Exhibit 99.1
SETTLEMENT AGREEMENT AND
MUTUAL RELEASE OF ALL CLAIMS
This Settlement Agreement and Mutual Release of All Claims (the
"Agreement") is entered into by and between Xxxxx X. Xxxxxxx ("Xxxxxxx"),
Metabolic Research, Inc., a Nevada corporation ("Metabolic"), X. X. Xxxx
("Xxxx"), Xxxxxx Xxxxxx ("Xxxxxx") and X. X. Xxxxxxxx ("Xxxxxxxx") (sometimes
collectively the "Parties").
The term "Releasor," as used herein, shall refer to Xxxxxxx.
The term "Releasee," as used herein, shall refer to Metabolic, Xxxx,
Xxxxxx and Xxxxxxxx, collectively.
I.
Recitals
1.01 The Dispute. On November 20, 2008, Xxxxxxx initiated an action
against Metabolic, Xxxx, Xxxxxx and Xxxxxxxx by filing a Complaint in the
Eighth Judicial District Court, Xxxxx County, Nevada, Case No. A576251,
entitled "Xx. Xxxxx X. Xxxxxxx, individually and in his derivative capacity
as a shareholder of Metabolic Research Inc., a Nevada corporation, Plaintiff
vs. Metabolic Research, Inc., a Nevada corporation; X. X. Xxxx, an
individual; Xxxxxx Xxxxxx, an individual; X. X. Xxxxxxxx, an individual; Does
I-X, inclusive; Xxx Entities I-X, inclusive, Defendants" asserting certain
claims as set forth in the Complaint. Defendants in turn filed various
counterclaims against Xxxxxxx (the "Lawsuit").
1.02 Settlement. In order to avoid the burden, uncertainty, nuisance,
and expense of going forward with the Lawsuit, the Releasor and Releasee
desire to enter into this Agreement, which, among other things, provides for
the settlement and mutual release of Releasor and Releasee for every aspect
of the alleged claims and damages related to the above-referenced Lawsuit,
and any and all other matters and potential matters by and between Releasor
and Releasee that were or that could have been raised in the Lawsuit, on the
terms and conditions set forth herein.
II.
Agreement
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein and other good and valuable consideration, the receipt and sufficiency
of which the Parties hereto acknowledge, Releasor and Releasee agree as
follows:
2.01 Release of Releasee. Releasor hereby fully releases and forever
discharges Releasee, his agents, representatives, employers, employees,
attorneys, insurers, successors, and assigns, and their parent, affiliated,
and subsidiary companies, corporations, and business entities, of and from
(a) any and all claims, asserted or unasserted, of whatever nature relating
in any way to the Lawsuit, their subject matter, or any matters that were or
that could have been asserted therein; (b) any and all claims against the
Releasee arising out of or in any way related to any transaction between
Releasor and Releasee; (c) any claim arising out of or in any way related to
any agreement, whether written or oral, between Releasor and Releasee; and
(d) any damages suffered by Releasor including, but not limited to,
contractual or extra-contractual damages suffered at any time by reason of
any of the conduct alleged in the Lawsuit.
2.02 Release of Releasor. Releasee hereby fully releases and forever
discharges Releasor, his managers, members, directors, officers, agents,
representatives, employers, employees, attorneys, insurers, successors, and
assigns, and their parent, affiliated, and subsidiary companies,
corporations, and business entities, of and from (a) any and all claims,
asserted or unasserted, of whatever nature relating in any way to the
Lawsuit, their subject matter, or any matters that were or that could have
been asserted therein; (b) any and all claims against the Releasor arising
out of or in any way related to any transaction between Releasor and
Releasee; (c) any claim arising out of or in any way related to any
agreement, whether written or oral, between Releasor and Releasee; and (d)
any damages suffered by Releasee including, but not limited to, contractual
or extra-contractual damages suffered at any time by reason of any of the
conduct alleged in the Lawsuit.
2.03 Settlement Consideration. The releases stated above in sections
2.01 and 2.02 are made and given for and in consideration of the following:
(a) payment by Metabolic to Xxxxxxx of $2,000.00 per month against
royalties agreed to be paid pursuant to that certain License Agreement dated
January 6, 2007 by and amongst Xxxxxxx, Xxxx and Partners In Science
Holdings, Inc. (the "Royalty Agreement", a copy of which is attached hereto
as Exhibit A), which royalties have accrued through March 1, 2009 until the
full amount of accrued royalties have been paid. The Parties understand and
agree that the Provisional Patent Application Serial No. 60/833,552 which is
referred to in Exhibit A to the Royalty Agreement has since been converted
into Utility Patent Serial No. 12/251,457. The Parties agree that the total
amount of accrued royalties pursuant to the Royalty Agreement through March 1,
2009 is $56,756.00.
(b) payment by Metabolic to Xxxxxxx of $2,000.00 per month against
accrued legitimate business expenses which have been properly documented by
Xxxxxxx until the full amount of accrued business expenses have been paid.
The Parties agree that the current total amount of Xxxxxxx' accrued business
expenses is $20,912.02. If Xxxxxxx has additional legitimate business
expenses which are properly documented, then Xxxxxxx may submit such expenses
to Metabolic for reimbursement on or before March 31, 2009. If Metabolic
disallows any of Xxxxxxx' additional business expenses for reimbursement and
Xxxxxxx disagrees with such disallowance, then Xxxxxxx may submit the
documentation for such business expenses to Xxxxxx X. Xxxxxx, CPA, who shall
determine the legitimacy of such business expenses and whether such business
expenses have been properly and adequately documented.
(c) payment by Metabolic to Xxxxxxx of royalties pursuant to the Royalty
Agreement on a current, monthly basis commencing April 1, 2009. Metabolic
estimates that based upon the recent level of sales, Xxxxxxx' royalty will be
approximately $5,000.00 a month, subject to fluctuation in sales. Metabolic
agrees that the royalty payment due to Xxxxxxx on April 1, 2009 will be no less
than $5,000.00. From and after April 1, 2009, Xxxxxxx understands and agrees
that the $5,000.00 a month estimate is only an estimate and in no way can be
construed as a guaranty that his royalty will be $5,000 a month at any point
in time. The Parties understand and agree that royalties payments are not due
until Metabolic has been paid for the product for which royalties are earned.
(d) resignation by Xxxxxxx as an officer and director of Metabolic
effective immediately upon the execution of this Agreement;
(e) cancellation by Metabolic of Xxxxxxx claimed one share of Series
B "super-preferred" stock;
(f) termination of that certain Employment Agreement dated December
18, 2006 by and between Xxxxxxx and Partners In Science Holdings, Inc.
effective immediately upon execution of this Agreement; and
(g) execution by the Parties of a dismissal with prejudice of the
Lawsuit acknowledging that the Lawsuit and each of the claims asserted
therein are fully and finally ended, such dismissal to be filed with the
Court within three (3) business days of the execution of the Agreement
(Sections (a) through (g) collectively, the "Settlement Consideration").
2.04 No Liability. By entering into this Agreement, neither Releasor
nor Releasee shall be deemed to admit: (a) any liability for any claim,
cause of action, or demand; (b) any wrongdoing or fault; or (c) any violation
of any law, precedent, rule, regulation, or statute. Further, nothing
contained in this Agreement may be construed as an admission against the
interest of any party.
2.05 Attorneys' Fees. Xxxxxxx shall bear his attorneys' fees and
costs incurred to date. Metabolic shall bear the attorneys' fees and costs
incurred to date of the Defendants. Metabolic shall pay the fees and costs
incurred by the Court-appointed special master.
2.06 Return of Metabolic Files, Documents and Equipment. Xxxxxxx
shall, within ten (10) days of the execution of this Agreement, return to
Metabolic all files, documents and equipment relating to the business of
Metabolic in any manner whatsoever, including but not limited to the Dell
computer system provided by Metabolic to Xxxxxxx for his use in Texas.
2.07 Acknowledgements. Releasor and Releasee mutually understand and
expressly agree and warrant:
(a) That no promise or inducement has been offered except as herein
set forth.
(b) That this settlement is made in good faith and is equitable and
fair.
(c) That this Agreement is executed without reliance upon any
statement or representation by any party or its representatives concerning
the nature or extent of the claimed damages or legal liability therefor.
(d) That the Parties are legally competent and have the valid and
existing authority to execute this Agreement and to accept full
responsibility therefor.
(e) That this Agreement and the releases set forth herein have been
carefully read in their entirety by the Parties, who have had the benefit and
advice of counsel of their choosing, and that this Agreement and the releases
set forth herein are known by the Parties to be in full and final and
complete compromise, settlement, release, accord and satisfaction, and
discharge of all claims and actions as above stated.
(f) That in entering into this Agreement and the settlement and
releases that are encompassed herein, Releasor and Releasee are acting freely
and voluntarily and without influence, compulsion, or duress of any kind from
any source, including, but not limited to, any other party or parties, their
attorneys, representatives, or anyone acting or purporting to act on behalf
of any of the Parties.
(g) That Metabolic is duly organized, validly existing, and in good
standing under the laws of the state of the Nevada and has the requisite
corporate power and authority to perform their obligations under this
Agreement.
(h) That Releasor had the authority and capacity to initiate the
Lawsuit and has the authority to consent to the stipulation of dismissal with
prejudice of the Lawsuit. Releasor and Releasee further represent and
warrant that they have not heretofore assigned to any other person or party
all or any portion of any claim whatsoever that they may have now or in the
future against any party arising out of the facts involved in the Lawsuit.
2.08 Taxes. Releasor agrees that Releasee shall have no
responsibility whatsoever to any federal, state, or local taxing authority
for the tax liability, or consequences, if any, arising from the payment of
the Settlement Consideration recited herein, and that all such responsibility
is exclusively that of Releasor.
2.09 Integration. This Agreement represents the full and complete
integration of the agreement between the Parties and is the complete
expression thereof. All other agreements, negotiations, and representations
between the Parties pertaining to the subject matter of this Agreement, and
to the extent not expressly set forth herein, are void and of no force or
effect whatsoever. This Agreement may not be amended or modified except in
writing and signed by each of the Parties.
2.10 Governing Law and Forum Selection. This Agreement shall be
governed by and construed in accordance with the laws of the State of Nevada.
Any suit or motion to enforce this Agreement, to prosecute any claim for
breach of this Agreement shall be brought in the Eighth Judicial District
Court, Xxxxx County, Nevada.
2.11 Counterparts. This Agreement may be executed in any number of
counterparts confirmed by facsimile signatures transmitted by telephone, each
of which shall be deemed a duplicate original.
2.12 Severability. If any provision of this Agreement or the
application thereof to any person, entity, or circumstance shall be invalid,
illegal, or unenforceable to any extent, the remainder of this Agreement and
the application thereof shall not be affected and shall be enforceable to the
fullest extent permitted by law.
2.13 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors, or assigns, as the case may be.
I HAVE READ, UNDERSTAND, AND AGREE TO THE FOREGOING
Xxxxx X. Xxxxxxx
/s/----------------------
Xxxxx X. Xxxxxxx
Dated: March 25, 2009
I HAVE READ, UNDERSTAND, AND AGREE TO THE FOREGOING
X. X. Xxxx
/s/----------------------
Metabolic Research, Inc., a Nevada corporation
By: X. X. Xxxx
Its: Secretary
Dated: March 25, 2009
I HAVE READ, UNDERSTAND, AND AGREE TO THE FOREGOING
X. X. Xxxx
/s/----------------------
X. X. Xxxx
Dated: March 25, 2009
I HAVE READ, UNDERSTAND, AND AGREE TO THE FOREGOING
Xxxxxx Xxxxxx
/s/----------------------
Xxxxxx Xxxxxx
Dated: March 25, 2009
I HAVE READ, UNDERSTAND, AND AGREE TO THE FOREGOING
X. X. Xxxxxxxx
/s/----------------------
X. X. Xxxxxxxx
Dated: March 25, 2009
CERTIFICATION OF COUNSEL
As counsel for Xxxxx X. Xxxxxxx, I verify that this document manifests
the agreement of compromise earlier reached by and between the Parties and
was accepted by Xxxxx X. Xxxxxxx on the 23rd day of March, 2009.
Xxxxx X. Xxxxxxx
/s/----------------------
Xxxxx X. Xxxxxxx
Xxxxxxx & Xxxxxxx
As counsel for Metabolic Research, Inc., a Nevada corporation, X. X.
Xxxx, Xxxxxx Xxxxxx and X. X. Xxxxxxxx, I verify that this document manifests
the agreement of compromise earlier reached by and between the Parties and
was accepted by Metabolic Research, Inc., a Nevada corporation, X. X. Xxxx,
Xxxxxx Xxxxxx and X. X. Xxxxxxxx, on the 23rd day of March, 2009.
Xxxxxx X. Xxxxxxxx
/s/----------------------
Xxxxxx X. Xxxxxxxx
Xxxxx and Xxxx LLP
