EMPYREAN BIOSCIENCE INC
SETTLEMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>SETTLEMENT AGREEMENT
<TEXT>

                              SETTLEMENT AGREEMENT

     This  Settlement  Agreement  ("Agreement")  entered  into  this  9th day of
August,  2000  ("Effective  Date")  by and  between  Empyrean  Bioscience,  Inc.
("Empyrean"),  a Wyoming  corporation,  having an office at 23800  Commerce Park
Road, Suite A, Cleveland,  Ohio 44122, and International  Bioscience Corporation
("IBC"),  a Florida  corporation,  having an office at 777 South Flagler  Drive,
Phillips Point Building,  East Tower, Suite 909, West Palm Beach, Florida 33401,
David  Thornburgh,  M.D. ("Dr.  Thornburgh"),  c/o IBC, 777 South Flagler Drive,
Phillips Point Building,  East Tower, Suite 909, West Palm Beach, Florida 33401,
and Sara  Gomez de Ferro  ("Ms.  Gomez"),  c/o IBC,  777  South  Flagler  Drive,
Phillips Point Building,  East Tower, Suite 909, West Palm Beach, Florida 33401,
(Empyrean  and IBC  hereinafter  collectively  referred to as the  "Parties" and
individually referred to as a "Party"):

     WHEREAS Empyrean commenced an action against Geda  International  Marketing
Company (a Bahamian  subsidiary  of IBC,  which shall  herein be included in the
reference "IBC"),  David  Thornburgh,  M.D., and Sara Gomez a/k/a Sara Ferro, by
filing a complaint ("the Complaint") in the United States District Court for the
Southern District of Florida ("the Court"), captioned Empyrean Bioscience,  Inc.
v. International Bioscience Corporation, David Thornburgh, M.D., and Sara Gomez,
a/k/a Sara Ferro, Case No. 00-8300-CIV-Dimitrouleas ("the Empyrean/IBC Action");

     WHEREAS,  OPTIMA Holding Co. has been granted the right to intervene in the
Empyrean/IBC Action and has filed a Complaint In Intervention  asserting certain
claims  against  Empyrean and IBC in Case No.  00-8300 CIV -  Dimitrouleas  (the
"Optima Action");
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     WHEREAS,  the Parties now desire to resolve the Empyrean/IBC Action without
further  expense or time and  Empyrean  now desires to dismiss the  Empyrean/IBC
Action in its entirety without prejudice;

     NOW,  THEREFORE,  in consideration of the promises and conditions set forth
below, the Parties agree as follows:

     1. Empyrean agrees that the  Empyrean/IBC  Action shall be dismissed in its
entirety without prejudice. To effectuate the foregoing,  Empyrean shall deliver
to IBC's counsel  concurrently  with  Empyrean's  execution of this Agreement an
executed  Stipulation of Dismissal Without Prejudice pursuant to Rule 41 (a) (1)
(ii) of the Federal  Rules of Civil  Procedure  in the form  attached  hereto as
Exhibit A, suitable for filing with the Clerk of the Court.

     2. In  consideration  for the  settlement  of the  Empyrean/IBC  Action and
concurrently with the execution of this Settlement  Agreement,  Empyrean and IBC
have entered into a series of  Agreements  on this date  identified in Exhibit B
hereto annexed respecting a certain proprietary  formulation  invented and owned
by IBC and licensed to Empyrean which was the subject matter of the Empyrean/IBC
Action,  confirmation of which is  acknowledged by the Parties.  This Settlement
Agreement, and the Agreements identified in Exhibit B, are deemed by the Parties
to be an integrated Agreement.

     3.  In  consideration  of this  Settlement  Agreement  and  the  Agreements
identified in Exhibit B hereto  annexed and the  settlement of the  Empyrean/IBC
Action,   Empyrean  hereby   voluntarily  and  knowingly  releases  and  forever
discharges Ms. Gomez, her predecessors, successors and assigns in her individual
and  representative  capacity,  (the "Released Gomez Party"),  from any actions,
claims, demands, causes of action, obligations,  damages, liabilities,  expenses
and controversies of any nature and description  whatsoever,  whether or not now
known, suspected or claimed, which Empyrean had, has, or may have related to the
Empyrean/IBC  Action,  against  the  Released  Gomez  Party  including,  without

                                       2
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limitation,  any  actions,  claims,  demands,  causes  of  action,  obligations,
damages, liabilities, expenses and controversies of any kind which arise out of,
relate to or are based on the Empyrean/IBC Action.

     4.  In  consideration  of this  Settlement  Agreement  and  the  Agreements
identified in Exhibit B hereto  annexed and the  settlement of the  Empyrean/IBC
Action,   Empyrean  hereby   voluntarily  and  knowingly  releases  and  forever
discharges  Dr.  Thornburgh,  his  predecessors,  successors  and assigns in his
individual and representative  capacity, (the "Released Thornburgh Party"), from
any  actions,   claims,  demands,  causes  of  action,   obligations,   damages,
liabilities,   expenses  and   controversies   of  any  nature  and  description
whatsoever,  whether or not now known, suspected or claimed, which Empyrean had,
has,  or may have  related to the  Empyrean/IBC  Action,  against  the  Released
Thornburgh Party including,  without limitation,  any actions,  claims, demands,
causes of action, obligations,  damages, liabilities, expenses and controversies
of any kind  which  arise out of,  relate  to or are  based on the  Empyrean/IBC
Action.

     5.  In  consideration  of this  Settlement  Agreement  and  the  Agreements
identified in Exhibit B hereto  annexed and the  settlement of the  Empyrean/IBC
Action,   Empyrean  hereby   voluntarily  and  knowingly  releases  and  forever
discharges  IBC, its  subsidiaries,  predecessors,  successors  and assigns (the
"Released  IBC Party"),  from any actions,  claims,  demands,  causes of action,
obligations,  damages, liabilities, expenses and controversies of any nature and
description  whatsoever,  whether or not now known,  suspected or claimed, which
Empyrean had, has, or may have related to the Empyrean/IBC  Action,  against the
Released IBC Party including,  without limitation, any actions, claims, demands,

                                       3
<PAGE>
causes of action, obligations,  damages, liabilities, expenses and controversies
of any kind  which  arise out of,  relate  to or are  based on the  Empyrean/IBC
Action.

     6.  In  consideration  of this  Settlement  Agreement  and  the  Agreements
identified in Exhibit B hereto  annexed and the  settlement of the  Empyrean/IBC
Action,  IBC hereby  voluntarily and knowingly  releases and forever  discharges
Empyrean, its subsidiaries,  predecessors, successors and assigns (the "Released
Empyrean  Party"),  from  any  actions,   claims,  demands,  causes  of  action,
obligations,  damages, liabilities, expenses and controversies of any nature and
description  whatsoever,  whether or not now known,  suspected or claimed, which
IBC had,  has,  or may have  related to the  Empyrean/IBC  Action,  against  the
Released  Empyrean Party including,  without  limitation,  any actions,  claims,
demands,  causes of action,  obligations,  damages,  liabilities,  expenses  and
controversies  of any kind  which  arise  out of,  relate to or are based on the
Empyrean/IBC Action.

     7. Each Party  hereto  acknowledges  that this  Agreement  constitutes  and
contains the entire agreement and  understanding  of the Parties  concerning the
Empyrean/IBC  Action,  and  supersedes  and  replaces  all  prior  negotiations,
proposed  agreements,  and  agreements,  written or oral. Any amendments to this
Agreement shall be in writing and executed by both parties hereto.

     8. This  Agreement  shall be binding  upon and inure to the  benefit of the
Parties hereto and their respective heirs, successors and beneficiaries.

     9. The language of this Agreement  shall be construed as a whole  according
to its fair  meaning,  and  none of the  Parties  hereto  shall  be  deemed  the
draftsman of this  Agreement or any part hereof,  for purposes of any litigation
which may arise  hereafter  between  them.  If any  provision or portion of this

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Agreement  shall be held for any reason to be  unenforceable  or  illegal,  that
provision  shall be  severed  from  this  Agreement  and the  remainder  of this
Agreement shall remain valid and enforceable  between the Parties hereto just as
if the provision held to be illegal or unenforceable  had never been included in
this Agreement.

     10. Nothing herein shall preclude the Parties from making disclosure of any
information   regarding  the  terms  and/or  conditions  of  this  Agreement  in
compliance with Securities and Exchange Commission Rules and Regulations,  or in
compliance  with any state or federal  securities  rules or  regulations,  or as
otherwise obligated by law.

     11. This  Agreement  shall be governed by and construed in accordance  with
the internal laws of the state of Florida,  without  giving effect to principles
of conflicts of law.  Each Party submits to the  exclusive  jurisdiction  of the
state and federal  courts located in Miami-Dade or Palm Beach  Counties,  in the
State of Florida,  for any action or proceeding relating to this agreement,  and
expressly  waives  any  objection  it  may  have  to  such  jurisdiction  or the
convenience  of such forum.  If any legal action or other  proceeding is brought
for the  enforcement of this  Agreement,  the successful or prevailing  party or
parties shall be entitled to recover  reasonable  attorneys fees and other costs
incurred in that action or proceeding,  in addition to any other relief to which
it may be entitled.

     12.  Nothing  in this  Agreement  shall  be  construed  as or  shall  be an
admission of any liability or wrongdoing by IBC or by Empyrean.

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     13. Each Party  represents  that they have read this  Agreement,  that they
have discussed it thoroughly  with their  attorney,  that they understand all of
its provisions,  that they enter into it  voluntarily,  and that the individuals
executing  this Agreement have the power and authority to do so on behalf of the
respective Parties, and to bind such respective Parties to the terms hereof.

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<PAGE>
     IN WITNESS  WHEREOF,  the Parties have caused this Agreement to be executed
by their duly authorized representatives as of the date set forth above.

FOR EMPYREAN BIOSCIENCE, INC.           FOR INTERNATIONAL BIOSCIENCE CORPORATION


-----------------------------------     ----------------------------------------
Signed                                  Signed

-----------------------------------     ----------------------------------------
Printed Name                            Printed Name

-----------------------------------     ----------------------------------------
Title                                   Title

-----------------------------------     ----------------------------------------
Date                                    Date

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<PAGE>
                                    EXHIBIT A

                          UNITED STATES DISTRICT COURT
                          SOUTHERN DISTRICT OF FLORIDA


 EMPYREAN BIOSCIENCE, INC.,

        Plaintiff,                CASE NO.: 00-08300-CIV-DIMITROULEAS

 vs.

 INTERNATIONAL BIOSCIENCE
 CORPORATION, DAVID THORNBURGH, M.D., and
 SARA GOMEZ a/k/a SARA FERRO,

        Defendants.

                                   /
 ----------------------------------


                            STIPULATION OF DISMISSAL
                 PURSUANT TO RULE 41(A)(1)(II), FED. R. CIV. P.

     IT IS HEREBY  STIPULATED AND AGREED,  by and among the parties,  subject to
the  approval  of the Court,  that all claims and  counterclaims  be  dismissed,
without  prejudice,  pursuant to Rule  41(a)(1)(ii),  Fed. R. Civ. P. Each party
shall bear its own attorney fees and costs.

                                       8
<PAGE>
Dated:   August ____, 2000
                                        STROOCK & STROOCK & LAVAN LLP
                                        Attorneys for Empyrean
                                        3300 First Union Financial Center
                                        200 South Biscayne Boulevard
                                        Miami, Florida 33131-2385
                                        Telephone:  (305) 358-9900



                                        By:
                                           -------------------------------------
                                        Richard B. Simring
                                              (Florida Bar No. 890571)


Dated:   August ____, 2000
                                        Holtzman, Krinzman, Equels & Furia
                                        Attorneys for IBC, Thornburgh and Ferro
                                        2601 South Bayshore Drive, Suite 600
                                        Miami, Florida 33133
                                        Telephone:  (305) 859-7700

                                        By:
                                           -------------------------------------
                                        Joseph L. Raia
                                              (Florida Bar No. 322083)


SO ORDERED:



                                        ----------------------------------------
                                                    U. S. D. J.

Dated:  ______________________, 2000

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<PAGE>
                                    EXHIBIT B

1.  License Agreement from IBC to Empyrean
2.  License Agreement from IBC to IBC-Empyrean LLC
3.  Trademark License from Empyrean to IBC
4.  Trademark License from Empyrean to IBC-Empyrean LLC
5.  Trademark License from IBC to Empyrean
6.  Trademark License from IBC to IBC-Empyrean LLC
7.  Joint Venture Agreement between Empyrean and IBC
8.  IBC-Empyrean LLC Operating Agreement
9.  Voting Agreement
10. Non-Qualified Stock Option Plan
11. Put Agreement
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</DOCUMENT>
