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:

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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.

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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 proceeding, of any nature, in
Turkey to invalidate or otherwise challenge Mr. Hamdemir’s ownership of the
Trademarked Names.

4.

Dismissal of Action with Prejudice.  Within 7 days of execution of this
Agreement, Farmatek will file with the Orange County Superior Court a Request
for Dismissal with prejudice of its Complaint.  The Parties agree that each side
will bear its own costs and attorneys’ fees in connection with this action.

5.

Retention of Jurisdiction.  The court will retain jurisdiction over the parties
to enforce the terms of the settlement until performance in full by the Parties
pursuant to CCP Section 664.6.  Should either Party fail to abide by or perform
the terms of this Agreement, the aggrieved party may move the Court for an order
enforcing the terms of this Agreement and compelling acceptance of the
Agreement.

6.

No Admissions.  This Agreement is entered into for the purpose of compromising
disputed claims and avoiding the expense, inconvenience, and uncertainty of
litigation.  Nothing contained in this Agreement, nor any consideration given
pursuant to it, shall constitute or be deemed an admission of any act, omission,
liability, or damages of any Party.

7.

Definition of “Related Persons.”  As used in this Agreement, a Party’s “Related
Persons” are, and the term is defined to mean, its past and present affiliates,
parents, subsidiaries, divisions, predecessors, successors, assigns and any
entity in which the Party has a controlling interest, and its or their current
or former partners, principals, officers, directors, shareholders, owners,
members, agents, employees, trustees, attorneys, representatives, insurers,
heirs, and assigns, any other current or former persons who managed or directed
its or any of their respective affairs or acted on its or any of their
respective behalves, and all predecessors, successors and assigns of it or any
of them.

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8.

Farmatek Releases.  Faramtek, on behalf of itself and its successors and
assigns, do hereby absolutely and forever release and discharge Baywood, NSI,
and each of their Related Persons from any and all actions, causes of action,
demands, damages, debts, obligations, liabilities, accounts, costs, expenses,
liens or claims of whatever character, whether known or unknown, suspected or
unsuspected, in any way related to, connected with, or arising out of the claims
or facts and circumstances which were or could have been the subject of the
Action or which relate, in any way, to the Trademark Names, the prosecution
thereof and any attorneys’ fees and costs incurred in connection with the
Action.  The releases in this paragraph do not apply to the obligations created
under this Agreement.

9.

Mr. Hamdemir Releases.  Mr. Hamdemir, on behalf of himself and his successors
and assigns, do hereby absolutely and forever release and discharge Baywood and
NSI, and each of their Related Persons from any and all actions, causes of
action, demands, damages, debts, obligations, liabilities, accounts, costs,
expenses, liens or claims of whatever character, whether known or unknown,
suspected or unsuspected, in any way related to, connected with, or arising out
of the claims or facts and circumstances which were or could have been the
subject of the Action or which relate, in any way, to the Trademark Names, the
prosecution thereof and any attorneys’ fees and costs incurred in connection
with the Action.  The releases in this paragraph do not apply to the obligations
created under this Agreement.

10.

Baywood and NSI Releases.  Baywood and NSI, on behalf of themselves and their
successors and assigns, do hereby absolutely and forever release and discharge
Farmatek, Mr. Hamdemir, and each of its Related Persons from any and all
actions, causes of action, demands, damages, debts, obligations, liabilities,
accounts, costs, expenses, liens or claims of whatever character, whether known
or unknown, suspected or unsuspected, in any way related to, connected with, or
arising out of the claims or facts and circumstances which were or could have
been the subject of the Action or which relate, in any way, to the Trademark
Names, the prosecution thereof and any attorneys’ fees and costs incurred in
connection with the Action.  The releases in this paragraph do not apply to the
obligations created under this Agreement.

11.

Waiver of Rights under Section 1542.  The Parties understand and agree that this
Agreement extends to all claims of any nature and kind, known or unknown,
suspected or unsuspected, and in that regard, acknowledge that they are familiar
with Section 1542 of the Civil Code of the State of California which provides as
follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWN 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.

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The Parties expressly waive and relinquish every right or benefit which they may
have under Section 1542 of the Civil Code of the State of California.

12.

Consultation with Counsel.  Each Party represents and warrants that, in
negotiating and entering into this Agreement, it has consulted with and relied
upon legal counsel of its own selection.

13.

No Representations.  Each Party acknowledges that, except as expressly set forth
herein, no representations, promises, or inducements of any kind or character
have been made to them by the other Party or by any Party’s agents,
representatives or attorneys to induce the execution of this Agreement.

14.

Interpretation of the Agreement.  The Parties agree that any rule pertaining to
the construction of contracts to the effect that ambiguities are to be resolved
against the drafting party shall not apply to the interpretation of this
Agreement.  The language in all parts of this Agreement shall be interpreted
according to its fair meaning and, specifically, shall not be interpreted
strictly for or against any of the Parties to this Agreement.

15.

Disputes.  In any litigation between the Parties to declare the rights granted
in the Agreement or to enforce the provisions of the Agreement, the Party
prevailing in the litigation, whether at trial, arbitration or an appeal, shall
be awarded its costs and expenses (including experts) of suit, including,
without limitation, a reasonable sum for attorneys’ fees and expert witness’
fees incurred in such litigation.  The term “prevailing party” as used in this
paragraph shall not be limited to a prevailing plaintiff Party, but shall also
include, without limitation, any Party who is made a defendant in litigation in
which damages or other relief or both may be sought against such Party and a
final judgment or dismissal or decree is entered in such litigation in favor of
such Party defendant.  Attorneys’ fees and expert witness’ fees incurred in
enforcing any judgment or order rendered in connection with the interpretation
or enforcement of this Agreement (“Judgment”) are recoverable by the Party in
whose favor such Judgment or award is rendered, as a separate item of damages.
 The provisions of this paragraph are severable from the other provisions of
this Agreement and shall survive any such Judgment or award, and the provisions
of this paragraph shall not be deemed merged into any such Judgment or award.

16.

Entire Agreement.  This Agreement contains the entire understanding between the
Parties concerning the settlement of this dispute.  Any and all prior
negotiations that are not contained in this Agreement are superseded and of no
force or effect.

17.

Modifications.  This Agreement may not be orally superseded, modified, or
amended.  No waiver, modification, or amendment shall be valid unless signed by
all Parties.

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18.

Applicable Law and Forum Selection.  This Agreement shall be interpreted in
accordance with the law of the State of California. Any legal action brought by
a Party to interpret, enforce, or recover damages for the breach of any term of
this Agreement must be filed in the Superior Court of the County of Orange.

19.

Execution in Counterparts.  This Agreement shall become effective on its
execution by or on behalf of all Parties.  It may be executed in two or more
counterparts each of which shall be deemed to be an original and all
counterparts shall together constitute the Agreement.

The Parties hereto have caused this Agreement to be executed on the date shown
below by their respective duly authorized representatives.

DATED:    6/12/09   

                   

DEFENDANT BAYWOOD

 

 

INTERNATIONAL, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Neil Reithinger

 

 

 

Neil Reithinger

 

 

 

Chief Financial Officer

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DATED:   6/12/09   

DEFENDANT NUTRITIONAL

 

SPECIALTIES, INC.

                                                              

 

 

 

 

 

 

By:

/s/ Thomas Pinkowski

 

 

Thomas Pinkowski

 

 

President

 

 

 

 

 

 

DATED:   6/08/09   

PLAINTIFF FARMATEK IC VE DIS TIC,

 

LTD. STI. AND OSKIYAN HAMDEMIR

 

 

 

 

 

 

 

By:

/s/ Oskiyan Hamdemir

 

 

Oskiyan Hamdemir

 

 

President

 

 

 

 

 

 

APPROVED AS TO FORM:

 

 

 

 

 

 

 

 

 

 

 

DATED:   June 12, 2009   

GORDEE, NOWICKI & ARNOLD LLP

 

 

 

 

 

 

 

By:

/s/ Bryan B. Arnold

 

 

Bryan B. Arnold

 

 

Attorneys for Defendants BAYWOOD

 

 

INTERNATIONAL, INC. AND

 

 

NUTRITIONAL SPECIALTIES, INC.

 

 

 

 

 

 

DATED:   6/08/09   

NIZAMIAN & NIZAMIAN LLP

 

 

 

 

 

 

 

By:

/s/ Raffi Nizamian

 

 

Raffi Nizamian

 

 

Attorneys for Plaintiff FARMATEK

 

 

IC VE DIS TIC, LTD. STI.

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