Document:

United States Securities & Exchange Commission EDGAR Filing

Exhibit 10.48

SETTLEMENT AGREEMENT AND GENERAL RELEASE

This SETTLEMENT AGREEMENT AND GENERAL RELEASE (the “Settlement Agreement”) is entered into as of November 13, 2009, by and between New Leaf Brands, Inc., a Nevada corporation (the “Company”) together with its wholly-owned subsidiary Baywood New Leaf Acquisition, Inc., a Nevada corporation, and Eric Skae, an individual residing at 42 Delongis Court, Sparkill, NY 10976 ("Skae"), and Skae Beverage International, LLC, a Delaware limited liability company.

WHEREAS, effective September 9, 2008, the Company, together with Baywood New Leaf Acquisition, Inc., entered into an Asset Purchase Agreement with Skae Beverage International, LLC, and Skae, as an individual, pursuant to which it purchased substantially all of the rights and assets of Skae Beverage International’s business (the “Beverage Business”);

WHEREAS, prior to the acquisition of the Beverage Business, Skae owned all of the outstanding equity interests of Skae Beverage International, LLC;

WHEREAS, as part of the purchase price of the Beverage Business, on September 9, 2008, the Company issued to Skae Beverage International, LLC, an 8% convertible subordinated promissory note with a principal amount of $1,000,000 (the “$1,000,000 Note”) and an 8% convertible subordinated promissory note with a principal amount of $100,000 (the “$100,000 Note”), as well as a series of 8% subordinated promissory notes with a principal amount of $1,000,000 to various creditors of Skae Beverage International, LLC, including Skae (the “Skae Family and Friends Notes”);

WHEREAS, on October 23, 2008, the Company issued Skae a 12% subordinated note with a principal amount of $200,000 (the “$200,000 Note”);

WHEREAS, on March 20, 2009, with an effective date of March 17, 2009, the Company issued Skae an 18% subordinated note with a principal amount of $325,000 (the “$325,000 Note”); 

WHEREAS, Skae owns warrants exercisable to purchase an aggregate of 395,000 shares of the Company’s common stock (together, referred to as the “Warrants”) as follows:

·

warrant issued October 23, 2008 to purchase 150,000 shares of common stock, initially exercisable at $0.85 per share;

·

warrant issued October 23, 2008 to purchase 145,000 shares of common stock, initially exercisable at $0.85 per share; and

·

warrant issued March 17, 2009 to purchase 100,000 shares of common stock, initially exercisable at $0.85 per share;

WHEREAS, on or about October 12, 2009, the Company paid an aggregate of $725,712 to pay down $725,712 in principal under the Skae Family and Friends Notes;

WHEREAS, effective August 31, 2009, the parties agreed that the remaining amount due under the Skae Family and Friends Notes, or $274,288, including accrued interest, totaling $77,808 would be cancelled and exchanged for an aggregate of 1,408,384 shares of the Company’s common stock;

1

WHEREAS, on or about the following dates, the Company paid the following amounts to Skae in satisfaction of the principal under the $200,000 Note and the $325,000 Note:

·

March 30, 2009 - $30,000;

·

June 1, 2009 - $25,000;

·

July 31, 2009 - $6,500;

·

September 1, 2009 - $5,000;

·

September 16, 2009 - $10,000;

·

September 23, 2009 - $10,000; and

·

October 12, 2009 - $438,500;

WHEREAS, as of August 31, 2009, an aggregate of $1,222,946 remained outstanding to Skae and Skae Beverage International, LLC, (referred to as the “Outstanding Indebtedness”) comprised of:

 

·

the $1,000,000 Note plus accrued interest of $77,808; 

·

the $100,000 Note plus accrued interest of $7,781; 

·

accrued interest of $5,063 from the $200,000 Note; 

·

accrued interest of $24,119 from the $325,000 Note; and

·

liquidating damages of $8,175;

WHEREAS, effective August 31, 2009, pursuant to a letter agreement between the Company and Skae, dated September 28, 2009, Skae agreed to use $37,357 of the Outstanding Indebtedness to exercise a portion of the Warrants at a reduced exercise price of $0.25 per share and to exercise the remaining Warrants on a cashless basis, thereby yielding Skae 140,327 shares of common stock;

WHEREAS, effective August 31, 2009, pursuant to a letter agreement between the Company and Skae, dated September 28, 2009, the Company agreed to issue Skae Beverage International, LLC 4,742,356 shares of its common stock in exchange for cancellation of the remaining amounts of the Outstanding Indebtedness;

WHEREAS, each party desires to provide the other party with a release of any and all claims, if any, against the other, subject to the terms and conditions hereof.

NOW THEREFORE, in consideration of the premises and the undertakings set forth herein, and intending to be fully bound hereby, the parties agree:

1.

Warrants.  The Company hereby agrees to reduce the exercise price of the Warrants to $0.25 per share and Skae agrees to immediately exercise the Warrants, first by using interest of $37,357 and second by exercising the remaining Warrants on a cashless basis, thereby yielding Skae 140,327 shares of common stock

2.

Outstanding Indebtedness.  The Company and Skae hereby agree that the Company shall issue 4,742,356 shares of its common stock in satisfaction of the Outstanding Indebtedness.

3.

Skae Friends and Family Notes.  The parties acknowledge and agree that the Skae Friends and Family Notes were satisfied in full and terminated by way of payment on October 12, 2009 and with the balance by way of exchange to common stock on August 31, 2009.

2

4.

Effective as of the date hereof, the following instruments are hereby satisfied in full, terminated and shall have no further force or effect.  Neither the Company, Baywood New Leaf Acquisition, Inc., Skae nor Skae Beverage International, LLC, shall have any further rights or obligations under any of the following instruments, under federal or state law, with respect to payment or other obligations, except to the extent set forth in this Settlement Agreement:

·

$1,000,000 Note;

·

$100,000 Note;

·

$200,000 Note; and

·

$325,000 Note.

5.

For and in consideration of the undertakings set forth herein, the Company (for itself and its respective past, present and future administrators, affiliates, agents, assigns, attorneys, directors, employees, executors, heirs, insurers, parents, partners, predecessors, representatives, servants, successors, transferees, and all persons acting by, through, under or in concert with any of them) agrees to perform the obligations set forth in this Settlement Agreement and hereby absolutely and irrevocably releases, waives, relinquishes, renounces and discharges forever Skae and his past, present and future administrators, affiliates, agents, assigns, attorneys, employees, employers, executors, heirs, insurers, officers, managers, parents, partners, predecessors, representatives, servants, subpartners, successors, transferees, underwriters, clients, customers, and each of them, and all persons acting by, through, under or in concert with any of them from any claims, obligations or amounts due to the Company.

6.

For and in consideration of the undertakings set forth herein, Skae (for himself and his respective past, present and future administrators, affiliates, agents, assigns, attorneys, employees, executors, heirs, insurers, parents, partners, predecessors, representatives, servants, successors, transferees, and all persons acting by, through, under or in concert with any of them) agrees to perform the obligations set forth in this Settlement Agreement and hereby absolutely and irrevocably releases, waives, relinquishes, renounces and discharges forever the Company and its past, present and future administrators, affiliates, agents, assigns, attorneys, directors, employees, employers, executors, heirs, insurers, officers, managers, parents, partners, predecessors, representatives, servants, shareholders, subpartners, subsidiaries, successors, transferees, underwriters, clients, customers, and each of them, and all persons acting by, through, under or in concert with any of them from any claims, obligations or amounts due to Skae, including any existing default or any breach that relates directly or indirectly, to an existing default, under any of the $1,000,000 Note, the $100,000 Note, the $200,000 Note and the $325,000 Note.

7.

This Settlement Agreement sets forth the entire agreement of the parties relating to the subject matter hereof and supersedes any other agreement verbal or written.  Both the Company and Skae acknowledge that they have consulted legal counsel regarding the contents and effect of this Settlement Agreement and that they are entering into this Settlement Agreement knowing that doing so will terminate their right to assert any legal claims against the other party in the future with respect to claims that have been waived by the terms of this Settlement Agreement.

8.

This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of Arizona, without regard to conflicts of laws principles that would result in the application of the substantive law of another jurisdiction.  This Settlement Agreement may not be amended or modified except by an instrument in writing signed by each party.

3

9.

As further consideration for the release contained in this Settlement Agreement, the Company and Skae, for themselves and each of their respective successors and assigns, hereby agree, represent, and warrant that the matters released herein are not limited to matters that are known or disclosed, and the Company and Skae hereby waive any and all rights and benefits that they now have or in the future may have conferred upon them by virtue of the provisions of Section 1542 of the Civil Code of the State of California (or any other statute or common law principles of similar effect), which Section provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR

In this connection, the Company and Skae hereby agree, represent, and warrant that they realize and acknowledge that factual matters now unknown to them may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses, and expenses that are presently unknown, unanticipated, and unsuspected, and they further agree, represent, and warrant that this Settlement Agreement has been negotiated and agreed upon in light of that realization and that, except as expressly limited above, they nevertheless hereby intend to release, discharge, and acquit each other from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses, and expenses.

THE PARTIES AGREE THIS SETTLEMENT AGREEMENT MAY BE DELIVERED AND/OR RETURNED BY TELEPHONE FACSIMILE IN ONE OR MORE COUNTERPART COPIES, AND THE PARTIES MAY RELY UPON THE SIGNATURES HERETO WHETHER IN ORIGINAL OR FACSIMILE COPY.

Dated: November 13, 2009

AGREED AND ACCEPTED

By:  Skae

__\s\______________________________

Name:  Eric Skae, individually

By:  Skae Beverage International, LLC, and duly authorized to sign:

____\s\____________________________

Name:  Eric Skae

Title: President

4

By:  New Leaf Brands, Inc. and duly authorized to sign:

____\s\____________________________

Name:  Neil Reithinger 

Title:  Chief Financial Officer

By:  Baywood New Leaf Acquisition, Inc., and duly authorized to sign:

___\s\_____________________________

Name:  Neil Reithinger

Title:  

5EDGAR Document

Exhibit 10.49

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) made as of November 13, 2009 (“Effective Date”) by and between New Leaf Brands, Inc., a Nevada Corporation (the “Company”) and Neil Reithinger, an individual (“Employee”), and is specifically intended to amend the EMPLOYMENT AGREEMENT (“Agreement”) between Company and Employee dated July 11, 2007.

WHEREAS, Employee’s role and job responsibilities with Company have changed significantly since the parties first entered into the Agreement; and

WHEREAS, Employee and Company wish to continue the employment relationship, but the parties wish to clarify and modify certain rights, entitlements, and duties with respect to the employment relationship as hereinafter set forth.

NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1.

Continuation of the Agreement.  Except as set forth herein, all provisions of the Agreement not specifically amended by this First Amendment shall remain in full force and effect at all times.  In the event of any contradictions between this First Amendment and the Agreement, this First Amendment shall govern any and all issues.

2.

Employment; Term.  The term of the Agreement, as amended by this First Amendment, shall commence upon the Effective Date and shall continue until cancelled by either party at any time with ninety (90) days written notice (the “Term”).  Company hereby agrees to employ Employee as its Chief Financial Officer and Chief Operating Officer for the Term.  At such time as Employee gives or receives 90 days written notice, Employee agrees to resign from the Board of Directors.

3.

Back Pay/Accrued Salary.  In addition to continued payment of Employee’s salary as set forth in Section 3(a) of the Agreement, the Company shall pay to Employee the total amount of Ninety-Four Thousand and Nine Hundred Dollars ($94,900), which represents amounts currently due and owing to Employee from the Company for accrued salary and which Employee acknowledges is the total amount of accrued salary due to Employee by the Company as of the Effective Date.  The Company shall begin paying this amount to Employee in monthly installments of $9,000 beginning the first payroll period of November 13, 2009 until paid in full.  This payment shall be subject to standard withholding deductions.  Company agrees that, in the event that Company terminates Employee or causes Employee to leave for any reason, that this amount shall become due immediately.  In addition, the Company and Employee agree that if the Company raises debt or equity capital in the amount of $1,500,000 or more (“Capital Raise”), then the accrued salary shall become due and payable within thirty (30) calendar days.  The Company further acknowledges that its duty to pay this amount survives the termination of the Agreement and/or First Amendment.

1

4.

Non-Competition Covenant.  Employee and Company agree that Employee shall be bound by the “Non-Competition” and “Confidentiality of this Agreement” covenants set forth in Sections 7(a) and 7(h), respectively, of the Agreement only as long as he is employed by Company.  Upon termination of Employee by either party for any reason or for no reason whatsoever, the Non-Competition covenant set forth in Section 7 of the Agreement shall immediately expire.

5.

Non-Cooperation/Non-Disparagement.  Each party agrees to refrain from any defamation, libel or slander of the other, or tortious interference with the contracts and relationships of the other.  Employee agrees he will not act in any manner that might damage the business of Company.  Employee agrees that he will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against Company and/or any officer, director, employee, agent, representative, shareholder or attorney of Company, unless under a subpoena or other court order to do so.

6.

Stock Option Exercise Date and Additional Vesting Triggers.  Employee and Company agree that with respect to option numbers 45 (granted July 11, 2007), 66 (granted September 26, 2008), and 67 (granted September 26, 2008), Employee shall be entitled to exercise any and all such options provided he does so within ten (10) years of the original grant, or within 5 (five) years of termination of his employment by either party for any reason or for no reason whatsoever, whichever is sooner.  Employee and Company specifically agree that, with respect to these option grants, any and all post-termination exercise requirements shorter than 5 (five) years, including but in no way limited to Section 10 of the Baywood International, Inc. 2008 Stock Option and Incentive Plan (the “Plan”), are hereby superseded.  Employee and Company further agree that Employee shall be entitled to exercise his options regardless of the nature of the employment termination, and that any and all post-termination restrictions to the contrary, including but in no way limited to Section 10 of the Plan, are hereby superseded.  Employee and Company further agree that all options granted prior to the Effective Date of this First Amendment shall vest immediately. On the Effective Date, the exercise price of option numbers 45, 66, and 67 shall be $0.65 per share.  

7.

Release of Claims by Employee.  Employee agrees that the payments described in Section 3 and the option terms set forth in Section 6 to this First Amendment represent settlement in full of all outstanding obligations owed to Employee by the Company and that there are no other amounts owed.  Employee and his respective past, present and future administrators, affiliates, agents, assigns, attorneys, directors, employees, executors, heirs, insurers, parents, partners, predecessors, representatives, servants, successors, transferees, and all persons acting by, through, under or in concert with any of them hereby absolutely and irrevocably releases, waives, relinquishes, renounces and discharges forever the Company and its past, present and future administrators, affiliates, agents, assigns, attorneys, directors, employees, employers, executors, heirs, insurers, officers, managers, parents, partners, predecessors, representatives, servants, shareholders, subpartners, subsidiaries, successors, transferees, underwriters, clients, customers, and each of them, and all persons acting by, through, under or in concert with any of them from any claims, obligations or amounts due to him arising from any 

2

omissions, acts or facts that have occurred up until and including the Effective Date of this First Amendment including, without limitation,

(a)

any and all claims relating to or arising from Employee's employment relationship with the Company and the modification of that relationship;

(b)

any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; invasion of privacy; and conversion;

(c)

any and all claims for violation of any federal or state law;

(d)

any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and

(e)

any and all claims for notice of termination of employment; compensatory indemnity in lieu of notice of termination of employment; severance pay; contractual or extra-contractual damages; salary; bonus; allowances; vacation pay; holiday pay or any other claim of any nature whatsoever pursuant to any law; contract; policy; plan; regulation; decree; or practice whatsoever.

Employee agrees that the release set forth in this Section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release shall expressly exclude all: (1) obligations incurred under this First Amendment; and (2) claims, complaints, charges, duties, obligations or causes of action relating to Employee's ownership of shares in the Company arising under federal or state securities laws.

8.

Release of Claims by the Company.  In consideration of Employee’s release of the Company and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, consistent with state and federal law, the Company and its respective past, present and future administrators, affiliates, agents, assigns, attorneys, directors, officers, employees, executors, insurers, partners, predecessors, representatives, servants, successors, transferees, and all persons acting by, through, under or in concert with any of them hereby absolutely and irrevocably releases, waives, relinquishes, renounces and discharges forever Employee and his respective past, present and future administrators, affiliates, agents, assigns, attorneys, directors, employees, executors, heirs, insurers, parents, partners, predecessors, representatives, servants, successors, transferees, and each of them and all persons acting by, through, under or in concert with any of them from any claims, obligations or amounts due to the Company arising from any omissions, acts or facts that have occurred up until and including the Effective Date including, without limitation,

3

(a)

any and all claims relating to or arising from Employee’s employment relationship with the Company and the modification of that relationship set forth in this First Amendment; 

(b)

any and all claims for breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage, unfair business practices, defamation, libel, slander, negligence, invasion of privacy, and conversion;

(c)

any and all claims for violations of any federal or state law; and

(d)

any and all claims arising out of any other laws and regulations relating to employment.

The Company agrees that the release set forth in this Section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release shall expressly exclude all obligations incurred in the Agreement and under this First Amendment. 

9.

No Third Party Rights.  The parties do not intend the benefits of this First Amendment to inure to any person or entity not a party to this First Amendment (other than to the spouse or estate of Employee in the case of death or Disability of Employee, in which case such spouse or estate shall be entitled to only those rights set forth in Section 6(a) of the Agreement).  Notwithstanding anything contained in this First Amendment, this First Amendment shall not be construed as creating any right, claim or cause of action against any party by any person or entity not a party to this First Amendment (other than the spouse or estate of Employee in the case of the death or Disability of Employee, in which case such spouse or estate shall be entitled to only those rights set forth in Section 6(a) of the Agreement).

10.

Notices.  Unless otherwise provided herein, any notice required or permitted under this First Amendment shall be given in writing and shall be deemed to have been duly given upon personal delivery to the party to be notified or three (3) days after being mailed by United States certified or registered mail, postage prepaid, return receipt requested or one (1) day after being sent by Federal Express or other recognized overnight delivery to the following respective addresses, or at such other address as each may specify by notice to the other:

Notice to the Company:

New Leaf Brands, Inc.

9380 E. Bahia Drive, Suite A-201

Scottsdale, Arizona  85260

Attention:  Chief Executive Officer

Facsimile:  (480) 483-2168

Notice to Employee:

4

Neil Reithinger

c/o New Leaf Brands, Inc.

9380 E. Bahia Drive, Suite A-201

Scottsdale, Arizona  85260

Facsimile:  (480) 483-2168

11.

Assignability; Binding Effect.  This First Amendment is a personal contract calling for the provision of unique services by Employee, and Employee’s obligations hereunder may not be sold, transferred, assigned, pledged or hypothecated.  In the event of any attempted assignment or transfer of obligations hereunder by Employee contrary to the provisions hereof, the Company will have no further liability for payments hereunder.  The rights and obligations of the Company hereunder will be binding upon and inure to the benefit of the successors and assigns of the Company, except as otherwise provided herein.

12.

Entire Agreement; Amendment; Waiver.  This First Amendment constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, provided however that the preceding Agreement shall remain in full force and effect except as amended, altered, or otherwise modified by this First Amendment.  This First Amendment shall not be modified or amended except by a written instrument duly executed by each of the parties hereto.  Any waiver of any term or provision of this First Amendment shall be in writing signed by the party charged with giving such waiver.  Waiver by either party hereto of any breach hereunder by the other party shall not operate as a waiver of any other breach, whether similar to or different from the breach waived.  No delay on the part of the Company or Employee in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or Employee of any such right or remedy shall preclude other or further exercise thereof.

13.

Severability.  If any term or provision of this First Amendment shall be held to be invalid or unenforceable for any reason, such term or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating the remaining terms and provisions hereof, and this First Amendment shall be construed as if such invalid or unenforceable term or provision had not been contained herein.

14.

Survivability.  The provisions of this First Amendment, which by their terms call for performance subsequent to termination of Employee’s employment hereunder, or of this First Amendment, shall survive such termination.

15.

Counterparts and Headings.  This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all which together shall constitute one and the same instrument.  Facsimile signatures shall be given the same legal effect as original signatures.  All headings are inserted for convenience of reference only and shall not affect the meaning or interpretation of this First Amendment.

16.

Governing Law.  This First Amendment shall be construed in accordance with the internal laws of the State of Arizona, without regard to principles of conflicts of laws.

5

NEW LEAF BRANDS, INC.

By:  _____________________________

______________

Name:  Eric Skae

Date

Title:  Chief Executive Officer

EMPLOYEE

     _____________________________

______________

     Neil Reithinger

Date

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]