Area Development Agreement
Sample Area Development Agreement
Exhibit J Regional Development Agreement
Booster Juice RDA 2006
BOOSTER JUICE LIMITED PARTNERSHIP REGIONAL DEVELOPMENT AGREEMENT
Dated:
Booster Juice RDA 2006
TABLE OF CONTENTS
1. GRANT OF RIGHTS...........................................................................................................................2
2. REGIONAL DEVELOPER'S DEVELOPMENT OBLIGATION.......................................................2
2.1. Minimum Development Obligation.............................................................................................2
2.2. Pilot Store....................................................................................................................................3
3. EXCLUSIVITY,...................................................................................................................................3
3.1. Territorial Rights.........................................................................................................................3
3.2. Rights Maintained by Company..................................................................................................3
4. TERM...................................................................................................................................................3
5. ADDITIONAL OBLIGATIONS OF COMPANY AND REGIONAL DEVELOPER........................4
5.1. Store Training..............................................................................................................................4
5.2. Regional Developer Training......................................................................................................4
5.3. Regional Developer Manual........................................................................................................4
5.4. General Guidance........................................................................................................................5
5.5. Franchise Registration and Disclosure........................................................................................5
5.6. Investigation and Qualification of Prospective Franchisees........................................................5
5.7. Approval of Regional Developer's Store Sites, and Execution of Franchise Agreement............6
5.8. Training and Support...................................................................................................................6
5.9. Inspection of Stores and Operations............................................................................................6
5.10. Marketing and Promotion.......................................................................................................6
6. OPERATING STANDARDS...............................................................................................................7
6.1. Standards of Service....................................................................................................................7
6.2. Compliance with Laws and Good Business Practices.................................................................7
6.3. Accuracy of Information............................................................................................................7
6.4. Notification of Litigation.............................................................................................................7
6.5. Insurance.....................................................................................................................................7
6.6. Proof of Insurance Coverage.......................................................................................................7
6.7. Approval of Advertising..............................................................................................................8
6.8. Websites......................................................................................................................................8
6.9. Accounting, Bookkeeping and Records.......................................................................................8
6.10. Reports....................................................................................................................................9
7. DEVELOPMENT FEE.........................................................................................................................9
8. PAYMENTS TO REGIONAL DEVELOPER.....................................................................................9
8.1. Initial Fee Commissions and Conditions of Payment..................................................................9
8.2. Commissions on Royalty Fees.....................................................................................................9
8.3. Commissions after Termination..................................................................................................9
8.4. Application of Payments...........................................................................................................10
8.5. Setoffs........................................................................................................................................10
9. MARKS..............................................................................................................................................10
9.1. Ownership and Goodwill of Marks...........................................................................................10
9.2. Limitations on Regional Developer's Use of Marks.................................................................10
9.3. Notification of Infringements and Claims.................................................................................10
9.4. Discontinuance of Use of Marks...............................................................................................11
9.5. Indemnification for Use of Marks.............................................................................................11
10. CONFIDENTIAL INFORMATION..............................................................................................11
10.1. Obligations Concerning Confidential Information...............................................................11
10.2. Confidential Information Developed....................................................................................12
10.3. Information Not Included.....................................................................................................12
11. ASSIGNABILITY.........................................................................................................................12
11.1. Assignability by Company....................................................................................................12
11.2. Assignment by Regional Developer.....................................................................................12
11.3. Conditions for Approval of Assignment or Transfer by Company.......................................13
11.4. Assignment to Entity Principally Controlled By You...........................................................13
11.5. Death or Disability................................................................................................................14
11.6. Company's Right of First Refusal........................................................................................14
Booster Juice RDA 2006
12. NON-COMPETITION...................................................................................................................15
12.1. InTerm.................................................................................................................................15
12.2. Post-Term.............................................................................................................................15
12.3; Scope....................................................................................................................................15
13. TERMINATION............................................................................................................................16
13.1. Termination by Company.....................................................................................................16
13.2. Rights and Obligations upon Termination or Expiration......................................................16
14. ARBITRATION.............................................................................................................................17
15. GENERAL CONDITIONS AND PROVISIONS..........................................................................18
15.1. Relationship of Regional Developer to Company................................................................18
15.2. Indemnification.....................................................................................................................18
15.3. Waiver and Delay.................................................................................................................18
15.4. Survival of Covenants...........................................................................................................19
15.5. Successors and Assigns........................................................................................................19
15.6. Joint and Several Liability....................................................................................................19
15.7. Governing Law.....................................................................................................................19
15.8. Consent to Jurisdiction..........................................................................................................19
15.9. Waiver of Punitive Damages and Jury Trial.........................................................................19
15.10. Limitations of Claims...........................................................................................................19
15.11. Entire Agreement..................................................................................................................19
15.12. Titles for Convenience..........................................................................................................20
15.13. Gender..................................................................................................................................20
15.14. Severability...........................................................................................................................20
15.15. Fees and Expenses................................................................................................................20
15.16. Notices..................................................................................................................................20
15.17. Time of Essence....................................................................................................................21
15.18. Calendar Days.......................................................................................................................21
16. SUBMISSION OF AGREEMENT................................................................................................21
17. ACKNOWLEDGMENTS..............................................................................................................21
EXHIBITS
Exhibit A Development Area
Exhibit B Minimum Development Obligations
Exhibit C Ownership Structure
Exhibit D Continuing Guaranty
Booster Juice RDA 2006
THIS REGIONAL DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into this
_____day of____________, 200____(the "Effective Date"), by and between Booster Juice
Limited Partnership, an Oregon limited liability company ("Company," "we," "us" or "our"), and , a corporation/limited liability company/partnership (circle one), ("Regional Developer"), with reference to the following facts:
A. We and our affiliates have designed and developed valuable and proprietary recipes, formats and systems for the development and operation of Booster Juice Stores. We offer to the public a wide variety of: fresh fruit and vegetable juices squeezed-to-order; smoothies; "Boosters®" (consisting of a variety of powered nutritional supplements which can be added to a drink; soups; Italian panini sandwiches, quesadillas, wraps, wheatgrass, yogurt and yogurt products, muffins, teas, fruit salads, nutritional products, as well as other ancillary food products to be added to the menu from time to time, all as designated by us (the "Products") Our customers come to the store for breakfast, lunch, snacks and dinners. They typically are health conscious and are interested in obtaining fresh and nutritious foods. Our stores are cheerful, our customer service is extraordinary and our staff is knowledgeable in the benefits of the Products.
B. We have developed and use, promote and license certain trademarks, service marks and other commercial symbols in operating Booster Juice Stores, including "Booster®," and we may create, use and license other trademarks, service marks and commercial symbols for use in operating Booster Juice Stores (collectively, the "Marks"). Booster® is a registered trademark of Booster Juice Limited Partnership.
C. We offer franchisees the right to own and operate a Booster Juice Store offering the products and services we authorize (and only the products and services we authorize) and using our business system, business formats, methods, procedures, signs, designs, layouts, standards, specifications and Marks, all of which we may improve, further develop and otherwise modify from time to time (collectively, the "System").
D. We seek a regional developer who will open and operate, or solicit and assist franchisees in opening and operating, numerous Booster Juice Stores within the geographic area described in Exhibit A (the "Development Area").
E. Regional Developer desires to establish a business (a "Regional Developer Business") under which it agrees to solicit, qualify, train and assist franchisees (the "Franchisees") to open and operate Booster Juice Stores within the Development Area (Booster Juice Stores operated in the Development Area by Regional Developer or a Franchisee are referred to herein as the "Stores"), and we desire to grant to Regional Developer the right to operate the Regional Developer Business in accordance with the terms and upon the conditions contained in this Agreement. For purposes of this Agreement, the term "Regional Developer Stores" shall refer to Stores owned and operated by Regional Developer, or a company that may have similar ownership as the Regional Developer Business and the term "Franchised Stores" shall refer to Stores owned and operated by Franchisees.
WHEREFORE, IT IS AGREED
1. GRANT OF RIGHTS
Subject to the terms of this Agreement, we hereby grant to Regional Developer, and Regional Developer hereby accepts, the right during the Term to open and operate, and to solicit, screen, qualify for final approval by us, train and assist Franchisees to open and operate, Booster Juice Stores in the Development Area.
2. REGIONAL DEVELOPER'S DEVELOPMENT OBLIGATION
2.1. Minimum Development Obligation. Regional Developer shall construct, equip, open and continue to operate, and solicit, screen, qualify, train and assist Franchisees to construct, equip, open and operate, within the Development Area, not less than the cumulative number of Stores set forth in Exhibit "B," which is annexed hereto and by this reference made a part hereof, in the manner and within each of the time periods (the "Development Periods") specified
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therein (the "Minimum Development Obligation"). As long as Regional Developer has sold franchises at the pace of the Minimum Development Obligation Agreement and/or is moving forward in the lease negotiations and/or construction/design phase of each franchised store's development, we will not suspend or terminate this Agreement. Regional Developer agrees that they shall provide us with the appropriate documentation to verify the current development stage of each project for us to determine its viability.
Each Unit shall be the subject of a separate agreement. We and Regional Developer or the Franchisee shall enter into our then current form of franchise agreement (the "Franchise Agreement"); provided, however, that (i) the Franchise Agreements signed by Regional Developer shall have modified training and assistance provisions as set forth in Section 5.1 hereof; and (ii) Regional Developer shall not be required to pay an initial franchise fee under the Franchise Agreement for the Pilot Store_(defrned below).
Stores which are the subject of a Franchise Agreement executed pursuant hereto, whether by Regional Developer or by a Franchisee, shall be counted in determining whether the Minimum Development Obligation shall have been met within the applicable Development Periods. Design, permits, construction, equipment, furniture, fixtures, small wares and signage are part of Turnkey Store price described further in the Franchise Agreement for each store.
2.2. Pilot Store. Regional Developer must sign a Franchise Agreement and open one (1) Store within the Development Area that successfully passes our operational review, to be used as a prototype business and training facility (the "Pilot Store") before providing training or assistance to any Franchisees in the Development Area and, in any event, no later than one hundred eighty (180) days from the Effective Date. Regional Developer will operate the Pilot Store or replacement therefore at all times during the Term and any extension thereof.
3. EXCLUSIVITY
3.1. Territorial Rights.
For so long as this Agreement shall remain in effect, and except as provided in Section 3.2, we shall not operate, or grant a franchise to any person other than Regional Developer or Franchisees recruited by Regional Developer to operate, a Booster Juice Store in the Development Area.
3.2. Rights Maintained by Company.
We (and any affiliates that we might have from time to time) shall at all times have the right to engage in any activities we deem appropriate that are not expressly prohibited by this Agreement, whenever and wherever we desire, including, but not limited to:
3.2.a. Establishing and operating Booster Juice Stores, and granting rights to other persons to establish and operate Booster Juice Stores, on any terms and conditions we deem appropriate and at any locations other than within the Development Area;
3.2.b. Providing, and granting rights to other persons to provide, goods and services similar to
and/or competitive with those provided at Booster Juice Stores to customers located within the Development Area, whether identified by the Marks or other trademarks or service marks, through any distribution channel other than a Booster Juice Store located within the Development Area (including, but not limited to, sales of products via mail order, mass and grocery and specialty retail);
3.2.c. Acquiring the assets or ownership interests of one or more businesses providing products similar to those provided at Booster Juice Stores, and franchising, licensing or creating similar arrangements with respect to these businesses once acquired, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating (including within the Development Area); and
3.2.d. Being acquired (regardless of the form of transaction) by a business providing products similar to those provided at Booster Juice Stores, or by another business, even if such business operates, franchises and/or licenses competitive businesses within the Development Area.
4. TERM
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The term of this Agreement (the "Term") shall be for a period often (10) years, commencing on the Effective Date, unless sooner terminated in accordance with the provisions of Section 13. Regional Developer shall have the right to extend the Term for an additional period often (10) years if (i) Regional Developer has substantially complied with the Minimum Development Obligation and all of the other terms of this Agreement during the Term, (ii) Regional Developer and all of its owners sign our general release form, (iii) we and Regional Developer mutually agree on a new minimum development obligation for the Development Area for the extension period, and (iv) Regional Developer has paid a renewal fee of Three Thousand Dollars ($3,000.00) per operating Franchised Booster Juice Store in the Development Area. Under the general release, Regional Developer and its owners will waive any and all claims against us and our affiliates and our and their respective shareholders, directors, officers, employees, agents, successors and assigns. If Regional Developer wishes to extend the Terra, Regional Developer must notify us in writing no more than one hundred eight (180) days and no less than ninety (90) days before the Term would otherwise expire.
5. ADDITIONAL OBLIGATIONS OF COMPANY AND REGIONAL DEVELOPER
5.1. Store Training.
Prior to the opening of the Pilot Store, we shall provide Regional Developer with our initial training program and opening assistance for Booster Juice Stores pursuant to the terms of the Franchise Agreement for the Pilot Business. The Franchise Agreement for each Regional Developer Store opened after the Pilot Store shall provide that Regional Developer will receive from us only the ten (10) day classroom training portion of our initial training program and shall not provide on-site assistance to Regional Developer.
5.2. Regional Developer Training.
Within one hundred twenty (120) days of the Effective Date, we will provide approximately five (5) days of training to Regional Developer on the operation of a Regional Developer Business. This training program may include classroom training and/or hands-on training and will be conducted at our corporate headquarters, at an operating Booster Juice Store and/or at other locations we designate. Regional Developer must complete the initial training to our satisfaction and participate in all other activities we require before soliciting Franchisees in the Development Area. Although we provide this training at no additional fee, Regional Developer must pay all travel and living expenses which it incurs. If we determine that regional Developer cannot complete initial training to our satisfaction, we may, at our option, either (i) require Regional Developer to attend additional training at Regional Developer's expense (for which we may charge reasonable fees), or (ii) terminate this Agreement. We may require Regional Developer to attend up to seven (7) days of additional or refresher training courses each year and a national business meeting or convention up to three (3) days per year at the times and locations we designate. We may charge reasonable fees for these courses, conventions and programs. Regional Developer is responsible for all travel and living expenses.
5.3. Regional Developer Manual.
We shall loan to Regional Developer one (1) copy of our Regional Developer manual (the "Regional Developer Manual"), one (1) copy of the Policies and Procedures Manual (the "Operations Manual"), and (collectively referred to as the "Manuals"). Regional Developer shall conduct all business activities in strict accordance with our standard operational methods and procedures as prescribed from time to time in the Manuals. As used in this Agreement, the term "Manuals" shall be deemed to include the Manuals so delivered to Regional Developer, all amendments to the Manuals, and all supplemental bulletins, notices and memoranda which prescribe standard methods or techniques of operation, and which we may from time to time deliver to Regional Developer. We shall have the right to modify or supplement the Manuals. Such modifications and supplements shall become effective and binding on Regional Developer fifteen (15) days after notice thereof is mailed or otherwise delivered to Regional Developer.
Regional Developer acknowledges and agrees that modifications of and supplements to the Manuals may obligate Regional Developer to invest additional capital or incur higher operating costs. The Manuals are our property and may not be duplicated, copied, disclosed or disseminated in whole or in
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part in any manner except with our express prior written consent. Regional Developer shall maintain the confidentiality of the Manuals. Upon the termination of this Agreement, Regional Developer shall return to us all copies of the Manuals in its possession or control. If Regional Developer's copy of the Manuals is lost, destroyed or significantly damaged, Regional Developer agrees to obtain a replacement copy at our then applicable charge.
5.4. General Guidance.
We will provide guidance to Regional Developer in the Manuals and other bulletins or other written materials; by electronic media; and/or by telephone consultation. If Regional Developer requests and we agree to provide additional or special guidance, assistance or training, Regional Developer must pay our then applicable charges, including its personnel's per diem charges and any travel and living expenses.
5.5. Franchise Registration and Disclosure.
Neither Regional Developer nor any employee or representative of Regional Developer shall solicit prospective Franchisees of Booster Juice Stores until we have registered our current Franchise Offering Circular in applicable jurisdictions in the Development Area and have provided Regional Developer with the requisite documents or at any time when we notify Regional Developer that our registration is not then in effect or our documents are not then in compliance with applicable law. If Regional Developer's activities pursuant to this Agreement require the preparation, amendment, registration, or filing of information or any disclosure or other documents, all requisite offering circulars, ancillary documents, and registration applications shall be prepared and filed by us or our designee, and registration secured, before Regional Developer may solicit prospective Franchisees of Booster Juice Stores. Costs of such registration applicable to Regional Developer shall be bome by Regional Developer.
In particular, Regional Developer shall:
5.5.a. prepare and forward to us verified financial statements of Regional Developer in such form
and for such periods as shall be designated by us, including audited financial statements, if
necessary and appropriate to comply with applicable legal disclosure, filing, or other legal
requirements; 5.5.b. promptly provide all information reasonably required by us to prepare all requisite offering
circulars and ancillary documents for the offering of franchises throughout the Development
Area; and 5.5.c. execute all documents required by us for the purpose of registering Regional Developer and
us to offer franchises throughout the Development Area.
Regional Developer agrees to review all information pertaining to Regional Developer prepared to comply with legal requirements for selling franchises in the Development Area and verify its accuracy if so requested by us. Regional Developer acknowledges that we and our affiliates and designees shall not be liable to Regional Developer for any errors omissions, or delays which occur in the preparation of such materials; provided, however, that any such errors, omissions or delays that result in Regional Developer's inability to offer franchises shall extend Regional Developer's Minimum Development Obligation by a period of time equal to such delay.
5.6. Investigation and Qualification of Prospective Franchisees.
5.6.a. Each Franchised Store opened by a Franchisee pursuant to this Agreement shall be the subject of a separate Franchise Agreement with us, upon our then current form. Regional Developer shall have no right to modify or offer to modify any Franchise Agreement or other contract.
5.6.b. If we shall approve a Franchisee and a prospective franchise location, Regional Developer shall transmit to such Franchisee for execution, copies of our then current Franchise Agreement pertaining to the approved site and providing for an exclusive territory surrounding said Store, as determined by us.
5.6.c. Regional Developer shall investigate the qualifications of each prospective Franchisee and the suitability of each prospective franchise location in the Development Area in accordance
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with our standards, policies, and procedures relating to qualification of franchisees and franchise sites then in effect, and shall obtain all information required of prospective franchisees by us.
5.6.d. After Regional Developer is satisfied that a prospective Franchisee and prospective franchise location meet the standards established by us, Regional Developer may recommend to us the approval of such prospective Franchisee and a prospective location or locations for such Franchisee. Regional Developer shall then furnish to us all information relating to the prospective Franchisee and any prospective franchise locations (including the terms and conditions of the proposed lease or purchase of each such location) which shall be required by us in the form and manner customarily required by us.
5.6.e. We may thereafter conduct or obtain such credit reports and background checks on
prospective franchisees as we deems necessary or convenient. We may then approve or reject a prospective franchisee or prospective franchise location for any reason, and may seek further information with respect to the prospective Franchisee and any such location or locations. Regional Developer shall cooperate with us in any further investigation of the prospective Franchisee or any such locations. If we shall reject a prospective Franchisee or franchise location, we shall provide Regional Developer with a written explanation of its reasons therefor.
5.6.f. Regional Developer shall deliver to us a copy of all correspondence with Franchisees which is material to the franchise relationship, concurrently with its being sent or received by Regional Developer.
5.7. Approval of Regional Developer's Store Sites, and Execution of Franchise Agreement.
After Regional Developer has located a site for construction of a proposed Regional Developer Store, Regional Developer shall submit to us such information regarding the proposed site as we shall require, in the form which we shall from time to time require, together with the terms and conditions of any proposed lease or purchase relating to such site. We may seek such additional information as it deems necessary within twenty days of submission of the prospective site, and Regional Developer shall respond promptly to such request for additional information. If we do not reject the site in writing within twenty (20) days, or within twenty (20) days after a receipt of such additional information, the site shall be deemed approved. We shall not unreasonably reject a proposed site nor unreasonably delay our approval or disapproval thereof.
5.8. Training and Support.
Regional Developer agrees to develop a training program and to provide training to Franchisees and their employees in accordance with specifications prescribed by us. Regional Developer shall provide all Franchisees with such assistance and services as we shall reasonably request and require from time to time in connection with the construction, equipping and opening of the Stores within the Development Area, the sourcing of equipment, fixtures, furnishings, inventory and supplies for such Stores, the advertising and promotion of such Stores, and the supervision of the use, and compliance with our quality control standards in the use, of the Marks at such Stores. All services and assistance provided to Franchisees in connection with the operation of Booster Juice Stores will be provided by Regional Developer, designated employee or authorized representative of Regional Developer's Company, and such obligations of Regional Developer will not be transferred, delegated or subcontracted to any other person.
5.9. Inspection of Stores and Operations.
Regional Developer shall conduct inspections of all of the Stores in the Development Area, and of its operations and the operations of all Franchisees, in accordance with the standards from time to time established by us, upon such schedules and according to such procedures as shall be agreed upon by us and Regional Developer, acting in good faith, but, in any event, at least once during each calendar month. Regional Developer shall provide reports to us with respect to the findings of such inspections, in such form and at such times as we shall require.
5.10.Marketing and Promotion.
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Regional Developer shall participate in all promotion and marketing activities required by us of our regional developers, as required in the Franchise Agreements or otherwise.
6. OPERATING STANDARDS
6.1. Standards of Service.
Regional Developer shall at all times give prompt, courteous, and efficient service to Booster Juice Store Franchisees in the Development Area. Regional Developer shall, in all dealings with Franchisees, prospective Franchisees, and the public, adhere to the highest standards of honesty, integrity, fair dealing, and ethical conduct.
6.2. Compliance with Laws and Good Business Practices.
Regional Developer shall secure and maintain in force all required licenses, permits, and certificates relating to Regional Developer's activities under this Agreement and operate in full compliance with all applicable laws, ordinances, and regulations. Regional Developer acknowledges being advised that many jurisdictions have enacted laws concerning the advertising, sale, renewal, and termination of, and continuing relationship between parties to, a franchise agreement, including, without limitation, laws concerning disclosure requirements. Regional Developer agrees promptly to become aware of, and to comply with, all such laws and legal requirements in force in the Development Area and to utilize only offering circulars that we have approved for use in the applicable jurisdiction.
6.3. Accuracy of Information.
Before it solicits any prospective franchisee, Regional Developer shall each time take reasonable steps to confirm that the information contained in any written materials, agreements, and other documents related to the offer or sale of franchises is true, correct, and not misleading at the time of such offer or sale and that the offer or sale of such franchise will not at that time be contrary to or in violation of any applicable state law related to the registration of the franchise offering. We shall provide Regional Developer with any changes to our disclosure documents and other agreements on a timely basis and, upon request, provide Regional Developer with confirmation that the information contained in any written materials, agreements, or documents being used by Regional Developer is true, correct, and not misleading, except for information specifically relating to disclosures regarding Regional Developer. If Regional Developer notifies us of an error in any information in our documents, we shall have a reasonable period of time to attempt to correct any deficiencies, misrepresentations, or omissions in such information.
6.4. Notification of Litigation.
Regional Developer shall notify us in writing within five (5) days after the commencement of any action, suit, arbitration, proceeding, or investigation, or the issuance of any order, writ, injunction, award, or decree, by any court, agency, or other governmental instrumentality, which names Regional Developer or any of its Owners or otherwise concerns the operation or financial condition of Regional Developer, the Regional Developer Business, or any Franchisee.
6.5. Insurance.
Regional Developer shall at all times during the term of this Agreement maintain in force, at Regional Developer's sole expense, insurance for the Regional Developer Business of the types, in the amounts, and with such terms and conditions as we may from time to time prescribe in the Regional Developer Manual or otherwise. All of the required insurance policies shall name us and affiliates designated by us as additional insureds, contain a waiver of the insurance company's right of subrogation against us and the designated affiliates, and provide that we will receive thirty (30) days' prior written notice of termination, expiration, cancellation, or modification of any such policy.
6.6. Proof of Insurance Coverage.
Regional Developer will provide proof of insurance to us before beginning operations of its Regional Developer Business. This proof will show that the insurer has been authorized to inform us in the event any policies lapse or are canceled or modified. We have the right to change the types, amounts, and terms of insurance that Regional Developer is required to maintain by giving Regional Developer prior reasonable notice. Noncompliance with these insurance provisions shall be deemed a material breach
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of this Agreement; and, in the event of any lapse in insurance coverage, we shall have the right, in addition to all other remedies, to demand that Regional Developer cease operations of its Regional Developer Business until coverage is reinstated or, in the alternative, to pay any delinquencies in premium payments and charge the same back to Regional Developer.
6.7. Approval of Advertising.
Prior to their use by Regional Developer, samples of all advertising and promotional materials not prepared or previously approved by us shall be submitted to us for approval, which approval shall not be unreasonably withheld. Regional Developer shall not use any advertising or promotional materials that we have not approved or has disapproved. Regional Developer acknowledges and understands that certain states require the filing of franchise sales advertising materials with the appropriate state agency prior to dissemination. Regional Developer agrees fully and timely to comply with such filing requirements at Regional Developer's own expense unless such advertising has been previously filed with the state by us. We may charge Regional Developer for the costs incurred by us in printing large quantities of advertising and marketing materials supplied by us to Regional Developer at Regional Developer's request.
6.8. Websites.
As used in this Agreement, the term "Website" means an interactive electronic document, contained in a network of computers linked by communications software that refers to the Store, Booster Juice Stores, franchises for Booster Juice Stores, or the Marks. The term Website includes, but is not limited to, Internet and World Wide Web home pages. In connection with any Website, Regional Developer agrees to the following:
6.8.a. Regional Developer shall not establish a separate Website without our prior written consent. We shall have the right, but not the obligation, to designate one or more web page(s) to describe Regional Developer, such web page(s) to be located within our Website; 6.8.b. If we approve, in writing, a separate Website for Regional Developer, then each of the following provisions shall apply: 6.8.b.i. Regional Developer shall not establish or use the Website without our prior written
approval. 6.8.b.ii. Before establishing the Website, Regional Developer shall submit to us, for our prior written approval, a sample of the proposed Website domain name, format, visible content (including, but not limited to, proposed screen shots), and non-visible content (including, but not limited to, meta tags) in the form and manner we may reasonably require; and Regional Developer shall not use or modify such Website without our prior written approval as to such proposed use or modification. 6.8.b.iii. In addition to any other applicable requirements, Regional Developer shall comply with our standards and specifications for Websites as we prescribe from time to time in the Manuals or otherwise in writing. 6.8.b.iv. If we require, Regional Developer shall establish such hyperlinks to our Website
and others as we may request in writing. 6.8.b.v. We may revoke our approval at any time, in writing, and require that Regional
Developer discontinue use of a separate Website. 6.8.b.vi.
6.9. Accounting, Bookkeeping and Records.
Regional Developer shall maintain at its business premises in the Development Area all original invoices, receipts, checks, contracts, licenses, acknowledgment of receipt forms, and bookkeeping and business records we require from time to time. Regional Developer shall furnish to us, within one hundred twenty (120) days after the end of Regional Developer's fiscal year, a balance sheet and profit and loss statement for Regional Developer's Business for such year (or monthly or quarterly statement if required by us, in which case such statements also shall reflect year-to-date information). In addition, upon our request, within ten (10) days after such returns are filed, exact copies of federal and state income, sales, and any other tax returns and such other forms, records, books, and other information as we periodically require regarding Regional Developer's Business shall be furnished to us. Regional Developer shall maintain all
Booster Juice RDA 2006
records and reports of the business conducted pursuant to this Agreement for at least two (2) years after the date of termination or expiration of this Agreement.
6.10.Reports.
Regional Developer shall, as often as required by us, deliver to us a written report of its Regional Developer Business activities in such form and detail as we may from time to time specify, including information about efforts to solicit prospective Franchisees, the status of pending real estate transactions, and the status of the Stores.
7. DEVELOPMENT FEE
Regional Developer shall pay to us a non-refundable Development Fee of______________________
Dollars ($_______________), payable upon the execution of this Agreement. Regional Developer shall
also pay our then customary charge for a demographic analysis.
8. PAYMENTS TO REGIONAL DEVELOPER
8.1. Initial Fee Commissions and Conditions of Payment.
During the term of this Agreement, Regional Developer shall be paid a commission, as set forth in this Section, based on a percentage of initial franchise fees paid by Franchisees and Regional Developer for the purchase of Booster Juice Store franchises to be located within the Development Area (the "Initial Fee Commission"), subject to fulfillment of the following conditions: (a) the Franchisee (or Regional Developer) executes a Franchise Agreement with us,-and an initial franchise fee has been paid to and actually received by us (we shall not be deemed to have received any fees paid into escrow, if applicable, until such fees actually have been remitted to us); and (b) Regional Developer has complied with all of its other obligations under this Agreement with respect to such sale and has verified the same to us in writing in a form prescribed by us. The sale of any Booster Juice Franchise License in the Development Area shall be deemed "commissionable" provided the Regional Developer is in compliance with all other obligations under this agreement excluding any licenses, which may have been granted in this Development Area prior to the effective date of this agreement, which would however be eligible for royalty sharing.
In the event a third party provides a franchisee lead, Booster Juice agrees to split the "Referral Fee" 50/50 up to a maximum liability of $5,000.00 per initial license sold (plus $4,000 per additional license if purchased at the same time), Proof of qualifying lead must be submitted to Booster Juice prior to or within 5 business days of disclosure of franchisee candidate with UFOC. Booster Juice will not be liable for any referral fees for future licenses sold to an existing licensee. The responsibility for payment of any Referral Fees lies solely with the Regional Developer.
Initial Fee Commissions shall be an amount equal to fifty percent (50%) of the total initial franchise fees paid to us and will be payable to Regional Developer within twenty (20) days after the conditions of this Section 8.1 have been fulfilled.
8.2. Commissions on Royalty Fees.
We shall pay to Regional Developer, within twenty (20) days after the end of each calendar month, fifty percent (50%) of the royalty fees (which excludes advertising and marketing fees) actually received by us from each Franchisee located in the Development Area during the applicable period pursuant to their Franchise Agreement ("Royalty Fees"). Notwithstanding the foregoing:
8.2.a. If Regional Developer has failed to conduct the periodic inspections described in Section 5.9 and failed to file a written report or failed to perform in any material respect, with respect to one (1) or more Franchisees located in the Development Area, the other services described in Section 5 to be provided to Franchisees located in the Development Area during any applicable month, Regional Developer shall not be entitled to receive commissions on Royalty Fees with respect to such Franchisees for the period during which reports or services were not provided.
8.3. Commissions after Termination.
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All payments under this Section 8 shall immediately and permanently cease after the expiration or termination of this Agreement, although Regional Developer shall receive all amounts which have accrued to Regional Developer as of the effective date of expiration or termination.
8.4. Application of Payments.
Our payments to Regional Developer shall be based on amounts actually collected from Franchisees, not on payments accrued, due, or owing. In the event of termination of a Franchise Agreement for a Booster Juice Store within the Development Area under circumstances entitling the Franchisee to the return of all or part of the initial franchise fee or Royalty Fees (or in the event that we become legally obligated or decide to return part or all of the initial franchise fee or Royalty Fees), we may deduct the portion of the amount to be returned to the Franchisee in the same proportion as Regional Developer shared in the initial franchise fee or Royalty Fees from any future amounts owed Regional Developer. We shall apply any payments received from a Franchisee to any past due indebtedness of that Franchisee for Royalty Fees, advertising contributions, purchases from us or our affiliates, interest, or any other indebtedness of that Franchisee to us or our affiliates. To the extent that such payments are applied to a Franchisee's overdue Royalty Fee payments, Regional Developer shall be entitled to its pro rata share of such payments, less its pro rata share of the costs of collection paid to third parties.
8.5. Setoffs.
Regional Developer shall not be allowed to set off amounts owed to us for fees or other amounts due under this Agreement against any monies owed to Regional Developer by us, which right of set off is hereby expressly waived by Regional Developer. We shall be allowed to set off against amounts owed to Regional Developer for commissions, Royalty Fees, or other amounts due under this Agreement any monies owed to us by Regional Developer.
9. MARKS
9.1. Ownership and Goodwill of Marks.
Regional Developer's right to use the Marks is derived only from this Agreement and is limited to Regional Developer's operation of its Regional Developer Business. Regional Developer's unauthorized use of the Marks is a breach of this Agreement and infringes our rights in the Marks. Regional Developer's acknowledges and agrees that Regional Developer's use of the Marks and any goodwill established by that use are for our exclusive benefit and that this Agreement does not confer any goodwill or other interests in the Marks upon Regional Developer (other than the right to operate a Regional Developer Business under this Agreement). All provisions of this Agreement relating to the Marks apply to any additional and substitute trademarks and service marks we authorize Regional Developer to use.
9.2. Limitations on Regional Developer's Use of Marks.
Regional Developer may not use any Mark: (1) as part of any corporate or legal business name; (2) with any pre-fix, suffix or other modifying words, terms, designs or symbols (other than logos we have licensed to Regional Developer); (3) in selling any unauthorized services or products; (4) as part of any domain name, electronic address or search engine, without our consent; or (5) in any other manner we have not expressly authorized in writing. Regional Developer may not use any Mark in advertising the transfer, sale or other disposition of Regional Developer's business under this Agreement or an ownership interest in Regional Developer (if a corporation, partnership, limited liability company or another business entity holds the franchise at any time during this Agreement's term) without our prior written consent.
9.3. Notification of Infringements and Claims.
Regional Developer agrees to notify us immediately of any apparent infringement of or challenge to Regional Developer's use of any Mark, or of any person's claim of any rights in any Mark, and not to communicate with any person other than us and our attorneys , and Regional Developer's attorneys, regarding any infringement, challenge or claim. We may take the action we deem appropriate (including no action) and control exclusively any litigation, U.S. Patent and Trademark Office proceeding or other administrative proceeding arising from any infringement, challenge or claim or otherwise concerning any Mark. Regional Developer agrees to sign any documents and take any actions that, in the opinion of our
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attorneys, are necessary or advisable to protect and maintain our interests in any litigation or Patent and Trademark Office or other proceeding or otherwise to protect and maintain our interests in the Marks.
9.4. Discontinuance of Use of Marks.
If we believe at any time that it is advisable for us and/or Regional Developer to modify or discontinue using any Mark and/or use one or more additional or substitute trademarks or service marks, Regional Developer agrees to comply with our directions within a reasonable time after receiving notice. We need not reimburse Regional Developer for Regional Developer's expenses in complying with these directions, for any loss of revenue due to any modified or discontinued Mark, or for Regional Developer's expenses of promoting a modified or substitute trademark or service mark.
9.5. Indemnification for Use of Marks.
We agree to reimburse Regional Developer for all damages and expenses Regional Developer incurs in any trademark infringement proceeding disputing Regional Developer's authorized use of any Mark under this Agreement if Regional Developer has timely notified us of the proceeding, has complied with this Agreement, and complies with our directions in responding to the proceeding. At our option, we may defend and control the defense of any proceeding relating to any Mark.
10. CONFIDENTIAL INFORMATION
We possess (and may continue to develop and acquire) certain confidential information relating to the development and operation of Booster Juice Stores (the "Confidential Information"), which includes (without limitation): site selection criteria; methods, formats, specifications, standards, systems, procedures, sales and marketing techniques, knowledge and experience used in developing and operating Booster Juice Stores; marketing research and promotional, marketing and advertising programs for Booster Juice Stores; knowledge of specifications for and suppliers of, and methods of ordering, certain operating assets and products that Booster Juice Stores use; knowledge of the operating results and financial performance of Booster Juice Stores; customer communication and retention programs, along with data used or generated in connection with those programs; graphic designs and related intellectual property; information generated by, or used or developed in, the operation of Booster Juice Stores, including customer names, addresses, telephone numbers and related information; and any other information designated confidential or proprietary by us.
10.1. Obligations Concerning Confidential Information. Regional Developer acknowledges and agrees that by entering into this Agreement Regional Developer will not acquire any interest in Confidential Information, other than the right to use certain Confidential Information in accordance with this Agreement and that Regional Developer's use of any Confidential Information in any other business would constitute an unfair method of competition with us and our franchisees. Regional Developer further acknowledges and agrees that the Confidential Information is proprietary, includes our trade secrets, and is disclosed to Regional Developer only on the condition that Regional Developer agrees, and it does agree, that Regional Developer:
10.1.a. will not use any Confidential Information in any other competitive fresh juice &
smoothie bar business or capacity; 10.1 .b. will keep the Confidential Information absolutely confidential during and after this
Agreement's term; 10.I.e. will not make unauthorized copies of any Confidential Information disclosed via
electronic medium or in written or other tangible form; 10.1 .d. will adopt and implement all reasonable procedures that we periodically prescribe to prevent unauthorized use or disclosure of Confidential Information, including, without limitation: (i) restricting its disclosure to Regional Developer's personnel and Franchisees needing to know such Confidential Information in order to develop and operate the Stores, and (ii) requiring those having access to Confidential Information to sign confidentiality and non-disclosure agreements. We have the right to regulate the form of agreement that Regional Developer uses and to be a third party beneficiary of that agreement with independent enforcement rights; and 10.I.e. will not sell, trade or otherwise profit in any way from the Confidential Information, except using methods approved by us.
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10.2. Confidential Information Developed.
All ideas, concepts, techniques or materials relating to a Booster Juice Store, whether or not protectable intellectual property and whether created by or for Regional Developer or its employees, must be promptly disclosed to us and will be deemed to be our sole and exclusive property and works made-for-hire for us. To the extent any item does not qualify as a "work made-for-hire" for us, by this paragraph Regional Developer assigns ownership of that item, and all related rights to that item, to us and agrees to sign whatever assignment or other documents we request to evidence our ownership or to help us obtain intellectual property rights in the item.
10.3. Information Not Included.
"Confidential Information" does not include information, knowledge or know-how which is or becomes generally known in the fresh juice and smoothie bar industry or which Regional Developer knew from previous business experience before we provided it to Regional Developer (directly or indirectly) or before Regional Developer attended our initial training program. If we include any matter in Confidential Information, anyone who claims that it is not Confidential Information must prove that the exclusion in this paragraph is fulfilled.
11. ASSIGNABILITY
11.1. Assignability by Company.
We shall have the right, but not the obligation, to cause a subsidiary or affiliate of ours to perform any or all of our obligations and exercise any or all of our rights under this Agreement and under any Franchise Agreement, and to require Regional Developer to perform any or all of its obligations hereunder, in favor of such subsidiary or affiliate, by delivery of written notice thereof to Regional Developer. We shall have the right to assign this Agreement, or any of our rights and privileges under this Agreement to any other person, firm or corporation, other than a subsidiary or affiliate of ours, without Regional Developer's prior consent, and we shall not be liable for any obligations accruing under this Agreement after the effective date of such assignment; provided the assignee shall expressly assume and agree to perform our obligations under this Agreement and is reasonably capable of performing them.
11.2. Assignment by Regional Developer.
We have entered into this Agreement in reliance upon and in consideration of the singular personal skills, character, aptitude, business ability, financial capacity, and qualifications of Regional Developer and the trust and confidence reposed in Regional Developer or, in the case of a business entity Regional Developer, its Owners. Therefore, neither Regional Developer's interest in this Agreement nor any of its rights or privileges hereunder shall be assigned or transferred, voluntarily or involuntarily, in whole or in part, by operation of law or otherwise, in any manner, without our prior written approval. Any assignment or transfer without our approval is a breach of this Agreement and has no effect. In this Agreement, the term "transfer" includes any voluntary, involuntary, direct or indirect assignment, sale, gift or other disposition and includes the following events:
11.2.a. transfer of record or beneficial ownership of capital stock in Regional Developer (if Regional Developer is a corporation), a partnership or membership interest (if Regional Developer is a partnership or limited liability company), or any other ownership interest or right to receive all or a portion of Regional Developer's profits or losses; 11.2.b. a merger, consolidation or exchange of shares or other ownership interests, or issuance of additional ownership interests or securities representing or potentially representing shares or other ownership interests, or a redemption of shares or other ownership interests; 11.2.C. any sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any owner or to control Regional Developer's operations or affairs; 11.2.d. transfer of an interest in Regional Developer, this Agreement, or Regional Developer
Business or its assets (or any right to receive all or a portion of Regional Developer's or the Regional Development Business' profits or losses or any capital appreciation relating to the Regional Development Business) in a divorce, insolvency or entity dissolution proceeding, or otherwise by operation of law; 11.2.e. if Regional Developer or an Owner (if regional Developer is a business entity) dies,
transfer of an interest in Regional Developer, this Agreement, or the Regional Development
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Business or its assets (or any right to receive all or a portion of Regional Developer's or the Regional Development Business' profits or losses or any capital appreciation relating to the Regional Development Business) by will, declaration of or transfer in trust, or under the laws of intestate succession; or 11.2.f. pledge of this Agreement (to someone other than us) or of an ownership interest in Regional Developer (if Regional Developer is a business entity) as security, foreclosure upon the development area franchises, or Regional Developer's transfer, surrender or loss of the area development franchise possession, control or management.
11.3. Conditions for Approval of Assignment or Transfer by Company.
We may impose any reasonable condition(s) to the granting of our consent to such assignment. Without limiting the generality of the foregoing, the imposition by us of any or all of the following conditions to our consent to any such assignment shall be deemed to be reasonable:
11.3.a. that the assignee (or the principal officers, shareholders, directors or general partners of
the assignee in the case of a business entity assignee) demonstrate that it has the skills,
qualifications and economic resources necessary, in our judgment, reasonably exercised, to
own and operate the Regional Developer Business; 11.3.b. that Regional Developer has paid all amounts owed to us; 11.3.C that the assignee shall expressly assume in writing for our benefit all of the obligations of
Regional Developer under this Agreement and any other agreements proposed to be
assigned to such assignee; 11.3.d. that neither the assignee nor its owners or affiliates operates, has an ownership interest in
or performs services for a Competitive Business (defined in Section 12.2); 11.3.e. that the assignee shall have completed (or agreed to complete) our training program; 11.3.f. that the assignee signs our then current form of regional development agreement, the
provisions of which may differ materially from any and all of those contained in this
Agreement, and the term of which shall be the remaining term of this Agreement; 11.3.g. that as of the date of any such assignment, the assignor shall have strictly complied with
all of its obligations to us, whether under this Agreement or any other agreement,
arrangement or understanding with us; 11.3-h. that the assignee is not then in default of any of obligation to us under any agreement
between such assignee and us; 11.3.i. that the assignor shall pay to us a transfer fee equal to two thirds (2/3) of our then current
initial franchise fee under the Franchise Agreement, except for transfers pursuant to Section
11.4 below; 11.3.j. that assignor sign a general release, in a form satisfactory to us, of any and all claims
against us and our affiliates and our and their respective shareholders, officers, directors,
employees, representatives, agents, successors and assigns; and 11.3 .k. that assignor will not directly or indirectly at any time or in any manner identify himself,
herself or itself or any business as a current or former Booster Juice Store or as one of our
franchisees or regional developers, use any Mark, any colorable imitation of a Mark, or
other indicia of a Booster Juice Store in any manner or for any purpose, or utilize for any
purpose any trade name, trademark, service mark, or other commercial symbol that suggests
or indicates a connection or association with us.
Regional Developer shall not in any event have the right to pledge, encumber, charge, hypothecate or otherwise give any third party a security interest in this Agreement in any manner whatsoever without our express prior written permission, which permission may be withheld for any reason whatsoever in our sole subjective judgment.
11.4. Assignment to Entity Principally Controlled By You.
The franchise and its assets and liabilities may be assigned to a newly-formed corporation or other legal entity that conducts no business other than the operation of the franchise and in which you and any of your principals own and control in the aggregate not less than sixty-seven percent (67%) of the equity and voting power of all outstanding capital stock or ownership interest, provided as follows:
11.4.a. that the proposed transferee complies with the provisions of this Agreement; and 11.4.b. that you are empowered to act for said corporation or other legal entity; and
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11.4.c. that you shall submit to us documentation that we may reasonably request to effectuate the transfer, including the approving and acknowledging execution of this Agreement; and
11.4.d. that you shall submit to us a true and complete list of the shareholders, members or partners, showing number of shares or interests owned, and a list of the officers and directors if a corporation, or managers if a limited liability company, or managing partners if a partnership. We shall be promptly notified of any changes in said lists; and
11.4.e. that all certificates of shares or interests issued by transferee at any time shall have endorsed thereon an appropriate legend to conform with state law, referring to this Agreement by date and name of parties hereto, and stating "Transfer of This Certificate is Limited by the Terms and Condition of a Regional Development Agreement Dated _________________________;" and
11.4.f. that a copy of this Agreement shall be given to every shareholder, member or partner; and
11.4.g. that a copy of the organizational documents and any corporate resolutions, and a
Certificate of Good Standing, will be furnished to us at our reasonable request, and prompt notification in writing of any amendments thereto will be provided to us; and
11.4.h. that the number of shares or interests issued or outstanding in the transferee will not be increased or decreased without prior written notice to us, which notice will in its terms guarantee compliance with this Agreement. In addition, new shareholders, members or partners must agree to be bound by this entire Agreement. Shareholders, members or partners may make a separate agreement among them providing for purchase by the survivors among them of the shares of any shareholders or interests of any members or partners upon death, or other agreements affecting ownership or voting rights, so long as voting control and a majority representation of the board of directors or members or partners remains with those individuals who initially applied for and were approved as franchisees under this Agreement. Shareholders, members or partners must notify us in writing of any such agreement which affects control of the transferee.
11.5. Death or Disability.
Upon the death or disability of Regional Developer or an Owner, the executor, administrator, conservator, guardian or other personal representative must transfer Regional Developer's interest in this Agreement, the Regional Development Business and its assets, or the Owner's ownership interest in Regional Developer, to the surviving partner of the current Regional Developer partnership without a transfer fee paid to Booster Juice. That transfer (including, without limitation, transfer by bequest or inheritance) must occur, subject to our rights, within a reasonable time, not to exceed nine (9) months from the date of death or disability, and is subject to all of the terms and conditions in this Section 11. A failure to transfer such interest within this time period is a breach of this Agreement. The term "disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent Regional Developer from supervising the Development Area management and operation for ninety (90) or more'consecutive days.
If upon the death or disability of Regional Developer or an Owner, a trained manager who we approve is not managing the day-to-day operations, then the executor, administrator, conservator, guardian or other personal representative must, within a reasonable time not to exceed thirty (30) days from the date of death or disability, appoint a manager that we must approve to operate the Regional Development Business. The manager must, at Regional Developer's or the Owner's estate's expense, satisfactorily complete the training that we designate within the specified time period if the manager has not already done so.
11.6. Company's Right of First Refusal.
If Regional Developer at any time determines to sell or transfer an interest in this Agreement or the Regional Developer Business, or if an Owner determines to sell or transfer a controlling ownership interest in Regional Developer, then Regional Developer or the Owner, as applicable (the "Seller") must obtain from a responsible and fully disclosed buyer, and send us, a true and complete copy of a bona fide, executed written offer relating exclusively to an interest in Regional Developer or this Agreement and the Regional Development Business. The offer must include details of the payment terms of the proposed sale and the sources and terms of any financing for the proposed purchase price. To be a valid, bona-fide offer, the proposed purchase price must be in a fixed dollar amount and without any contingent payments of purchase price (such as earn-out payments). We may, by delivering written notice to the Seller within
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fifteen (15) days after we receive both an exact copy of the offer and all other information requested, elect to purchase the interest for the price and on the terms and conditions contained in the offer, provided that: (1) we may substitute cash for any form of payment proposed in the offer; (2) our credit will be deemed equal to the credit of any proposed buyer; (3) the closing will be not less than thirty (30) days after notifying the Seller of our election to purchase or, if later, the closing date proposed in the offer; and (4) we must receive, and the Seller agrees to make, all customary representations and warranties given by the seller of the assets of a business or ownership interests in a legal entity, as applicable, including, without limitation, representations and warranties regarding ownership and condition of, and title to, assets and (if applicable) ownership interests and validity of contracts and the liabilities, contingent or otherwise, relating to the assets or ownership interests being purchased.
If we exercise our right of first refusal, the Seller agrees that, for two (2) years beginning on the closing date, the Seller and members of its immediate family will be bound by the non-competition covenant contained in Section 12.2 below. If we do not exercise our right of first refusal, the Seller may complete the sale to the proposed buyer on the original offer's terms, subject to our approval of the transfer as provided above. If the Seller does not complete the sale to the proposed buyer within sixty (60) days after we notify the Seller that we do not intend to exercise our right of first refusal, or if there is a material change in the terms of the sale (which the Seller must tell us promptly), we will have an additional right of first refusal during the thirty (30) day period following either the expiration of the sixty (60) day period or receipt of notice of the material change(s) in the sale's terms, either on the terms originally offered or the modified terms, at our option.
11.7. Ownership Structure. Regional Developer represents and warrants that all persons holding direct or indirect, legal or beneficial ownership interests in Regional Developer ("Owners'") are listed on Exhibit C and that its ownership structure is as set forth on Exhibit C. Regional Developer shall not change its ownership structure without complying with all of the terms and conditions of this Section 11. Within ten (10) days of any change in Regional Developer's ownership structure, Regional Developer shall submit a revised Exhibit C to us and any new Owners shall sign a Continuing Guaranty in the form attached to this Agreement as Exhibit D.
12. NON-COMPETITION
12.1. In Term.
During the term of this Agreement, neither Regional Developer, any of the Principals, nor any member of Regional Developer's or a Principal's immediate family will have any direct or indirect interest (e.g., through a spouse) as a disclosed or beneficial owner, investor, partner, director, officer, controlling shareholder, employee, consultant, representative or agent, or in any other capacity, in a Competitive Business (defined below), whether located within or outside the Development Area, unless we shall first consent thereto in writing.
12.2. Post-Term.
For a twenty four (24) month period following the assignment, expiration or termination of this Agreement, for any reason, neither Regional Developer, any Owner, nor any member of Regional Developer's or an Owner's immediate family will have any direct or indirect interest (e.g., through a spouse) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, representative or agent, or in any other capacity, in any Competitive Business located or operating: (a) within the Development Area, (b) within the development area of any of our other regional developers, or (c) within twenty five (25) miles of any Booster Juice Store in operation or development on the date of assignment, expiration or termination. The term "Competitive Business" means any business which derives more than Fifty Thousand Dollars ($50,000) of revenue per year from the sale of fresh juice and smoothies or related products, or any business which grants franchises or licenses to others to operate such a business, other than a Booster Juice Store operated under a franchise agreement with us.
12.3. Scope.
The parties have attempted in Sections 12.1 and 12.2 above to limit the Regional Developer's and its Owners' right to compete only to the extent necessary to protect the us from unfair competition. The parties expressly agree that if the scope or enforceability of Sections 12.1 or 12.2 is disputed at any time by
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Regional Developer, a court or arbitrator, as the case may be, may modify either or both of such provisions to the extent that it deems necessary to make such provisions enforceable under applicable law. In addition, we reserve the right to reduce the scope of either, or both, of said provisions without the Regional Developer's consent, at any time or times, effective immediately upon notice to Regional Developer.
13. TERMINATION
13.1. Termination by Company.
We may terminate this Agreement, effective upon written notice of termination to Regional Developer, if:
13.1.a. Regional Developer or one of its Owners makes or attempts to make a transfer in violation of Section 11;
13.1.b. Regional Developer fails to meet the Minimum Development Obligation for any Development Period.
13.1 .c. Regional Developer has made or makes a material misrepresentation or omission in
acquiring the rights under this Agreement or in operating the Regional Developer Business;
13. l.d. Regional Developer does not satisfactorily complete initial training; Regional Developer is convicted by a trial court of, or pleads no contest to, a felony; Regional Developer fails to maintain the insurance we require from time to time;
13.I.e. Regional Developer or an Owner engages in any dishonest, unethical or illegal conduct or any other conduct which, in our opinion, adversely affects the our reputation, the reputation of other Booster Juice Stores or the goodwill associated with the Marks;
13.1 .f. Regional Developer knowingly makes any unauthorized use or disclosure of any part of the Manuals or any other Confidential Information;
13.1.g. Regional Developer (a) fails on three (3) or more separate occasions within any twenty four (24) consecutive month period to submit when due reports or other data, information or supporting records, pay when due any amounts due to us (or our affiliates), or otherwise comply with this Agreement, whether or not Regional Developer corrects any of these failures after we deliver written notice to Regional Developer; or (b) fails on two (2) or more separate occasions within any twelve (12) consecutive month period to comply with the same obligation under this Agreement, whether or not Regional Developer corrects either of the failures after we deliver written notice to Regional Developer;
13.1 .h. Regional Developer makes an assignment for the benefit of creditors or admits in writing insolvency or inability to pay debts generally as they become due;
13.1.i. Regional Developer consents to the appointment of a receiver, trustee or liquidator of all or the substantial part of the assets of the Regional Developer Business; the assets of the Regional Developer Business are attached, seized, subjected to a writ or distress warrant, or levied upon, unless the attachment, seizure, writ, warrant or levy is vacated within thirty (30) days; or any order appointing a receiver, trustee or liquidator of Regional Developer or the Regional Developer Business or its assets is not vacated within thirty (30) days following the order's entry; Regional Developer fails to comply with any other provision of this Agreement and does not correct the failure within thirty (30) days after we deliver written notice of the failure to Regional Developer; or
13.1-j. Regional Developer fails to pay any sums due to us and does not correct the failure within ten (10) days after we deliver written notice of that failure to Regional Developer.
We have the right to terminate any other agreement between us and Regional Developer due to a default by Regional Developer.
13.2. Rights and Obligations upon Termination or Expiration.
Upon the expiration of the Term, or upon the earlier termination of this Agreement, Regional Developer shall have no further right to construct, equip, own, open or operate additional Stores (except pursuant to a Franchise Agreement between Regional Developer and us which is in full force and effect on the date of expiration or termination). Upon expiration or termination of this Agreement, we may ourselves construct, equip, open, own, operate, or license others to construct, equip, open, own or operate Booster Juice Stores in the Development Area, except as provided in any Franchise Agreement executed pursuant to this Agreement. When this Agreement expires or is terminated for any reason, and except as required to
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perform Regional Developer's obligations under a valid Franchise Agreement with us, Regional Developer shall:
13.2.a. not directly or indirectly at any time thereafter or in any manner: (a) identify itself or any business as a current or former regional developer of ours; (b) use any Mark, any colorable imitation of a Mark, any trademark, service mark or commercial symbol that is confusingly similar to any Mark, or other indicia of a Booster Juice Store in any manner or for any purpose; or (c) use for any purpose any trade name, trademark, service mark or other commercial symbol that indicates or suggests a connection or association with us;
13.2.b. take the actions required to cancel all fictitious or assumed name or equivalent registrations relating to Regional Developer's use of any Mark;
13.2.c. deliver to us within thirty (30) days all advertising, marketing and promotional materials, forms, and other materials containing any Mark or otherwise identifying or relating to the Regional Developer Business or to a Booster Juice Store;
13.2.d. if applicable, notify all search engines of the termination or expiration of Regional
Developer's right to use all domain names, Websites and other search engines associated directly or indirectly with the Marks or Booster Juice Stores and authorize those search engines to transfer to us or our designee all rights to the domain names, Websites and search engines relating to the Marks or Booster Juice Stores. We have the absolute right and interest in and to all domain names, Websites and search engines associated with the Marks or Booster Juice Stores, and Regional Developer hereby authorizes us to direct all applicable parties to transfer Regional Developer's domain names, Websites and search engines to us or our designee if this Agreement expires or is terminated for any reason whatsoever. All parties may accept this Agreement as conclusive of our right to such domain names, Websites and search engines and this Agreement will constitute the authority from Regional Developer for all parties to transfer all such domain names, Websites and search engines to us;
13.2.e. immediately cease using any of our Confidential Information in any business or
otherwise and return to us all copies of the Manuals and any other confidential materials that we have loaned Regional Developer; and
13.2.f. give us, within thirty (30) days after the expiration or termination of this Agreement, evidence satisfactory to us of Regional Developer's compliance with these obligations.
14. ARBITRATION
We and Regional Developer agree that, except for controversies, disputes, or claims related to or based on use of the Marks or the enforcement of non-competition provisions, with respect to which we and Regional Developer may seek judicial remedies, all controversies, disputes, or claims between us and pur affiliates, and Regional Developer's and its affiliates' respective shareholders, officers, directors, agents, and/or employees, and Regional Developer (and/or its owners, guarantors, affiliates, and/or employees) arising out of or related to: (1) this Agreement or any other agreement between Regional Developer and us; (2) our relationship with Regional Developer; or (3) the validity of this Agreement or any other agreement between Regional Developer and us; must be submitted for binding arbitration to the American Arbitration Association. The arbitration proceedings will be conducted by one arbitrator at a location selected by the arbitrator that is within twenty (20) miles of our then-current principal place of business and, except as this Section otherwise provides, according to the then current commercial arbitration rules of the American Arbitration Association. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). Judgment upon the arbitrator's award may be entered in any court of competent jurisdiction.
We and Regional Developer agree that, in any arbitration proceeding, each must submit or file any claim which would constitute a compulsory counterclaim (as defined by the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any claim which is not submitted or filed as required is forever barred. The arbitrator may not consider any settlement discussions or offers that might have been made by either Regional Developer or us. We and Regional Developer agree that arbitration will be conducted on an individual, not a class-wide, basis and that we (and/or our affiliates and our and their respective shareholders, officers, directors, agents, and/or employees) and Regional Developer (and/or
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its owners, guarantors, affiliates, and/or employees) shall be the only parties to any arbitration proceeding described in this Section and that no such arbitration proceedings may be consolidated with any other arbitration proceeding, nor shall any other person be joined as a party to such arbitration proceeding. Despite the agreement to arbitrate, we and Regional Developer each have the right in a proper case to seek temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction; provided, however, that we and Regional Developer must contemporaneously submit the dispute for arbitration on the merits as provided in this Section. The provisions of this Section are intended to benefit and bind certain third party non-signatories and will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination.
15. GENERAL CONDITIONS AND PROVISIONS
15.1. Relationship of Regional Developer to Company.
It is expressly agreed that the parties intend by this Agreement to establish between us and Regional Developer the relationship of franchisor and Regional Developer. Except as expressly provided herein, it is further agreed that Regional Developer has no authority to create or assume in our name or on our behalf, any obligation, express or implied, or to act or purport to act as agent or representative on our behalf for any purpose whatsoever. In no event shall either party be deemed to be fiduciaries of the other. Neither we nor Regional Developer is the employer, employee, agent, partner or coventurer of or with the other, each being independent contractors. Regional Developer agrees that it will not hold himself out as the agent, employee, partner or co-venturer of our, or as having any of the aforesaid authority. All employees hired by or working for Regional Developer shall be the employees of Regional Developer and shall not, for any purpose, be deemed employees of us or subject to our control.
15.2. Indemnification.
To the fullest extent permitted by law, Regional Developer agrees to indemnify, defend and hold harmless us, our affiliates, and our and their respective shareholders, directors, officers, employees, agents, representatives, successors and assigns (the "Indemnified Parties") from and against, and to reimburse any one or more of the Indemnified Parties for, any and all claims, obligations and damages directly or indirectly arising out of: (1) the Regional Developer Business conducted by Regional Developer pursuant to this Agreement, (2) Regional Developer's breach of this Agreement, or (3) Regional Developer's noncompliance or alleged noncompliance with any law, ordinance, rule or regulation. For purposes of this indemnification, "claims" include all obligations, damages (actual, consequential, punitive or otherwise) and costs that any Indemnified Party reasonably incurs in defending any claim against it, including, without limitation, reasonable accountants', arbitrators', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses and other expenses of litigation, arbitration or alternative dispute resolution, regardless of whether litigation, arbitration or alternative dispute resolution is commenced. Each Indemnified Party may defend and control the defense of any claim against it which is subject to this indemnification at Regional Developer's expense, and Regional Developer may not settle any claim or take any other remedial, corrective or other actions relating to any claim without our consent. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination. An Indemnified Party need not seek recovery from an insurer or other third party, or otherwise mitigate its losses and expenses, in order to maintain and recover fully a claim against Regional Developer. Regional Developer agrees that a failure to pursue a recovery or mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover from Regional Developer.
15.3. WaiverandDelay.
Except as otherwise expressly provided to the contrary, no waiver by us of any breach or series of breaches or defaults in performance by the Regional Developer, and no failure, refusal or neglect of or by us to exercise any right, power or option given to us under this Agreement or under any other agreement between us and Regional Developer, whether entered into before, after or contemporaneously with the execution of this Agreement (and whether or not related to this Agreement) or to insist upon strict compliance with or performance of the Regional Developer's obligations under this Agreement or any other agreement between us and Regional Developer, whether entered into before, after or contemporaneously with the execution of this Agreement (and whether or not related to this Agreement), shall constitute a novation, or a
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waiver of the provisions of this Agreement with respect to any subsequent breach thereof or a waiver of our right at any time thereafter to require exact and strict compliance with the provisions thereof.
15.4. Survival of Covenants.
The covenants contained in this Agreement which, by their terms, require performance by the parties after the expiration or termination of this Agreement or ancillary agreements shall be enforceable notwithstanding said expiration or other termination of this Agreement for any reason whatsoever.
15.5. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the legal representatives, successors and assigns of us and Regional Developer.
15.6. Joint and Several Liability.
If either party consists of more than one person or entity, or a combination thereof, the obligations and liabilities of each such person or entity to the other under this Agreement are joint and several.
15.7. Governing Law.
All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). Except to the extent governed by the Federal Arbitration Act, the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. sections 1051 et seq.), or other federal law, this Agreement and all claims arising from the relationship between us and Regional Developer will be governed by the laws of the State of Oregon, without regard to its conflict of laws rules, except that any Oregon law regulating the sale of franchises or governing the relationship of a franchisor and its franchisee will not apply unless its jurisdictional requirements are met independently without reference to this Section 15.7.
15.8. Consent to Jurisdiction.
Subject to Section 14 and the provisions below, Regional Developer and its owners agree that all actions arising under this Agreement or otherwise as a result of the relationship between Regional Developer and us must be commenced in the state, and in the state or federal court of general jurisdiction closest to where our principal business address then is located, and Regional Developer (and its owners) irrevocably submits to the jurisdiction of those courts and waives any objection Regional Developer (or its owners) might have to either the jurisdiction of or venue in those courts. Nonetheless, Regional Developer and any of its owners agree that we may enforce this Agreement and any arbitration orders and awards in the courts of the state or states in which Regional Developer or its owners are domiciled.
15.9. Waiver of Punitive Damages and Jury Trial.
Except for Regional Developer's obligation to indemnify us under Section 15.2 above and except where authorized by federal statute, we and Regional Developer and its Owners waive to the fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the other and agree that, in the event of a dispute between us and Regional Developer, the party making a claim will be limited to equitable relief and to recovery of any actual damages it sustains. We and Regional Developer irrevocably waive trial by jury in any action, proceeding, or counterclaim, whether at law or in equity, brought by either party.
15.10. Limitations of Claims.
Any and all claims arising out of or relating to this Agreement or our relationship with Regional Developer except for claims for indemnification under Section 15.2 above will be barred unless a judicial or arbitration proceeding is commenced within one (1) year from the date on which the party asserting the claim knew or should have known of the facts giving rise to the claims.
15.11. Entire Agreement.
This Agreement and the Exhibits incorporated in this Agreement contain all of the terms and conditions agreed upon by the parties to this Agreement with reference to the subj ect matter of this Agreement. No other agreements, written or oral, shall be deemed to exist or to bind any of the parties to this Agreement and all prior agreements, understandings and representations, are merged in this Agreement and superseded by this Agreement. Each party represents to the other that there are no contemporaneous agreements or
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understandings between the parties relating to the subject matter of this Agreement that are not contained in this Agreement. This Agreement cannot be modified or changed except by written instrument signed by all of the parties to this Agreement.
15.12. Titles for Convenience.
Article and Section titles used in this Agreement are for convenience only and shall not be deemed to affect the meaning or construction of any of the terms, provisions, covenants, or conditions of this Agreement.
15.13. Gender.
All terms used in any one number or gender shall extend to mean and include any other number and gender as the facts, context, or sense of this Agreement or any section or paragraph hereof may require.
15.14. Severability.
Except as expressly provided to the contrary in this Agreement, each Section, paragraph, term and provision of this Agreement is severable, and if, for any reason, any part is held to be invalid or contrary to or in conflict with any applicable present or future law or regulation in a final, un-appealable ruling issued by any court, agency or tribunal with competent jurisdiction, that ruling will not impair the operation of, or otherwise affect, any other portions of this Agreement, which will continue to have full force and effect and bind the parties. If any covenant which restricts competitive activity is deemed unenforceable by virtue of its scope in terms of area, business activity prohibited, and/or length of time, but would be enforceable if modified, we and Regional Developer agree that the covenant will be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction whose law determines the covenant's validity. If any applicable and binding law or rule of any jurisdiction requires more notice than this Agreement requires of this Agreement's termination or of our refusal to enter into a successor agreement, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement is invalid, unenforceable or unlawful, the notice and/or other action required by the law or rule will be substituted for the comparable provisions of this Agreement, and we may modify the invalid or unenforceable provision to the extent required to be valid and enforceable or delete the unlawful provision in its entirety. Regional Developer agrees to be bound by any promise or covenant imposing the maximum duty the law permits which is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement.
15.15. Fees and Expenses.
Should any party to this Agreement commence any action or proceeding for the purpose of enforcing, or preventing the breach of, any provision of this Agreement, whether by arbitration, judicial or quasi-judicial action or otherwise, or for damages for any alleged breach of any provision of this Agreement, or for a declaration of such party's rights or obligations under this Agreement, then the prevailing party shall be reimbursed by the losing party for all costs and expenses incurred in connection therewith, including, but not limited to, reasonable attorneys' fees for the services rendered to such prevailing party.
15.16. Notices.
Except as otherwise expressly provided herein, all written notices and reports permitted or required to be delivered by the parties pursuant to this Agreement shall be deemed so delivered at the time delivered by hand, one (1) business day after transmission by facsimile, telegraph or other electronic system; three (3) days after deposit in the United States mail, via registered or certified mail, return receipt requested; or one (1) business day after placement with Federal Express, or other reputable air courier service, requesting delivery on the most expedited basis available, postage prepaid and addressed as follows:
If to Company: Booster Juice Limited Partnership
4949 Meadows Road, Suite 375 Lake Oswego, Oregon 97035
Attn: Jonathan J. Amack Phone 503-675-7511 Fax 503-296-5877
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with a copy to:
If to Regional Developer:
FAX: with a copy to:
FAX:
or to such other address as any such party may designate by ten (10) days' advance written notice to the other party.
15.17. Time of Essence.
Time shall be of the essence for all purposes of this Agreement.
15.18. Calendar Days.
All References to "Days" throughout this agreement shall mean Calendar Days unless otherwise specified.
16. SUBMISSION OF AGREEMENT
This Agreement shall not be binding upon us unless and until it shall have been submitted to and signed by our Chief Executive, and the date of said signing as set forth on the first page of this Agreement shall be the effective date of this Agreement.
17. ACKNOWLEDGMENTS
To induce us to sign this Agreement and grant Regional Developer the Regional Developer Rights as outlined above, Regional Developer acknowledges:
(1) That Regional Developer has independently investigated the Booster Juice Regional Developer Business opportunity and recognizes that, like any other business, the nature of the Regional Developer Business may, and probably will, evolve and change over time.
(2) That an investment in a Booster Juice Regional Developer Business involves business risks.
(3) That Regional Developer's business abilities and efforts are vital to Regional Developer's success.
(4) That performing Regional Developer's obligations will require a high level of customer service and strict adherence to the System.
(5) That Regional Developer has not received or relied upon, and we expressly disclaim making, any representation, warranty or guaranty, express or implied, as to the revenues, profits or success of a Booster Juice Regional Developer Business or any Booster Juice Store.
(6) That any information Regional Developer has acquired from other Booster Juice Store franchisees or regional developers regarding their sales, profits or cash flows is not information obtained from us, and we make no representation about that information's accuracy.
(7) That Regional Developer has no knowledge of any representations made about the Booster Juice Store franchise opportunity us, our subsidiaries or affiliates or any of their respective officers, directors, shareholders or agents that are contrary to the statements made in our Franchise Offering Circular or to the terms and conditions of this Agreement.
(8) That in all of their dealings with Regional Developer, our officers, directors, employees and agents act only in a representative, and not in an individual, capacity and that business dealings between Regional Developer and them as a result of this Agreement are only between Regional Developer and us.
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(9) That Regional Developer has represented to us, to induce us to enter into this Agreement, that all statements Regional Developer has made and all materials Regional Developer has given to us in acquiring the franchise are accurate and complete and that Regional Developer has made no misrepresentations or material omissions in obtaining the franchise.
(10) That Regional Developer has read this Agreement and our Franchise Offering Circular and understands and accepts that the terms and covenants in this Agreement are reasonably necessary for us to maintain our high standards of quality and service, as well as the uniformity of those standards at each Booster Juice Store, and to protect and preserve the goodwill of the Marks.
IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to be executed as of the first date set forth above.
COMPANY:
For Booster Juice Limited Partnership:
AW Holdings, Inc., its General Partner Date
By Jon Amack, President
REGIONAL DEVELOPER:
Insert Name 1 Date
Insert Name 2
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EXHIBIT "A" DEVELOPMENT AREA
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EXHIBIT "B"
MINIMUM DEVELOPMENT OBLIGATIONS
|
Development Period Date |
Cumulative Stores Open |
|
|
Beginning Date |
Ending Date |
|
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EXHIBIT "C
OWNERSHIP STRUCTURE
Owner Name and Address Number of Shares Percentage of Ownership
TOTAL 100%
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EXHIBIT «D
CONTINUING GUARANTY
In consideration of, and as an inducement to, the execution of the foregoing Regional Development Agreement (the "Agreement") by Booster Juice Limited Partnership, doing business as "Booster Juice" (hereinafter "Company"), and [insert name of Regional Developer here] (hereinafter "Guarantor") each of the undersigned hereby personally and unconditionally (a) guarantees to Company, and its successor and assigns, for the term of the Agreement and as provided in the Agreement, that the Guarantor named therein will perform during the term of this Agreement each and every covenant, payment, agreement, and undertaking on the part of Guarantor contained and set forth in such Agreement; and (b) Agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, including, without limitation, the noncompetition, confidentiality, transfer, and arbitration requirements.
Each of the undersigned waives: (1) acceptance and notice of acceptance by Company of the foregoing undertakings; (2) notice of demand for payment of any indebtedness or nonperformance of any obligations guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations guaranteed; (4) any right he may have to require that an action be brought against Guarantor or any other person as a condition of liability.
Each of the undersigned consents and agrees that: (1) his or her direct and immediate liability under this guaranty shall be joint and several; (2) he or she shall render any payment or performance required under the Agreement upon demand if Guarantor fails or refuses punctually to do so; (3) liability shall not be contingent or conditioned upon pursuit by Company of any remedies against Guarantor or any other person; and (4) liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which Company may grant to Guarantor or to any other person, including the acceptance of any partial payment or performance, or the compromise or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be continuing and irrevocable during the term of the Agreement.
Each of the undersigned Guarantor represents and warrants that, if no signature appears below for such Guarantor's spouse, such Guarantor is either not married or, if married, is a resident of a state which does not require the consent of both spouses to encumber the assets of a marital estate.
Guarantor hereby consents and agrees that:
(a) Guarantor's liability under this undertaking shall be direct, immediate, and independent of the liability of, and shall be joint and several with, Guarantor and the other guarantors of Guarantor;
(b) Guarantor shall render any payment or performance required under the Agreement upon demand if Guarantor fails or refuses punctually to do so;
(c) This undertaking will continue unchanged by the occurrence of any bankruptcy with respect to Guarantor or any assignee or successor of Guarantor or by any abandonment of the Agreement by a trustee of Guarantor. Neither the Guarantor's obligations to make payment or render performance in accordance with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed, released or limited in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Guarantor or its estate in bankruptcy or of any remedy for enforcement, resulting from the operation of any present or future provision of the U.S. Bankruptcy Act or other statute, or from the decision of any court or agency;
(d) Company may proceed against Guarantor and Guarantor jointly and severally, or Company may, at its option, proceed against Guarantor, without having commenced any action, or having obtained any judgment against Guarantor. Guarantor hereby waives the defense of the statute of limitations in any action hereunder or for the collection of any indebtedness or the performance of any obligation hereby guaranteed; and
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(e) Guarantor agrees to pay all reasonable attorneys' fees and all costs and other expenses incurred in any collection or attempt to collect amounts due pursuant to this undertaking or any negotiations relative to the obligations hereby guaranteed or in enforcing this undertaking against Guarantor.
IN WITNESS WHEREOF, each of the undersigned has affixed his signature on the same day and year as the Agreement was executed.
Printed Name of Guarantor: Signature of Guarantor:
Printed Name of Guarantor's Spouse: Signature of Guarantor's Spouse:
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EXHIBIT "F"
NONDISCLOSURE AND NONCOMPETITION AGREEMENT
NONDISCLOSURE AND NONCOMPETITION AGREEMENT
This Nondisclosure and Noncompetition Agreement (Agreement) is made and entered into
effective the____day of______,20__, by____________________, (Franchisee), and
_________________, (the Associate).
RECITALS
WHEREAS, the Booster Juice is a trade mark of AW Holdings, Inc., a Nevada Corporation (Franchisor);
WHEREAS, the Franchisor has developed a business method for operating the Centers utilizing certain information, plans, methods, data, processes, marketing systems, techniques, operating procedures, trademarks, proprietary marks and information and know-how of Franchisor;
WHEREAS, the Franchisor has established substantial goodwill and an excellent reputation with respect to the quality of services available, which goodwill and reputation have been and will continue to be of major benefit to the Franchisee;
WHEREAS, the Franchisor has signed a franchise agreement (Franchise Agreement) with Franchisee on the_____day of_____, 20__;
WHEREAS, the Associate is or will become involved in the Franchise in the capacity of an manager, officer, partner, director, or as a beneficial owner of the Franchise business, and is authorized to become privy to Confidential and Trade Secret (as those terms are described below) through the Associate's signature on this Nondisclosure Agreement;
WHEREAS, all capitalized words not otherwise defined herein shall have the meaning set forth in the Franchise Agreement;
NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Associate and Franchisee intending legally to be bound, hereby agree as follows:
COVENANTS
1. Confidential Information,
The Recitals are incorporated herein by this reference.
For the purposes of this Agreement, it is understood that "Trade Secrets" shall include, without limitation, any and all information contained in the "Operations Manual", which may be provided as one or more separate manuals, or written instructional guides, as the same are changed or supplemented from time to time, the Site Selection Package, the Marks, trade dress, methods of daily operation of the business operation, marketing strategies, advertising strategies and costs, and any information of whatever nature which gives to the Franchisee an opportunity to obtain an advantage over its competitors who do not have access to, know or the use of such trade secrets (Trade Secrets).
Associate and Franchisee acknowledge that the Trade Secrets are confidential, unique, constitute
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the exclusive property of Franchisor. Associate and Franchisee further acknowledge that any wrongful disclosure of the Confidential Information would cause irreparable injury and harm to Franchisor and the Franchisee. Associate further acknowledges that Franchisor has expended a great amount of effort and money in obtaining and developing the Trade Secrets, that Franchisor and Franchisee have each taken numerous precautions to guard the secrecy of the Trade Secrets, and that it would be very costly for competitors to acquire or duplicate the same.
2. In-term Noncompetition Covenant.
Associate therefore agrees that he or she shall not during the term of this Agreement:
a. have any direct or indirect controlling interest as a disclosed, undisclosed, or beneficial owner in a "Competitive Business" (as that term is defined below); or
b. perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a "Competitive Business."
For purposes of this Agreement the term "Competitive Business" shall mean any business which derives ten percent (10%) or more of its Gross Receipts from the sale at wholesale or retail, of any combination of any soups, smoothies, fruit juices, nutritional supplements, or snacks which are sold through a Booster Juice Center at the time of the termination for any reason.
3. Post-Termination Covenant Not to Compete
Associate further acknowledge that, in the event the Franchise Agreement is terminated for any reason, or in the event that the Associate is terminated or resigns from his or her position with the Franchisee for any reason, Associate could injure Booster Juice, not only because he or she has been made privy to the Trade Secrets, but also because he or she would be able to take those customers that have been acquired over a period of time by the Booster Juice Franchise to another Competitive Business.
Associate therefore, agrees that in the event the Franchise Agreement is terminated for any reason, or if it expires, if Franchisee otherwise relinquishes its rights to the Franchise Agreement through assignment or otherwise, or if the Associate is terminated or resigns for any reason, Associate shall, for a period of two (2) years, commencing on the date of termination or expiration, or the date on which Franchisee ceases to conduct business, whichever is earlier have no direct or indirect interest as a disclosed, undisclosed, or beneficial owner, investor, partner, director, officer, employee, consultant, representative or agent, (or in any other capacity) in a Competitive Business within a radius of fifteen (15) miles from the center of the Franchised Business or within a radius of six (6) miles from the center of any other Booster Juice Center owned or operated by Booster Juice or any of its Franchisees.
4. No Interference With Business
During the term of this Agreement and for two (2) years thereafter, Associate shall not divert or attempt to divert any business related to, or any customer or prospective customer of the Center, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of Booster Juice or another Franchisee to any Competitive Business.
5. Confidentiality of Proprietary Information
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Associate further covenants and agrees that it shall not make unauthorized use of, or disclose to any unauthorized third party, the system, techniques, operating procedures, marketing systems or other Trade Secrets or confidential information relating to the establishment and operation of a Booster Juice Franchise.
6. Reasonable Restrictions
These covenants are intended to be a reasonable restriction on Associate. For purposes of interpretation, every location of a Franchised or company-owned Center, and every month of time and mile of distance shall be considered severable. In the event a court of competent jurisdiction interprets a spatial, temporal or other limitation to be overly broad, then the court shall adjust the offending limitation, either by months of time or miles of distance, or otherwise, so as to fashion a reasonably enforceable covenant which upholds the restrictive nature of these covenants to the fullest extent of the law.
The Associate irrevocably grants the Franchisee, in addition to other legal remedies available, the right to apply for an injunction to enforce the covenants herein and the other terms and conditions of this Agreement.
7. Effect of Waiver.
The waiver by Franchisee of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof.
8. Binding Effect.
This Nondisclosure Agreement shall be binding upon and inure to the benefit of Associate and Franchisee and their respective heirs, executors, representatives, successors and assigns.
9. Entire Nondisclosure Agreement
This instrument contains the entire Nondisclosure Agreement between Associate and Franchisee, relating to the matters set forth herein. It may not be changed orally, but only in writing, signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.
10. Governing Law and Interpretation
This instrument shall be governed by and construed under the laws of the State of__________.
The parties also agree that this document was drafted by the Franchisee but was reviewed by the Associate. As a result the terms of this Noncompetition Agreement shall not be construed against the Franchisor as the author of same and the effect of any common law or case law to the contrary shall be waived by the parties hereto.
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11. Severability and Survival
Should any one or more of the provisions hereof be determined to be illegal or unenforceable, all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby.
In addition should any covenant of this Agreement be required to survive the termination of this Agreement, the termination of the Franchise Agreement or the termination of any other agreement between the Associate and the Franchisee in order to remain enforceable, then said covenant shall so survive in order to remain enforceable.
12. Cost of Enforcement.
The Prevailing Party in any action brought under this Agreement shall be awarded his, her, or its costs, expert witness fees, and attorney's fees. The Prevailing Party shall be deemed to be the party that -has prevailed on a majority of the material issues before the court.
IN WITNESS WHEREOF, the parties hereto have signed this Nondisclosure Agreement on the date first above written.
Booster Juice Limited Partnership
by: _____________________________ _______________
President date
FRANCHISEE ASSOCIATE
by: _____________________________________________________
date: ____________________.______ date:______________________
title:___________________
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