EXHIBIT 10.42
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE (this
"Agreement") is effective as of July 31, 2007 and is by and among, and
is binding upon, the following parties: TELEVISIONS EVENTS &
MARKETING, INC., a Hawaii corporation ("TEAM"); XXX XXXXX, an
individual ("Xxxxx"); THE BEVERAGE GROUP, INC., a Delaware corporation
("TBGI"); AMCON DISTRIBUTING COMPANY, a Delaware corporation
("Distributing"); AMCON CORPORATION, a Delaware corporation ("AC");
XXXXXXX X. XXXXXX, an individual ("Xxxxxx"); and XXXXXX X. XXXXXXXX,
an individual ("Xxxxxxxx"); THE XXXXXXXX WORKS, INC., a California
corporation ("TWI"), each of which may individually be referred to
herein as a "Party," or collectively as the "Parties."
RECITALS:
1. On or about January 15, 2003, TEAM, as licensor, entered into two
Trademark License Agreements (the "License Agreements") regarding its
XTERRA trademark. The Parties dispute which person or entity is
responsible as licensee under the License Agreements.
2. The Parties are currently engaged in litigation regarding the
License Agreements, entitled Television Events & Marketing, Inc. v.
AMCON Distributing Company, et al. and Related Counterclaim, United
States District Court, District of Hawaii, Case Xx. 00 XX 00000 ACK
(the "Action").
3. Without any of them admitting any fault, liability or wrongdoing,
the Parties desire to resolve their disputes, dismiss the Action and
settle all related claims of any kind or nature, in law or equity,
known or unknown, past and present which the Parties may have against
one another from any and all dealings concerning the License
Agreements and the Action.
NOW, THEREFORE, according to the preceding recitals and in exchange
for and considering the covenants, agreements, and representations set
forth in this Agreement, the Parties agree as follows:
AGREEMENT
I. CONSIDERATION:
A. PAYMENT BY DISTRIBUTING. Distributing shall pay TEAM a total of
$875,000 as follows:
1. $187,500 on or before August 17, 2007;
2. $187,500 in 2008 in four equal quarterly installments as
follows: $46,875 on or before January 4, 2008, April 4, 2008, July 3,
2008 and October 3, 2008;
3. $187,500 in 2009 in four equal quarterly installments as
follows: $46,875 on or before January 2, 2009, April 3, 2009, July 3,
2009 and October 2, 2009;
4. $187,500 in 2010 in four equal quarterly installments as
follows: $46,875 on or before January 7, 2010, April 7, 2010, July 7,
2010 and October 7, 2010; plus
5. $125,000 in 2011 in four equal quarterly installments as
follows: $31,250 on or before January 7, 2011, April 7, 2011, July 7,
2011 and October 7, 2011.
B. XTERRA PARTICIPATING SPONSOR PACKAGES BY TEAM. TEAM shall provide
Distributing (at the rate of one per year in any three of 2008, 2009,
2010 and 2011, at Distributing's option) with three (3) one-year
XTERRA Participating Sponsor Packages (the "Sponsor Packages") worth
at least $100,000 each (as determined by TEAM's arms-length valuation
with respect to other Participating Sponsors and not by the actual
cost to TEAM) for the benefit of a product or service which does not
conflict with any other existing Sponsor. The terms of the Sponsor
Packages are set forth in the separate written agreement between TEAM
and Distributing and the brochure attached as Exhibit "A" hereto, and
such terms shall also include (if not already provided for in Exhibit
"A"):
1. Signage at all Championship events (TEAM produces and displays)
in the United States;
2. Logo and visibility in the touring XTERRA Pavilion which is on
display at the XTERRA America Tour and World Championship package;
3. Provision of a sponsor pavilion at the Championship events in
the United States for Distributing or its assignee to use for its
promotional purposes. This includes set up / teardown and
transportation of the pavilion;
4. Logo in all marketing materials and advertising in the United
States;
5. XXXXXXXxxxxx.xxx web link;
6. Product sampling at event sites and sales through the onsite
vendor in the United States;
7. Category exclusivity;
8. Any other benefits normally conferred with Sponsor Packages in
the United States at the level contemplated in the brochure attached
as Exhibit "A" hereto;
9. Distributing is permitted to transfer, sell, assign, or
hypothecate any or all of the Sponsor Packages to any reasonably
suitable (e.g., no cigarette companies) non-duplicative brand/service;
and
10. Each of the three Sponsor Packages can be used in any year (one
or two packages per year) beginning in 2008 or later, and do not need
to be used in consecutive years. Distributing (and/or its assignees)
shall provide TEAM use of the relevant logo(s) and promotional items
in the quantity and of the type customarily expected of other Sponsors
under the customary pricing and delivery conditions.
C. GUARANTY BY XXXXXX. Xxxxxx shall personally and unconditionally
guaranty each of Distributing's payment obligations set forth in
Section I.A.2-5, above, totaling $687,500.
D. PAYMENT BY XXXXXXXX. Xxxxxxxx shall commit to pay TEAM a total of
$50,000 on or before August 17, 2007.
Each Party hereto will bear its own attorneys' fees and costs arising
from or in connection with the Action and the negotiation of this
Agreement.
E. MUTUAL GENERAL RELEASES.
Except for the obligations set forth in this Agreement, each of (1)
TEAM and Xxxxx, and (2) Xxxxxxxx and TWI, and (3) TBGI, Distributing,
AC and Xxxxxx, for themselves and for all of their respective heirs,
successors, assigns, principals, agents, officers, directors,
representatives, attorneys, promoters, partners, joint venturers,
affiliates, parent companies, subsidiaries, independent contractors,
employees, employers, trustees, sureties, bonding companies, insurers
and all others who claim to have an interest in the claims released
herein, hereby release and forever discharge each other and all of
each other's respective heirs, successors, assigns, principals,
agents, officers, directors, representatives, attorneys, promoters,
partners, joint venturers, affiliates, parent companies, subsidiaries,
independent contractors, employees, employers, trustees, sureties,
bonding companies and insurers, including but not limited to what has
been referred to as "The Beverage Group" by TEAM in the Action, from
any and all actual or potential claims, demands, losses, damages, and
liabilities of any nature whatsoever, whether based on contract, tort,
constitution, statute, or other legal or equitable theory of recovery,
known or unknown, past or present, which each have, had, or claim to
have against each other relating to or arising out of (1) the License
Agreements and (2) the events, transactions and relationships
underlying and/or related to the Action.
F. DISMISSAL OF ACTION. All Parties shall execute the documents
required to dismiss the Action with prejudice with each Party bearing
its own fees and costs (except as provided in Paragraph X, below)..
G. RESERVATION OF RIGHTS.
The Parties expressly reserve the right to enforce this Agreement.
The Parties further agree that dismissal of the Action shall not
affect either (1) the effectiveness of this Agreement, or (2) the
jurisdiction of the United States District Court for the District of
Hawaii over them, and they agree that the District Court shall reserve
jurisdiction for the purposes of enforcing this Agreement in the event
it is breached by any Party. The order of dismissal will specifically
recite that the District Court shall retain jurisdiction for these
purposes.
II. NO ADMISSION OF LIABILITY:
This Agreement shall not be construed as an admission of liability by
any party to it. This Agreement is a compromise of the Action and
contested claims therein.
III. SUCCESSORS AND ASSIGNS:
This Agreement is binding upon, and shall inure to the benefit of the
Parties hereto, and their respective agents, officers,
representatives, successors, attorneys, agents, partners, past or
present employees, past or present independent contractors, employers,
heirs, trustees, personal representatives, sureties, bonding
companies, insurers and assigns.
IV. OWNERSHIP OF CLAIMS:
Each releasing party represents and warrants that no person other than
the releasing party has an interest in the claims released, and that
each party has not sold, assigned, transferred, conveyed or otherwise
disposed of any of the released claims.
V. GOVERNING LAW:
This Agreement shall in all respects be interpreted, enforced, and
governed by and under the laws of the State of Hawaii.
VI. WAIVER:
The waiver of any breach of this Agreement by any Party shall not be a
waiver as to any other subsequent or prior breach.
VII. ENTIRE AGREEMENT:
This Agreement contains the entire agreement between and among the
Parties and supersedes any other prior representations,
understandings, or agreements, except for any written agreement
regarding the Sponsorship Packages referred to in Section I.B., above.
The terms of this Agreement are contractual and not a mere recital.
VIII. AMENDMENT:
This Agreement shall not be amended, modified or otherwise changed in
any respect or particular whatsoever, except in a writing duly
executed by all Parties. The Parties hereby acknowledge and agree that
they will make no claim at any time that this Agreement has been
orally altered or modified in any respect.
IX. AUTHORITY:
Each Party represents that the Party has full power, authority, and
capacity to execute and perform his, her or its obligations under this
Agreement.
X. ENFORCEMENT OF RIGHTS UNDER THIS AGREEMENT:
If any Party hereto attempts to set aside this Agreement, or brings
any action for its breach, the prevailing party shall be entitled to
recover reasonable costs and attorneys' fees.
XI. INTERPRETATION:
This Agreement is the product of negotiations between the Parties and
shall be construed without regard to the party or parties responsible
for preparing or drafting of this document. Any ambiguity or
uncertainty existing herein shall not be interpreted or construed
against any Party hereto by virtue of identification of the party who
drafted the language.
XII. ADVICE FROM COUNSEL:
The Parties each acknowledge that he, she or it has entered into the
Agreement freely and voluntarily, that he, she or it has read and
understands the terms of the Agreement, and that each has signed the
Agreement with the advice of counsel. The terms of the Agreement have
been negotiated at arm's length among knowledgeable parties, who are
represented by experienced counsel. As a result, the rule of
"interpretation against the draftsman" shall not apply in any dispute
over the interpretation of the terms of the Agreement.
XIII. SEVERABILITY:
If one or more of the provisions, or portions thereof, of the
Agreement is/are determined to be illegal or unenforceable, then the
remainder of this Agreement shall not be affected, and each remaining
provision or portion thereof shall continue to be valid and effective
and shall be enforceable to the fullest extent permitted by law.
XIV. COUNTERPART SIGNATURES:
This Agreement may be executed in two or more counterparts, and by
facsimile, each of which shall be deemed to be an original, and all of
which taken together will be deemed one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective
as of the date first mentioned above.
TELEVISIONS EVENTS & MARKETING, INC., a Hawaii corporation
By: /s/ Xxx Xxxxx
Its: President
AMCON DISTRIBUTING COMPANY, a Delaware corporation
By: /s/ Xxxxxxxxxxx Xxxxxx
Its: Chief Executive Officer
XXX XXXXX, an individual
By: /s/ Xxx Xxxxx
THE BEVERAGE GROUP, INC., a Delaware corporation
By: /s/ Xxxxxx Xxxxxxx
Its: President
THE XXXXXXXX WORKS, INC., a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Its: President
AMCON CORPORATION, a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
Its: Chairman and Chief Executive Officer
XXXXXX X. XXXXXXXX, an individual
By: /s/ Xxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXX, an individual
By: /s/ Xxxxxxx X. Xxxxxx
