Exhibit 10.1

 

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

 

This Confidential Settlement Agreement and Mutual Release (the "Agreement") is
entered into by and between RB Capital, Inc. ("RB Capital") and its principals
Brett Rosen and Deborah Braun (collectively, the "RB Capital Parties") and
Judith Braun (who is executing this agreement with respect to sections 4 and 5
only); on the one hand; and GreenBox POS; GreenBox POS, LLC; and Ben Errez and
Fredi Nisan (collectively, the "GreenBox Parties"), on the other. The RB Capital
Parties and the GreenBox Parties are collectively referred to herein as simply
the "Parties," and each is sometimes individually referred to herein as a
"Party."

 

 

RECITALS

 

 

WHEREAS, a dispute has arisen between the Parties arising out of an investment
and loans RB Capital made with and to some of the GreenBox Parties; and

 

WHEREAS, in connection with the dispute between the Parties, on 24 April 2019,
RB Capital filed a complaint against the GreenBox Parties, and each of them, in
the Superior Court for the State of California, County of San Diego, Case No.
37-2019-21137 (the "Action"); and on 1 October 2019, RB Capital filed a First
Amended Complaint in that Action against the GreenBox Parties, and each of them,
alleging claims of fraud, breach of fiduciary duty, breach of contract, and
other related claims; and

 

WHEREAS, on 31 October 2019, the GreenBox Parties filed in the Action a Cross-
Complaint against the RB Capital Parties, alleging claims of fraud, breach of
contract, tortious interference, insider trading, and other related claims; and

 

WHEREAS, the Parties desire to settle their differences with respect to all of
the matters referenced above without further litigation and without any
admission of fault or wrongdoing by any Party;

 

NOW, THEREFORE, in consideration of the covenants, representations, and
warranties contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:

 

 

AGREEMENT AND RELEASES

 

 

 

1.

The recitals above are hereby incorporated herein by reference and made a part
of this Agreement.

 

 

2.

Payments and Deliveries. On the execution of this Agreement by all Parties
hereto, GreenBox POS (the Nevada public company, also known as "GRBX") hereby
agrees to pay and deliver to RB Capital the following:

 

(a)     $250,000 by attorney's trust account check, subject to clearance and
collection, which check will be drawn on a bank having a branch within the State
of California, County of San Diego, under the following conditions:

 

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(i)

$200,000 will be applied to any and all outstanding principal balance of the
$200,000 Convertible Promissory Note between RB Capital and GreenBox POS, dated
November 26, 2018;

 

 

(ii)

$50,000 will be applied to any and all outstanding principal balance of the
$300,000 Convertible Promissory Note between RB Capital and GreenBox POS, LLC;
dated March 15, 2018.

 

(b)     6 million shares of GreenBox POS stock (GRBX), issued by GRBX under the
following conditions:

 

 

(i)

The 6 million shares shall be issued pursuant to and as provided by the
conversion rights in the $300,000 Convertible Promissory Note between RB Capital
and GreenBox POS, LLC; dated March 15, 2018.

 

 

(ii)

The 6 million shares shall be fully paid and non-assessable; will be represented
by new stock certificates issued directly by GRBX to and in the name of RB
Capital by book entry with VStock Transfer, GRBX's transfer agent; will not be
certificates that have been assigned to RB Capital by any transferor; will be
issued pursuant to and shall be subject to and in full compliance with rule 144,
regardless whether GRBX is current in its SEC and other required filings. This
transfer will be initiated and completed as soon as possible and no later than
72 hours after the execution of this Agreement; and documentation reasonably
acceptable to RB Capital's counsel shall be delivered to RB's counsel within
that time period, evidencing 6 million shares of GRBX newly issued shares,
reflected on the books and records of GRBX's transfer agent as being
direct-issue shares in the name of RB Capital.

 

 

(iii)

GreenBox POS represents that it does not intend any dilution of its stock until
GreenBox POS is ready for a major capital raise. GreenBox POS cannot warrant or
guarantee that no dilution event will occur in the future as a result of capital
raise or other transactions.

 

 

(iv)

Nonetheless, all the 6 million shares issued to RB Capital under this Agreement
and remaining with VStock (or any successor to VStock as the public company may
appoint) at the time of issuance will be anti- dilutive for three years from the
date of the full execution of the Settlement Agreement. This means that the 6
million shares to be delivered under this Settlement Agreement (and excluding
any other shares that RB Capital already owns or in the future acquires from
other sources) shall continue to comprise no less than 3.4% of the issued and
outstanding stock of GreenBox. The calculation to determine the percentage is as
follows: 6 million shares divided by (6M shares + the 170,643,055 shares
currently issued and outstanding) = 3.4%.

 

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(v)

RB's sale of GreenBox POS shares in any one quarter may not exceed 5% of the
total number of GRBX shares outstanding as of the end of the prior quarter.

 

 

(vi)

RB Capital will not short GreenBox POS stock.

 

 

(vii)

GreenBox POS will use best efforts to bring GRBX stock into compliance as soon
as possible, including completion of the pending audit.

 

 

(viii)

GreenBox POS will use best efforts to achieve removal of the stop sign from the
stock as soon as possible.

 

 

(ix)

GreenBox POS will use best efforts to get GRBX stock re-listed on the OTCQB as
soon as possible.

 

 

(x)

RB irrevocably grants to GreenBox POS the exclusive right, privilege, and option
(but not an obligation) to repurchase any of the remaining 6 million shares not
previously sold by RB, held in book entry, in whole or in part. The price to be
paid by GreenBox POS for any or all of those shares that it elects to purchase,
shall be at the higher of: (i) then-current market value; or (ii) ten cents
($.10) per share).

 

 

(xi)

RB Capital will retain all earnings and proceeds it received from any previous
sales of GreenBox POS stock.

 

 

(xii)

RB Capital will retain and, subject to the terms of this Settlement Agreement,
it may dispose of the approximately 2.5 million shares of GRBX it currently
owns.

 

 

(c)

RB Capital agrees that it will:

 

 

(i)

Waive any and all interest for the $200,000 Convertible Promissory Note between
RB Capital and GreenBox POS, dated November 26, 2018.

 

 

(ii)

Waive any and all interest, and any claimed principal balance, for the

$300,000 Convertible Promissory Note between RB Capital and GreenBox POS, LLC;
dated March 15, 2018.

 

 

(iii)

Relinquish any and all claim to any benefit described in the Share Purchase
Agreement between RB Capital and GreenBox POS, LLC (dated January 10, 2018),
including, but not limited to, any equity ownership stake in GreenBox POS, LLC.

 

 

(iv)

Cooperate with GreenBox POS and its auditors to provide any and all other
necessary accounting documents, as may be requested, to facilitate the
settlement and related transactions.

 

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(d)     As a result of this settlement between the parties, both the $200,000
Convertible Promissory Note and the $300,000 Convertible Promissory Note will be
considered fully repaid and/or forgiven, with no obligation of any kind owed by
the GreenBox Parties to RB with respect to these notes.

 

 

3.

Deadline for Payment and Deliveries. Counsel for the GreenBox Parties shall
confirm via email to RB Capital's counsel that GreenBox POS has deposited
$250,000 in escrow with its counsel and that counsel is holding those funds in
its attorney's trust account and, to the best of counsel's knowledge, those
funds are good funds, before the RB Capital Parties will execute this Agreement.
The $250,000 shall be paid, and the transfer of 6 million shares shall be
initiated to RB Capital simultaneously with the execution of this Agreement by
all parties.

 

(a)     The $250,000 shall be paid by attorney trust account check, payable to
Shustak Reynolds & Partners, P.C. The Shustak firm will ask its bank to advise
it when the funds have cleared and may be drawn against and will promptly notify
GreenBox's counsel if and when those funds have cleared its bank. The GreenBox
Parties will issue a Form 1099 to Shustak Reynolds & Partners, P.C. for the full
$250,000. RB Capital will be solely responsible for paying any and all income
taxes and penalties arising from this payment, if any.

 

(b)     The 6 million shares shall be transferred from GreenBox POS to RB
Capital by book entry with VStock Transfer, with the transfer being initiated
and instructions submitted to the transfer agent, and the transfer being
completed with documentation reasonably acceptable to RB Capital's counsel
evidencing the transfer and the shares being in the name of RB Capital, such
transfer being completed and documentation being provided to RB Capital's
counsel within seventy two (72) hours after execution of this Agreement by all
parties. If GreenBox delivers the $250,000.00 but fails to promptly deliver the
6 million shares then, in that event, RB Capital will promptly return the

$250,000.00; neither party nor their counsel may release, from escrow, the
Request for Dismissals with prejudice they are holding in escrow; and this
litigation will continue.

 

If counsel for the GreenBox Parties has not confirmed by January 31, 2020, that
counsel

(i) is holding in escrow the $250,000 payment or is in possession of the
certified check for that amount; (ii) the 6 million shares are ready to be
registered in RB Capital's name; and

(iii) all GreenBox Defendants have executed this Agreement, this Agreement and
RB Capital's willingness to enter into this Agreement shall expire and be of no
further force or effect. Likewise, if RB Capital Parties fail to execute this
Agreement in full by January 31, 2020, then the GreenBox Parties' willingness to
enter into this Agreement shall expire and be of no further force or effect.

 

 

4.

Dismissal of Claims. Upon execution of this Agreement, RB Capital will provide
counsel for the GreenBox Parties a fully executed Request for Dismissal with
prejudice of all claims asserted in the First Amended Complaint; and the
GreenBox Parties will provide counsel for the RB Capital Parties a fully
executed Request for Dismissal with prejudice of all claims asserted against the
RB Capital Parties, including Judith Braun, in the Cross- Complaint. The
GreenBox Parties agree that they will hold and not file the RB Capital

 

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Parties' Request for Dismissal until receiving written, email confirmation from
RB Capital's attorneys that (i) the payment has cleared its bank and constitutes
good funds; and (ii) the shares discussed above have been transferred into RB
Capital's name and the documentation provided to RB Capital's counsel is
reasonably acceptable to them to evidence that GRBX has issued shares directly
to, and in the name of RB Capital. Likewise, RB Capital Parties agree that they
will hold and not file the GreenBox Parties' Request for Dismissal until a full
and final execution of this Agreement by all Parties and counsel and until the
payment has cleared its counsel's bank account and shares discussed above are
timely delivered, as specified above. Upon delivery of said money; timely
delivery of the shares; and upon receiving written, email confirmation from RB
Capital's counsel that the $250,000.00 payment has cleared its bank account and
reasonably acceptable documentation has been provided confirming the issuance of
the GRBX shares directly in RB Capital's name, the RB Capital Parties will
immediately file said Requests for Dismissal on behalf of both sides.

 

 

5.

Mutual Releases. Upon payment of the monetary consideration set forth above; the
full execution of this Agreement; written notification that the funds have
cleared RB Capital's attorney's account; and timely delivery of the 6 million
shares as specified above, all to have taken place no later than seventy two
hours after January 31, 2020, each of the Parties does hereby fully release
every other one of the Parties, including but not limited to Judith Braun, and
their agents, officers, directors, employees, partners, attorneys, insurance
companies, insurers, subsidiaries, related entities, representatives,
predecessors, successors, and assigns, from any and all claims, whether past,
present, or future, and from all liability and from any form or amount of
damages directly or indirectly arising from, related to, sustained in connection
with this dispute or this lawsuit. Nothing stated herein shall constitute a
release of the GreenBox Parties' claims against anyone other than the RB Capital
Parties and Judith Braun. By signing this Agreement, the GreenBox Parties are
not hereby releasing and are, in fact, fully preserving any and all claims they
have, without limitation, against Yoram Dahan, Melissa Dahan, Forty8 Ltd., and
Trustees of the Melissa H. Dahan Living Trust (collectively, "the Dahan
Parties").

 

 

6.

Waiver of Civil Code Section 1542. This Agreement is intended as a full and
complete release and discharge of the claims the Parties have and/or may have
against each other based on any and all acts, conduct, or omissions occurring on
or before the Effective Date of this Agreement (as defined in Paragraph 22
below), and any and all damages arising from, related to, or sustained by reason
of those claims, whether the claims and the damages are now known or unknown,
expected or unexpected, or have already developed or appeared or may now be
unknown but in the future may appear, develop, or become known. Accordingly, the
Parties each expressly waive all rights under section 1542 of the Civil Code of
the State of California. The Parties understand that section 1542 of the Civil
Code provides as follows:

 

A general release does not extend to claims that the creditor or releasing party
does not know or suspect to exist in his or her favor at the time of executing
the release and that, if known by him or her, would have materially affected his
or her settlement with the debtor or released party.

 

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The Parties hereby represent they have read and had an opportunity to consult
with counsel regarding the meaning and implications of California Civil Code
section 1542, and each Party does hereby waive any rights under this provision.
The Parties acknowledge that the foregoing waiver of section 1542 of the
California Civil Code was separately bargained for. It is the Parties' intent
that the full release provided for in this Agreement be construed as broadly as
possible to include any claims arising in any way connected to the Parties'
dispute and the Action.

 

 

7.

Attorneys' Fees and Costs for Underlying Dispute/Action. Each Party to this
Agreement agrees to bear its/his/her own attorneys' fees and costs relating to
the claims released in this Agreement, including any fees or costs incurred in
connection with the Parties' dispute and the Action, and further agrees that the
Party will not pursue recovery of any costs or attorneys' fees.

 

 

8.

Notice. Notice and service under this Agreement shall be by U.S. Mail and e-mail
and shall be considered received the next business day after it is sent. Notice
and service shall be addressed as follows, unless a Party notifies any other in
writing of a different address:

 

 

  To RB Capital Parties:   To GreenBox Parties:           Shustak Reynolds &
Partners, P.C.   Mintz Levin   Attn: Erwin J. Shustak, Esq.   Attn: Natalie
Prescott, Esq.   Kara Siegel, Esq.   Evan Nadel, Esq.   401 West A Street, Suite
2200   3580 Carmel Mountain Road, Suite 300   San Diego, CA 92101   San Diego,
CA 92130

 

 

9.

No Admission. It is understood and agreed by the Parties that this Agreement is
in compromise of certain disputed claims and is not an admission of any fact or
liability for all or any part of any such claims, and that the consideration
referenced herein is being made to bring this dispute and the issues raised in
the Action to a conclusion without additional legal fees or costs being
incurred.

 

 

10.

Binding Effect; Applicable Law; Etc. As provided by Evidence Code 1123(b), this
Agreement is enforceable, binding, and admissible in a court of law. This
Agreement shall be governed by and construed, interpreted, and enforced in
accordance with the laws of the State of California. Exclusive jurisdiction to
resolve any dispute between the Parties regarding this Agreement lies and shall
remain with the San Diego Superior Court, which shall retain jurisdiction until
all the terms of the Agreement have been carried out.

 

 

11.

Interpretation of Ambiguities. The Parties acknowledge that: (1) this Agreement
and its reduction to final form are a result of good-faith negotiations among
the Parties and/or their counsel; (2) counsel or the Parties have carefully
reviewed and examined the Agreement for execution by the Parties; and (3) any
statute or rule of construction under which ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement.

 

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12.

Enforceable Provisions Survive. If any provision of this Agreement shall be
adjudged by a court to be void and/or unenforceable, this shall in no way affect
any other provision of this Agreement, nor the validity or enforceability of the
Agreement as a whole.

 

 

13.

Persons Bound. This Agreement is binding upon and inures to the benefit of each
Party and each of the Parties' respective agents, owners, associates, employees,
representatives, directors, officers, members, managers, partners, attorneys,
predecessors, successors, assigns, and all other persons or entities acting by,
through, under, or in concert with each Party.

 

 

14.

Warranty of Capacity to Execute Agreement. Notwithstanding the GreenBox Parties'
pending cross-claims against the Dahan Parties, each Party represents and
warrants that no other person or entity has or had any interest in the claims,
demands, obligations, or causes of action referred to in this Agreement; that
the Party has the sole right and exclusive authority to execute this Agreement
and receive the consideration specified in it; and that the Party has not sold,
assigned, transferred, conveyed or otherwise disposed of any of the claims,
demands, obligations, or causes of action referred to in this Agreement.

 

 

15.

Execution of Agreement. This Agreement may be executed by separately signed
signature pages, and when so executed shall have the full force and effect as if
all Parties had signed a single original Agreement. Facsimile and/or PDF
signatures may be used by the Parties as if they were originals and shall have
full force and effect.

 

 

16.

Integration. This Agreement is a fully integrated contract and constitutes the
entire agreement between the Parties with respect to the settlement of the
claims and all other related matters referenced within this Agreement.

 

 

17.

Agreement Understood. The Parties each certify they have read all of this
Agreement and fully understand the same, and that they have consulted with and
received full legal advice regarding this Agreement. The parties acknowledge
that there have been no representations or warranties made regarding the tax
consequences of the settlement and each party agrees to be responsible for what
tax consequences may arise to it, him, or her from this settlement and to
consult with qualified tax professionals, if necessary.

 

 

18.

Amendment / Waiver of Breach of Agreement. This Agreement may be amended only by
written agreement signed by each of the Parties, and any alleged breach of this
Agreement may be waived only by a written waiver signed by the Party granting
the waiver. This Agreement and any such amendments or waivers of breach may only
be executed directly by the Parties.

 

 

19.

Effectiveness. This Agreement shall become effective immediately upon execution
by all the Parties ("Effective Date").

 

 

20.

Effect of Headings. The subject headings of this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.

 

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UNDERSTOOD, ACCEPTED AND AGREED.

 

  

Date:     January       , 2020                                                  
                                                                  Brett Rosen  
  On behalf of RB Capital Partners, Inc.             Date:     January       ,
2020                                                                            
                                        Brett Rosen            
Date:     January       , 2020                                                  
                                                                  Deborah Braun
            Date:     January       , 2020                                      
                                                                             
Ben Errez     On behalf of GreenBox POS, a Nevada corporation            
Date:     January       , 2020                                                  
                                                                  Ben Errez    

On behalf of GreenBox POS, LLC, a Washington limited

liability company

            Date:     January       , 2020                                      
                                                                             
Ben Errez             Date:     January       , 2020                            
                                                                               
        Fredi Nisan             Date:     January       , 2020                  
                                                                               
                  Judith Braun (with respect to sections 4 and 5 only)

 

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      APPROVED AS TO FORM ONLY:           Date:     January       , 2020        
                                                                               
                            Erwin Shustak, Esq.    

On behalf of RB Capital Partners, Inc., Brett Rosen,

Deborah Braun, and Judith Braun

      Date:     January       , 2020                                            
                                                                        Natalie
Prescott, Esq.    

On behalf of GreenBox POS; GreenBox POS, LLC; Ben

Errez; and Fredi Nisan

 

 

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