per order (the "Signup Fee") see Exhibit "C"). The
payout for the paradise Program (as set forth in Exhibit "B")
shall be $3.00 per month on the Nutritional Supplement
Program.
c) Blitz will have the option of doing "insert programs") in
lie of the foregoing conventional Programs. For the purposes
of this Agreement, an "Insert Program" is defined as a program
based on a video image, graphic terms and conditions and
voice-over of terms and conditions being edited into the blue
screen portion(s) of an "infomercial". For purposes of this
Agreement, "Infomercial" shall be defined as a direct response
television advertisement with an airing time of one (1) to
thirty (30) minutes in length. Under the terms of this Insert
Program, every primary order ("primary order" shall be defined
as the primary product presented for sale within the
Infomercial) generated by the Infomercial also generates an
order for the inserted item ("inserted item" shall be defined
as the Paradise Value Discount Service and/or Nutritional
Supplement). NBMI responsibilities are to either edit in the
material per Blitz' specifications or to allow Blitz to edit
the material to NMBI's master videotape. NBMI then must
provide Blitz with daily downloads of data files of all credit
card and order information from their inbound telemarketing
firms(s). Blitz shall then ship out the item(s) directly to
the customer and xxxx customers in accordance with the
original terms and conditions disclosed at the time of sale.
Blitz shall compensate NBMI in accordance with the terms set
forth in standard agreements attached hereto as Exhibits "D"
and "E" respectively.
d) NBMI hereby warrants that it will pay Blitz directly $.50
per "retail unit" shipped (illegible) if NBMI enters into any
agreement between it and a third party involving the
assignment or transfer of the rights or obligation under this
contract, said agreement will contain a provision that the
third party will pay Blitz directly the $.50 per retail unit
(for the purpose s of this Agreement, "Retail Unit" shall
defined as follows: Any "Backstroke Back Massager" shipped for
resale on a retail basis including, but not limited to , a
retail store, kiosk show, catalog or internet). If any third
party or assignee fails to perform its obligations to Blitz,
NBMI will remain liable to Blitz for that failure. NBMI shall
provide quarterly accounting to ascertain the adequacy of such
payments.
f) Within seven (7) calendar days following the execution
hereof, NBMI shall: Purchase 4,100 bottles of the "PM relax"
vitamin supplement for twenty thousand dollars ($20,000.00)
payable to Blitz in advance of shipment thereof provided that
such payment is received no later than 14 calendar days
following the execution hereof; or, in the alternative,
immediately include the PM Relax Vitamin Continuity on the
present "Backstroke Back Massager" Infomercial, subject to the
same terms set forth in the blitz Insert Continuity Program
contract attached hereto as Exhibit "E".
g) All monies payable to Blitz by NBMI under the terms of this
Agreement shall be received by Blitz no later than fourteen
(14) calendar days from the date of shipment of the subject
item of sale from which such payment is derived. Notice of
each such shipment shall be evidenced to Blitz by NBMI by way
of a copy of the applicable xxxx of landing which shall be
sent via facsimile to Blitz no later than 72 hours following
each respective shipment.
A. Releases
Except for claims relating to the parties' obligations under this Agreement,
NBMI and Blitz irrevocably and unconditionally release and forever discharge
each other from any and all known and unknown claims of action that the parties
have had in the past, or now have or may have in the future arising from or
relating in any way to any known or unknown events, actions or failure to act
that occurred at any time prior to the date of this Agreement, including, any
and all claims related to the parties' business relationships and any oral or
written agreements.
B. Confidentiality
The terms of this Agreement are to be kept strictly confidential, and shall not
be disclosed by the parties except as follows: (a) to the parties' attorneys,
accountants, or other financial or legal advisors; and (b) disclosures required
by law.
C. Other
1. This Agreement sets forth the complete and final agreement of the
parties relating to the matters addressed herein, and, except as expressly
provided herein, supersedes all prior
arrangements, understandings, agreements and discussions between Blitz
Marketing, Inc. and NBMI. NBMI and Blitz Marketing Group, Inc. Are entering into
this Agreement of their own free will after consulting counsel of their choice,
and are not relying on any promises or representations other than those
expressly stated herein. No change, modification, alteration or addition to any
provision hereof shall be binding unless in writing and signed by both parties.
The parties agree that they have not assigned and will not without prior written
notice, assign, transfer or delegate any of their rights, duties or obligations
hereunder and any attempt to do so shall be null and void.
2 This Agreement may be executed in counterparts, which altogether
shall constitute a single document; it may be effective upon the exchange of
facsimile signatures which shall be deemed "executed originals."
3. Should any party breach any provision herein, that party will be
liable to the other for reasonable attorney's fees.
4. This Agreement shall be governed and construed according to the
internal laws of the State of California and any actions to enforce said
agreement will be brought in Los Angeles County.
5. NBMI will maintain books and records which report sales and
exploitation of the Retail Units and other such items for which Blitz is
entitled to payment from the sale of hereunder. Summaries of such books and
records shall be sent to Blitz on a quarterly basis. Blitz may, at Blitz's own
expense, examine those books and records upon reasonable request to NBMI to
verify such summaries and the applicable payments to Blitz by NBMI.
6. In the event that Blitz determines that NBMI is in breach of this
Agreement, Blitz shall notify NBMI of such breach in writing. Upon receipt of
said notice, NBMI shall have seven (7) calendar days to cure such breach
(hereinafter the "Cure Period"). In the event that NBMI does not cure such
breach within the cure Period, Blitz, at its discretion, may seek the
intervention of the courts for all available legal Relief to which it is
entitled or to which it was entitled prior to entering into this Agreement
including all claims for damages that were available prior to entering into this
Agreement.
G. Effective Date.
This settlement Agreement is not effective until executed by all of the Parties
to this Settlement Agreement.
DATED AND EFFECTIVE on this 26th day of August 1999.
BLITZ NBMI
By: /s/ (illegible) MacGregor By: /s/ Xxxxxx X. Xxxxx
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(illegible) MacGregor
President Its: CEO
