EXHIBIT 10.11
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS
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This Settlement Agreement and Mutual Release of Claims (`Agreement") is
made and entered into as of August 13, 2001 by and among Beauty Resource, Inc.
("Beauty Resource") and Biozhem Cosmecuticals, Inc. ("Biozhem").
RECITALS
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WHEREAS on or about August 7, 2001, Beauty Resource filed an action
against Biozhem and others in the Los Angeles County Superior Court styled
Beauty Resource, Inc. v. Biozhem Cosmecuticals, Inc., Xxxxx X. Xxxxxxxx and Does
1 through 100, inclusive, Case No. BC 255691 (the "Action"). In the Action,
Beauty Resource asserts a claim against Biozhem for breach of the Management
Agreement between Beauty Resource and Biozhem.
WHEREAS the parties to this Agreement desire to fully and forever
resolve their disputes and differences.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and agreements herein contained, the parties hereto agree as
follows:
AGREEMENT
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1. PAYMENT TO BEAUTY RESOURCE. Biozhem agrees to pay Beauty Resource
the sum of One Hundred thousand Dollars ($100,000.00) (the "Settlement Sum") as
follows: $50,000.00 upon the execution of this Agreement; $25,000.00 on or
before October 31. 2001; and $25,000.00 on or before December 31, 2001.
2. ISSUANCE OF BIOZHEM COMMON STOCK TO BEAUTY RESOURCE. Upon the
execution of this Agreement, Biozhem will issue to Beauty Resource 337,500
shares of Biozhem common stock.
3. CEO SIGNING BONUS. Biozhem confirms that it has issued to (Xxxxx
Xxxxxx warrants to purchase 100,000 shares of Biozhem common stock having an
exercise price of $0.25 per share and expiring September 30, 2003 as the CEO
Signing Bonus under the Management Agreement.
4. REGISTRATION OF THE STOCK AND WARRANTS WITH THE SEC. Biozhem agrees
to register the common stock described in paragraph 2, on an S-1 B-2 or S-3
Registration Statement, whichever it is qualified to use, on or before September
or 30, 2001 to permit the sale of this stock by Beauty Resource. Biozhem agrees
to similarly register the 100,000 warrants described in paragraph 3 as well as
the shares of Biozhem common on stock underlying these warrants on or before
September 30, 2001. Biozhem will diligently pursue these registrations with the
Securities and Exchange Commission and take whatever steps necessary to ensure
that they become effective.
5. DISMISSAL OF THE ACTION WITH PREJUDICE. Upon receipt by Beauty
Resource of the first installment payment in paragraph 1, Beauty Resource will
file a Request for Dismissal of the Action with prejudice.
6. BEAUTY RESOURCE'S RELEASE OF BIOZHEM. Upon receipt of the final
installment of the Settlement Sum, Beauty Resource, its affiliates, and their
respective officers, directors, shareholders, agents, employees,
representatives, attorneys, agents, successors and assigns will have fully and
forever released and discharged Biozhem and its officers, directors,
shareholders, agents, employees, representatives, attorneys, agents, successors
and assigns from
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any and all claims, demands, actions, causes of action, liabilities and damages
asserted in the Action or which could have been asserted in the action relating
to or arising from the Management Agreement and from all future obligations
under the Management Agreement except as expressly set forth herein.
7. BIOZHEM'S RELEASE OF BEAUTY RESOURCE. Biozhem and its officers,
directors, shareholders, agents, employees, representatives, attorneys, agents,
successors and assigns hereby fully and forever release and discharge Beauty
Resource, its affiliates and their respective officers, directors, shareholders,
agents, employees, representatives, attorneys, agents, successors and assigns
from any and all claims, demands, actions, causes of action, liabilities and
damages, relating to or arising from the Management Agreement or the Action
which could have been asserted by Biozhem in the Action by way of
cross-complaint or otherwise and from all future obligations under the
Management Agreement except as expressly set forth herein.
8. RELEASE OF UNKNOWN CLAIMS. Beauty Resource and Biozhem acknowledge
that they are familiar with and have been advised regarding the provisions of
Section 1542 of the California Civil Code, which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
Beauty Resource and Biozhem acknowledge that they may have sustained damages,
leases, costs or expenses that are presently unknown or unsuspected, and that
such damages, losses, costs, or expenses may give rise to additional damages,
losses, costs or expenses in the future. Beauty Resource and Biozhem acknowledge
that this Agreement has been en negotiated and agreed upon in light of Civil
Code Section 1542, and they hereby expressly waive any and all rights which they
may have under that statute or under any other statute or rule of similar
effect.
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9. NO ADMISSIONS. This Agreement is part of the compromise and
settlement of contested claims. No action taken by the parties hereto, either
previously or in connection with the compromise reflected in this Agreement,
shall be deemed or construed to be an admission of the truth or falsity of any
matter pertaining to any claim, demand, or cause of action referred to herein or
relating to the subject matter of this Agreement, or any acknowledgement by
them, or any of them, of any fault or liability to any party hereto or to any
other person in connection with any matter or thing.
10. NO ASSIGNMENTS. The parties hereto represent and warrant to each
other that no portion of any claim, demand, cause of action, or other matter
released herein has been assigned to any other person or entity, either directly
or by Way of subrogation or operation of law.
11. INDEMNIFICATION OF BEAUTY RESOURCE. Biozhem shall indemnify, defend
and hold harmless Beauty Resource, its affiliates and their respective officers,
directors, shareholders, agents, employees, representatives. attorneys, agents,
successors and assigns from and against any and all losses, liabilities, claims,
damages, deficiencies and expenses, including interest, penalties, court costs
and reasonable attorneys' fees which may be incurred by or suffered by persons
or entities and which arise out of or result from any breach of any
representation, warranty, covenant or agreement of Biozhem contained in this
Agreement.
12. INDEMNIFICATION OF BIOZHEM. Beauty Resource shall indemnify, defend
and hold harmless Biozhem, its officers, directors, shareholders, agents,
employees, representatives, attorneys, agents, successors and assigns from and
against any and all losses, liabilities, claims, damages, deficiencies and
expenses. including interest, penalties, court costs and reasonable attorneys'
fees which may be incurred by or suffered by persons or entities and
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which arise out of or result from any breath of any representation, warranty,
covenant or agreement of Beauty Resource contained in this Agreement.
13. INTEGRATED AGREEMENT. This Agreement is an integrated agreement and
contains the entire understanding of the parties regarding the matters set forth
herein. The parties acknowledge that they have not relied on any representation,
statement of fact, promise, warranty, or opinion except those expressly set
forth or incorporated in this Agreement, in deciding to enter into this
Agreement. This Agreement supercedes and. controls any and all prior
communications between the parties or their representatives relative to the
matters contained herein. This Agreement may not be changed, amended, or
modified except by a writing signed by the party affected by any such change,
amendment or modification.
14. JOINT DRAFTING. This Agreement has been jointly drafted by each of
the parties hereto, and the parties are jointly responsible for all of the
language contained herein. The rule of interpretation contained in California
Civil Code section 1654 providing for the interpretation of contract language
against the party responsible for any ambiguity or uncertainty shall not apply
to the interpretation of this Agreement.
15. BINDING NATURE OF TERMS AND REPRESENTATIONS OF THE PARTIES. Each of
the terms of this Agreement shall inure to the benefit of, and is binding upon,
each of the signatories hereto and upon their respective predecessors,
successors, transferees, and assigns.
16. APPLICABLE LAW. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of California applicable
to contracts between California domiciliaries which are to be performed wholly
within the State of California.
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17. ATTORNEY'S FEES. In the event that any party brings any action or
proceeding against the other because of breach of a covenant, condition, or
provision hereof; or for any other relief, declaratory or otherwise, including
appeals therefrom, and whether being an action in tort or contract, then the
prevailing party in such action or proceeding shall be paid by the other party
reasonable attorney's fees and all costs of such action or proceeding whether or
not such action or proceeding is prosecuted to
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts.
BEAUTY RESOURCE, INC. BIOZHEM COSMECUTICALS, INC.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxx X. Xxxxxxx
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Xxxxx Xxxxxx Xxxx X. Xxxxxxx
President Chairman
APPROVED AS TO FORM AND CONTENT:
XXXXXXXX & XXXXXXXXX LLP XXXXXXXX & KRAY
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxx X. Xxxxxxxx
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Xxxx 1. Xxxxxx Xxx X. Xxxxxxxx
Attorneys for Beauty Resource, Inc. Attorney for Biozhem
Cosmecuticals, Inc.
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