Settlement Agreement - The Fresh Juice Co. of California Inc., The Fresh Smoothie Co. LLC and Hansen's Juice Creations LLC
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Settlement Agreement")'is entered effective the
3rd day of September, 1999 by and between The Fresh Juice Company of California,
Inc., as successor to and/or assignee of Hansen's Juice, Inc. (both hereinafter
referred to as "HJI"), The Fresh Smoothie Company, LLC ("FSC") and its managing
partner, Barry Lublin ("Lublin"), Hansen's Juice Creations, LLC ("Juice
Creations"), and its managing partner, Harvey Laderman ("Laderman") (HJI, FSC,
Lublin and Laderman shall collectively hereinafter be referred to as "the
Parties").
WHEREAS, HJI owns, possesses and/or enjoys certain rights, title and interests,
inter alia: (i) as a grantor and beneficiary under and pursuant to the terms of
a Trust created under that certain Agreement of Trust dated as of July 27, 1992,
as amended from time to time (the "Trust Agreement" or "Trust") by, between and
among Hansen's Juices, Inc. and Gary Hansen, Anthony Kane and Burton S. Rosky
(collectively, the "Former Trustees") as Trustees of the Trust; and (ii) as
licensee of the common law and registered trademark "HANSEN'S", alone or in
conjunction with other words, and in various forms, variations and composites
thereof (hereinafter, collectively, the "Trademarks"), and the trade name,
company name, corporate name and doing, business name "HANSEN'S ", 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") entered into as of July 27,
1992 between HJI as Licensee and the Former Trustees on behalf of the Trust as
Licensor; and
WHEREAS, HJI and Juice Creations entered into a Royalty Agreement dated April
26, 1996, annexed as Exhibit "A" hereto (the "Juices Royalty Agreement"), which
has been amended and supplemented pursuant to: (i) a letter agreement, dated May
14, 1996 annexed as Exhibit "B" hereto (the "Letter Agreement"), (ii) Amendment
to Royalty Agreement, dated May 9, 1997 to the Juices Royalty Agreement annexed
as Exhibit "C" hereto (the "Juices Royalty Amendment"), (iii) an Agreement of
Purchase and Sale of Membership Interests and Amendment of Royalty Agreement
dated May 9, 1997 annexed hereto as Exhibit "D" hereto (the "Membership Purchase
Agreement"), and (iv) the Settlement Agreement dated September _, 1999 between
Hansen Beverage Company ("HBC"), Rodney C. Sacks, as Trustee of the Trust, FSC,
Juice Creations, Lublin and Laderman, annexed as Exhibit "E" hereto (the "HBC
Settlement Agreement"). The Juices Royalty Agreement, as amended by the Letter
Agreement, Juices Royalty Amendment, the Membership Purchase Agreement, the HBC
Settlement Agreement, and the within Settlement Agreement (being hereinafter
referred to, collectively, as the "Fresh Juices Sublicense"), shall govern FSC's
rights and license in the Trademarks and/or Trade Names; and
WHEREAS, in accordance with to the terms of the Juices Royalty Agreement, HJI
granted Juice Creations an exclusive license to use the designation "HANSEN'S"
as a trademark, trade name and business name in connection with the manufacture,
sale and distribution of "fresh juices and fresh juice products";
WHEREAS, The Fresh Juice Company of California, Inc. by successorship to and/or
assignment from Hansen's Juices, Inc., became the sublicensor to Juice Creations
under and pursuant to the terms of the Fresh Juices Sublicense; and
WHEREAS, pursuant to the terms of an Assignment of License Agreements dated
February, 1999, Juice Creations assigned to FSC all of Juice Creations' rights,
license, and interests under the Juices Royalty Agreement, as amended; and
WHEREAS, the Trustee and HBC, as Claimants, and Juice Creations, as Respondent,
are parties to an arbitration (the "Arbitration") pending before the American
Arbitration Association ("AAA") in Los Angeles California, No. 72 Y 114 01292
98, however, the Arbitration has been settled and dismissed pursuant to the HBC
Settlement Agreement; and
WHEREAS, HJI has submitted to the AAA and moved for leave to file a Cross-Demand
For Declaratory Relief, dated August 11, 1999 (the "Cross-Demand") against FSC,
Lublin, Juice Creations, and Laderman before the AAA, and FSC, Lublin, Laderman
and Juice Creations have denied the claims set forth in the Cross-Demand and
have certain claims against HJI (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 Cross-Demand and with respect
to the Fresh Juices Dispute, 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 the Cross-Demand and the Fresh Juices
Dispute 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 and among the Parties as follows:
1. Required Submissions and Documents. Contemporaneously with the
execution of this Settlement Agreement, HJI shall submit to the
Arbitrator for signature and approval an executed original Stipulated
Final Dismissal upon the terms of this Settlement Agreement in the form
annexed as Exhibit "F."
2. Rescission of Termination Notices. Confirmation Validity of Fresh
Juice Sublicense. HJI hereby acknowledges, agrees and confirms, that: (i)
all prior notices and letters purporting to terminate the Juices Royalty
Agreement, as amended, which were sent to FSC (or to Juice Creations) by
HJI (or by HJI's legal counsel), including without limitation the letters
dated March 1, 1999, April 2, 1999, and July 7, 1999 (copies of which are
attached hereto as Exhibits "G-1," "G-2," and "G-3") are hereby rescinded
and terminated and are of no further force and effect, (ii) the Fresh
Juices Sublicense is valid, and in full force and effect pursuant to the
terms and conditions contained therein, and as amended hereinbelow, and
(iii) upon the execution of this Settlement Agreement by the Parties, FSC
shall not be deemed to be in default under the Fresh Juices Sublicense.
3. Amendment To Juices Royalty Amendment. HJI and FSC hereby agree that the
Juices Royalty Amendment is further hereby amended as follows: after the
word "machine" contained in the last line of Paragraph I and on the last
line of Paragraph 2.b., the following words shall be added in parenthesis:
"(including blenders)."
4. Non-Competition.
(i) Nothing in this Agreement, or in any of the
agreements comprising the Fresh Juices Sublicense as
defined in this Settlement Agreement shall be
construed to prohibit or restrict FSC from supplying,
in any bottled, non-bottled or pre-bottled form,
custom blend fresh juice-based products, including,
without limitation, smoothies, which are designed to
be sold for use at home or by the ultimate consumer
in a Taylor machine, or similar machine (including
blenders) ("Custom Blended Fresh Juice Products"),
provided that neither the designation '"HANSEN" nor
"HANSEN'S", alone or in combination with any other
word(s), or any form, variation or composite thereof,
is used in any manner whatsoever in connection with
any such Custom Blended Fresh Juice Products as a
trademark, service mark, trade name, company name,
corporate name, doing business name or otherwise.
Other than with respect to its supply obligations to
FSC, HJI shall not manufacture, sell, distribute or
supply any Custom Blended Fresh Juice Products.
(ii) In the event that at any time during the term of the Juices
Royalty Agreement, as amended, that FSC elects (at its sole option) to
sell, manufacture or distribute under a trademark not using the name
"Hansens" any juice based product that is in competition to any product
presently manufactured and distributed solely by HJI, then FSC must
first obtain the prior consent of HJI, which consent shall not be
unreasonably withheld by HJI. FSC shall give to HJI at least sixty (60)
days prior written notice with respect to describing said product(s)
and its intended uses (the "Notice"), and HJI shall respond within
thirty (30) days from the receipt of the Notice. In the event that HJI
rejects FSC's request contained in the Notice, then: (i) HJI's response
to FSC shall set forth HJI's reasons why it is disapproving FSC's
request, and (ii) if FSC is of the opinion that HJI has unreasonably
disapproved FSC's request, then FSC may, at its option, submit such
dispute to Arbitration pursuant to the procedures set forth in
Paragraph 17 hereinafter.
5. Payment by FSC to HJI of Certain Invoices. The Parties hereby
acknowledge that there are certain outstanding invoices recently billed
by HJI to FSC as follows (collectively, the "Invoices"):
Invoice No. Amount
0227 367 $ 117.60
0226 722 21,217.20
0229 175 22,811.90
Total: $ 44,146.70
HFI and FSC have agreed that FSC shall have up to November 1, 1999 to
pay in full the Invoices. It is further agreed that FSC shall pay all
future HJI invoices within thirty (30) days from receipt by FSC of the
products ordered by FSC pursuant to such new invoices.
6. Payment of Legal Fees. It is hereby agreed and confirmed that neither
Juice Creations, FSC, Barry Lublin, or Harvey Laderman shall have any
liability or obligation to pay to HJI any legal fees or costs with
respect to the indemnification provisions contained in Paragraph 9.01
of the Membership Purchase Agreement or contained in any other
document.
7. Ratification of Fresh Juices Sublicense. The Parties hereby confirm,
agree, and acknowledge that: (i) Fresh Juices Sublicense is in full
force and effect, and (ii) the Parties shall comply with the terms and
conditions of, and perform their obligation under, and be bound by all
of the terms and conditions contained in the Fresh Juices Sublicense.
8. Mutual Releases.
(i) Except for the obligations created under this
Settlement Agreement, FSC, Juice Creations, Lublin,
and Laderman, jointly and severally, do hereby
unconditionally, irrevocably and forever release and
discharge HJI and its officers, directors, managers,
attorneys, agents, servants, representatives,
employees, and the successors and assigns of each of
the foregoing from any and all claims, debts,
liabilities, demands, obligations, costs, expenses,
damages, lawsuits, actions and causes of action, of
whatever kind or nature, whether known or unknown,
based on, arising out of, or in connection with
anything done or omitted or suffered to be done at
any time prior to the date of this Settlement
Agreement which pertains in any way to any of the
events described in the Recitals to this Settlement
Agreement, the Cross-Demand, and the Fresh Juices
Dispute.
(ii) Except for the obligations created under this Settlement
Agreement, HJI hereby unconditionally, irrevocably and forever releases
and discharges (a) Juice Creations, FSC, and their respective members,
principals, officers, directors, managers, attorneys, agents, servants,
representatives, employees, and (b) Barry Lublin and Harvey Laderman,
and their respective attorneys, agents, servants, representatives,
employees, agents, heirs, successors, and assigns, from any and all
claims, debts, liabilities, demands, obligations, costs, expenses,
damages, lawsuits, actions and causes of action, of whatever kind or
nature, whether known or unknown, based on, arising out of, or in
connection with anything done or omitted or suffered to be done at any
time prior to the date of this Settlement Agreement which pertains in
any way to any of the events described in the Recitals to this
Settlement Agreement, the Cross-Demand, or the Fresh Juices Dispute.
(iii) Except for as provided in this Settlement Agreement and its
related documents, the release of the Parties contained in this
Paragraph 7 of this Settlement Agreement includes the waiver and
release of any and all rights under California Civil Code Section 1542,
which provides as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the tie of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
(iv) Each of the Parties hereto represents and
warrants that such Party has not heretofore assigned
or transferred, or purported to assign or transfer,
to any person or other entity whatever, any claim or
cause of action released or assigned pursuant to this
Settlement Agreement.
9. Integration. This Settlement Agreement contains the full and complete
settlement reached by the Parties with respect to the Cross-Demand and
the Fresh Juices Dispute and the matters contained therein, and merges
all prior and contemporaneous discussions, writings, promises,
undertakings, representations and communications between them
respecting the settlement of the Cross-Demand and the Fresh Juices
Dispute 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.
10. Binding Effect. This Settlement Agreement and the Juices Sublicense
Agreement shall inure to the benefit of, and shall be binding upon,
the undersigned Parties, their parent entities, controlled
subsidiaries, members, shareholders, 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, provided, however, nothing in this
Settlement Agreement, except as expressly provided in this
Settlement Agreement, shall expand, limit, or affect in any manner
either the restrictions on competition or the supply obligations
set forth in the Fresh Juices Sublicense.
11. 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 HJI: The Fresh Juices Company of California, Inc.
875 West 8th Street
Azusa, California 91702
Telecopy: (818) 812-6077
Attention: Jeffrey Heavirland
In the case of FSC: Barry Lublin
The Fresh Smoothie Company, LLC
11640 San Vicente Blvd., Suite 205
Los Angeles, California 90049
Telecopy: (310) 820-0053
Copy to: Roger H. Howard, Esq.
Christensen, White, Miller, Fink,
F. Jacobs, Glaser & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, California 90067-5010
Telecopy: (310) 556-2920
and
Dennis G. Martin
Blakely, Sokoloff, Taylor & Zafman
12400 Wilshire Blvd., Seventh Floor
Los Angeles, California 90025-1026
Telecopy: (310) 820-5988
In the case of
Juice Creations: Harvey Laderman
Hansen's Juice Creations, LLC
11640 San Vicente Blvd., Suite 205
Los Angeles, California 90049
Telecopy: (310) 820-0053
Copy to: Roger H. Howard, Esq.
Christensen, White, Miller, Fink,
F. Jacobs, Glaser & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, California 90067-5010
Telecopy: (310) 556-2920.
In the case of
Barry Lublin: Barry Lublin
c/o The Fresh Smoothie Company, LLC
11640 San Vicente Blvd., Suite 205
Los Angeles, California 90049
Telecopy: (310) 820-0053
Copy to: Roger H. Howard, Esq.
Christensen, White, Miller, Fink,
F. Jacobs, Glaser & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, California 90067-5010
Telecopy: (310) 556-2920.
In the case of
Harvey Laderman: Harvey Laderman
c/o Hansen's Juice Creations, LLC
11640 San Vicente Blvd., Suite 205
Los Angeles, California 90049
Telecopy: (310) 820-0053
Copy to: Roger H. Howard, Esq.
Christensen, White, Miller, Fink,
F. Jacobs, Glaser & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, California 90067-5010
Telecopy: (310) 556-2920.
12. 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.
13. Non-admission; Non-Prejudice. 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 Cross-Demand. The Parties have
agreed to compromise and settle the claims asserted in the Arbitration
and Cross-Demand to avoid the expense and inconvenience that would be
entailed in continuing this proceeding.
14. 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.
15. 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.
16. Conflict. In the event of a conflict between the provisions of this
Agreement and the HBC Settlement Agreement, the HBC Settlement
Agreement will govern and control.
17. Final Dismissal. Alternative Dispute Resolution and Remedies
17.1 Final Dismissal. The Stipulated Final Dismissal of the Cross-Demand shall
be submitted to the Arbitrator for signature and approval.
17.2.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 Los Angeles County, California. Judgement 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 17.3 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 11 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 Trust Agreement, the Fresh Juices
Agreement, the Fresh Juices Sublicense, or any other
instrument, arrangement or agreement by and/or between and/or
among the Parties that provides for arbitration before the
American Arbitration Association, the arbitration provisions
of this Section 17 shall govern and control and the entire
controversy, claim and dispute shall be conducted by JAMS in
accordance with the provisions of this Section 17. To the
extent that the provisions of the Trust Agreement and the
Fresh Juices Sublicense, or any such other instrument,
arrangement or agreement are in conflict or inconsistent with
this Section 17, 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 17.
17.3 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 the 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 17.2
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.
THE FRESH JUICE COMPANY OF CALIFORNIA, INC.
By: /s/Jeffrey Heavirland
Chief Executive Officer
THE FRESH SMOOTHIE COMPANY, LLC
By: /s/Barry Lublin
as Managing Partner
BARRY LUBLIN
By: /s/Barry Lublin
Individually
HANSEN'S JUICE CREATIONS, LLC
By: /s/Harvey Laderman
as Managing Partner
HARVEY LADERMAN
By: /s/Harvey Laderman
Individually
We, the undersigned, HANSEN BEVERAGE COMPANY and RODNEY C. SACKS, as Trustee of
the Hansen's Trust, by our signatures below, hereby confirm our consent to and
approval of the terms and conditions of the above Settlement Agreement
HANSEN BEVERAGE COMPANY
By: /s/Rodney C. Sacks
Chairman and Chief Executive Officer
RODNEY C. SACKS, as Trustee of the Hansen's Trust
By: /s/Rodney C. Sacks
Trustee