Document:

ex102.htm

Exhibit 10.2

 

SETTLEMENT AGREEMENT

 

This Settlement Agreement ("Settlement Agreement") is deemed made and entered into on the 8th day of May 2013 by and between Mendel (Menachem) Bluming ("Bluming") and IntelliCell Biosciences, Inc. ("IntelliCell").

 

RECITALS

 

A. Whereas, as consideration for receiving a bridge loan of $500,000 from Bluming, IntelliCell issued and delivered to Bluming a promissory note styled as "6% Subordinated Convertible Note" dated June 3, 2011 (the "Note"). The term of the Note ran from June 3, 2011 to March 31, 2012.

 

B. Whereas, on February 13, 2013, Bluming filed a Complaint against IntelliCell in the United States District Court for the Southern District of New York, styled Menachem Bluming v. IntelliCell Biosciences, Inc., Case No. 1:13-cv-00978-CM.

 

C. Whereas, IntelliCell filed an Answer on March 11, 2013.

 

D. Whereas, IntelliCell has requested Bluming to dismiss the Complaint without prejudice and to defer IntelliCell's repayment obligations under the Note in exchange for receiving a payment of $35,000 from Hanover Holdings I, LLC, a New York limited liability company (hereafter "Hanover"), under the terms of a Receivable Purchase Agreement, for attorneys' fees owed by IntelliCell to Bluming under the Note.

 

E. NOW THEREFORE, in consideration of the foregoing recitals (incorporated herein by reference), the mutually exchanged promises and other consideration set forth in this Settlement Agreement, the legal sufficiency of which is hereby acknowledged, and mutually intending to be bound, the Parties hereby contract and agree as follows:

 

TERMS AND CONDITIONS

 

1.            Hanover and IntelliCell Section 3(a)(10) Proceeding. As a condition of this Settlement Agreement, Hanover and IntelliCell have entered into an agreement for Hanover to purchase various debt obligations of, or claims against, IntelliCell and to file a civil action under Section 3(a)(10) of the Securities Act of 1933, as amended.

 

2.            Acknowledgements of IntelliCell. IntelliCell acknowledges and agrees that under the terms of the Note, it is indebted to and owes Bluming the following sums:

 

	
a)  

	
Five Hundred Thousand Dollars ($500,000.00) in principal;

 

	
b)  

	
A default rate of interest of nine percent (9%) under New York law, to be paid in cash, calculated from April 1, 2012, until the Note and all sums due thereunder are paid in full;

 

	
c)  

	
Based on the default rate of interest, that IntelliCell owes Bluming from April 1, 2012 through March 31, 2013, interest under the Note in the amount of $45,000; and

 

	
d)  

	
Reasonable attorneys' fees as set forth in Exhibit B – Invoices of the Receivable Purchase Agreement between Hanover and Blurring.

 

 

  

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3.            Issuance of 4,070 shares to Bluming as Interest. IntelliCell and Bluming agree that IntelliCell over issued 4,070 shares of common stock to Bluming as an interest payment. (Bluming's counsel had demanded 28,409 shares, but IntelliCell issued a certificate for 32,479 shares). In consideration of Bluming's willingness to enter into this Settlement Agreement, IntelliCell agrees that Bluming shall retain the 4,070 shares of common stock and that said shares of stock shall be credited against interest due Bluming pursuant to the Note.

 

4.             Deferment of Note Obligation. Bluming agrees to not take any legal action against IntelliCell to collect the Note and enforce IntelliCell's payment obligations thereunder for a period of one year from the date of execution of this Settlement Agreement (the "deferment period"). In accordance with the deferment period, all amounts due under the Note shall become immediately due and payable by IntelliCell to Bluming one year from the date of execution of this Settlement Agreement.

 

5.           Hanover's Payment of $35,000 to Bluming. Under the terms of a Receivable Purchase Agreement between Hanover and Bluming, Hanover has agreed to pay Bluming the sum of Thirty-Five Thousand Dollars ($35,000.00) for some of the attorneys' fees owed by IntelliCell to Bluming under the Note. If the court does not approve the fairness of the exchange of debt for securities between Hanover and IntelliCell in the Section 3(a)(10) proceeding and/or if Hanover fails to pay Bluming the sum of $35,000 in accordance with the Receivable Purchase Agreement, the deferment period shall be deemed extinguished and Bluming shall have the right to immediately take legal action against IntelliCell to collect and enforce the Note and IntelliCell's payment obligations thereunder.

 

6.           Piggyback Registration Rights. IntelliCell hereby agrees to grant Bluming piggyback registration rights on all shares issued to Bluming and on the shares underlying the warrant certificate for 1,108,860 shares to coincide with any registration of any class of securities for IntelliCell or any of its securities holders.

 

7.            Option to Purchase Shares of Common Stock. IntelliCell hereby grants to Bluming the option to purchase Two Hundred Thirty-Three Thousand Three Hundred and Thirty-Three Shares (233,333) of common stock of IntelliCell at a price of fifteen cents ($0.15) per share. The grant date of this option shall be the date of execution of this Settlement Agreement, and the option shall be deemed fully vested and exercisable on the grant date. This option may be exercised in whole or in part at one time or from time to time. This option shall be exercised by giving notice to IntelliCell (or a brokerage firm designated or approved by IntelliCell), stating the number of shares of common stock which Bluming is exercising, accompanied by payment in full for such common stock at a price of $0.15 per share. Payment may be made, in whole or in part, by cash, check or wire transfer. This option shall expire five (5) years from the date of execution of this Settlement Agreement. This option may be assigned, sold, or transferred by Bluming, in whole or in part, to any person. This option shall survive the death of Bluming and shall inure to the benefit of his heirs, estate, executors, personal representatives, and trustees.

 

8.            Dismissal of Action. Upon (i) the execution by Hanover and Bluming of a Receivable Purchase Agreement, (ii) the execution of an agreement(s) between Hanover and IntelliCell, and (iii) written notice from counsel for Hanover to counsel for Bluming of a date certain that IntelliCell and Hanover shall file a civil action in court to undertake a Section 3(a)(10) court approval proceeding, Bluming and IntelliCell promptly shall file a Stipulation of Dismissal without Prejudice of Menachem Bluming v. IntelliCell Biosciences, Inc., Case No. 1:13-cv-00978-CM.

 

9.            Bankruptcy. Upon the filing of a Petition for Bankruptcy by or against IntelliCell, whether voluntary or involuntary, or upon the appointment of a receiver or Trustee for IntelliCell, the deferment period shall automatically be deemed canceled and Bluming immediately may enforce his rights under the Note.

 

10.          Governin Law. This Settlement Agreement shall be governed by and construed according to the laws of the State of New York, without regard to New York's conflict of law principles.

 

11.          Modifications. Except as otherwise provided in this Settlement Agreement, no subsequent alteration, amendment, modification, change or addition to this Settlement Agreement shall be binding upon either party unless in writing and signed by the party against whom enforcement of the alteration, amendment, modification, change or addition is sought.

 

12.         Counterparts and Facsimile Signatures. This Agreement may be executed in counterparts such that each duplicate shall constitute one and the same Agreement. Signatures reproduced by facsimile transmission or in Portable Document Format (PDF) shall be treated as originals for all purposes applicable hereto.

 

 

  

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IN WITNESS WHEREOF, this Settlement Agreement has been executed by the parties hereto as of the dates hereinafter written.

 

INTELLICELL BIOSCIENCES, INC.

 

 

 

 

By: Title:

 

Date: _______________________________                                          

 

MENDEL BLUMING

 

 

By: Mendel Bluming

Date: May 8, 2013

 

 

 

 

 

 

3Exhibit 10.01

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

AGREEMENT made as
of May 28, 2013 by and between Ace Marketing & Promotions, Inc., a New York corporation, having an office at 600 Old Country
Road, Suite 541, Garden City, NY 11530 (the “Company”) and Dean L. Julia, also having an office at 600 Old Country
Road, Suite 541, Garden City, NY 11530 (“Julia”).

 

W I T N E S S E T H:

 

WHEREAS, the Company
entered into an agreement on or about March 1, 2005 (the “Employment Agreement”) to retain the services of Julia as
an executive officer of the Company for a term of three years with an automatic provision to extend the contract for an additional
two years unless Julia gives 60 days prior written notice of his intention not to renew the agreement prior to the end of the initial
term; and

 

WHEREAS, on August
22, 2007, the Board of Directors approved a three-year extension of Julia’s Employment Agreement with an expiration date
of February 28, 2011 and approved the following:

 

		·	Continuation of current annual salary
with scheduled salary increases of $24,000 per annum to occur on every anniversary date of the contract and extension thereof commencing
on March 1, 2008;

		·	A signing bonus of options to purchase
150,000 shares granted to each executive which is fully vested at the date of grant and exercisable at $1.20 per share through
August 22, 2017;

		·	Ten-year options to purchase 50,000 shares
of Common Stock to be granted at fair market value on each anniversary date of the contract and extension thereof commencing March
1, 2008; and

		·	Termination pay of one-year base salary
based upon the scheduled annual salary of each executive officer for the next contract year, plus the amount of bonuses paid (or
entitled to be paid) to the executive for the current fiscal year or the preceding fiscal year, whichever is higher; 

and

 

WHEREAS,
on September 21, 2007, the Company and Julia entered into an amendment to the Employment Agreement in accordance with the Board
of Director’s resolutions of August 22, 2007; and

WHEREAS,
on April 7, 2010, the Board of Directors approved and Julia entered into an amendment to his Employment Agreement extending the
expiration date of his Employment Agreement through March 1, 2015 as well as the following additional provisions:

		·	Continuation of his annual salary and
scheduled salary increases;

		·	Signing bonus of stock options to purchase
200,000 shares, exercisable at $.50 per share through April 7, 2020

		·	10-year stock options to purchase 100,000
shares of common stock to be granted to Julia at fair market value on each anniversary date of the contract and extension thereof
commencing March 1, 2011; and

		·	termination pay of one year base salary
based upon the scheduled annual salary of Julia for the next contract year plus the amount of bonuses paid or entitled to be paid
to the him for the current fiscal year or the preceding fiscal year, whichever is higher. In the event of termination, Julia will
continue to receive all benefits included in the Employment Agreement through the scheduled expiration date of said Employment
Agreement prior to the acceleration of the termination date thereof.

 

and

 

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WHEREAS, on February
29, 2012, the Board approved Julia serving as Co-Chief Executive Officer of the Company for the duration of his Employment Agreement;
and

 

WHEREAS, on July
23, 2012, the Board approved and on January 25, 2013, the Board elected to implement an amendment to Julia’s Employment Agreement
so that Julia’s Employment Agreement shall then expire on February 28, 2017 and on each March 1st anniversary
commencing March 1, 2013, Julia’s Employment Agreement shall be extended for an additional one year, unless notice of termination
of the Employment Agreement has been provided by either the Company or Julia on or before December 30th of the prior
year, it being understood that in the event of termination by the Company, Julia will be entitled to all salary and other benefits
through the then expiration date of his ‘Employment Agreement plus one-year termination pay as per his amended agreement
of April 7, 2010; and

 

WHEREAS, on May
28, 2013, the Board of Directors approved an amendment to Julia’s Employment Agreement so that in the event majority control
of the Company is acquired in a particular year, Julia may choose as an annual bonus of an amount equal to 5% of pre-tax earnings
or to receive 1% of total consideration paid by the acquirer to purchase at least majority control of the Company; and

 

WHEREAS, the parties
desire to make all modifications necessary to Julia’s Employment Agreement to reflect the foregoing amendments.

 

NOW, THEREFORE,
it is agreed as follows:

 

 I.      Sections 4(b) of Julia’s Employment Agreement shall be amended to read as follows:

 

“4.
Compensation; Bonus

 

(b)In
addition to the Julia Base Salary, Julia shall be entitled to an annual bonus (the “Annual Bonus”) of at least 5% pre-tax
earnings (as defined under Generally Accepted Accounting Principles) for the most recently completed fiscal year before deduction
of Annual Bonuses paid to officers. In the event majority control of the Company is acquired by a person or group of persons during
the fiscal year, Julia may choose to receive the aforementioned percentage of pre-tax earnings as calculated above as an Annual
Bonus or 1% of the total consideration paid by the acquirer(s) to acquire at least majority control of the Company. The Annual
Bonus, if any, shall be paid no later than on the last business day of March of each year. Should this Agreement be terminated
prior to the end of any fiscal year for any reason other than that provided in paragraph 9(a), a pro-rata portion of the Annual
Bonus shall be paid within 30 days of such termination.”

  

II.     The Employment Agreement of March 1, 2005, as amended in writing prior hereto on January 25, 2013 and again herein, shall
constitute the entire agreement between Julia and the Company. This agreement may only be amended in writing and executed by both
parties. All other provisions of the Employment Agreement of March 1, 2005 remain unchanged.

 

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IN WITNESS WHEREOF,
the parties hereto have caused this agreement to be duly executed as of the date first above written.

 

ACE MARKETING &
PROMOTIONS, INC.

 

 

 

By: __________________________________

Michael D. Trepeta

Co-Chief
Executive Officer

 

___________________________

Dean L. Julia,
Executive

 

 

 

 

 

 

 

 

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