Document:

ex_136023.htm

 

Exhibit 10.65

 

KONARED CORPORATION

 

STOCKHOLDERS AGREEMENT

 

This Stockholders Agreement (the “Agreement”) is made and entered into as of October 24, 2017 by and among Kyle Redfield, Shaun Roberts and Juan Gonzalo Camet Piccone (the “Large Holders”), KonaRed Corporation, a Nevada corporation (the “Corporation”), and Kona I Holdings LLC, a Delaware limited liability company, and Kona II Holdings LLC, a Delaware limited liability company.

 

Kona I Holdings LLC and Kona II Holdings LLC are collectively referred to herein in the singular as “VB.” All obligations, duties, representations, warranties and/or rights set forth herein as to VB shall be deemed to be joint and several obligations, duties, representations, warranties and/or rights of Kona I Holdings LLC and Kona II Holdings LLC. Where (if anywhere) in this Agreement the context so requires, the term VB shall be deemed to refer to Kona I Holdings LLC and to obligations, duties, representations, warranties and/or rights of Kona I Holdings LLC; where (if anywhere) in this Agreement the context so requires, such term shall be deemed to refer to Kona II Holdings LLC and to obligations, duties, representations, warranties and/or rights of Kona II Holdings LLC. (Where the context requires or permits that such term refer to Kona I Holdings LLC and Kona II Holdings LLC collectively and to obligations, duties, representations, warranties and/or rights of Kona I Holdings LLC and Kona II Holdings LLC collectively, such term shall be deemed to so refer.) Each of Kona I Holdings LLC and Kona II Holdings LLC hereby agree that any notice, action, election, waiver or consent given or done hereunder by Kona I Holdings LLC shall be deemed to have been given or done by Kona I Holdings LLC on behalf of Kona II Holdings LLC as well as on behalf of Kona I Holdings LLC itself, pursuant to authority hereby irrevocably granted; and (in order to ensure perfect uniformity at all times) it is expressly agreed that Kona II Holdings LLC shall not in its own name give or do any notice, action, election, waiver or consent hereunder but instead shall stand aside and let Venice Brands give or do (or not give or not do) on behalf of both. Any such notice, action, election, waiver or consent given or done hereunder by Kona I Holdings LLC shall be conclusively deemed to be with respect to all Corporation securities and/or interests owned by Kona I Holdings LLC, on the one hand, and Kona II Holdings LLC, on the other hand, unless otherwise expressly so stated by Kona I Holdings LLC in such notice, action, election, waiver or consent (and in any case of such an express statement otherwise, it is agreed and required that Kona I Holdings LLC must state the percentage of its own Corporation securities and/or interests (of a particular class, series or type) as to which such notice, action, election, waiver or consent is given or done hereunder and exactly the same percentage of Kona II Holdings LLC’s Corporation securities and/or interests (of such class, series or type) shall be unavoidably deemed to have given or done such notice, action, election, waiver or consent too).

 

This Agreement is entered into in connection with the closing contemplated by the Series A Preferred Stock Purchase Agreement dated on or about the date hereof among the Corporation and VB (the “Series A Preferred Stock Purchase Agreement”). Capitalized terms not otherwise defined in this Agreement shall have the definitions ascribed to them in the Series A Preferred Stock Purchase Agreement or, if not defined in such Series A Preferred Stock Purchase Agreement, then as defined in the Corporation’s Series A Certificate of Designation. For purposes of this Agreement, the term “Liquidation Transaction” shall include, in addition to the transactions included in the definition of such term in the Corporation’s Series A Certificate of Designation, any transaction in which 100% of the outstanding shares of Corporation capital stock are to be sold directly to an

 

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acquiring entity or person.

 

1.     SALES BY LARGE HOLDERS.

 

1.1     Right of First Refusal.

 

(a) Should any Large Holder (or a Permitted Transferee, as defined below) propose to accept one or more bona fide offers (collectively, a “Purchase Offer”) from any persons to purchase shares of the Corporation’s Common Stock (the “Shares”) from such Large Holder (other than as set forth in Section 1.2 of this Agreement), such Large Holder shall promptly deliver a notice (the “Notice”) to the Corporation and VB stating the terms and conditions of such Purchase Offer including, without limitation, the number of Shares proposed to be sold or transferred, the nature of such sale or transfer, the consideration to be paid, and the name and address of each prospective purchaser or transferee, and offering to sell such Shares instead to VB (for such Purchase Offer consideration, or if the Purchase Offer consideration was not all in the form of cash or notes, for the Purchase Offer consideration to the extent the Purchase Offer consideration was in the form of cash or notes and an equivalent amount of cash to the extent the Purchase Offer consideration was not in the form of cash or notes, all on a per-Share basis) (the “Right of First Refusal”). Each Large Holder agrees not to consummate any such third-party transfer until the Right of First Refusal process set forth in this Section 1.1 is completed, and then only to the extent that the Right of First Refusal has not been exercised.

 

(b) VB shall have the right until 30 days after receipt of the Large Holder’s Notice to submit notice of its irrevocable commitment to exercise such Right of First Refusal; the Right of First Refusal must be exercised, if at all, before the expiration of such 30-day period.

 

(c) At a closing under the Right of First Refusal to be held on the tenth business day after the end of such 30-day period, the exercising VB shall deliver the appropriate consideration and the Large Holder shall deliver certificates representing the appropriate shares, free and clear of liens, security interests and adverse claims and duly endorsed for transfer to the exercising VB.

 

1.2     Permitted Transactions. The provisions of Section 1 of this Agreement shall not pertain or apply to:

 

(a) Any pledge of the Corporation’s Common Stock made by a Large Holder pursuant to a bona fide loan transaction which creates a mere security interest;

 

(b) Any repurchase of Common Stock by the Corporation;

 

(c) Any bona fide gift to a U.S. tax exempt nonprofit organization;

 

(d) Any transfer to a Large Holder’s ancestors, descendants or spouse or to a trust for their benefit; or

 

(e) Any sale or transfer by a Large Holder of up to 1% of the total number of shares of Common Stock held by such Large Holder on the date of this Agreement in any twelve-month period.

 

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provided, in each case, that (i) the Large Holder(s) shall inform VB of such pledge, transfer or gift before effecting it, and (ii) the pledgee, transferee or donee (each a “Permitted Transferee”) shall furnish VB with a written agreement to be bound by and comply with all provisions of this Agreement applicable to the Large Holders.

 

1.3     Prohibited Transfers. Any attempt by a Large Holder to transfer Shares in violation of Section 1 of this Agreement shall be void and the Corporation agrees it will not effect such a transfer nor will it treat any alleged transferee as the holder of such shares without the written consent of VB.

 

1.4     Legended Certificates. Each certificate representing shares of the Common Stock of the Corporation now or hereafter owned by the Large Holders or issued to any Permitted Transferee pursuant to Section 1.2 shall bear the following legend:

 

“THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT BY AND AMONG THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS OF COMMON AND PREFERRED STOCK OF THE CORPORATION. SUCH STOCKHOLDERS AGREEMENT ALSO INCLUDES A VOTING AGREEMENT WHICH IS APPLICABLE TO THE SECURITIES REPRESENTED BY THIS CERTIFICATE. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.”

 

2.     DRAG-ALONG RIGHT.

 

2.1     Actions to be Taken.

 

(a) In the event that a proposed Liquidation Transaction has been approved by the holders of the majority of the outstanding shares of Common Stock, acting or voting as a separate class, approved by the holders of the majority of the outstanding shares of Series A Preferred Stock, acting or voting as if a separate class, and approved by majority vote of the Corporation’s Board of Directors, the Corporation shall, if requested by VB, provide written notice signed by an officer of the Corporation to each Large Holder, which notice shall include the following (a “Drag-Along Notice”):

 

(i) A summary (in reasonable detail) of the material terms of such proposed Liquidation Transaction, including, but not limited to, the following: (A) the proposed time and place of the closing of the Liquidation Transaction; (B) the substantive terms and conditions of the Liquidation Transaction including (1) the purchase price and terms of payment and (2) the identity, beneficial ownership (if known by the Corporation or VB), address and telephone number of the proposed acquirer; (C) the number and class of capital stock of the Corporation held by the proposed acquirer and its affiliates (if any) and the substantive terms and conditions of any previous transactions under which the proposed acquirer or any of its affiliates purchased capital stock of the Corporation from VB, including the price per share at which such capital stock was purchased; and (D) any written consent of stockholders, stockholder resolutions (if the Liquidation

 

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Transaction is being approved at a stockholders meeting), agreement, instrument or other document the Parties are required to execute together with all exhibits, attachments and schedules thereto; and

 

(ii) A certification that such proposed Liquidation Transaction has received all of such approvals.

 

(b) Each Large Holder hereby agrees that, if it receives a Drag-Along Notice with respect to such a proposed transaction that complies with the provisions of Section 2.1(a) above, then, subject to Section 2.2 hereof, it shall:

 

(i) vote (in person, by proxy or by action by written consent, as applicable), with respect to all Shares or any other Corporation securities that such Large Holder owns or over which such Large Holder otherwise exercises voting power, in favor of such proposed Liquidation Transaction and vote in opposition to any and all other proposals that could delay or impair the ability of the Corporation or its stockholders to consummate such Liquidation Transaction;

 

(ii) execute and deliver all related documentation and take such other action in support of such proposed Liquidation Transaction as shall reasonably be requested by the Corporation or VB in order to carry out the terms and provision of this Section 2.1(b), including without limitation executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances), and any similar or related documents;

 

(iii) not deposit, and cause its affiliates not to deposit, except as provided in this Agreement, any securities of the Corporation owned by such Large Holder or affiliate in a voting trust or subject any such securities to any arrangement or agreement with respect to the voting or transfer of such securities (or to not vote or not transfer such securities), unless specifically requested to do so by the acquirer in connection with such proposed Liquidation Transaction; and

 

(iv) refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Liquidation Transaction.

 

2.2     Exceptions. Notwithstanding the forgoing, a Large Holder will not be required to comply with Section 2.1(b) in connection with any proposed Liquidation Transaction (a “Proposed Transaction”) unless:

 

(a) any representations and warranties to be made by such Large Holder in connection with the Proposed Transaction are limited to representations and warranties related to authority, ownership of the Shares held by such Large Holder and the ability to convey title to such Shares, including but not limited to representations and warranties that (i) the Large Holder holds all right, title and interest in and to the Corporation’s securities such Large Holder purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of the Large Holder in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by the Large Holder have been duly executed by the Large Holder and delivered to the acquirer and are enforceable against the Large Holder in accordance with their respective terms and (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of the Large Holder’s obligations thereunder, will cause a breach or violation of the

 

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terms of any agreement of the Large Holder or any law or judgment, order or decree of any court or governmental agency specially applicable to the Large Holder;

 

(b) the Large Holder shall not be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Proposed Transaction, other than the Corporation;

 

(c) the liability for indemnification, if any, of such Large Holder in the Proposed Transaction and for the inaccuracy of any representations and warranties made by the Corporation in connection with such Proposed Transaction, is several and not joint with any other person, and is pro rata in accordance with the portion of the proceeds received by such Large Holder in the Proposed Transaction;

 

(d) upon the consummation of the Proposed Transaction, (i) every holder of Series B Preferred Stock will receive the same amount of consideration per share of Series B Preferred Stock, (ii) every holder of Series A Preferred Stock will receive the same amount of consideration per share of Series A Preferred Stock, and (iii) every holder of Common Stock will receive the same amount of consideration per share of Common Stock.

 

3.    Common Director. VB and the Large Holders agree that neither VB nor any of the Large Holders will vote any Corporation stock in favor of the election of any person as the Swing Director (as defined in the Series A Certificate of Designation) except a person who has substantial beverage industry experience and connections, is not affiliated with VB or any of its managers or portfolio companies (provided, that from and after the time that Kona I Holdings LLC and/or its affiliates purchases $2.0 million of additional Series A Preferred Stock from the Corporation during the 2018 calendar year (i.e., in addition to shares of Series A Preferred Stock purchased on the Purchase Date), pursuant to the exercise of “Pre-Wired Warrants #1,” then it would be permissible for the Swing Director to be a person affiliated with VB or any of its managers or portfolio companies so long as such person meets the other qualifications set forth ion this Section 3), and is not affiliated with the Corporation (but for such directorship) or any of its officers or directors or with any of the Large Holders, is (and continues to be) recommended by a majority of the current Directors, is reasonably acceptable to VB and is reasonably acceptable to a majority in interest of the Large Holders. VB and the Large Holders agree not to vote any of their Corporation stock in favor of the removal of any person elected to the Swing Director seat who possesses all of such characteristics. In addition, VB and the Large Holders agree to vote all their Corporation stock in favor of the removal of any person elected to the Swing Director seat (e.g., by the votes of Corporation shareholders other than VB and the Large Holders) who lacks any of such characteristics.

 

4.     VOTING.

 

4.1     Springing Voting Agreement. Subject to the conditions stated in Section 4.2 having first occurred, the Large Holders agree to, if so requested by VB, vote (in person, by proxy or by action by written consent, as applicable), with respect to all Shares or any other Corporation securities that such Large Holder owns or over which such Large Holder otherwise exercises voting power, in favor of any Majority Matter (or, if so requested by VB, to vote against and decline to give written consent in favor of any Majority Matter).

 

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4.2     Conditions. Section 4.1 shall not be in effect unless and until the time that Kona I Holdings LLC and/or its affiliates purchases $2.0 million of additional Series A Preferred Stock from the Corporation during the 2018 calendar year (i.e., in addition to shares of Series A Preferred Stock purchased on the Purchase Date), pursuant to the exercise of “Pre-Wired Warrants #1.” In addition, in no event shall Section 4.1 apply to require a vote to approve any Proposed Transaction which fails any of the Section 2.2 elements or in favor of the election or removal of a Swing Director contrary to any of the Section 3 elements.

 

4.3     Definition. “Majority Matter” means any matter which requires, for approval, the vote of or approval by a majority of all shares of capital stock of the Corporation.

 

5.     REMEDIES.

 

5.1     Irrevocable Proxies.

 

(a) Each Large Holder hereby constitutes and appoints VB, with full power of substitution, as the proxies of the Large Holder with respect to the matters set forth herein, including without limitation, votes regarding any Proposed Transaction for which a Drag-Along Notice has been sent pursuant to Section 2 of this Agreement and which does not fail any of the Section 2.2 elements, and hereby authorizes each of them to represent and to vote, if and only if the Large Holder attempts to vote (whether by proxy, in person or by written consent), or to fail to vote, in a manner which is inconsistent with the terms of this Agreement, all of such Large Holder’s Corporation shares as was contemplated by this Agreement. The proxy granted pursuant to the immediately preceding sentence is given in consideration of the agreements and covenants of the Corporation and VB in connection with the transactions contemplated by this Agreement and the Series A Preferred Stock Purchase Agreement and, as such, is coupled with an interest and shall be irrevocable unless and until this Agreement terminates pursuant to Section 6.1 hereof. Each Large Holder hereby revokes any and all previous proxies with respect to such Large Holder’s Corporation shares and shall not hereafter, unless and until this Agreement terminates pursuant to Section 6.1 hereof, purport to grant any other proxy or power of attorney with respect to any of such Large Holder’s Corporation shares, deposit any of such Large Holder’s Corporation shares into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of its Corporation shares, in each case, with respect to any of the matters set forth herein.

 

(b) VB hereby constitutes and appoints the Chief Executive Officer of the Corporation (ex officio), with full power of substitution, as the proxy of VB with respect to the matters set forth in Section 3, and hereby authorizes him to represent and to vote, if and only if VB attempts to vote (whether by proxy, in person or by written consent), or to fail to vote, in a manner which is inconsistent with the terms of this Agreement, all or any of VB’s Corporation shares as was contemplated by this Agreement. The proxy granted pursuant to the immediately preceding sentence is given in consideration of the agreements and covenants of the Corporation and the Large Holders in connection with the transactions contemplated by this Agreement and the Series A Preferred Stock Purchase Agreement and, as such, is coupled with an interest and shall be irrevocable unless and until this Agreement terminates pursuant to Section 6.1 hereof. VB hereby revokes any and all previous proxies with respect to its Corporation shares and shall not hereafter, unless and until this Agreement terminates pursuant to Section 6.1 hereof, purport to grant any other proxy or power of attorney with respect to any of its Corporation shares, deposit any of its Corporation shares into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding

 

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with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of its Corporation shares, in each case, with respect to any of the matters set forth herein.

 

5.2     Specific Enforcement.

 

(a) Each Large Holder acknowledges and agrees that the Corporation and VB will be irreparably damaged in the event any of the provisions of this Agreement are not performed by the Corporation and each Large Holder in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that each of the Corporation and VB shall be entitled to an injunction to prevent breaches of this Agreement and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction; and that the prevailing party(ies) in such action shall be entitled to recover their reasonable attorneys fees in addition to any and all other legal and/or equitable relief.

 

(b) VB acknowledges and agrees that the Corporation and each Large Holder will be irreparably damaged in the event any of the provisions of this Agreement are not performed by VB in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that each of the Corporation and each Large Holder shall be entitled to an injunction to prevent breaches of this Agreement and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction; and that the prevailing party(ies) in such action shall be entitled to recover their reasonable attorneys fees in addition to any and all other legal and/or equitable relief.

 

5.3     Remedies Cumulative. All remedies, either under this Agreement or by law or otherwise afforded to the Corporation, VB or any Large Holder, with respect to the matters which are the subject of this Agreement shall be cumulative and not alternative.

 

6.     TERMINATION.

 

6.1     Termination Events. This Agreement shall terminate upon the earliest to occur of any one of the following events (and this Agreement shall not prohibit any transfer by a Large Holder in connection with any such event):

 

(a) The liquidation, dissolution or indefinite cessation of the business operations of the Corporation;

 

(b) The execution by the Corporation of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take possession of the property and assets of the Corporation;

 

(c) A firm commitment underwritten public offering by the Corporation of shares of its Common Stock pursuant to a registration statement under the Securities Act of 1933, as amended, which results in aggregate cash proceeds to the Corporation of at least $25,000,000 (net of underwriting discounts and commissions); or

 

(d) A Liquidation Transaction.

 

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6.2     Removal of Legend. At any time after the termination of this Agreement in accordance with Section 6.1, any holder of a stock certificate legended pursuant to this Agreement may surrender such certificate to the Corporation for removal of such legend, and the Corporation will duly reissue a new certificate without the legend.

 

7.     MISCELLANEOUS.

 

7.1     Successors and Assigns. Except as otherwise provided herein, this Agreement and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon, the parties’ respective successors, assigns and legal representatives.

 

7.2     Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and thereof, and any and all other prior or contemporaneous commitments, understandings and agreements, written or oral, relating to the subject matter hereof and thereof are expressly superseded.

 

7.3     Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Corporation, and VB, and holders of a majority of the Large Holders’ shares (or their respective successors and assigns) voting together as a class, and a majority of the persons who are then serving as Series A Preferred Directors. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. Any amendment or waiver effected in accordance with this Section 7.3 shall be binding upon the Corporation and VB and any holder of Large Holders’ Shares, and each of their respective successors and assigns.

 

7.4     Notices. Any notice, report, request, approval or consent required or permitted by this Agreement shall be in writing and shall be addressed to the party to be notified at such party’s address or email number as set forth below on the signature page, and (a) if to the Corporation, with a copy to Stradling Yocca Carlson & Rauth, A Professional Corporation, 4365 Executive Drive, Suite 1500, San Diego, CA 92121; attn: Hayden Trubitt, or (b) if to VB, with a copy to Spring Street Business Law, 634 S. Spring Street, Los Angeles, CA 90014; attn: Tony Borrego

 

or, in each case, to the most recent address, specified by written notice, given to the sender pursuant to this Section.

 

Any such written notice, report, request, approval or consent shall be deemed to have been given on the earliest of (a) actual receipt, or (b) if personally delivered to the party to whom notice is to be given, the date of delivery, or (c) if sent by email, the date of transmission, if sent to such email address before 5:00 p.m. at the location of receipt on a business day, or the first business day after the date of transmission, if sent to such email

 

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address at or after 5:00 p.m. at the location of receipt on a business day or on a day that is not a business day, or (d) if sent by overnight courier and addressed as set forth above, the next business day after the date of deposit with such courier (by the courier’s stated time for enabling next-business-day delivery), or if deposited after such stated time shall be deemed to be the second business day after the date of deposit, or (e) if sent in the United States by United States certified mail, return receipt requested, postage prepaid and addressed as set forth above, on the fifth business day after such mailing.

 

7.5     Severability. This Agreement is severable. When possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law; but if any provision of this Agreement is determined by a final and binding court or arbitration judgment to be invalid, illegal or unenforceable to any extent, such provision shall not be affected or impaired up to the limits of such invalidity, illegality or unenforceability; the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected or impaired in any way; and the parties agree to negotiate in good faith to replace such invalid, illegal and unenforceable provision (or portion of provision) with a valid, legal and enforceable provision that achieves, to the greatest lawful extent under this Agreement, the economic, business and other purposes of such invalid, illegal or unenforceable provision (or portion of provision).

 

7.6     Further Assurances. The parties hereby covenant and agree without the necessity of any further consideration, to execute, acknowledge and deliver any and all such other documents and instruments and take any such other action as may be reasonably necessary or appropriate to carry out the intent and purposes of this Agreement.

 

7.7     Interpretation. The language used in this Agreement is the language chosen by the parties to express their mutual intent, and no provision of this Agreement shall be interpreted for or against any party because that party or its attorney drafted the provision.

 

7.8     Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

 

7.9     Counterparts. This Agreement may be executed and delivered in two or more electronically transmitted counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the parties have executed this Stockholders Agreement as of the date first written above.

 

	
			 /s/ Kyle Redfield                                                        

			KYLE REDFIELD

			 

			Address: 1101 Via Callejon, Suite 200,

			San Clemente, CA 92673

			Email: kyle@konared.com

			 

			 /s/ Juan Gonzalo Camet Piccone ​​​​​​​                               

			JUAN GONZALO CAMET PICCONE

			 

			Address: Castillo de Malpica 108; 28691,

			Villanueva de la Canada; Madrid, Spain

			Email: gonzalo.kred@gmail.com

			 

			 

				
			 /s/ Shaun Roberts                                                

			SHAUN ROBERTS

			Address: 3680 Omao Road,

			Koloa, HI 96756

			Email: shaun@konared.com

			
	
			KONARED CORPORATION

			 

			By:  /s/ Kyle Redfield​​​​​​​                                                 

			 

			Title: President

			 

			Address: 1101 Via Callejon, Suite 200,

			San Clemente, CA 92673

			Email: kyle@konared.com

			 

			 

			KONA I HOLDINGS LLC

			 

			By:  /s/ Gregory T. Willsey                                         

			Title: Manager

			Address: 101 California Avenue, Suite 430,

			Santa Monica, CA 90403

			Email: greg@venicebrands.com

			 

			 

			KONA II HOLDINGS LLC

			 

			By:  /s/ Adam B. Scott                                                

			Title: Manager

			Address: c/o Kona I Holdings LLC,

			101 California Avenue, Suite 430,

			Santa Monica, CA 90403

			Email: greg@venicebrands.com

				 

 

 

10ex_136046.htm

 

Exhibit 10.66

 

October 24, 2017

 

 

 

Kyle Redfield

1101 Via Callejon, Suite 200

San Clemente, CA 92673

 

Dear Kyle:

 

On behalf of KonaRed Corporation (the “Corporation”), I am pleased to offer you the following contractual arrangement which, if you accept it, shall govern your employment relationship with the Corporation for the 24-month period effective beginning on October 24, 2017 (the “Start Date”), as set forth below. You acknowledge that it is a condition to consummation of an investment in the Corporation by Kona Holdings I LLC and Kona Holdings II LLC that you and the Corporation (i) enter into this agreement to establish the terms and conditions of your employment following the Start Date and (ii) enter into the general release set forth on Attachment A attached hereto (the “Release”) with respect to any matters occurring prior to the Start Date.

 

1.     Position.

 

(a) You will serve the Chief Executive Officer of the Corporation and will report to the Board of Directors. (You will resign your positions as President and Chief Operating Officer of the Corporation.)

 

(b) You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Corporation. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Corporation, the Corporation will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Corporation, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Corporation. Nothing in this Section 1 will prevent you from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning no more than 1% of the outstanding equity securities of a corporation whose stock is listed on a national securities exchange. In addition, you are allowed to participate as an investor and an advisor for a project to build a manufacturing facility for coffee, beer and ciders; provided that such project may not enter into any arrangement or transaction with the Corporation without the approval of the Series A Directors of the Corporation.

 

(c) In general, you will have the responsibilities and duties associated with and over the areas which are typically associated with the office of Chief Executive Officer of a corporation.

 

2.     Proof of Right to Work. For purposes of federal immigration law, you will be required to re-provide to the Corporation, upon request, documentary evidence of your identity and eligibility for employment in the United States.

 

 

 

 

 

Kyle Redfield 

October 24, 2017

Page 2

 

 

3.     Compensation. For the first 12-month period commencing from the Start Date, you will be paid a monthly salary of $17,500, which is equivalent to $210,000 on an annualized basis (the “Base Salary”). Such Base Salary will be payable pursuant to the Corporation’s regular payroll policy. You will be eligible for a cash bonus for such 12-month period as may be awarded by the Board of Directors in its discretion based upon your performance and the achievement of objectives established by the Board of Directors; your bonus target shall be 15% of Base Salary. Your Base Salary and any and all bonuses will be subject to standard withholding pursuant to the Corporation’s regular payroll policy.

 

For the 12-month period commencing on the first anniversary of the Start Date, you will be paid a monthly Base Salary of $20,833, which is equivalent to $250,000 on an annualized basis. (Provided, however, that such increased Base Salary shall be subject to an automatic prospective rollback to the $17,500 per month level effective January 1, 2019 if the Corporation does not achieve, in calendar 2018, gross sales (less any discounts, returns or allowances for damaged or missing goods) of at least $7,000,000.) Such Base Salary will be payable pursuant to the Corporation’s regular payroll policy. You will be eligible for a cash bonus for such 12-month period as may be awarded by the Board of Directors in its discretion based upon your performance and the achievement of objectives established by the Board of Directors; your bonus target shall be 15% of second-year Base Salary.

 

You will also be paid (in advance, monthly) a monthly automobile allowance of $650, which is equivalent to $7,800 on an annualized basis.

 

If requested, you agree to serve on the Corporation’s Board of Directors for no additional consideration.

 

4.     Stock Option Grants. The Corporation will recommend that its Board of Directors grant you, from the “Management Incentive Pool,” a 10-year stock option to purchase 18,368,516 shares of the Corporation’s common stock (“Option Shares”) with an exercise price equal to the fair market value on the date of the grant and on the other terms and conditions set forth in the Stock Option Grant Notice / Option Agreement attached hereto as Attachment C.

 

5.     Accrued Compensation. It is mutually acknowledged that you are owed $189,976 of accrued but unpaid compensation from the Corporation for services through September 30, 2017. The Corporation and you agree that this amount shall be fully satisfied by the following: (a) payments of $23,747 cash (less applicable tax withholdings) on each of January 1, April 1, July 1 and October 1, 2018, and (b) a grant of a 10-year stock option to purchase 67.11 shares of the Corporation’s Series B Preferred Stock (“Series B Option Shares”) with an exercise price equal to the fair market value of a share of Series B Preferred Stock on the date of the grant and on the other terms and conditions as set forth in the Stock Option Grant Notice / Option Agreement attached hereto as Attachment D.

 

6.     Benefits.

 

(a)     Insurance Benefits, Etc. The Corporation will provide you with the opportunity to participate in the standard benefits plans currently available to other Corporation executives, subject to any eligibility requirements imposed by such plans.

 

(b)     Vacation; Sick Leave.  You will be entitled to 10 days per year of vacation

 

 

 

 

 

Kyle Redfield 

October 24, 2017

Page 3

 

 

plus 7 days per year of paid time off (plus Corporation observed holidays) according to the Corporation’s standard policies, subject to any and all accrual caps imposed by such policies.

 

7.     Confidential Information and Invention Assignment Agreement.  Your acceptance of this offer and commencement of employment with the Corporation is contingent upon the execution, and delivery to an officer of the Corporation, of the Corporation’s Confidential Information and Invention Assignment Agreement, a copy of which is attached as Attachment B for your review and execution (the “Confidentiality Agreement”), before or on your Start Date.

 

8.     At-Will Employment. Your employment with the Corporation will be on an “at will” basis, meaning that either you or the Corporation may terminate your employment at any time for any reason or no reason, without further obligation or liability (except as may be expressly set forth in Section 9 of this letter).

 

9.     Separation. In the event of any cessation of your employment, the Corporation shall pay you (i) any salary earned and accrued but unpaid before termination and all accrued but unused paid time off not barred by the accrual cap, and (ii) any documented business expenses incurred in accordance with the Corporation’s policies but not reimbursed as of the date of termination.

 

You shall not be entitled to any severance or separation benefits except under the following provisions:

 

In the event that you are terminated without Cause (as defined below) or resign with Good Reason (as defined below) before the second anniversary of the Start Date, then you shall be entitled to receive the following severance benefits (and no other): (i) to receive continuation of your Base Salary as in effect immediately before the termination date, paid on the same basis and at the same times as previously paid, through the second anniversary of the Start Date; and (ii) should you timely elect to continue coverage for you and your eligible dependents pursuant to COBRA, to receive reimbursement for such same period for the COBRA premiums (but subject to the Corporation’s right to discontinue or change any of its COBRA-eligible plans generally or to change providers).

 

	 	
			a.

				
			As used herein, “Cause” means termination based on (i) your conviction or plea of “guilty” or “no contest” to any crime constituting a felony in the jurisdiction in which committed, any crime involving moral turpitude (whether or not a felony), or any other violation of criminal law involving, fraud, dishonesty or willful misconduct (whether or not a felony); (ii) your refusal to follow the lawful and proper directives of the Board of Directors; (iii) your knowing and willful breach of this letter agreement or the Confidentiality Agreement; (iv) your actions that would be likely to materially discredit or cause substantial damage to the Corporation or its reputation; (v) your knowing and willful material breach of your duty of care (except in good faith) or your duties of trust or loyalty; (vi) your willful falsification of records or reports; (vii) your chronic absence from work for reasons other than illness; or (viii) failure to enter into the Release or revocation of the Release; provided, however, that for purposes of (ii), (iii), (iv), (v), (vi), (vii) or (viii), the Corporation will provide to you a written notice from the Board of Directors which describes the basis for the Board of Directors’ belief that you have not substantially satisfied your obligations to the Corporation and a reasonable opportunity to cure any such alleged deficiencies within 15 days if such

			

 

 

 

 

 

Kyle Redfield 

October 24, 2017

Page 4

 

 

	 	
			 

				
			deficiency can be cured. It is understand that mere poor performance or poor results does not constitute Cause.

			

 

	 	
			b.

				
			As used herein, “Good Reason” means the occurrence of any of the following circumstances, without your express consent: you resign due to (i) a material reduction of your title or authority (including, after a transaction in which the Corporation is acquired, a requirement that you serve in a role other than Chief Executive Officer of the acquiring entity), (ii) a material reduction in your salary or benefits (other than a reduction that generally applies to the officers at your level in the Corporation or, as applicable, the surviving corporation at that time), or (iii) a change of the principal non-temporary location in which you are required to perform your services to any location exceeding 50 miles from Carlsbad, California. In no event shall a resignation be considered to be with Good Reason unless the resignation occurs after but within 30 days after the initiation of the item of Good Reason.

			

 

If so required to avoid any liability or tax under section 409A of the Internal Revenue Code, this Section 9 shall be deemed reformed to require payments only when and in the amounts necessary to avoid any liability or tax under section 409A of the Internal Revenue Code.

 

10.     No Conflicting Obligations.  You understand and agree that by accepting this offer of employment, you represent to the Corporation that your performance will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Corporation, enter into any oral or written agreement in conflict with any of the provisions of this letter or the Corporation’s policies. You are not to bring with you to the Corporation, or use or disclose to any person associated with the Corporation, any confidential or proprietary information belonging to any former employer or other person or entity with respect to which you owe an obligation of confidentiality under any agreement or otherwise. The Corporation does not need and will not use such information and we will assist you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties. Also, we expect you to abide by any obligations to refrain from soliciting any person employed by or otherwise associated with any former employer and suggest that you refrain from having any contact with such persons until such time as any non-solicitation obligation expires.

 

11.     Arbitration. You and the Corporation agree to arbitrate before a neutral arbitrator any and all claims or disputes arising out of this letter agreement and any and all claims arising from or relating to your employment with the Corporation, including (but not limited to) claims against any future, current or former employee, director or agent of the Corporation, claims of wrongful termination, retaliation, discrimination, harassment, breach of contract, breach of the covenant of good faith and fair dealing, defamation, invasion of privacy, fraud, misrepresentation, constructive discharge or failure to provide a leave of absence, or claims regarding commissions, stock options or bonuses, infliction of emotional distress or unfair business practices.

 

The arbitrator’s decision must be written and must include the findings of fact and law that support the decision. The arbitrator’s decision will be final and binding on both parties, except to the extent applicable law allows for judicial review of arbitration awards. The arbitrator may award any remedies that would otherwise be available to the parties if they were to bring the dispute in court. The arbitration will be conducted in accordance with the National Rules for the Resolution of

 

 

 

 

 

Kyle Redfield 

October 24, 2017

Page 5

 

 

Employment Disputes of the American Arbitration Association; provided, however that the arbitrator must allow the discovery authorized by the California Arbitration Act or its equivalent under the state law of the state in which the arbitration is conducted. The arbitration will take place in Orange County, California.

 

You and the Corporation will share the costs of arbitration equally, except that the Corporation will bear the cost of the arbitrator’s fee and any other type of expense or cost that you would not be required to bear if you were to bring the dispute or claim in court. Both the Corporation and you will be responsible for their own attorneys’ fees, and the arbitrator may not award attorneys’ fees unless a statute or contract at issue specifically authorizes such an award.

 

The foregoing notwithstanding, this arbitration provision does not apply to (a) workers’ compensation or unemployment insurance claims or (b) any other claims that an employer cannot, in accordance with applicable state law, require (either pursuant to an arbitration agreement or otherwise) an employee to arbitrate, or (c) claims concerning the ownership, validity, infringement, misappropriation, disclosure, misuse or enforceability of any confidential information, patent right, copyright, mask work, trademark or any other trade secret or intellectual property held or sought by either you or the Corporation (whether or not arising under the Confidentiality Agreement).

 

If an arbitrator or court of competent jurisdiction (the “Neutral”) determines that any provision of this arbitration provision is illegal or unenforceable, then the Neutral will modify or replace the language of this arbitration provision with a valid and enforceable provision, but only to the minimum extent necessary to render this arbitration provision legal and enforceable.

 

12.     Entire Agreement, Etc. This letter agreement, together with the Confidentiality Agreement, sets forth the entire agreement and understanding between you and the Corporation relating to your employment for the period commencing from the Start Date and supersedes all prior and contemporaneous agreements and discussions between us with regard to such subject matter. This letter agreement may not be modified or amended or waived except by a written agreement, signed by an officer of the Corporation. This letter agreement shall be governed by the laws of the State of California without regard to its conflict of laws provisions.

 

We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Corporation’s offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement.

 

 

 

 

 

 

 

Kyle Redfield 

October 24, 2017

Page 6

 

 

	
			Very truly yours,  

			 

			KONARED CORPORATION

			 

			 

			By:  /s/ Shaun Roberts                                     

			 

			Title: President 

				
			ACCEPTED AND AGREED:

			 

			KYLE REDFIELD

			 

			 /s/ Kyle Redfield                                       

			Signature

			 

			Date 10/24/2017

			

        

 

 

 

Attachment A: General Release

Attachment B: Confidential Information and Invention Assignment Agreement

Attachment C: Stock Option Grant Notice / Option Agreement (Common Stock)

Attachment D: Stock Option Grant Notice / Option Agreement (Series B Preferred Stock)

 

 

 

 

 

Attachment A

 

General Release

 

 

 

1.     I, Kyle Redfield, for and in full consideration of the compensation, benefits and rights to be provided to me that are described in the employment letter agreement (the “Employment Agreement”) between KonaRed Corporation and me dated as of October 24, 2017 (the “Effective Date”), and as to which I would not be entitled but for giving the release set forth herein, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE KonaRed Corporation and each of its predecessors, subsidiaries, parents and affiliates, their officers, directors, parents, shareholders, partners, members, managers, employees and agents, and their respective predecessors, successors and assigns, heirs, executors and administrators (hereinafter collectively referred to as the “Company”), acting in any capacity whatsoever, of and from any and all manner of actions and causes of actions, torts, wrongs, suits, debts, claims and demands whatsoever (and whether known or unknown) at law or in equity, which I ever had, now have, or hereafter may have, or which my heirs, executors or administrators hereafter may have, by reason of any matter, cause or thing whatsoever from the beginning of time to the date of this General Release (“Release”) and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to my employment relationship with the Company, including but not limited to, any claims which have been asserted, could have been asserted, or could be asserted now or in the future under any federal, state or local laws, including claims under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended, the Employee Retirement Income Security Act of 1974 as amended, any law regarding discrimination, family leave or family care, any contracts between the Company and me, and any common law claims now or hereafter recognized and all claims for counsel fees and costs (collectively, the “Claims”) provided, however, that nothing in this Release is intended or will be construed to release any of my rights or benefits arising under or in respect of the Employment Agreement after the Effective Date or any other agreement delivered in connection therewith.

 

2.     Notwithstanding anything in this Release to the contrary, this Release does not apply to actions, causes of actions, suits, debts, claims, demands or rights accruing or arising after its execution or to actions, causes of actions, suits, debts, claims, demands or rights that as a matter of law cannot be released in a Release such as this one; such things are expressly excluded from the definition of Claims. In addition, the following things are excluded from the definition of Claims and are not released hereby: regular salary accrued since the Corporation’s last regular payroll cutoff date(which will be paid to you on the next regularly scheduled payroll date), unreimbursed or un-submitted out-of-pocket expenses incurred on behalf of the Corporation (to the extent reasonable in amount and consistent with past practice, and subject to appropriate documentation), accrued paid-time-off in accordance with the Corporation’s paid-time-off policies, rights under all written stock ownership and stock option notices/agreements as reflected in the Corporation’s records, indemnification rights under the Corporation’s bylaws or written

 

 

 

 

 

agreements, rights to remittal of withheld tax amounts for periods through the Effective Date, and accrued rights under the Corporation’s ERISA plans.

 

3.     I confirm the intention that the execution of this instrument will be effective as a bar to each and every Claim specified in this Release. In furtherance of this intention, I hereby expressly waive any and all rights and benefits conferred upon me by the provisions of Section 1542 of the California Civil Code and expressly consent that this Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims, if any, as well as those relating to any other claims hereinabove specified. Section 1542 provides:

 

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

 

Having been so apprised, I nevertheless hereby voluntarily elect to and do waive the rights described in Civil Code Section 1542, and elect to assume all risks for claims that now exist in my favor, known or unknown.

 

4.     I acknowledge that I have no further Claims for wages or other compensation due me from the Company through the Effective Date. I further acknowledge that the Company has granted to me all leave rights, if any, to which I was or believed I was entitled during my employment and that my leave rights under the Family and Medical Leave Act, if applicable, the Company’s policies and any applicable state laws have been fully respected and honored by the Company.

 

5.     I agree, covenant and promise that I will not in any way communicate or disclose the terms of this Release to any person other than my immediate family, my attorney and my financial or tax advisor, each of whom shall be informed of this confidentiality obligation and shall be bound by its terms.

 

6.     I acknowledge that by electing to accept the benefits provided pursuant to the Employment Agreement I am being provided with benefits which are in addition to any amounts to which I otherwise would have been entitled.

 

7.     I hereby certify the following:

 

(a)     I have read the terms of this Release, and I understand its terms and effects, including the fact that I have agreed to release and forever discharge the Company from any legal obligation for Claims arising out of my employment relationship with the Company prior to the Effective Date;

 

(b)     I have signed this Release voluntarily and knowingly in exchange for the consideration described herein, which I acknowledge is adequate and satisfactory;

 

 

 

 

 

(c)     I have been advised by the Company, through this document, to consult with an attorney prior to signing this Release;

 

(d)     the Company has provided me with at least 21 days within which to consider whether to sign this Release, and that I have agreed to sign it on the date indicated below after concluding that this Release is satisfactory to me;

 

(e)     I have the right to revoke this Release for a period of 7 days following the Release’s execution by giving written notice to:

 

KonaRed Corporation

1101 Via Callejon, Suite 200

San Clemente, CA 92673

 

(f)     neither the Company, nor any of its agents, affiliates, representative or attorneys have made any representations to me concerning the terms or effects of this Release other than those contained herein.

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, I have executed the foregoing General Release on this 24th day of October, 2017.

 

	 	
			EMPLOYEE

			 

			 

			                                                             

			Kyle Redfield

			

 

 

 

 

 

 

 

Attachment B

 

Confidential Information and Invention Assignment Agreement

 

 

 

 

 

 

 

 

 

[This form is designed to be used by an individual hired as an employee of KonaRed Corporation. If an individual is hired as a consultant, or becomes a consultant after having been an employee, use the Consultant form of Confidential Information and Invention Assignment Agreement.]

 

KONARED CORPORATION

 

CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT

 

 

As a condition of my becoming employed (or my employment being continued) by KonaRed Corporation (including any of its subsidiaries) (together, the “Corporation”), and in consideration of my employment relationship with the Corporation and my receipt of the compensation now and hereafter paid to me by the Corporation, I agree to the following:

 

1.     Employment Relationship. I understand and acknowledge that this Agreement does not alter, amend or expand upon (i) any rights I may have to continue in the employ of, or (ii) the duration of my employment relationship with, the Corporation under any existing agreements between the Corporation and me or under applicable law. Any employment relationship between the Corporation and me, whether commenced before or upon the date of this Agreement, shall be referred to herein as the “Relationship.”

 

2.     Duties. I will perform for the Corporation such duties as may be designated by the Corporation from time to time. During the Relationship, I will devote my best efforts to the interests of the Corporation and will not engage in other employment or in any activities detrimental to the best interests of the Corporation without the prior written consent of the Corporation.

 

3.     At-Will Relationship. I understand and acknowledge that the Relationship is and shall continue to be at-will, as defined under applicable law, meaning that either I or the Corporation may terminate the Relationship at any time for any reason or no reason, without further obligation or liability except as set forth in an express written agreement.

 

4.     Confidential Information.

 

(a)     Corporation Information. I agree at all times during the Relationship and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Corporation to the extent necessary to perform my obligations to the Corporation under the Relationship, or to disclose to any person, firm, corporation or other entity without written authorization of the Board of Directors of the Corporation, any Confidential Information of the Corporation which I obtain or create. I further agree not to make copies of such Confidential Information except as authorized by the Corporation. I understand that “Confidential Information” means any Corporation proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Corporation on whom I called or with whom I became acquainted during the Relationship), prices and costs, markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to me by the Corporation either directly or indirectly in writing, orally or by drawings or observation of parts

 

 

 

 

 

or equipment or created by me during the Relationship, whether or not during working hours. I understand that Confidential Information includes, but is not limited to, information pertaining to any aspect of the Corporation’s business which is either information not known by actual or potential competitors of the Corporation or other third parties not under confidentiality obligations to the Corporation, or is otherwise proprietary information of the Corporation or its customers or suppliers, whether of a technical nature or otherwise. I further understand that Confidential Information does not include any of the foregoing items which has become made generally available through no wrongful act of mine or my disclosees or which was in or comes into my possession from a third party who was under no obligation to maintain the confidentiality of such information.

 

(b)     Prior Obligations. I represent that my performance of all terms of this Agreement as an employee of the Corporation has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me prior or after the commencement of the Relationship, and I will not disclose to the Corporation or use any inventions, confidential or non-public proprietary information or material belonging to any current or former client or employer or any other party. I will not induce the Corporation to use any inventions, confidential or non-public proprietary information, or material belonging to any current or former client or employer or any other party. I acknowledge and agree that I have listed on Exhibit A hereto all agreements (e.g., non-competition agreements, non-solicitation of customers agreements, non-solicitation of employees agreements, confidentiality agreements, inventions agreements, etc.) with a current or former employer, or any other person or entity, that may restrict my ability to accept employment with the Corporation or my ability as an employee to recruit or engage customers or service providers on behalf of the Corporation, or otherwise relate to or restrict my ability to perform my duties as an employee of the Corporation or any obligation I may have to the Corporation.

 

(c)     Third Party Information. I recognize that the Corporation has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Corporation’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Corporation consistent with the Corporation’s agreement with such third party.

 

5.     Inventions.

 

(a)     Inventions Retained and Licensed. I have attached hereto, in Exhibit A, a list describing with particularity all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me before the commencement of the Relationship (collectively referred to as “Prior Inventions”), which belong solely to me or belong to me jointly with another, which relate in any way to any of the Corporation’s proposed businesses, products or research and development, and which are not assigned to the Corporation hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. If, in the course of the Relationship, I incorporate into a Corporation product, process or machine a Prior Invention owned by me or in which I have an interest, the Corporation is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

 

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(b)     Assignment of Inventions. I agree that I will promptly make full written disclosure to the Corporation, will hold in trust for the sole right and benefit of the Corporation, and hereby assign to the Corporation, or its designee, all my right, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the Relationship (collectively referred to as “Inventions”), except as provided in Section 5(e) below. I further acknowledge that all Inventions which are made by me (solely or jointly with others) within the scope of and during the Relationship are “works made for hire” (to the greatest extent permitted by applicable law) and are compensated by my salary, unless regulated otherwise by the mandatory law of the state of California.

 

(c)     Maintenance of Records. I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the Relationship. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, laboratory notebooks, and any other format. The records will be available to and remain the sole property of the Corporation at all times. I agree not to remove such records from the Corporation’s place of business except as expressly permitted by Corporation policy which may, from time to time, be revised at the sole election of the Corporation for the purpose of furthering the Corporation’s business. I agree to return all such records (including any copies thereof) to the Corporation at the time of termination of the Relationship as provided for in Section 6.

 

(d)     Patent and Copyright Rights. I agree to assist the Corporation, or its designee, at its expense, in every proper way to secure the Corporation’s, or its designee’s, rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Corporation or its designee of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which the Corporation or its designee shall deem necessary in order to apply for, obtain, maintain and transfer such rights, or if not transferable, waive such rights, and in order to assign and convey to the Corporation or its designee, and any successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world. If the Corporation or its designee is unable because of my mental or physical incapacity or unavailability or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents, copyright, mask works or other registrations covering Inventions or original works of authorship assigned to the Corporation or its designee as above, then I hereby irrevocably designate and appoint the Corporation and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent, copyright or other registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to the Corporation or its designee any and all claims, of any nature whatsoever, which I now or hereafter have for infringement of any and all proprietary rights assigned to the Corporation or such designee.

 

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(e)     Exception to Assignments. I understand that the provisions of this Agreement requiring assignment of Inventions to the Corporation do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit B). I will advise the Corporation promptly in writing of any inventions that I believe meet such provisions and are not otherwise disclosed on Exhibit A.

 

6.     Corporation Property; Returning Corporation Documents. I acknowledge and agree that I have no expectation of privacy with respect to the Corporation’s telecommunications, networking or information processing systems (including, without limitation, stored company files, e-mail messages and voice messages) and that my activity and any files or messages on or using any of those systems may be monitored at any time without notice. I further agree that any property situated on the Corporation’s premises and owned by the Corporation, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Corporation personnel at any time with or without notice. I agree that, at the time of termination of the Relationship, I will deliver to the Corporation (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any of the aforementioned items developed by me pursuant to the Relationship or otherwise belonging to the Corporation, its successors or assigns. In the event of the termination of the Relationship, I agree to sign and deliver the “Termination Certification” attached hereto as Exhibit C; however, my failure to sign and deliver the Termination Certificate shall in no way diminish my continuing obligations under this Agreement.

 

7.     Notification to Other Parties.

 

(a)     Employees. In the event that I leave the employ of the Corporation, I hereby consent to notification by the Corporation to my new employer about my rights and obligations under this Agreement.

 

(b)     Consultants. I hereby grant consent to notification by the Corporation to any other parties besides the Corporation with whom I maintain a consulting relationship, including parties with whom such relationship commences after the effective date of this Agreement, about my rights and obligations under this Agreement.

 

8.     Solicitation of Employees, Consultants and Other Parties. I agree that during the Relationship and for a period of 12 months immediately following the termination of the Relationship for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Corporation’s employees or consultants to terminate or diminish their relationship with the Corporation, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Corporation, either for myself or for any other person or entity. Further, during the Relationship and at any time following termination of the Relationship for any reason, with or without cause, I shall not use any Confidential Information of the Corporation to attempt to negatively influence any of the Corporation’s clients or customers from purchasing Corporation products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Corporation.

 

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9.     Representations and Covenants. 

 

(a)     Facilitation of Agreement. I agree to execute promptly any proper oath or verify any proper document required to carry out the terms of this Agreement upon the Corporation’s written request to do so.

 

(b)     Conflicts. I represent that my performance of all the terms of this Agreement does not and will not breach any agreement I have entered into, or will enter into with any third party, including without limitation any agreement to keep in confidence proprietary information acquired by me in confidence or in trust before commencement of my Relationship with the Corporation. I agree not to enter into any written or oral agreement that conflicts with the provisions of this Agreement.

 

(c)     Voluntary Execution. I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.

 

10.     General Provisions.

 

(a)     Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws. The parties agree and acknowledge that the “California” aspects of this Agreement are based in part on the Corporation’s interest in uniformity of such standard documentation for employees, and that such aspects shall be no basis for challenging any non-California choice of law or forum in any other agreement between the parties.

 

(b)     Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Corporation and me relating to the subject matter herein and merges all prior discussions between us. No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by both parties. Any subsequent change or changes in my duties, obligations, rights or compensation will not affect the validity or scope of this Agreement.

 

(c)     Severability. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

 

(d)     Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives, and my successors and assigns, and will be for the benefit of the Corporation, its successors, and its assigns.

 

(e)     Survival. The provisions of this Agreement shall survive the termination of the Relationship and/or the assignment of this Agreement by the Corporation to any successor in interest or other assignee.

 

(f)     Remedies. I acknowledge and agree that violation of this Agreement by me may cause the Corporation irreparable harm, and therefore agree that the Corporation will be entitled to seek extraordinary relief in court, including but not limited to temporary restraining orders, preliminary injunctions and permanent injunctions without the necessity of posting a bond or other

 

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security and in addition to and without prejudice to any other rights or remedies that the Corporation may have for a breach of this Agreement.

 

(g)     ADVICE OF COUNSEL. I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

 

 

[Signature Page Follows]

 

 

 

-6-

 

 

The parties have executed this Confidential Information and Invention Assignment Agreement on the respective dates set forth below:

 

 

	CORPORATION:   	EMPLOYEE:
	 	 
	KONARED CORPORATION	__________________, an Individual:
	 	 
	 	 
	By:                                                       	 
	 	 
	Name: Shaun Roberts	                                                                   
	 	Signature
	Title: Chairman	 
	 	 
	Date:                                                   	Date:                                                           
	 	 
	Address:   	Address:

                 

 

 

 

 

 

 

EXHIBIT A

 

LIST OF RESTRICTIVE AGREEMENTS UNDER SECTION 4(b); LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP

EXCLUDED UNDER SECTION 5

 

	
			Title of Agreement

				
			Date 

				
			Nature of Restriction

			

 

 

 

 

 

 

 

 

 

 

	
			

			    Title of Invention, etc.        

				
			

			   Date   

				
			Identifying Number

			or Brief Description

			
	 	 	 

 

 

 

 

 

 

 

 

 

___ No restrictive agreements, and no inventions or improvements

 

___ Additional Sheets Attached

 

Signature of Employee/Consultant:                                                         

 

Print Name of Employee/Consultant:                                                      

 

Date:                                                                                                               

 

 

 

 

 

 

EXHIBIT B

 

Section 2870 of the California Labor Code is as follows:

 

(a)     Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

(2) Result from any work performed by the employee for the employer.

 

(b)     To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

 

 

 

 

 

 

 

EXHIBIT C

 

TERMINATION CERTIFICATION

 

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property, or copies or reproductions of any aforementioned items belonging to KonaRed Corporation, its subsidiaries, affiliates, successors or assigns (together the “Corporation”).

 

I further certify that I have complied with all the terms of the Corporation’s Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

 

I further agree that, in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Corporation or any of its employees, clients, consultants or licensees.

 

I further agree that for 12 months from the date of this Certificate, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Corporation’s employees or consultants to terminate their relationship with the Corporation, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Corporation, either for myself or for any other person or entity. Further, I shall not at any time use any Confidential Information of the Corporation to negatively influence any of the Corporation’s clients or customers from purchasing Corporation products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Corporation.

 

 

	Date:                                                     	
			                                                               

			(Employee’s Signature)

			 

			                                                               

			(Type/Print Employee’s Name)

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