Execution Copy
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TERMINATION, SETTLEMENT AND RELEASE AGREEMENT
THIS TERMINATION, SETTLEMENT AND RELEASE AGREEMENT (this "Agreement") is
entered into as of this 20th day of July, 2005 but is effective as of February
15, 2005 (the "Effective Date") between Galaxy Nutritional Foods, Inc., a
Delaware corporation ("Galaxy"), and Fromageries Bel, S.A., a French corporation
("Distributor") (each of Galaxy and Distributor is hereinafter sometimes
referred to as a "Party" and both are sometimes hereinafter, collectively,
referred to herein as the "Parties"), as follows:
Recitals
WHEREAS, the Parties are party to that certain Master Distribution and
License Agreement entered into as of May 22, 2003 and certain other arrangements
and understandings, whether written or oral (collectively, the "Prior
Agreement"), wherein the parties set forth the terms of their distribution
relationship for Galaxy's healthy cheese and dairy related and dairy alternative
products in the Territory (the "Distribution Relationship").
WHEREAS, the Parties have decided to terminate the Prior Agreement and the
Distribution Relationship.
WHEREAS, the Parties desire to enter into this Agreement to set forth the
terms of the termination of the Prior Agreement and Distribution Relationship.
NOW, THEREFORE, in consideration of the mutual promises and covenants
between the Parties contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Galaxy and
Distributor hereby agree as follows:
1. Recitals; Defined Terms. All of the foregoing recitals are true and
correct and are incorporated herein. Capitalized terms used but not defined
herein shall have the same meaning ascribed thereto in the Prior Agreement.
2. Termination of Prior Agreement.
(a) The Parties acknowledge, agree and confirm that the Prior Agreement,
Galaxy's engagement of Distributor pursuant thereto and the Distribution
Relationship is terminated effective as of the Effective Date hereof, and that
Distributor shall not, and shall have no right or authority to, perform any
further services or undertake any actions for Galaxy or otherwise involving the
Products. Neither Party shall represent itself to third parties as a
representative or distributor of the other Party hereto or as otherwise having
any relationship with the other Party hereto with respect to the Products. Each
of the Parties hereby agrees to take such further actions and execute and
deliver such further documents and instruments as may be reasonably requested by
the other Party hereto in order to document the termination of Distribution
Relationship and to revoke any and all prior authorization or right that may
have been expressly or impliedly granted by such Party to the other Party
hereto.
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(b) Distributor agrees to cease use of and avoid any reference to the
"Galaxy" name(s), trademark(s) or logo(s), including the Logo and to not keep
nor register the Logo and/or similar trademarks or names on Galaxy's behalf.
Galaxy agrees to cease use of and avoid any reference to the "Fromageries Bel"
name(s), trademark(s) or logo(s), including the Trademarks. Notwithstanding
anything to the contrary in this Agreement, Galaxy acknowledges that Distributor
has in the past and will continue in the future to engage in the cheese and
dairy products manufacturing and distribution business, including the
development of dairy-related and dairy alternative products and new cheese and
dairy products, and nothing stated herein shall preclude Distributor from
engaging in the development, implementation, marketing, manufacture,
distribution, sales and other activities involving healthy cheese and dairy
related and dairy alternative products, including vegetable fat-based products
(collectively, "Cheese and Dairy Business"), both within and outside of the
Territory to the extent Distributor's activities in such area do not involve (i)
the distribution or sale of the Products identified in the Prior Agreement and
(ii) use of the Know How or other confidential information of Galaxy provided to
Distributor in connection with the Prior Agreement. Galaxy hereby expressly
acknowledges and agrees that Distributor may engage in such activities both
within and outside of the Territory utilizing skills or knowledge acquired in
conducting its business and in the development of new products, including skills
and knowledge developed or acquired while the Prior Agreement was in effect, but
excluding the use of the Know How and other confidential information of Galaxy
provided to Distributor in connection with the Prior Agreement. Distributor
hereby expressly acknowledges and agrees that Galaxy may continue in the future
to engage in the Cheese and Dairy Business, distribute and sell the Product or
products similar to the Product both within and outside the Territory and to
engage other distributors to distribute and sell the Product or products similar
to the Product both within and outside the Territory. Distributor hereby
expressly acknowledges and agrees that Galaxy may engage in such activities
utilizing skills or knowledge acquired in connection with its business and in
the development of new products, including skills and knowledge developed or
acquired while the Prior Agreement was in effect.
3. Settlement and Release; Payment.
(a) Each Party acknowledges and agrees that all amounts due to it from the
other Party under the Prior Agreement have been paid in full, and that such
prior payments constitute complete satisfaction of any and all rights, claims
and/or causes of action that such Party may have against the other Party or any
of its agents, representatives, partners, officers, directors and/or employees.
In consideration for the execution by the Parties of this Agreement and other
good and valuable consideration, receipt of which is hereby acknowledged, each
Party hereby releases and forever discharges the other Party, any other persons
who directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Party, and any and all
predecessor and successor entities and organizations, including their former and
current agents, representatives, shareholders, partners, officers, directors and
employees, and each of them, from any and all claims, demands, damages,
lawsuits, obligations, promises, administrative actions, charges and causes of
action, both known or unknown, in law or in equity, of any kind whatsoever,
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which have arisen or may arise, which such Party ever had, now has, or may at
any time in the future have against any other Party, including specifically but
not by way of limitation, any and all claims for compensation payable by one
Party to the other from March 22, 2003 up to and including the date of this
Agreement, any and all claims arising out of Distributor's engaging in product
improvement, testing and reformulations of Galaxy's Products, both from Galaxy's
facilities in the United States and Distributor's facilities in France thru the
date of this Agreement, and all development costs, expenses and legal fees or
loss of business incurred by either party as a result of or in connection with
the transactions contemplated hereby. Each party hereto acknowledges and hereby
agrees that upon the termination of the Prior Agreement, the other party hereto
shall not be liable or obligated to such party with respect to any payments,
future profits, exemplary, special or consequential damages, indemnifications or
other compensation regarding such termination, irrespective of whether such
obligations or liabilities may be contemplated in the law of the Territory or
elsewhere, and such party hereby waives and relinquishes any rights, pursuant to
law or otherwise, to any such payments, indemnifications or compensation. Each
party also declares expressly that all its efforts have been duly and fully
satisfied and compensated, and that the termination of mentioned relationships
have been agreed mutually and for the benefit of each Party.
(b) Notwithstanding anything stated herein to the contrary, as
consideration for the substantial expenditures of time, effort, and money Galaxy
has incurred in connection with the Distribution Relationship, as evidenced by
the Invoice attached hereto as Exhibit A, Distributor shall pay to Galaxy an
amount equal to One Hundred Fifty Thousand and 00/100 Dollars ($150,000) within
10 business days of the execution of this Agreement. Distributor and Galaxy
hereby acknowledge and agree that such payment is not required under any of the
terms of the Prior Agreement.
4. Confidential Information. Distributor certifies and confirms that it
has returned to Galaxy or destroyed all tangible materials previously provided
by Galaxy constituting the Know How and other confidential information including
all copies thereof, and has permanently deleted from its internal computer
systems all e-mails or other electronic files containing the Know How, Galaxy
product formulas, or other Galaxy confidential information. Distributor further
undertakes to destroy any other materials that pertain to the Know How, Galaxy
product formulas, or other Galaxy confidential information in the event that
Distributor later finds any such materials in Distributor's possession or
control. Notwithstanding anything stated to the contrary, Distributor and Galaxy
hereby acknowledge and agree that one (1) copy of all such materials will be
held in escrow in accordance with the following provisions and shall not be
destroyed in accordance with the terms hereof, such copy to be retained for
evidentiary purposes in the event a dispute arises as to the use or lack of use
of such materials by Distributor. Such materials shall be deposited (along with
a listing of such materials) into an escrow account maintained by Distributor
and Galaxy with a bank of international reputation and standing with capital and
surplus in excess of one hundred million dollars and 00/100 cents ($100
million), which bank shall be reasonably acceptable to both Distributor or
Galaxy. The terms of any such escrow arrangement shall provide that such
materials will be released to the following parties upon the earliest to occur
of the below-described events: (i) to Distributor, if Distributor notifies the
escrow agent in writing of any claim involving such Know How being asserted or
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threatened against Distributor or (ii) to Galaxy, six (6) years after the date
hereof but only if no claim involving the Know How has been asserted or
threatened during such period, in which event clause (i) shall govern.
Distributor and Galaxy hereby agree to execute and deliver joint written
instructions to the escrow agent upon the occurrence of any of the events
described above for purposes of instructing the escrow agent to release the
materials in accordance with this Section 4. All fees incurred as a consequence
of such escrow arrangement shall be paid by Distributor, except for legal fees
incurred by Galaxy in connection with the review of such arrangement. The escrow
agreement shall contain customary language concerning interpleader and other
dispute resolution avenues the escrow agent may pursue in the event the escrow
agent is uncertain of how to conduct its duties under the escrow arrangement.
Within ten (10) days of the delivery of the materials into escrow, Distributor
shall deliver an accurate and complete copy of such materials to Galaxy.
5. Construction. The Parties acknowledge that each has reviewed and
revised this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting Party shall not be
employed in the interpretation of this Agreement.
6. Entire Agreement. This Agreement constitutes the entire agreement
between the Parties hereto with respect to the termination of the Prior
Agreement and the Distribution Relationship and supersedes in its entirety any
and all agreements or communications by and between the Parties, whether written
or oral, previously made with respect thereto.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law except to the extent that another jurisdiction's laws
supercede this provision. Any proceeding arising between the Parties in any
manner pertaining to this Agreement shall be held in Miami-Dade County, Florida
and the Parties hereto hereby irrevocably consent to personal jurisdiction and
venue exclusively in such forum. In the event that legal action is brought by
either Party to enforce its rights hereunder, and such legal action results in a
final judgment in favor of one Party (the "Prevailing Party"), the
non-prevailing Party shall promptly pay all of the Prevailing Party's legal fees
and expenses incurred in connection with such legal action.
8. Headings. The headings are for the convenience of the Parties and are
not to be construed as terms and conditions of this Agreement.
9. Other Representations, Warranties and Covenants. Distributor and Galaxy
each hereby represents, warrants and covenants to the other that: (a) such Party
has not assigned or transferred, nor purported to assign or transfer, to any
person, firm, partnership, corporation or entity whatsoever, any rights, claims,
demands, damages, debts, liabilities, accounts, covenants, rights to
indemnification, liens, attorneys' fees, costs, expenses, actions or causes of
action released in this Agreement; (b) such Party has all requisite power and
authority to execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to perform such Party's obligations hereunder; (c) this
Agreement has been duly executed and delivered by such Party and is the legal,
valid and binding obligation of such Party enforceable against such Party in
accordance with its terms; (d) the provisions of this Agreement and their legal
effect are fully understood by such Party; (e) such Party has voluntarily
entered into this Agreement; (f) such Party has received disclosure of the
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arrangements and matters referenced herein to such Party's satisfaction; (g)
such Party has had an opportunity to discuss this Agreement with such Party's
counsel to the satisfaction of such Party; and (h) such Party has consented to
Distributor's product improvement, testing and reformulations of Galaxy's
Products both from Galaxy's facilities in the United States and Distributor's
facilities in France..
10. Notices. All notices, advices and communications to be given or
otherwise made to any Party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class registered or
certified mail, return receipt requested, postage prepaid, or by overnight
courier, addressed to such Party at the address provided for such Party in the
signature page of this Agreement or such other address as may be specified by
such Party by providing written notice thereof to the other Party in accordance
herewith.
11. Assignment; Intended Beneficiaries. The Parties acknowledge and agree
that all of Galaxy's rights and obligations under this Agreement may be assigned
to the successor of Galaxy in the event that Galaxy, or substantially all of its
assets, is acquired by or merged into a third party(ies); provided, however,
that such successor-in-interest shall expressly assume all of Galaxy's
obligations hereunder and shall acknowledge, agree to and ratify the releases
set forth in Section 3 hereof. Except as stated in the preceding sentence,
neither this Agreement nor any of the rights hereunder shall be assigned by any
Party without the prior written consent of the other Party hereto, which consent
may not be unreasonably withheld. Any attempted assignment of this Agreement or
any such rights in violation of this provision shall be null and void. This
Agreement is intended to and shall benefit and be enforceable by and be binding
upon each Party hereto and its successors and permitted assigns.
12. Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement. Any facsimile signature shall be deemed a
manually executed and delivered original.
13. No Admission. In entering into this Agreement or otherwise acting
hereunder, neither Party acknowledges or admits anything whatsoever with respect
to any claim or assertion made by the other Party or any third party.
14. Amendment. This Agreement may be amended or modified only by written
agreement by the Parties.
15. Further Assurances. The Parties agree to execute and deliver such
further instruments and do such further acts and things as may be reasonably
requested by the other Party hereto and/or required to carry out the intent and
purposes of this Agreement.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
GALAXY:
GALAXY NUTRITIONAL FOODS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx July 20, 2005
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Title: Chief Executive Officer Date
Address:
Galaxy Nutritional Foods, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
XXX
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
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With a copy to:
Xxxxx & Xxxxxxxxx LLP
0000 Xxxx 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx. , Esq.
Distributor:
FROMAGERIES BEL, S.A.
By: /s/ Xxxxxx Xxxxxx July 22, 2005
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Name: Xxxxxx Xxxxxx Date
Title: Chairman and Chief Executive Officer
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FROMAGERIES BEL, S.A.
By: /s/ Xxxx de Poncins July 22, 2005
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Name: Xxxx de Poncins Date
Title:
FROMAGERIES BEL, S.A.
By: /s/ Sussheel K. Surpal July 22, 2005
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Name: Sussheel K. Surpal Date
Title:
Address:
Fromageries Bel S.A.
00, Xx Xxxxxxxxxxx 00000
Xxxxx, Xxxxxx
Facsimile No.: 00 33 1 40 07 75 17
Attention: Xxxx de Poncins
And
Fromageries Bel S.A.
00, Xx Xxxxxxxxxxx 00000
Xxxxx, Xxxxxx
Facsimile No.: 00 33 1 40 07 74 00
Attention: Xxxxxx Xxxxxxxxx
With a copy to:
Xxxxxxxxx Xxxxxxx, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
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Exhibit A
Invoice
C:\DOCUME~1\spetras\LOCALS~1\Temp\MetaSave\Galaxy Nutritional Foods -
Fromageries Bel - Termination Agreement 6-08-05.DOC
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