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Exhibit 10.5
 
 
EXECUTION COPY
 
 
INVESTOR RIGHTS AGREEMENT
 
INVESTOR RIGHTS AGREEMENT, dated as of January 28, 2014 (this “Agreement”), by
and between KonaRed Corporation, a Nevada corporation (the “Company”) and VDF
FutureCeuticals, Inc., an Illinois corporation (“Investor”).
 
WHEREAS, Investor and the Company are entering into that certain Settlement
Agreement dated as of January 28, 2014 (the “Settlement Agreement”) to settle
certain outstanding litigation between the parties; and
 
WHEREAS, in connection with the execution of the Settlement Agreement, the
Company is issuing to Investor a Senior Secured Convertible Note of the Company
dated as of the date hereof (the “Note”) and a Warrant to purchase shares of
Common Stock of the Company dated as of the date hereof (the “Warrant”); and
 
WHEREAS, as a condition to entering into the Settlement Agreement, the Note and
the Warrant, Investor and the Company have agreed to enter into this Agreement.
 
Accordingly, the parties hereto agree as follows:
 
ARTICLE 1
 
DEFINITIONS
 
1.1           Definitions.  As used in this Agreement, and unless the context
requires a different meaning, the following terms shall have the meanings set
forth below:
 
“Agreement” has the meaning assigned to such term in the preamble.
 
“Articles of Incorporation” means the certificate of incorporation of the
Company, as the same may have been amended.
 
“Beneficially own” with respect to any securities means having “beneficial
ownership” of such securities as determined pursuant to Rule 13d-3 under the
Exchange Act, as in effect on the date hereof.
 
“Board of Directors” means either the board of directors of the Company or any
duly authorized committee thereof.
 
“Board Observer” has the meaning assigned to such term in Section 2.2.
 
“Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day
on which banking institutions in New York City are authorized or obligated by
law or executive order to remain closed.
 
 
 
 

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“Bylaws” means the bylaws of the Company, as the same may have been amended.
 
“Change of Control” means (a) any sale, transfer, lease or license of all or
substantially all of the assets of the Company in a transaction or series of
related transactions, (b) any merger, consolidation or reorganization that
results in any Person or group of Persons acting in concert (other than Shaun
Roberts, Dana Roberts and/or or any trust set up solely for the benefit of Shaun
Roberts or Dana Roberts and/or their descendents) owning in excess of 50% of the
outstanding voting power of the Company, (c) any issuance or sale or series of
issuances or sales of capital stock of the Company by the Company or any holder
of such capital stock that results in any Person or group of Persons acting in
concert (other than Shaun Roberts, Dana Roberts and/or any trust set up solely
for the benefit of Shaun Roberts or Dana Roberts and/or their descendents)
owning in excess of 50% of the outstanding voting power of the Company or (d)
the voluntarily or involuntarily dissolution or liquidation of the Company or
winding up of the Company’s affairs, or the taking by the Company of any action
to effect any of the foregoing.
 
“Commission” means the Securities and Exchange Commission or any similar agency
then having jurisdiction to enforce the Securities Act.
 
“Common Stock” means any shares of common stock, par value $0.001 per share, of
the Company, now or hereafter authorized to be issued, and any and all
securities of any kind whatsoever of the Company or any successor thereof which
may be issued on or after the date hereof in respect of, in exchange for, or
upon conversion of shares of Common Stock pursuant to a merger, consolidation,
stock split, reverse split, stock dividend, recapitalization of the Company or
otherwise.
 
“Company” has the meaning assigned to such term in the preamble.
 
“Conversion Shares” means the shares of Common Stock issuable upon conversion of
the Note or the exercise of the Warrant.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder by the Commission from time to
time.
 
“GAAP” means United States generally accepted accounting principles consistently
applied.
 
“Governmental Authority” means any court, tribunal, arbitrator, arbitrational
panel or authority, agency, commission, official or other instrumentality of the
United States or any other country, or any supra-national organization, state,
county, city or other political subdivision or any self-regulatory organization.
 
“Investor” has the meaning assigned to such term in the recitals.
 
“Investor Percentage Interest” means the percentage of the aggregate voting
power of the Company, determined on the basis of the number of Voting Securities
actually outstanding, that is controlled directly or indirectly by Investor,
including as beneficially owned.
 
 
 
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“License Agreement” means the license agreement among the Company and the
Investor dated January 28, 2014 whereby the Investor grants to the Company the
right to use the trademarked name “Coffeeberry”, provides use of the Investor’s
human clinical science on Coffeeberry and grants a license to the Company to use
the Investor’s patented process to extract any portion of the Coffeeberry for
any use.
 
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), voting or other restriction, preemptive
right or other security interest of any kind or nature whatsoever.
 
“Note” has the meaning assigned to such term in the recitals.
 
“Order” means any writ, judgment, decree, injunction, award or similar order of
any Governmental Authority, including any award in an arbitration proceeding (in
each case, whether preliminary or final).
 
“Permitted Lien” has the meaning specified in the Note.
 
“Person” means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint-stock company, company, limited
liability company, trust, unincorporated association, Governmental Authority, or
any other entity of whatever nature.
 
“Pledge and Security Agreement” means that certain Pledge and Security Agreement
between the Company and Investor, dated January 28, 2014.
 
“Qualifying Investor Interest” means an Investor Percentage Interest equal to or
greater than 10%.
 
“Registration Rights Agreement” means the Registration Rights Agreement between
the Company and Investor dated January 28, 2014.
 
“Related Party Agreement" means any agreement, arrangement or understanding
between the Company and any stockholder or any affiliate of a stockholder or any
director, officer or employee of the Company, as such agreement may be amended,
modified, supplemented or restated in accordance with the terms of this
Agreement.
 
“Requirement of Law” means any law, statute, code, treaty, Order, ordinance,
rule, regulation or other requirement promulgated or enacted by any Governmental
Authority.
 
“Restricted Period” has the meaning assigned to such term in Section 3.1.
 
“Rule 144” means Rule 144 promulgated by the Commission under the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder by the Commission from time to time.
 
 
 
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“Settlement Agreement” has the meaning assigned to such term in the recitals.
 
“Subsidiary” of any specified Person means any other Person more than 50% of the
outstanding voting securities of which is owned or controlled, directly or
indirectly, by such specified Person or by one or more other Subsidiaries of
such specified Person, or by such specified Person and one or more other
Subsidiaries of such specified Person.  For the purposes of this definition,
“voting securities” means securities which ordinarily have voting power for the
election of directors (or other Persons having similar functions), whether at
all times or only so long as no senior class of securities has such voting power
by reason of any contingency, or other ownership interests ordinarily
constituting a majority voting interest.
 
“Transaction Agreements” means this Agreement, the Note, the Pledge and Security
Agreement, the Registration Rights Agreement, the Warrant and the License
Agreement.
 
“Voting Securities” mean any class or classes of stock of the Company pursuant
to which the holders thereof have the general power under ordinary circumstances
to vote with respect to the election of the Board of Directors, irrespective of
whether or not, at the time, stock of any other class or classes shall have, or
might have, voting power by reason of the happening of any contingency.
 
“Warrant” has the meaning assigned to such term in the recitals.
 
ARTICLE 2
 
BOARD OF DIRECTORS
 
2.1           Board of Directors.  (a)  From and after the date that Investor
acquires shares of Common Stock and for so long as Investor has a Qualifying
Investor Interest, Investor shall have the right to designate that number of
nominees to the Board of Directors such that the total number of directors
designated by Investor is at least proportional to (and not less than) Investor
Percentage Interest; provided, that, to the extent that the proportional number
of designees to the Board of Directors that Investor is entitled to designate
based on Investor Percentage Interest shall not be a whole number (because of
the size of the Board of Directors), the number of nominees to the Board of
Directors that Investor shall be entitled to designate shall be rounded up to
the next higher whole number.  Investor’s nominees to the Board of Directors
shall satisfy all applicable Requirements of Law relating to service as a
director of the Company.  The Board of Directors may elect to (a) increase the
size of the Board of Directors, (b) fill any vacancies resulting from
resignations, or (c) a combination of (a) and (b) to accomplish the proportional
representation of Investor on the Board of Directors pursuant to this Section
2.1(a); provided, that, to the extent necessary to comply with applicable
Requirements of Law or applicable stock exchange rules, the Board of Directors
shall increase the size of the Board of Directors to accomplish proportional
representation of Investor’s nominees on the Board of Directors pursuant to this
Section 2.1.(a).  The Company shall be required to recommend to its
 
 
 
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stockholders the election of such designees of Investor to the Board of
Directors at the Company’s stockholder meetings and shall solicit proxies for
them to the same extent as it does for any of its other nominees to the Board of
Directors.  So long as Investor’s designated nominees are members of the Board
of Directors, any transactions between Investor and the Company shall be
approved by a special committee of the Board of Directors consisting entirely of
directors that are independent of Investor.
 
(b)           Within five (5) Business Days of the acquisition of shares of
Common Stock by Investor (by conversion of the Note, exercise of the Warrant or
otherwise), the Board of Directors and the Company shall take or cause to be
taken all necessary action not previously taken (including any necessary Bylaw
amendments to cause the numbers of directors constituting the Board of Directors
to be increased) to the extent necessary to accomplish the proportional
representation of Investor’s nominees to the Board of Directors pursuant to
Section 2.1(a).
 
(c)           Each committee of the Board of Directors (other than any special
committee or committee of independent directors that may be constituted for
purposes of making any determination with respect to any agreement or
transaction between the Company and Investor) shall at all times include a
number of directors designated by Investor that is at least proportional to the
Investor Percentage Interest; provided, that, to the extent having Investor
designate a number of members proportional to the Investor Percentage Interest
would not comply with applicable Requirements of Law or applicable stock
exchange rules, each of the audit committee, the compensation committee and the
nominating committee of the Board of Directors shall instead of having a number
of members designated by Investor proportional to the Investor Percentage
Interest have one member designated by Investor.  Any director designated by
Investor to serve on any committee may designate as his or her alternate another
director designated by Investor.
 
2.2           Board Observer Rights.  From and after the date hereof and until
such time as (i) the Note has terminated, (ii) the Warrant has terminated or
been exercised and (iii) the Investor Percentage Interest is less than 1%, if
Investor does not have a designee on the Board of Directors pursuant to Section
2.1, Investor shall have the right to appoint one individual (the “Board
Observer”) selected by Investor as a non-voting observer entitled to attend
meetings of the Board of Directors, and such Board Observer shall be entitled to
be delivered all notices and information provided to the members of such Board
of Directors (within the same time frames provided to such members) and attend
all meetings of such Board of Directors; provided, however, that the Board
Observer may be excluded from receiving such information and materials (or the
relevant portions thereof) or from attending such meetings (or the relevant
portions thereof) if the Company reasonably determines that such exclusion is
necessary to avoid a conflict of interest or to protect attorney-client
privilege.
 
ARTICLE 3
COVENANTS OF THE COMPANY
 
3.1           Conduct of Business.  Except as agreed in writing by Investor,
from and after the date hereof for so long as (x) the Note remains outstanding,
(y) the Warrant remains outstanding or (z) Investor owns a Qualifying Investor
Interest (collectively, the “Restricted Period”), the Company shall not, and
will cause its Subsidiaries not to:
 
 
 
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(i)           amend the Articles of Incorporation or Bylaws or the
organizational documents of the Company or any of its Subsidiaries, or increase
or decrease its authorized capital unless the rights of the Investor under the
Transaction Agreements would not be adversely affected thereby;
 
(ii)          recapitalize or otherwise change its capital structure in a manner
that would result in, or affect any transaction constituting, a Change of
Control;
 
(iii)         make any material change to the nature of the business conducted
by the Company or its primary line of business;
 
(iv)        incur, create, assume, become or be liable in any manner with
respect to, or permit to exist, any indebtedness other than (a) the Note, (b)
trade payables incurred in the ordinary course of business or (c) other
indebtedness not to exceed $7,500,000 in the aggregate at any one time
outstanding;
 
(v)         purchase, redeem, retire or otherwise acquire, split, combine or
reclassify, directly or indirectly, any of the Common Stock or other equity
securities of the Company or give notice of any intention to exercise any right
to purchase, redeem or otherwise acquire, split, combine or reclassify, any of
the Common Stock or other equity securities of the Company (including any such
purchase, redemption or acquisition in accordance with the terms of the Articles
of Incorporation or Bylaws or any stockholders agreement), other than
redemptions in accordance with any employee or consultant agreement approved by
the Board of Directors in connection with a separation of service, unless the
rights of the Investor under the Transaction Agreements would not be adversely
affected thereby;
 
(vi)        prior to the termination of the Note, declare or pay any dividends
on or make other distributions of any kind (whether in cash, stock or property
or any combination thereof), directly or indirectly, in respect of the Common
Stock or other equity securities;
 
(vii)       enter into or permit to exist any agreement or undertaking (other
than this Agreement) which prohibits, restricts or limits the ability of any
Subsidiary of the Company to pay dividends or distributions to the Company, or
otherwise to transfer any material assets or engage in transactions with the
Company;
 
(viii)      voluntarily dissolve, wind up or liquidate;
 
(ix)         sell, lease, license, surrender, relinquish, transfer, assign,
amend, convey or otherwise dispose of outside of the ordinary course of business
in one or more transactions any business, property or assets (whether tangible
or intangible) having an aggregate market value of in excess of $250,000
individually or $1,000,000 in the aggregate, or allow any Lien to be placed on
any of its assets other than a Permitted Lien;
 
(x)          enter into, amend in any material respect, waive or terminate any
Related Party Agreement other than the entry into a Related Party Agreement that
is on an arm's length basis and on terms no less favorable to the Company than
those that could be obtained from an unaffiliated third party;
 
 
 
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(xi)         discontinue, permit to lapse or otherwise fail to keep in full
force and effect any material policies of insurance or knowingly take any action
that would cause any such policy to terminate or be terminable prior to the
expiration of its stated term;
 
(xii)        change any method of accounting or accounting practice used by the
Company or any of its Subsidiaries, except for any change required by GAAP, by
any Governmental Authority or by a change in Requirements of Law;
 
(xiii)       file a voluntary petition in bankruptcy or commence a voluntary
legal procedure for reorganization, arrangement, adjustment, release or
composition of indebtedness in bankruptcy or other similar Requirements of Law
now or hereafter in effect, consent of the entry of an order for relief in an
involuntary case under any such Requirements of Law or apply for or consent to
the appointment of a rescuer, liquidator, assignee, custodian or trustee (or
similar office) of the Company or any of its Subsidiaries;
 
(xiv)       grant any put or similar rights to any Person that would reasonably
be expected to affect adversely the rights of Investor under this Agreement, the
Note or the other Transaction Agreements; or
 
(xv)        enter into any agreement with respect to any of the foregoing.
 
3.2           Access; Information Rights.  (a)  Except as otherwise expressly
contemplated by the terms of this Agreement or agreed in writing by Investor,
during the Restricted Period, upon reasonable notice, the Company shall (and
shall cause its Subsidiaries to) permit the officers, employees, accountants,
counsel, financial advisors and other representatives of Investor reasonable
access during normal business hours to all of its books, records, properties and
personnel (including the ability to discuss the Company’s affairs, finances and
accounts with its officers).
 
(b)           During the Restricted Period, the Company shall deliver to
Investor:
 
(i)           as soon as practicable, but in any event within ninety (90) days
after the end of each fiscal year of the Company, an income statement for such
fiscal year, a balance sheet of the Company and statement of stockholders’
equity as of the end of such year, and a schedule as to the sources and
applications of funds for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with GAAP, and audited and certified
by independent public accountants of nationally recognized standing selected by
the Company;
 
(ii)          as soon as practicable, but in any event within forty-five (45)
days after the end of each of the first three (3) quarters of each fiscal year
of the Company, an unaudited income statement for such fiscal quarter and a
balance sheet of the Company and a statement of stockholders’ equity as of the
end of such fiscal quarter;
 
 
 
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(iii)         with respect to the financial statements called for in subsections
(i), (ii) and (iii) of this Section 3.2(b) at a time when the Company is not
required to file reports under Section 13 or Section 15(d) of the Exchange Act,
an instrument executed by the chief financial officer or chief executive officer
of the Company and certifying that such financials were prepared in accordance
with GAAP consistently applied with prior practice for earlier periods (with the
exception of footnotes that may be required by GAAP) and fairly present the
financial condition of the Company and its results of operation for the period
specified, subject to year-end audit adjustment; and
 
(iv)        such other information relating to the financial condition,
business, properties, personnel, prospects or corporate affairs of the Company
as Investor may from time to time request.
 
ARTICLE 4
 
OTHER AGREEMENTS
 
4.1           Registration Rights.  Except with respect to the registration of
the shares of Common Stock to be issued pursuant to the Lincoln Equity Line (as
defined in the Registration Rights Agreement), the Company shall not grant any
right of registration under the Securities Act relating to any of its securities
to any Person other than Investor if such rights would or could reasonably be
expected to frustrate, impede or limit Investor’s rights pursuant to the
Registration Rights Agreement (it being understood that inclusion of securities
of the Company in any registration statement filed by the Company that is not a
Demand Registration (as defined in the Registration Rights Agreement) that, by
reason of the restrictions on the amount of securities that may be included in a
registration statement under Rule 415 promulgated under the Securities Act,
results in a limitation on the amount of securities that may be registered on
behalf of the Investor in a Demand Registration shall not be deemed to
frustrate, impede or limit Investor’s rights under the Registration Rights
Agreement).
 
4.2           Rule 144.  The Company shall file all reports required to be filed
by it under the Securities Act and the Exchange Act and shall take such further
action as Investor may reasonably request, all to the extent required to enable
Investor to sell the Common Stock into which the Note may be converted pursuant
to and in accordance with Rule 144.  Such action shall include, but not be
limited to, making available adequate current public information meeting the
requirements of paragraph (c) of Rule 144.
 
4.3           Availability of Common Stock.  The Company shall at all times
reserve and keep available out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of the Note and the exercise of the
Warrant, at least the full number of shares of Common Stock then issuable upon
the conversion of the Note and exercise of the Warrant.  The Company will, from
time to time, take the actions specified in Section 7 of the Note and Section 6
of the Warrant to increase the authorized amount of Common Stock if at any time
the number of shares of Common Stock remaining unissued and available for
issuance shall be insufficient to permit conversion of the Note and/or exercise
of the Warrant.
 
 
 
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4.4           No Rights Plan.  From the date hereof through the Restricted
Period, without the prior written consent of Investor, the Company shall not
adopt or enter into any “poison pill” rights plan or any similar plan or
agreement or declare or pay any dividend of any rights to purchase stock of the
Company in connection with such a plan or agreement, unless the Investor and its
affiliates are specifically excluded from being subject to any restrictions,
limitations or other triggering events that are otherwise applicable to holders
of capital stock of the Company pursuant to such plan (including any
restrictions on, or provisions triggered by, transactions between an “acquiring
person” under such rights plan (or any holder who owns greater than an
identified amount of the outstanding capital stock of the Company as described
in such rights plan) and the Company).
 
4.5           Legends.  Any legends placed on the Warrant or the Conversion
Shares, pursuant to the transactions contemplated by the Transaction Agreements
shall be removed by the Company upon delivery of an opinion of counsel
reasonably acceptable to the Company stating that such legend is no longer
necessary.
 
4.6           Takeover Statutes
 
.  If any “fair price,” “moratorium,” “control share acquisition” or other form
of antitakeover statute or regulation shall become applicable to the
transactions contemplated by the Transaction Agreements, the Board of Directors
of the Company shall grant such approvals and take such actions as are
reasonably necessary so that the transactions contemplated by the Transaction
Agreements may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
such statute or regulation on the transactions contemplated by the Transaction
Agreements.
 
ARTICLE 5
 
TERMINATION
 
5.1           Term.  This Agreement shall be in effect until such time as: (i)
the Note no longer remains outstanding; (ii) the Warrant no longer remains
outstanding; and (iii) Investor fails to own shares of Common Stock or other
Voting Securities in the Company. Notwithstanding the foregoing, in the event
the Investor transfers the Note (in whole) and the Warrant and does not hold
Conversion Shares, Sections 2.1, 2.2, 3.1, 4.1 and 4.4 shall terminate and be of
no force and effect.
 
ARTICLE 6
 
MISCELLANEOUS
 
6.1           Survival
 
.  All covenants and agreements of the Company and Investor contained in this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of Investor or any controlling Person thereof
or by or on behalf of the Company, any of its officers and directors or any
controlling Person thereof.  The covenants and agreements contained herein shall
survive in accordance with their terms.
 
6.2           Notices
 
.  All notices or other communications required or permitted hereunder shall be
in writing and shall be delivered personally, by facsimile (with receipt
confirmed telephonically) or sent by certified, registered or express mail,
postage prepaid.  Any such notice shall be deemed given if delivered personally
or facsimile, on the date of such delivery or such confirmation is received, or
if sent by reputable overnight courier, on the first Business Day following the
date of such mailing, as follows:
 
 
 
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(a)           if to the Company:
 

 
KonaRed Corporation
2829 Ala Kalani Kaumaka St., Suite F-133
Koloa, HI 96756
Facsimile: (808) 442-9922
Attention: Shaun Roberts
   
with a copy to (which shall not constitute notice):
         
Clark Wilson LLP
   
900-885 West Georgia Street
   
Vancouver, BC V6C 3H1 Canada
   
Attn: Bernard Pinsky
   
Facsimile: (604) 687-6314
       

(b)           if to Investor:
 

 
VDF FutureCeuticals, Inc.
2692 N. State Rt. 1-17
Momence, IL 60954
Facsimile: (815)472-3529
Attention: John Hunter
         
with a copy to (which shall not constitute notice):
         
Sidley Austin LLP
   
One South Dearborn
   
Chicago, Illinois  60603
   
Attn: Pran Jha
   
Facsimile: (312) 853-7036
       

Any party may by notice given in accordance with this Section 6.2 designate
another address or Person for receipt of notices hereunder.
 
6.3           Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of the parties
hereto.  Other than the parties hereto and their successors and permitted
assigns, and no Person is intended to be a beneficiary of this Agreement.  No
party hereto may assign its rights under this Agreement without the prior
written consent of the other party hereto; provided, however, that, without the
prior written consent of the Company, Investor may assign its rights hereunder
(along with the corresponding obligations) to any purchaser or transferee of the
Note or the Warrant.  Any assignee of Investor pursuant to the proviso of the
foregoing sentence shall be deemed to be “Investor” for all purposes of this
Agreement.
 
 
 
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6.4           Amendment and Waiver.  (a)  No failure or delay on the part of the
Company or Investor in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.
 
(b)           Any amendment, supplement or modification of or to any provision
of this Agreement and any waiver of any provision of this Agreement shall be
effective only if it is made or given in writing and signed by the Company and
Investor.
 
6.5           Counterparts.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, all of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
 
6.6           Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
 
6.7           Governing Law; Waiver of Jury Trial.
 
(a)           Governing Law.  This Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be
governed by, the laws of the State of New York, without giving effect to
principles of conflicts of laws.
 
(b)           Waiver of Jury Trial.  With respect to any action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, each of the parties hereby irrevocably, to the extent not prohibited by
applicable law that cannot be waived, waives, and covenants that it will not
assert (whether as plaintiff, defendant or otherwise), any right to trial by
jury in any action arising in whole or in part under or in connection with this
Agreement or the transactions contemplated hereby, whether now existing or
hereafter arising, and whether sounding in contract, tort or otherwise, and
agrees that any of them may file a copy of this paragraph with any court as
written evidence of the knowing, voluntary and bargained-for agreement among the
parties irrevocably to waive its right to trial by jury in any action or
proceeding whatsoever between them relating to this Agreement or the
transactions contemplated hereby.  Such action or proceeding shall instead be
tried by a judge sitting without a jury.
 
6.8           Severability.  If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
 
 
 
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6.9           Entire Agreement.  This Agreement, together with the schedules and
exhibits hereto, and the other Transaction Agreements referred to herein or
delivered pursuant hereto, are intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein or
therein.  This Agreement, together with the schedules and exhibits hereto, and
the other Transaction Agreements referred to herein or delivered pursuant
hereto, supersede all prior agreements and understandings between the parties
with respect to such subject matter.
 
6.10           Further Assurances.  Subject to the terms and conditions of this
Agreement, as of the date hereof, the Company and Investor agree to cooperate
with each other, and at the request of the other party, to execute and deliver
any further instruments or documents and take all such further action as the
other party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated by the Transaction Agreements and
to otherwise carry out the intent of the parties hereunder.
 
6.11           Public Announcements.  Except as required by any Requirement of
Law or the rules of any securities exchange, none of the parties hereto will
issue or make any reports, statements or releases to the public with respect to
this Agreement or the transactions contemplated by the Transaction Agreements
without the approval of the other party (such approval not to be unreasonably
withheld or delayed). The Investor acknowledges that the Transaction Agreements
will be publicly filed on EDGAR and disclosed in the Company’s periodic filings.
 
6.12           Specific Performance.  The parties acknowledge that money damages
are not an adequate remedy for violations of this Agreement and that any party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief or any requirement for a bond.
 
 
 
 
 
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective officers hereunto duly authorized as of the
date first above written.
 

 
KONARED CORPORATION
         
By:
“Shaun Roberts”
     
Name:
     
Title:
                     
VDF FUTURECEUTICALS, INC.
         
By:
 “John Hunter”
     
Name: John Hunter
     
Title: Executive Vice President
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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