Leading Brands, Inc. announces settlement of litigation

VANCOUVER, July 26 /CNW/ – LEADING BRANDS, INC. (NASDAQ: LBIX), North
America’s only fully integrated premium beverage company, announces that all litigation and disputes among the company, its affiliates and management (together, the “Company”) and Thomas C. Lines, Futuristic Brands USA, Inc., New Sun Beverages Company (USA) Inc. and other companies controlled by or associated with Mr. Lines (together the “Lines Group”) have been settled. No payment was made by the Company to or on behalf of any member of the Lines Group. As part of the settlement, a substantial payment was made by Robert W. Miller, the former President of Leading Brands of America, Inc. (“LBAI”) to LBAI and LBAI’s lawsuit against Mr. Miller and related litigation was also settled. In addition, the license agreements for Mad Croc, Red Devil and New Sun beverages were terminated and certain suppliers of those products to LBAI forgave substantial claims that will result in the Company recording a six figure gain in the present quarter.

The Company withdraws and retracts any statements previously made by it in respect of any member of the Lines Group. In particular, the Company withdraws and retracts the allegations made in its news releases of February 19, 2004, and April 12, 2004.