SATISFACTION AND RELEASE
Exhibit 10.46
SATISFACTION AND RELEASE
This SATISFACTION AND RELEASE
(this "Agreement") is made by and between Charlie’s
Holdings, Inc., a Nevada corporation (“Holdings”), Charlie’s Chalk Dust, LLC, a
Delaware limited liability company (“Chalk Dust”), and ▇▇▇ ▇▇▇▇▇ LLC, a Nevada limited
liability company (“▇▇▇ ▇▇▇▇▇”, and together with Holdings and Chalk
Dust, individually and collectively, “Company”), on the one hand, and Red ▇▇▇▇▇ Holdings,
LLC, a Delaware limited liability company (the
“Lender”) on the other. Company and Red ▇▇▇▇▇ are
sometimes collectively referred to herein as the
“Parties” and each individually as a
“Party”.
RECITALS
WHEREAS, the Parties executed that
certain Secured Promissory Note on April 8, 2020, in favor of Red
▇▇▇▇▇ in the original principal amount of Seven Hundred Fifty
Thousand and 00/100 Dollars ($750,000.00) (the “Note”), and that certain Security
Agreement also dated April 8, 2020 (the “Security
Agreement”);
WHEREAS, the Parties amended the Note
and Security Agreement as set forth in Amendment No. 1 to Secured
Promissory Note and Security Agreement dated August 27, 2020
(“Amendment No.
1”), Amendment No. 2 to Secured Promissory Note and
Security Agreement dated September 30, 2020 (“Amendment No. 2”), Amendment No.
3 to Secured Promissory Note and Security Agreement dated October
29, 2020 (“Amendment No.
3”), Amendment No. 4 to Secured Promissory Note and
Security Agreement effective December 1, 2020 (“Amendment No. 4”), and Amendment
No. 5 to Secured Promissory Note and Security Agreement, effective
December 5, 2020 ("Amendment No.
5") (Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇,
▇▇▇▇▇▇▇▇▇ ▇▇. ▇, and Amendment No. 5 are collectively, the
"Amended
Note");
WHEREAS, the Note, as amended by
Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇,
and Amendment No. 5, has a principal amount of One Million Four
Hundred Thousand and 00/100 Dollars ($1,400,000.00) (the
"Principal"), has a
guaranteed minimum interest of One Hundred Fifty Thousand and
00/100 Dollars ($150,000.00) (the "Guaranteed Interest"), and matured on
February 15, 2020 (the “Maturity Date”); and
WHEREAS, the Company desires to pay to
Red ▇▇▇▇▇ One Million Five Hundred Fifty Thousand and 00/100
Dollars (the "Settlement
Amount"), and Red ▇▇▇▇▇ desires to accept the Settlement
Amount, in full satisfaction of the Amended Note.
NOW, THEREFORE, in consideration of the
premises and the mutual representations and covenants hereinafter
set forth, the parties hereto do hereby agree as
follows:
AGREEMENT
1.
Confirmation of
Indebtedness. The Principal and Guaranteed
Interest as of the date of this Agreement was equal to the
Settlement Amount (the "Indebtedness"), which bears interest
from and after the Maturity Date at the rate of twenty percent
(20%) per annum until the Company repays the Principal and
Guaranteed Interest in full.
2. Delivery
of Settlement Amount in Satisfaction of
Indebtedness. Subject to the terms and conditions
herein, the Company agrees to deliver the
Settlement Amount to Lender upon pursuant to the terms of
this Section 2. Payment of the Settlement Amount shall be in the
form of a wire transfer in immediately available funds to an
account designated by Lender in writing to the Company within two
(2) days of the Effective Date.
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3. Satisfaction
of Indebtedness. Upon delivery of the Settlement
Amount by the Company in accordance with this Agreement, (a) the
Lender hereby agrees that the Indebtedness will have been fully and
completely satisfied; (b) the Lender hereby compromises, settles,
resolves, discharges, and releases the Company, and its successors
and assigns, from the payment of any and all amounts due and
payable to the Lender or accrued on or prior to the Effective Date,
in each case under the Amended Note; and (c) releases and
discharges any and all security interests in and to the Collateral
(as defined in the Security Agreement).
4. Lender
Release. Effective
upon delivery of the Settlement Amount by the Company in
accordance with this Agreement, the Lender, for itself and for any and all of its past
or present shareholders, members, predecessors, successors, parents
and subsidiaries, partners, officers, directors, managers,
employees, agents, servants, attorneys, assigns, transferees,
beneficiaries, subrogees, insurers, underwriters, and any others
claiming by, through, under, or in concert with it, and each of
them (collectively, the “Lender
Releasors”), does hereby
release and forever discharge the Company, and to the extent they
are acting by, through, under, or in concert with the Company, each
of the Company’s past or present shareholders, members,
predecessors, successors, parents and subsidiaries, partners,
officers, directors, managers, employees, agents, servants,
attorneys, assigns, transferees, beneficiaries, subrogees,
insurers, underwriters, and any others claiming by, through, under,
or in concert with it, and each of them (collectively, the
“Company Releasees”), of and from any and all claims,
obligations, damages, losses, injuries, debts, rights, rights to
payment, rights to equitable remedies, rights to legal or equitable
relief, demands, allegations, counterclaims, cross-claims,
contracts, covenants, agreements, promises, trespasses, torts,
tortious conduct, dues, accounts, bonds, bills, notices, costs,
expenses, attorneys’ fees, judgments, executions, liens,
encumbrances, contribution rights, indemnity rights, actions,
causes of action, choses in action, suits, controversies, disputes,
vicarious liability, challenges, and liabilities of any kind or
nature whatsoever in law, equity, or otherwise, whether known or
unknown, suspected or unsuspected, asserted or unasserted, fixed or
contingent, matured or unmatured, accrued or inchoate, which have
existed or may have existed or that may yet exist or do exist, that
any of the Lender Releasors at any time had, owned, or held
from the beginning of the world through the Effective Date against
any of the Company Releasees arising under or relating to any
matter or thing done, omitted, or suffered to be done by the
Company Releasees arising from, out of, or in any way connected to:
(a) the Amended Note or any other document evidencing the
Indebtedness (the “Indebtedness Documents”); and (b)
any act, omission, event, or condition that might arguably create
or constitute a breach or default under the Indebtedness Documents
(collectively, the “Lender
Released Claims”).
5. Covenants
Not to ▇▇▇. Effective upon the delivery of the
Settlement Amount by the Company to Lender in accordance with this
Agreement, the Lender agrees that it shall not file suit or
initiate legal proceedings against any person for events occurring
prior to the date of this Agreement for the collection of the
Indebtedness or any claim for relief arising under the Indebtedness
Documents or the obligation evidenced
thereby.
6. Company
Release. Effective upon delivery of the Settlement Amount by
the Company to the Lender in accordance with the Settlement
Instructions, the Company, on behalf of itself and its successors
and assigns, hereby forever waives, releases and discharges, and
hereby covenants not to assert or prosecute, any and all claims
(including, without limitation, cross-claims, counterclaims, rights
of setoff and recoupment), causes of action, demands, suits, costs,
expenses and damages arising out of actions taken under the
Indebtedness Documents or any failure to act under the Indebtedness
Documents that it now has or hereafter may have, of whatsoever
nature and kind, whether known or unknown, whether now existing or
hereafter arising, whether arising at law or in equity (the
“Company Released
Claims”, and collectively with the Lender Released
Claims, the “Released
Claims”), against the Lender (in its capacity as a
lender or in any other capacity) and any its subsidiaries and
affiliates, and each its successors, assigns, officers, directors,
employees, agents, attorneys and other representatives
(collectively, the “Lender
Releasees”, and collectively with the Company
Releasees, the “Releasees”), based in whole or in
part on facts, whether or not known, existing on or prior to the
Effective Date.
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7. Releases
to be Construed Broadly; All Derivative Claims
Released. The
parties hereto intend and agree that the releases provided
hereunder shall be construed to the broadest extent permitted by
law and, to the extent permitted by law, that the scope of the
releases shall be expanded for the benefit of the parties and the
identified Releasees to the extent that, at any time after the
Effective Date, the law is clarified or changed to permit such a
broader construction. To the extent this Agreement and
the releases hereunder become effective, (a) neither the
Lender nor any person claiming by, through, or under the Lender may
pursue any Company Released Claims against the Company Releasees,
and (b) neither the Company nor any person claiming by, through, or
under the Company may pursue any released claims against the Lender
Releasees. Among other things, no party, equity holder,
or other party in privity with Lender or the Company, respectively,
may assert any claims against the Company Releasees or the Lender
Releasees, as applicable: (x) that might be characterized as
“derivative” of the rights or claims of Lender or the
Company, as applicable; or (y) that arise from or relate to
the Indebtedness Documents.
8. Unknown
or Undiscovered Claims. The parties acknowledge
that: (a) they may subsequently discover facts in addition to,
or different from, those that they now know or believe to be true
with respect to the Released Claims;
and (b) they may have sustained or may yet sustain damages,
costs, or expenses that are presently unknown and that relate to
those claims. The parties acknowledge, however, that
they have negotiated, agreed upon, and entered into this Agreement
with full knowledge of these possibilities and agree that,
notwithstanding the provisions of California Civil Code Section
1542, or by any law of any state or territory of the United States
or other jurisdiction, or principle of common law, which is
similar, comparable or equivalent to Section 1542 of the California
Civil Code (“Comparable
Laws”), this Agreement
shall not be affected in any manner whatsoever if any of these
possibilities comes to pass, and it is intended to release all
claims, including those that are unknown or
unsuspected. In entering into this Agreement, each party
expressly waives any rights or benefits under Section 1542 of the
California Civil Code or Comparable Laws with respect to the
Released Claims, which provides as follows:
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“A general release does not extend to
claims that the creditor or releasing
party does not know or suspect to exist in his or her favor at
the time of executing the release and that, if known by
him or her, would have materially affected his or her
settlement with the debtor or released
party.”
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9.
Costs. Each
party shall pay his or its own costs and expenses incurred or to be
incurred by each in negotiating and preparing this Agreement and in
closing and carrying out the transactions contemplated by this
Agreement.
10. Notices. Any
notice, demand, request, or other communication permitted or
required under this Agreement shall be in writing and shall be
deemed to have been given as of the date so delivered, if
personally delivered; as of the date so sent, if transmitted by
facsimile and receipt is confirmed by the facsimile operator of the
recipient; as of the date so sent, if sent by electronic mail and
receipt is acknowledged by the recipient; and one day after the
date so sent, if delivered by overnight courier service, addressed
as follows:
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If to
the Company:
Charlie's
Chalkdust, Inc.
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
With a
copy to:
Disclosure Law
Group, a Professional Corporation
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Email:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to the
Lender:
Red
▇▇▇▇▇ Holdings, LLC
Attn:
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone:
Email:
▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Notwithstanding the foregoing, service of legal process or other
similar communications shall not be given by electronic mail and
will not be deemed duly given under this Agreement if delivered by
such means. Each party, by notice duly given in
accordance herewith, may specify a different address for the giving
of any notice hereunder.
12. Entire
Agreement. This Agreement represents
the entire agreement between the
parties relating to the subject matter hereof. There are
no other courses of dealing, understanding, agreements,
representations, or warranties, written or oral, except as set
forth herein.
13. Amendment
or Waiver. Every
right and remedy provided herein shall be cumulative with every
other right and remedy, whether conferred herein, at law, or in
equity and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall
be construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any
time prior to the Effective Date, this Agreement may be amended by
a writing signed by all parties hereto, respecting any of the terms
contained herein, and any term or condition of this Agreement may
be waived or the time for performance thereof may be extended by a
writing signed by the party or parties for whose benefit the
provision is intended.
14. Form
of Execution; Counterparts. A valid and binding signature hereto
or on any notice or demand hereunder may be in the form of a manual
execution or a true copy made by photographic, xerographic,
conversion to portable document format (pdf), or other electronic
process that provides similar copy accuracy of a document that has
been executed, and such electronic signature or record shall be of
the same legal effect, validity, or enforceability as a manually
executed signature. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original
and all of which taken together shall be but a single
instrument.
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15. Governing
Law. This Agreement
shall be governed by, and construed under and in accordance with,
the laws of the state of California without giving effect to any
choice or conflict of law provision or rule (whether the state of
California or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the state of
California.
16. Interpretation. Section
headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement. Except when the context clearly requires to
the contrary: (a) the word “or” shall not be
applied in its exclusive sense, unless the context otherwise
requires; (b) instances of gender or entity-specific usage
(e.g., “his,” “her,” “its” or
“individual”) shall not be interpreted to preclude the
application of any provision of this Agreement to any individual or
entity; and (c) “including” shall mean that the
items listed are illustrative, without any implication that all or
even most of the components are mentioned.
[The Remainder of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
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“COMPANY”
CHARLIE’S
HOLDINGS, INC.,
a
Nevada corporation
By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief
Executive Officer
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“RED ▇▇▇▇▇”
RED
▇▇▇▇▇ HOLDINGS, LLC
a
Delaware limited liability company
By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
General
Partner
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CHARLIE’S
CHALK DUST, LLC
a
Delaware limited liability company
By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief
Executive Officer
▇▇▇
▇▇▇▇▇ LLC
a
Nevada limited liability company
By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief
Executive Officer
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