TERMINATION, WAIVER AND MUTUAL RELEASE
TERMINATION, WAIVER AND
MUTUAL RELEASE
This
Termination, Waiver and Mutual Release (“Agreement”), dated April 7,
2008, is made and entered into by and between Java Universe, LLC, for itself and
on behalf of its respective affiliates and related entities or corporations, and
these entities’ past and present officers, directors, shareholders, employees,
agents, partners, attorneys, insurers, predecessors, successors, and assigns
(collectively, hereinafter “Java Universe”) on the one
hand, and Java Detour Franchise Corp. (formerly known as Java Detour), a
California corporation, for itself and on behalf of its respective affiliates
and related entities or corporations, and these entities’ past and present
officers, directors, shareholders, employees, agents, partners, attorneys,
insurers, predecessors, successors, and assigns (collectively, hereinafter
“Java Franchise,” and
collectively with “Java
Universe,” the “Released
Parties”) and solely for purposes of Sections 1 and 7, Java Detour, Inc.
(“Java Detour”) on the other hand,
with reference to the following facts:
A. Reference
is made to that certain Master Franchise Agreement dated as of March 30, 2007
entered into by and between Java Universe and Java Franchise (collectively, the
“Parties”), as amended
by that certain extension side letter dated October 2, 2007 and that certain
option to extend dated December 31, 2007 (as amended, the “Middle East Franchise
Agreement”), pursuant to which Java Franchise granted certain exclusive
franchise rights to Java Universe for the Middle East territory, subject to the
terms and conditions set forth therein.
B. Reference
is made to that certain Master Franchise Agreement dated as of July 21, 2007
entered into by and between the Parties (the “Southern California Franchise
Agreement”), pursuant to which Java Franchise granted certain exclusive
franchise rights to Java Universe for the Southern California territory, subject
to the terms and conditions set forth therein.
C. Reference
is made to that certain Asset Purchase Agreement of even date herewith entered
into by and between Java Universe, JDCO, Inc., a California corporation and
parent of Java Franchise (“JDCO”), Java Detour, ▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ (the “Purchase Agreement”), pursuant
to which JDCO acquired certain assets from Java Universe, subject to the terms
and conditions set forth therein.
D. In
connection with the Purchase Agreement, each of the Parties desire to mutually
terminate each of the Middle East Franchise Agreement and the Southern
California Franchise Agreement (collectively, the “Terminated Agreements”) and
waive, compromise and resolve fully and finally any and all claims and potential
disputes, whether known or unknown, which exist or could exist on the Parties
behalf against the Released Parties, respectively, related to the Terminated
Agreements and the transactions contemplated thereunder.
NOW,
THEREFORE, in consideration of the covenants and promises contained herein, the
Parties hereto agree as follows:
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1. Termination
of the Terminated Agreements. Each of the Parties hereby
agrees to terminate each Terminated Agreement in its entirety effective
immediately, and each of the Parties agrees that the amounts described in this
Section 1 is fully satisfactory to it and constitutes valid consideration in
exchange for the releases set forth in this Agreement. Upon Closing
(as defined in the Purchase Agreement), Java Franchise shall effect an aggregate
payment to Java Universe in the amount of Five Hundred Fifty Thousand Dollars
($550,000), payable in shares of common stock, $.001 par value, of Java Detour
(“Common Stock”) valued
at $1.00 per share, or Five Hundred Fifty Thousand (550,000) shares of Common
Stock, such shares to be issued to cover any and all amounts due to Java
Universe under the Terminated Agreements. All shares of Common Stock
to be issued to Java Universe under this Section 1 shall be subject to Section 6
of that certain Agency, Co-Occupancy and Operating Agreement dated of even date
herewith by and among JDCO, Java Universe, ▇▇▇▇▇▇ Foods, Inc. and ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
2. Non-Admission
of Liability. The Parties acknowledge that the Released
Parties each individually and collectively deny any wrongdoing whatsoever in
connection with the Terminated Agreements and the transactions contemplated
therein solely for the purpose of waiving potential claims and avoiding the time
and expense of litigation. It is expressly understood and agreed by
the Parties that nothing contained in this Agreement shall constitute or be
treated as an admission of any wrongdoing or liability on the part of any of the
Released Parties.
3. No Filing
of Claims. Each of the Parties represents and warrants that it
does not presently have on file, and further represents and agrees to the
fullest extent permitted by law that it will not hereafter file, any claims,
charges, grievances, actions, appeals or complaints against any of the Released
Parties in or with any administrative, state, federal or governmental entity,
agency, board or court, or before any other tribunal or panel of arbitrators,
public or private, based upon any actions by Released Parties occurring in
connection with Terminated Agreements and the transactions contemplated
therein.
4. Mutual
Release
of All Claims. Each of the Parties, for itself and its
affiliates, successors and assigns, respectively, does hereby waive, release,
acquit and forever discharge each and all of the Released Parties, respectively,
from any and all claims, actions, charges, complaints, grievances and causes of
action (hereinafter collectively referred to as “claims”), of whatever nature,
whether known or unknown, which exist or may exist on each of the Parties’
behalf against the Released Parties with respect to any of the Terminated
Agreements, respectively, as of the date of this Agreement, including but not
limited to the following as they relate to any of the Terminated Agreements: any
and all exclusive agency rights, residual rights to compensation, rights to fee
tail compensation provided under any of the Terminated Agreements, statutory
claims, all claims for injunctive relief, compensatory damages, consequential
damages, incidental damages, punitive damages interest, costs, expenses,
attorneys’ fees and/or any other type of damages or monetary relief cognizable
in law or equity, and any and all claims arising under any federal, state, city
and/or other governmental statute, law, regulation or ordinance relating to
corporate governance responsibilities or securities, including; provided, however, that nothing
in this Agreement shall waive, compromise or otherwise negate the rights,
privileges and claims directly provided under this Agreement.
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5. Mutual
Waiver of
Unknown Claims. It is further understood and agreed by each of
the Parties that as a condition of this Agreement, each of the Parties hereby
expressly waives and relinquishes any and all claims, rights or benefits that it
may have but of which it does not know or suspect to exist in its favor at the
time of executing this Agreement which if known by it must have materially
affected its settlement by such party. In connection with such waiver
and relinquishment, each of the Parties hereby acknowledges that it or its
attorneys may hereafter discover claims or facts in addition to, or different
from, those which it now knows or believes to exist, but that it expressly
agrees to fully, finally and forever settle and release any and all claims,
known or unknown, suspected or unsuspected, which exist or may exist on its
behalf against the Released Parties at the time of execution of this Agreement,
including, but not limited to, any and all claims relating to or arising from
the Termination Agreements and the transactions contemplated
thereunder. Each of the Parties further acknowledges, understands and
agrees that this representation and commitment is essential to the Release
Parties, respectively, and that this Agreement would not have been entered into
were it not for this representation and commitment.
6. Investment
Representations. Java Universe
represents and warrants that all statements set forth in Exhibit A are true and
correct.
7. Lock-up
Restrictions. It is understood that
the Common Stock issued to Java Universe hereunder will bear the following
legend:
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(a)
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Java
Universe agrees that other than as set forth below, it shall not: (i)
sell, assign, exchange, transfer, pledge, distribute or otherwise dispose
of (X) any of the Common Stock received by Java Universe pursuant to this
Agreement, or (Y) any interest (including, without limitation, an option
to buy or sell) in any such Common Stock, in whole or in part, and no such
attempted transfer shall be treated as effective for any purpose; or (ii)
engage in any transaction in respect of any Common Stock received by Java
Universe pursuant to this Agreement or any interest therein, the intent or
effect of which is the effective economic disposition of such shares
(including, but not limited to, engaging in put, call, short-sale,
straddle or similar market transactions) (the foregoing restrictions are
referred to herein as “Lock-Up
Restrictions”).
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(b)
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Java
Universe’s Common Stock acquired pursuant to this Agreement shall be
released from the Lock-Up Restrictions on the date eighteen (18) months
after the date such stock is
issued.
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(c)
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The
certificates evidencing the Common Stock received by Java Universe
pursuant to this Agreement shall bear a legend as set forth below and such
legend shall remain during the term of the Lock-Up Restrictions as set
forth above:
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“THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS SET
FORTH IN THAT TERMINATION, WAIVER AND MUTUAL RELEASE BY AND AMONG JAVA DETOUR
FRANCHISE CORP., A CALIFORNIA CORPORATION, SOLELY FOR PURPOSES OF SECTIONS 1 AND
7, JAVA DETOUR, INC., A DELAWARE CORPORATION, AND THE HOLDER HEREOF (THE
“TERMINATION AGREEMENT”), AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED, TRANSFERRED,
ENCUMBERED, PLEDGED, DISTRIBUTED OR OTHERWISE DISPOSED OF PRIOR TO THAT CERTAIN
TIME PERIOD DETAILED IN SECTION 7 OF THE TERMINATION AGREEMENT. THE
ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH
THE TRANSFER AGENT) UPON THE EXPIRATION OF THE TIME PERIOD SPECIFIED IN SECTION
7 OF THE TERMINATION AGREEMENT. A COPY OF THE TERMINATION AGREEMENT
IS AVAILABLE FOR YOUR REVIEW AT THE PRINCIPAL EXECUTIVE OFFICE OF THE
ISSUER.”
8. Other
Representations and Warranties. Each Party
represents and warrants, for itself only, as follows:
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(a)
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Duly
Authorized. The execution, delivery and performance of
this Agreement have been duly authorized by all required corporate and
limited liability company action.
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(b)
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No
Default. The execution, delivery and performance of this
Agreement, and any other agreement(s) executed in connection herewith, do
not contravene, or constitute a default under, any provision of applicable
law, or any agreement, judgment, injunction, order, decree or other
instrument binding upon the Party.
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(c)
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Capacity. Each
individual signing this Agreement in a representative capacity is duly
authorized to enter into, and execute, this Agreement in such
capacity.
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(d)
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Investigation. Each
Party acknowledges that it has not relied upon any inducement or
representations made by any other Party to this Agreement, other than
those set forth herein, and each Party has made such investigation of the
facts pertaining to this Agreement, as it has deemed
necessary.
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(e)
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Legal Advice.
Each Party has received independent legal advice from attorneys of its
choice with respect to the advisability of making the settlement and
release referenced herein and with respect to the advisability of
executing this Agreement.
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9. Ownership
of Claims. Each of the Parties represents and warrants that it
is the sole and lawful owner of all rights, title and interest in and to all
released matters, claims and demands referred to herein. Each of the
Parties further represents and warrants that there has been no assignment or
other transfer of any interest in any such matters, claims or demands which each
of the Parties may have against the Released Parties, respectively.
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10. Survival
of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
termination of this Agreement.
11. Other
Benefits Due. Each of the Parties understands and agrees that
this Agreement is intended to and does bar all claims each of the Parties has or
may have for losses, damages, costs, expenses, penalties, attorneys’ fees or any
similar claims that each of the Parties could possibly have against the Released
Parties, respectively, and that each of the Parties is not entitled to receive
and will not claim any right, benefit, or consideration other than what is set
forth above in Section 1, above.
12. Successors
and Assigns. It is expressly understood and agreed by the
Parties that this Agreement and all of its terms shall be binding upon the
Parties’ respective representatives, executors, administrators, successors and
assigns.
13. Governing
Law. This Agreement, in all
respects, shall be interpreted, enforced and governed by and under the laws of
the State of California.
14. Consultation
with Counsel. The Parties acknowledge that they have had the
opportunity and a reasonable period of time to consult with legal counsel of
their choice prior to the execution and delivery of this Agreement, and that
they have in fact done so.
15. Headings. The
headings in each paragraph herein are for convenience of reference only and
shall be of no legal effect in the interpretation of the terms
hereof.
16. Integration. This
Agreement constitutes a single, integrated, written contract, expressing the
entire agreement between the Parties. In this regard, the Parties
represent and warrant that they are not relying on any promises or
representations which do not appear written herein. The Parties
further understand and agree that this Agreement can be amended or modified only
by a written agreement, signed by all of the Parties hereto.
17. Counterparts. This
Agreement may be executed in one or more counterparts, which may be in the form
of a facsimile. Each signed counterpart shall be enforceable as
against any Party who signed it, and all shall constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the
parties hereto have executed this Termination, Waiver and Mutual Release on the
dates indicated above.
JAVA
UNIVERSE, LLC
/s/ ▇▇▇▇
▇▇▇▇▇▇
By: ▇▇▇▇
▇▇▇▇▇▇
Its:
Manager
/s/ ▇▇▇▇▇▇
▇▇▇▇▇
By:
▇▇▇▇▇▇ ▇▇▇▇▇
Its:
Manager
JAVA
DETOUR FRANCHISE CORP.
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its:
Chief Executive Officer
JAVA
DETOUR, INC., solely for purposes of
Sections
1 and 7
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its:
Chief Executive Officer
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Exhibit
A
Investment
Representations
(a) Java
Universe has received the Agreement and carefully read such Agreement; the
decision to acquire Common Stock has been taken solely in reliance upon the
information contained in the Agreement, and such other written information
supplied by an authorized representative of Java Detour as Java Universe may
have requested. Java Universe acknowledges that all documents,
records and books pertaining to this investment have been made available for
inspection by Java Universe, its attorneys, accountants and purchaser
representatives upon request prior to tendering this Agreement, and that Java
Universe has been informed by Java Detour that its books and records will be
available for inspection by Java Universe or its agents and representatives at
any time, and from time to time, during reasonable business hours and upon
reasonable notice. Java Universe further acknowledges that he (or its
advisors, agents and/or representatives) have had a reasonable and adequate
opportunity to ask questions of and receive answers from Java Detour concerning
the terms and conditions of the acquisition of Common Stock, the nature of
Common Stock and the business and operations of Java Detour, and to obtain from
Java Detour such additional information, to the extent possessed or obtainable
without unreasonable effort or expense, as is necessary to verify the accuracy
of the information contained in the Agreement or otherwise provided by Java
Detour; all such questions have been answered by Java Detour to the full
satisfaction of Java Universe. Java Universe is not relying upon any
oral information furnished by Java Detour or any other person in connection with
its investment decision, and in any event, no such oral information has been
furnished to Java Universe which is in any way inconsistent with or
contradictory to any information contained in the Agreement, or otherwise
provided to Java Universe by Java Detour in writing as described
above.
(b) Java
Universe is an “accredited investor” as such term is defined in Rule 501 of
Regulation D.
(c) Java
Universe: (1) has adequate net worth and means of providing for current
financial needs and possible personal contingencies, (2) has no need for
liquidity in this investment; and (3) is able to bear the economic risks of an
investment in Common Stock for an indefinite period of time, and of losing the
entire amount of such investment.
(d) Java
Universe understands and acknowledges that an acquirer of Common Stock must be
prepared to bear the economic risk of such investment for an indefinite period
because of: (A) the heightened nature of the risks associated with an investment
in Java Detour due to its status as a development stage company; (B) illiquidity
of Common Stock due to the fact that the Common Stock has not been registered
under the 1933 Act or any state securities act (nor passed upon by the
Securities & Exchange Commission or any state securities commission), and
Common Stock has not been registered or qualified by Java Universe under federal
or state securities laws solely in reliance upon an available exemption from
such registration or qualification, and hence such Common Stock cannot be sold
unless it is subsequently so registered or qualified (which is not likely), or
are otherwise subject to any applicable exemption from such registration
requirements; and (C) substantial restrictions on the transfer of Common Stock,
as set forth in, among other documents, this Agreement and by legend on the face
or reverse side of any certificate evidencing an ownership interest in Java
Detour.
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(e) Java
Universe has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in Common
Stock.
(f) Java
Universe understands and acknowledges that an investment in Common Stock is
speculative in nature, and involves certain risks.
(g) Java
Universe is not a member of the National Association of Securities Dealers, or
of any other self-regulatory agency which would require approval prior to any
acquisition of Common Stock.
(h) Java
Universe is acquiring Common Stock for its own investment, and not with a view
toward the subdivision, resale, distribution, or fractionalization
thereof. Java Universe does not have any contract, undertaking,
arrangement or obligation with or to any person to sell, transfer, or otherwise
dispose of Common Stock (or any portion thereof hereby acquired), and has no
present intention to enter into any such contract, undertaking, agreement or
arrangement.
(i) The
offering of Common Stock was made only through direct, personal communication
between the Java Universe (or its representatives) and Java Detour; the
acquisition of Common Stock by Java Universe is not the result of any form of
general solicitation or general advertising including, but not limited to, the
following: (i) any advertisement, article, notice or other communication
published in any newspaper, magazine, or other written communication, or
broadcast over television, radio or any other medium; or (ii) any
seminar or meeting to which the attendees had been invited by any general
solicitation or general advertising.
(j) Java
Universe has been advised to consult with an attorney regarding legal matters
concerning the acquisition and ownership of Common Stock, and with a tax advisor
regarding the tax consequences of acquiring such stock.
(k) Java
Universe has not distributed the Agreement, or any other information pertaining
to the acquisition of Common Stock hereunder, to anyone other than its
representative and/or its investment, legal or accounting advisors in connection
with its consideration of an acquisition of Common Stock.
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