BEFORE THE AMERICAN ARBITRATION ASSOCIATION
LOS ANGELES, CALIFORNIA
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Xxxxxx
Beverage Company and Xxxxxx X. Xxxxx, as Trustee of the Xxxxxx'x Trust,
Claimants,
-against-
Xxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxx X. Xxxxx, Xxxxxx'x Juice Creations, LLC, and
The Fresh Juice Company of California, Inc., Respondents. : :
:
:
No. 72 Y 114 01292 98
SETTLEMENT AGREEMENT
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X
This Settlement Agreement (the "Settlement Agreement") is entered into effective
the ___ day of September, 1999 by and between and among Xxxxxx Beverage Company
("HBC") and Xxxxxx X. Xxxxx, as sole Trustee (the "Trustee") of the Xxxxxx'x
Trust (the "Trust"), a Trust created under that certain Agreement of Trust dated
as of July 27, 1992, as amended from time to time (together with its amendments,
the "Trust Agreement", annexed as Schedule 1 hereto) by, between and among
Xxxxxx'x Juices, Inc. and HBC as grantors/beneficiaries and Xxxx Xxxxxx, Xxxxxxx
Xxxx and Xxxxxx X. Xxxxx as trustees (collectively, the "Former Trustees") and
The Fresh Juice Company of California, Inc., as successor to and/or assignee of
Xxxxxx'x Juices, Inc. (both hereinafter referred to as "HJI"). WHEREAS, HJI
owns, possesses and/or enjoys certain rights, titles and interests, inter alia:
(i) as a grantor and beneficiary under and pursuant to the terms of the Trust
Agreement; and (ii) as licensee of the common law and registered trademark
"XXXXXX'X", alone or in conjunction with other words, and in various forms,
variations and composites thereof (hereinafter, collectively, the "Trademarks"),
and the service mark, trade name, company name, corporate name and doing
business name "XXXXXX'X", alone or in conjunction with other words, and in
various forms, variations and composites thereof (hereinafter, collectively, the
"Trade Names"), in connection with the manufacture, sale and distribution of
fresh juice drinks and juices pursuant to that certain Fresh Juices License
Agreement, as amended (hereinafter, together with its amendments, the "Fresh
Juices Agreement", annexed as Schedule 2 hereto) entered into as of July 27,
1992 between HJI as Licensee and the Former Trustees on behalf of the Trust as
Licensor; and WHEREAS, HBC owns, possesses and/or enjoys certain rights, titles
and interests, inter alia: (i) as a grantor and beneficiary under and pursuant
to the terms of the Trust Agreement; and (ii) as licensee of the Trademarks and
Trade Names in connection with the manufacture, sale and distribution of all
beverage products (other than the beverage products licensed exclusively to HJI
under the Fresh Juices Agreement) and non-beverage products, pursuant to the
Carbonated Beverage License Agreement, Other Beverage License Agreement, and
Non-Beverage License Agreement, all entered into as of July 27, 1992 between HBC
as licensee and the Former Trustees on behalf of the Trust as licensor; and
WHEREAS, HJI and Xxxxxx'x Juice Creations, LLC ("Juice Creations") entered into
a Royalty Agreement dated April 26, 1996 (the "Juices Royalty Agreement",
annexed as Schedule 3 hereto), and a letter agreement dated May 14, 1996 (the
"Letter Agreement" annexed as Schedule 4 hereto) as amended by their subsequent
agreement to an amendment thereof dated May 9, 1997 (the "Juices Royalty
Amendment", annexed as Schedule 5 hereto), entered into together with the
Agreement of Purchase and Sale of Membership Interests and Amendment of Royalty
Agreement (the "Membership Purchase Agreement") dated May 9, 1997 (the Juices
Royalty Agreement, as amended by the Letter Agreement and the Juices Royalty
Amendment, and all of the terms and conditions of the Membership Purchase
Agreement and/or of such other agreement, as purport to govern Juice Creations'
right and license in the Trademarks and/or Trade Names, being hereinafter
referred to collectively, as the "Fresh Juices Sublicense"); and WHEREAS,
according to the terms of the Fresh Juices Sublicense, HJI granted Juice
Creations an exclusive license to use the designation "XXXXXX'X" as a trademark,
trade name and business name in connection with the manufacture, sale and
distribution of "fresh juices and fresh juice products" as defined therein; and
WHEREAS, Juice Creations further entered into a Royalty Agreement with the
Former Trustees dated April 26, 1996 (the "Other Products Royalty Agreement,"
annexed as Schedule 6 hereto), by the terms of which the Trust, by the Former
Trustees, purported to grant Juice Creations an exclusive license to use the
designation "XXXXXX'X" as a trademark, trade name and business name in
connection with the manufacture, sale and distribution of "fresh brewed coffee,
coffee flavored drinks, coffee beans and/or ground coffee, food spreads and
baked goods" as defined and limited by the terms of that Agreement; and WHEREAS,
The Fresh Juice Company of California, Inc. by successorship to and/or
assignment from Xxxxxx'x Juices, Inc., became the sublicensor to Juice Creations
under and pursuant to the terms of the Fresh Juices Sublicense; and WHEREAS,
according to the terms of an Assignment of License Agreements dated February,
1999 (the "Sublicense Assignment," annexed as Schedule 7 hereto), Juice
Creations assigned to the Fresh Smoothie Company, LLC ("FSC") the Fresh Juices
Sublicense, the Other Products Royalty Agreement, and all of Juice Creations'
rights and licenses under these agreements; and WHEREAS, the Trustee and HBC, as
Claimants, and HJI, as a Respondent, are parties to arbitration (the
"Arbitration") pending before the American Arbitration Association ("AAA") in
Los Angeles, California, No. 72 Y 114 01292 98 (each of HBC, the Trustee and HJI
being hereinafter referred to, individually, as a "Party" and, collectively, as
the "Parties" to this Settlement Agreement); and WHEREAS, HJI has submitted and
moved for leave to file a Cross-Demand For Declaratory Relief dated August 11,
1999 (the "Cross-Demand") against FSC, Xxxxx Xxxxxx, Juice Creations and Xxxxxx
Xxxxxxxx before the AAA (the "Fresh Juices Dispute"); and WHEREAS, the Parties
wish to dismiss, with prejudice, all claims that they have, or could have,
asserted against one another in the Arbitration and to avoid the expense,
inconvenience and distraction of protracted litigation, without any admission of
liability whatsoever by any of them and without the foregoing recitals
constituting any evidence or admission as to the validity, force or effect of
any of the agreements referred to therein; and WHEREAS, the Parties have agreed
to settle this Arbitration between and among them on the terms and conditions
set forth below; NOW, THEREFORE, in consideration of the premises, the mutual
covenants and promises set forth herein, and for other good and valuable
consideration, the validity, sufficiency and receipt of which are hereby
acknowledged, IT IS STIPULATED AND AGREED by, between and among the Parties as
follows: 1. Required Executions and Submissions. Contemporaneously with the
execution of this Settlement Agreement, the Parties shall execute the Releases
annexed as Exhibit A to the Settlement Agreement dated September __, 1999 by,
between and among HBC, the Trustee of the Trust, FSC, FSC's Managing Partner,
Xxxxx Xxxxxx, Juice Creations and Juice Creations' Managing Partner, Xxxxxx
Xxxxxxxx (the "FSC Settlement Agreement"), annexed as Exhibit A hereto and, by
their respective counsel, shall submit to the Arbitrator for signature and
approval an executed original Stipulated Final Dismissal upon the terms of this
Settlement Agreement, the FSC Settlement Agreement and the Releases annexed
thereto, in the form annexed as Exhibit B hereto. 2. Consent to FSC Settlement
Agreement. Subject to the non-waiver provisions of Section 7.3 below, HJI hereby
consents to and approves of the terms and conditions of the FSC Settlement
Agreement and agrees to abide by and implement such terms and conditions of the
FSC Settlement Agreement to the extent that such terms and conditions affect or
concern HJI or any agreement to which HJI is a party, including, without
limitation, the Fresh Juices Sublicense, and HJI hereby further consents to and
approves of the execution of and entry into the FSC Settlement Agreement by each
of the parties thereto, including, without limitation, these parties' adoption
of, and compliance with, the definitions, specifications and conditions set
forth in the FSC Settlement Agreement with respect to the "Licensed Mark,"
"Licensed Goods," and "Licensed Uses," and to the supersedence by the FSC
Settlement Agreement of the Fresh Juices Sublicense, Other Products Royalty
Agreement and other instruments, arrangements and agreements referred to in
Section 2.5 of the FSC Settlement Agreement as being superseded thereby. XXX
agrees to execute the covenant not to sue the Releasees in respect of the FSC
Settlement Agreement as set forth in the Release annexed as Exhibit A to the FSC
Settlement Agreement. 3. Integration. This Settlement Agreement contains the
full and complete settlement reached by the Parties with respect to the
Arbitration and merges all prior and contemporaneous discussions, writings,
promises, undertakings, representations and communications between them
respecting the settlement of the Arbitration and the subject matter set forth
herein. No modification, rescission or waiver of any of the terms and conditions
of this Settlement Agreement shall be binding or effective for any purpose
unless expressed in a writing signed by the Parties, and any such modification,
rescission or waiver shall be effective only in the specific instance and for
the specific purpose given. Binding Effect. This Settlement Agreement shall
inure to the benefit of, and shall be binding upon, the undersigned Parties,
their parent entities, controlled subsidiaries, affiliates, divisions, and
departments, and each of the foregoing entities' principals, officers,
directors, employees, representatives and agents, and all those acting under any
of the foregoing persons' or entities' control, in concert with any of them or
on any of their behalf, and each of their respective heirs, successors,
representatives, administrators and assigns. Notices. Any notice, request,
information or other document required to be provided hereunder shall be in
writing and delivered personally or sent by certified mail or registered mail,
postage prepaid, to the following addressees or to such other addressees as may
from time to time be designated in writing by the parties: In the case of
Trustee: Xxxxxx X. Xxxxx
Trustee, Xxxxxx'x Trust
c/x Xxxxxx Beverage Company
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Copy to: Xxxxxxxx X. Xxxx, Esq.
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
In the case of
HBC: Xxxxxx X. Xxxxx
Xxxxxx Beverage Company
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Copy to: Xxxxxxxx X. Xxxx, Esq.
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
In the case of
HJI: Xxxxxxx Xxxxxxxxxx
Fresh Juice Company of
California, Inc.
000 Xxxx 0xx Xxxxxx
Xxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Copy to: Xxxxxxxx X. Xxxxxx, Esq.
O'Melveny & Xxxxx LLP
Suite 1700
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Authority. Each of the individual signatories hereto personally represents and
warrants that he is a Party or an officer of a Party hereto, that his entry into
this Settlement Agreement is authorized in the manner required by applicable
law, and that he is empowered and authorized to sign on behalf of the Party on
behalf of whom or which he sets forth his signature below. Non-admission;
Non-Prejudice. 3.1 It is expressly understood and agreed that this Settlement
Agreement and its contents are not and shall not be construed as an admission or
denial by any of the Parties as to, or as any evidence of, the truth of any of
the allegations or the validity of any of the claims asserted in the
Arbitration. The Parties have agreed to compromise and settle the claims
asserted in the Arbitration to avoid the expense and inconvenience that would be
entailed in continuing this proceeding. 3.2 Nor shall the Parties' entry into
this Settlement Agreement, or any of the provisions hereof, be with prejudice
to, constitute a waiver of, or be construed as any evidence of, or any admission
or denial by any of the Parties or any other person as to, the truth of any of
the allegations or the validity of any of the claims that FSC, Juice Creations,
Xxxxxx Xxxxxxxx and Xxxxx Xxxxxx on the one hand, and HJI on the other, may have
or claim against one another, including, without limitation, any of the
allegations and claims set forth in HJI's Cross-Demand, or any unreleased claim
relating to the validity, force or effect of Juice Creations' assignment of its
license rights to FSC, the validity, force, effect or termination of the Fresh
Juices Sublicense, and/or HJI's claim for indemnification of attorneys' fees set
forth in the Cross-Demand.. 3.3 Nor shall HJI's consent and approval of the
terms and conditions of the FSC Settlement Agreement and/or of the execution of
thereof, as set forth in Section 2 above, be with prejudice to, constitute a
waiver of, or be construed as any evidence of, or any admission or denial by any
of the Parties as to, the truth of any of the allegations or the validity of any
of the claims that FSC, Juice Creations, Xxxxxx Xxxxxxxx and/or Xxxxx Xxxxxx, on
the one hand, or HJI, on the other hand, may have or claim against one another,
including, without limitation, any of the allegations and claims set forth in
HJI's Cross-Demand, or any other claim relating to the validity, force or effect
of Juice Creations' assignment of its license rights to FSC, the validity,
force, effect or termination of the Fresh Juices Sublicense, and/or HJI's claim
for indemnification of attorneys' fees set forth in the Cross-Demand.
Non-Exhaustive. The requirements and restrictions set forth in this Settlement
Agreement shall be in addition to, and not in lieu of, any requirements or
restrictions prescribed by law. Choice of Law. This Settlement Agreement shall
be construed under and governed by the laws of the State of California without
giving effect to principles of conflict of law. 4. Final Dismissal, Alternative
Dispute Resolution and Remedies. 4.1 Final Dismissal. The Stipulated Final
Dismissal shall be submitted to the Arbitrator for signature and approval. 4.2
Alternative Dispute Resolution. The Parties hereby expressly agree that any
dispute, controversy or claim arising out of, in connection with, or relating to
this Settlement Agreement, or the entry into, breach or termination hereof,
shall be settled by binding arbitration conducted by JAMS/Endispute ("JAMS") in
accordance with JAMS Comprehensive Arbitration Rules and Procedures (the
"Rules"). The arbitration shall be heard by one (1) arbitrator to be selected in
accordance with the Rules, within the boundaries of the United States District
Court for the Central District of California. Judgment upon any award rendered
may be entered in any court having jurisdiction thereof. Within seven (7)
calendar days after appointment the arbitrator shall set the hearing date, which
shall be within ninety (90) days after the filing date of the demand for
arbitration unless a later date is required for good cause shown and shall order
a mutual exchange of what he/she determines to be relevant documents,
identifications of witnesses and information and the dates thereafter for the
taking of up to a maximum of five (5) depositions by each Party to last no more
than two (2) days per deponent. The Parties waive the right, if any, to obtain
any award for exemplary or punitive damages or any other amount for the purpose
of imposing a penalty from the other in any arbitration or judicial proceeding
or other adjudication arising out of or with respect to this Settlement
Agreement, or any breach hereof, including any claim that this Settlement
Agreement, or any part hereof, is invalid, illegal or otherwise voidable or
void. In addition to all other relief that may be granted in the arbitration,
including, without limitation, the relief set forth in Section 10.3 below, the
arbitrator shall award reasonable attorneys' fees to the prevailing Party or
Parties. The arbitrator shall make his or her award no later than seven (7)
calendar days after the close of evidence or the submission of final briefs,
whichever occurs later. The arbitration award shall be final and binding upon
the Parties and the Parties hereto agree that they will accept such decision and
award as binding and conclusive and will abide thereby. Service of any notice,
process, motion or other document in connection with such arbitration proceeding
and arbitration award may be made by personal service or by any means specified
in Section 5 hereof. The Parties further acknowledge, consent and agree that to
the extent that any dispute, controversy or claim arising out of, in connection
with, or relating to this Settlement Agreement refers or relates to, implicates,
involves or concerns, in any manner whatsoever, the FSC Settlement Agreement,
the Trust Agreement, the Fresh Juices Agreement, the Fresh Juices Sublicense,
the Other Products Royalty Agreement or any other instrument, arrangement or
agreement by and/or between and/or among HBC, the Trustee, the Former Trustees,
FSC, Juice Creations, HJI, Xxxxx Xxxxxx and/or Xxxxxx Xxxxxxxx that provides for
arbitration before the American Arbitration Association, the arbitration
provisions of this Section 10 shall govern and control and the entire
controversy, claim and dispute shall be conducted by JAMS in accordance with the
provisions of this Section 10. To the extent that the provisions of the Trust
Agreement, the Fresh Juices Agreement, the Fresh Juices Sublicense, the Other
Products Royalty Agreement or any such other instrument, arrangement or
agreement are in conflict or inconsistent with this Section 10, they are hereby
superseded to the extent necessary to effectuate the intent of the Parties that
any dispute, controversy or claim arising out of, in connection with, or
relating to this Settlement Agreement be conducted in its entirety by JAMS in
accordance with the provisions of this Section 10. 4.3 Remedies. In the event of
a breach or threatened breach by any of the Parties of its obligations under
this Settlement Agreement, each Party acknowledges that the other Parties may
not have an adequate remedy at law and shall be entitled to seek specific
performance of this Settlement Agreement and such preliminary, permanent and
mandatory equitable and injunctive relief as may be available to restrain any
other Party from any actual or threatened violation of the provisions hereof.
Accordingly, notwithstanding the Parties' agreement to submit to arbitration set
forth in Section 10.2 above, each Party may apply to any court situate in Los
Angeles County (the "Court") to obtain any of the foregoing, or other, relief in
connection with any dispute, controversy or claim arising out of or relating to
this Settlement Agreement in the event that the granting of any such relief is
not within the authorization, power or policy of any arbitral authority selected
by the Parties, or is not expressly denied by such arbitral authority but
nevertheless cannot be obtained from such authority in time to avoid imminent,
irreparable harm. The Parties hereby consent to the personal jurisdiction of the
Court for the purposes of hearing and deciding such application. The prevailing
Party or Parties in any action or proceeding seeking such relief shall be
entitled to reimbursement from the other Party or Parties of any costs or
expenses (including, without limitation, reasonable attorneys' fees) incurred in
connection with such proceeding. Nothing herein shall be construed as
prohibiting any Party from pursuing any other remedies available for such breach
or threatened breach, including the recovery of damages.
WHEREFORE, each Party has caused his or its duly authorized signatory
to execute and enter into this Settlement Agreement with effect as of the date
first above written.
XXXXXX X. XXXXX, AS TRUSTEE
OF THE XXXXXX'X TRUST
BY: /s/ Xxxxxx X. Xxxxx
XXXXXX X. XXXXX, Trustee
XXXXXX BEVERAGE COMPANY
BY: /s/ Xxxxxx X. Xxxxx
XXXXXX X. XXXXX, as Chief Executive Officer
THE FRESH JUICE COMPANY OF CALIFORNIA, INC.
BY: /s/ Xxxxxxx Xxxxxxxxxx
XXXXXXX XXXXXXXXXX, as Chief Executive Officer
