SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

Exhibit 10.47

[E XECUTION C OPY ]

SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

1. Parties . The parties to this Settlement Agreement and Mutual General Release (“Agreement”) are:

(a) Orange 21 Inc. (“Orange 21”), Spy Optic, Inc. (“Spy Optic”), Spy S.r.l (“Spy Italy”) and LEM S.r.l. (“LEM”). Orange 21, Spy Optic, Spy Italy and LEM are collectively referred to herein as the “Orange 21 Parties”;

(b) Mark Simo (“Simo”); Simo Holdings, Inc. (fka No Fear, Inc.) (“No Fear”); No Fear Retail Stores, Inc. (“No Fear Retail”); and MX No Fear Europe SAS (“MX No Fear Europe”). Simo, No Fear, No Fear Retail and MX No Fear Europe are collectively referred to herein as the “No Fear Parties”).

(c) The Orange 21 Parties and the No Fear Parties are sometimes collectively referred to herein as the “Parties.”

2. Effective Date . The Effective Date of this Agreement is April 28, 2009 (the “Effective Date”).

3. The Dispute . A dispute has arisen between the Parties relating to their respective rights and obligations arising out of various business transactions including, without limitation, Simo’s service as Chief Executive Officer of Orange 21, the purchase of goods by No Fear from Spy Optic, and the purchase of goods by MX No Fear Europe from Spy Italy.

4. Monetary Payment .

(a) On the Effective Date, No Fear shall pay to Orange 21, in federal funds, by wire transfer to an account to be designated in advance by Orange 21, an amount in U.S. Dollars equivalent to Three Hundred Seven Thousand, Four Hundred Fourteen and Eighty One Hundredths Euros (€307,414.81). For purposes of this payment, the exchange rate for Euros to Dollars has previously been determined and agreed to. These funds will be applied to fully satisfy the outstanding amount Spy Italy claims to be owed by MX No Fear Europe.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

(b) In addition, on the respective Due Dates set forth in the table below, No Fear will make the following monetary payments in federal funds to Orange 21 or its designee by wire transfer to an account designated by Orange 21 prior to the Effective Date, or to such other accounts as Orange 21 may designate in writing thereafter:

(c) If Orange 21 fails to timely provide any credit required under Paragraph 5 in full when due, or to apply any available credit to any purchase order that has been accepted by Orange 21, and does not correct any such failure within five business days of No Fear providing written notice of this failure directed to Jerry Collazo, Chief Financial Officer, at Orange 21 with a copy to Chris Forrester at Morrison & Foerster, LLP, then No Fear shall have no obligation under this Agreement to make any payments under this Paragraph 4 due after such failure and notice, until such time as such credit is made available and thereafter all obligations under this Paragraph 4 shall resume.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

(d) Notwithstanding any other provision herein to the contrary, in no event shall Orange 21 be entitled to offset any amounts to be provided as credits to Simo under Paragraph 5 by any payments to be made to No Fear under this Paragraph 4.

5. Product Credits .

(a) Provided that the payments set forth above are made timely and in full in accordance with Paragraph 4 and receipt of all such funds in full is confirmed by Orange 21, Orange 21 shall provide Simo, or other No Fear Parties as Simo may designate, with a credit in the aggregate amount of Six Hundred Thousand U.S. Dollars ($600,000), less the Applicable Withholding Amount (defined in Paragraph 8 below), to purchase products from Orange 21 for retail resale to the public (which products will be sold to Simo or his designee [CONFIDENTIAL TREATMENT REQUESTED] as follows:

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

(b) The Orange 21 Parties shall use commercially reasonable efforts to fill each purchase order submitted by the No Fear Parties within a commercially reasonable period after receipt (with delivery F.O.B. Spy Optic’s Carlsbad, California facility); provided, however, that the Orange 21 Parties shall not be required to fill any purchase orders submitted by the No Fear Parties which exceed the aggregate amount of any existing credit balance pursuant to the credit schedule set forth above; and provided further, however, that to the extent the Orange 21 Parties do not fill any such purchase orders, the No Fear Parties shall retain any unused or unapplied credit balance to apply to any future purchase orders which do not exceed the amount of their credit balance.

(c) The initial purchase order of the No Fear Parties, which shall be submitted on the Effective Date, shall be for products in the quantities and styles set forth under the column titled “At Once” in Schedule 1 attached hereto, and all such products shall be delivered by Orange 21 on the Effective Date. Thereafter, the No Fear Parties will order products and the Orange 21 Parties will deliver products under this Paragraph 5 substantially in the quantities and styles set forth in Schedule 1 attached hereto; provided, however, that if at any time the Orange 21 Parties determine that it is or may become commercially unreasonable or impracticable to fill any purchase orders based on available inventory and other customer orders, the Orange 21 Parties will promptly inform the No Fear Parties, and the Parties will reasonably cooperate in making adjustments to the products ordered by the No Fear Parties and to be delivered by the Orange 21 Parties.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

(d) If No Fear fails to timely make any payment required under Paragraph 4 in full when due, then Orange 21 shall have no further obligation under this Agreement to provide any further product credits under this Paragraph 5 due after such failure (including, without limitation the corresponding credit to be given on the Date of such payment) until such time as such payment is made.

(e) Notwithstanding any other provision herein to the contrary, in no event shall the No Fear Parties be entitled to offset any amounts payable by the No Fear Parties to Orange 21 or its designee under Paragraph 4 by any product credits extended to No Fear under this Paragraph 5.

6. Promissory Note . The payments required in Paragraph 5 above shall be memorialized in a promissory note in substantially the form attached hereto as Exhibit A (the “Note”) from No Fear payable to Orange 21 or its designee, with the principal amount to be reduced by the amounts of all payments made by No Fear to Orange 21 (or its designee) pursuant to the schedule in Paragraph 4. The unpaid principal amount due shall begin to bear interest at the rate of ten percent, compounded annually, if No Fear fails to timely make any payment when due as required under Paragraph 4.

7. Security for Payments . The Note shall be secured by a pledge of Orange 21 held of record or beneficially by No Fear, pursuant to a stock pledge agreement in substantially the form attached hereto as Exhibit B, and all certificates of ownership of any such stock under the Security Agreement shall be delivered to the Orange 21 Parties by the No Fear Parties along with the executed version of this Agreement, the Promissory Note and the stock pledge agreement. The pledged stock shall be valued at $0.80 per share for collateral purposes, regardless of any then prevailing market price for the common stock of Orange 21.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

8. Income Tax . It is understood and agreed that in connection with the transactions contemplated hereby, Orange 21 will withhold approximately 33.72% (the “Applicable Withholding Amount”) of the gross amount of each credit as set forth in Paragraph 5 above as and when granted to Simo or his designee, shall reduce each credit by the Applicable Withholding Amount, and shall remit all such amounts to the Internal Revenue Service and the Franchise Tax Board, as applicable. Orange 21 will provide Simo with a W-2 form consistent with the foregoing.

9. Product Purchase Agreements . The Parties shall enter into product purchase agreements in substantially the forms of Exhibits C-1 and C-2 attached hereto.

10. General Releases . The Orange 21 Parties on the one hand, and the No Fear Parties on the other, hereby release each other and their respective past, present and future officers, employees, partners, shareholders, subsidiaries, affiliates, predecessors, successors, assigns, agents, representatives, insurers, and attorneys, from all claims, whether past, present, or future, for all liability for any and all damages or other relief, directly or indirectly arising from, related to, or sustained by reason of any prior dealings of any kind between them at any time. These releases include but are not limited to a release by Simo of any and all claims arising out of his service as the Chief Executive Officer of Orange 21 and any and all claims by Simo or No Fear arising out of or related to their ownership of stock or other securities of Orange 21. These general releases specifically include, but are not limited to, a release of

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

all claims for any expenses to which any Party may have been or may be put, and also include all damages to any Party, whether compensatory or punitive, and whether now known or unknown. For the avoidance of doubt, the Parties agree that these general releases do not release any party for liability in connection with actions or events that occur after the Effective Date of this Agreement.

11. Waiver of Civil Code Section 1542 . All rights under Section 1542 of the Civil Code of the State of California are hereby expressly waived by all Parties with respect to any and all releases set forth herein. It is understood that Section 1542 provides as follows:

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 settlement with the debtor.

12. Notices . All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including by facsimile) and mailed (by certified or registered mail), sent or delivered as follows:

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

or to such other address or facsimile number as such party shall have designated in a written notice to the other party. All such notices and communications shall be effective (i) if delivered by hand, sent by certified or registered mail or sent by an overnight courier service, when received; and (ii) if sent by facsimile transmission, when sent.

13. No Admission . This Agreement is in compromise of disputed claims and is not an admission of liability for all or any part of any such claims by any Party.

14. Applicable Law . This Agreement shall be governed by, construed and enforced in accord with the laws of the State of California.

15. Jurisdiction to Enforce . Any action to enforce, for breach of, or arising out of this Agreement shall be commenced in the Superior Court for the State of California, County of San Diego, and the Parties each agree and consent to jurisdiction over them in that court for any such proceeding.

16. Persons Bound and Benefited . This Agreement shall be binding upon and inure to the benefit of the Parties hereto, as well as all their representatives, employees, principals, agents, assigns, predecessors, successors, parents, affiliates, subsidiaries, partners and investors, and insurers.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

17. Integration . This Agreement and the Exhibits attached hereto constitutes the entire agreement between the Parties with respect to the settlement, payment, dismissal, releases, and all other matters and terms referenced herein. Without limiting the foregoing, the Parties agree that in any dispute arising out of this Agreement, no evidence relating to the negotiation or drafting of this Agreement, or any prior drafts of this Agreement, shall be admissible as evidence for any purpose, including but not limited to interpreting this Agreement of the intention of the Parties.

18. Agreement Understood . The Parties certify they have read all of this Agreement, consulted with and received legal advice from their respective attorneys concerning this Agreement, and understand and agree to the terms of this Agreement.

19. Involvement of Counsel . The Parties acknowledge they have been represented by legal counsel of their choosing in the negotiation and drafting of the terms of this Agreement, each Party enters into this Agreement of its own volition, freely and without coercion, based on its own judgment and advice of its own counsel, and not in reliance on any representations or promises of the other Party except as expressly set forth herein.

20. Joint Preparation . This Agreement has been jointly negotiated and drafted, and is not to be construed against any Party on the basis that it was the drafter.

21. Authority . Each person and party executing this Agreement warrants he or it is the sole owner of the rights and obligations referred to and released herein, has not assigned or otherwise transferred any interest in any such rights or obligations, and is authorized to execute this Agreement personally or on behalf of any entity for whom he or it is acting.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

22. Execution of Agreement . This Agreement may be executed by separately signed signature pages, and when so executed shall have the full force and effect as if all Parties had signed a single original document.

23. Cooperation and Execution of Additional Documentation . The Parties agree to cooperate and execute additional documentation which may be required to implement, memorialize or carry out the provisions and intent of this Agreement.

24. Attorneys’ Fees and Costs Resulting From Breach . If any Party incurs any attorneys’ fees or costs as a result of another Party’s breach of any obligation under this Agreement, the aggrieved Party shall be entitled to recover all such attorneys’ fees and costs incurred as a result of the breach.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.

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Information in this exhibit marked [CONFIDENTIAL TREATMENT REQUESTED] has been omitted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Confidential treatment has been requested with respect to the omitted portions.