SETTLEMENTAGREEMENT AND RELEASE OF ALL CLAIMS

 

This settlement agreement and mutual release of all claims (Settlement Agreement) is made and entered into as of this 19th day of January, 2010 by and between Who’s Your Daddy, Inc., a California corporation (“WYD CA”), Who’s Your Daddy, Inc., a Nevada corporation (“WYD NE”) (collectively referred to herein as “the Companies”) and Fish & Richardson P.C. (“Fish”), a Massachusetts professional corporation.

 

 

WHEREAS, Fish obtained a now-final judgment against the Companies as a result of an action in San Diego Superior Court, Case Number 37-2008-00083932-CU-CL-CTL  for unpaid legal fees and costs (“State Court Judgment”); and,

 

WHEREAS, no part of the judgment or subsequently accruing costs or interest has been paid; and,

 

WHEREAS, WYD CA had previously granted Fish a first priority security interest in all of the trademarks owned by it and all associated goodwill; and,

 

WHEREAS, Fish has commenced an action in United States District Court Southern District of California, Case Number 09 CV 1993 W POR (“Federal Action”) against WYD CA to foreclose on the security interest in its trademarks;

 

NOW, THEREFORE in consideration of the promises and covenants set forth in this Settlement Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto expressly agree as follows:

 

1.             Settlement. WYD CA agrees to transfer all right, title and interest in and to the trademarks which are the subject of Fish’s security interest (the “Marks”) to Fish absolutely and unconditionally and free of all liens and encumbrances.  Pursuant to the foregoing, WYD CA shall execute and deliver to Fish as of the effective date a Trademark Assignment in the form attached as Exhibit A.  Upon the completion of the said transfer of the trademarks to Fish, the State Court Judgment will be fully satisfied and Fish will acknowledge a full satisfaction of judgment.  Further, upon the completion of the said transfer of the Marks to Fish, Fish will dismiss the Federal Action with prejudice.

 

1.1           Discontinuation of Use.  Within twenty (20) days of the effective date of this Settlement Agreement, the Companies agree to permanently discontinue any and all use whatsoever of the Marks, except as otherwise expressly set forth in this Section 1.  The Companies further agree that they will not adopt, use, apply to register or register anywhere in the world for any and all goods and services the Marks, or any other mark that may cause likelihood of confusion with or dilution of the Marks.  For purposes of this Settlement Agreement, use includes but is not limited to use as a trade name, as a company name, in a logo or slogan, as an e-mail address, in a domain name or URL, on web sites, in correspondence, on letterhead, business cards, and promotional and marketing materials, and on signage.  The Companies further agree not to assign any actual or claimed rights in the Marks to any third party.

 

1.2           Africa.  The Companies shall retain all rights to use, register and license the Marks in the continent of Africa.  Fish, and its assigns and/or successors shall not challenge, contest, oppose, seek to cancel, or otherwise object to the Companies’ use and/or registration of the Marks in Africa or their rights therein, except on the grounds of non-use, abandonment or fraud based on actions occurring after the effective date of this Settlement Agreement.

 

1.3           Beryt.  Pursuant to the Agreement Regarding Use of Who’s Your Daddy Energy Shots between the Companies and Beryt Promotion, LLC (“Beryt”), attached hereto as Exhibit B, Beryt has the limited right to use the WHO’S YOUR DADDY trademark, solely in connection with the sale or give-away of WHO’S YOUR DADDY-branded energy shots and the promotion thereof within the city of Las Vegas, Nevada until April 13, 2010.  After such date, Beryt has agreed to permanently discontinue all commercial use of the WHO’S YOUR DADDY trademark and will retain no rights in the same.

 

1.4           Product Formulas and Flavors.  The Companies shall retain all rights to use and license their existing product formulas, recipes and flavors, so long as such products are not marketed in connection with the Marks.  The Companies may retain the basic color schemes of their existing product packaging and cans, but may not adopt any of the distinctive logos and designs that are being assigned herein and under Exhibit A.  Fish, and its assigns and/or successors shall not use the Companies’ existing product formulas nor adopt the precise color schemes that the Companies use with their WHO’S YOUR DADDY-branded energy drinks as of the effective date of this Settlement Agreement.

 

1.5           Domain Names.  Pursuant to the Assignment Agreement attached hereto as Exhibit A, the Companies agree to immediately transfer ownership of the <whosyourdaddyinc.com> domain to Fish.  The Companies may retain ownership of the <wydenergy.com> and <wydmail.com> domains until their expiration date, which are September 16, 2010 and December 22, 2010, respectively.  As of the effective date of the Settlement Agreement, the Companies will permanently remove all content from the <wydenergy.com> and <wydmail.com> websites, except to inform consumers of their name-change and to redirect consumers to an entirely new site which does not use the Marks.  The Companies agree to permanently cease all use of the <wydenergy.com> and <wydmail.com> domains and any email addresses containing such domains upon their expiration dates of September 16, 2010 and December 22, 2010, respectively, and to allow such domain registrations to lapse when they are set to expire on those dates.

 

1.6           Corporate Names.  The Companies agree to file certificates of dissolution, cancellation or amendments to their articles of organization with the Secretaries of State of California and Nevada to effect their corporate name change and forward copies of those documents to Fish on or before June 30, 2010.  Pursuant to Section 1.1, except for the limited purpose of complying with corporate formalities until June 30, 2010, the Companies may not use the Marks in any manner, and the new or amended corporate entity names for the Companies shall not incorporate the Marks or any derivatives thereof.

 

2.             Representations and Warranties.  WYD CA hereby represents and warrants that it is the owner of all right, title and interest in and to the Marks and that the Marks are free and clear of all liens, mortgages, pledges, security interests, prior assignments and encumbrances of any kind whatsoever.  WYD CA further represents and warrants that neither the Marks nor the use of such Marks infringe or otherwise conflict or interfere with any rights whatsoever of any other person or party in the United States.  WYD CA further represents and warrants that neither the execution and delivery of this Agreement nor consummation of the actions contemplated herein will violate any security agreement, indenture, order, other instrument or agreement to which WYD CA is a party and by which WYD CA and/or the Marks are bound.

 

3.             Indemnification.  By entering into this Agreement, Fish assumes no liabilities of the Companies.  The Companies shall indemnify and hold harmless Fish, its officers, directors, agents, employees and permitted assigns, from and against any and all claims, suits, damages, liabilities, costs and expenses, including, but not limited to court costs and reasonable attorneys’ fees, arising out of or based on: (i) any past act, omission or negligence by the Companies with respect to the performance of their obligations to third parties arising in connection with the Marks; or (ii) the infringement of any trademark application or trademark of a third party arising out of the Marks.

 

4.             Mutual Release. Effective upon the consummation of the events in paragraph 1 above:

 

The parties to this Settlement Agreement do hereby expressly, voluntarily and immediately release and discharge each other, their agents, attorneys, officers, directors, subsidiaries, predecessors, successors and assigns, of and from any and all past and present actions, cause of actions, suits, counterclaims, debts, charges, complaints, claims, liabilities, contracts, obligations, damages and expenses, of any nature whatsoever, both in law and in equity or otherwise, at any and all times prior to the date of this Release.

 

Subject to the terms of this Settlement Agreement, all the parties hereto hereby relinquish all claims, whether known or unknown, that they may have against each other.  The parties expressly waive any and all rights and benefits conferred upon them by the provisions of Section 1542 of the Civil Code of the State of California, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THIS RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE PLAINTIFF.

 

This waiver is not a mere recital but is a knowing waiver of the rights and benefits otherwise available to the parties under this section.

 

5.             No Costs Or Fees. Each of the parties to this Settlement Agreement is to bear, as between themselves, their own costs and attorneys' fees arising from the transactions contemplated by this Settlement Agreement.

 

6.             Successors and Assigns. This Settlement Agreement shall inure to the benefit of and be binding upon the parties, their affiliates, successors, heirs and assigns.

 

7.             Voluntary and Informed Consent; Authority.  Each party to this Settlement Agreement warrants that no promise or inducement to enter into this Settlement Agreement has been offered, except as herein set forth and that this Settlement Agreement is executed by each party without relying upon any statement or representation by any other party or its representatives, including, but not limited to, any representations concerning the nature and extent of any injury, damages or legal liability.  Each party to this Settlement Agreement has made such investigation of the facts and law pertaining to this settlement and this Settlement Agreement, and of all matters pertaining thereto, as that party deems necessary.  Each party also acknowledges that it has either been represented by counsel during all stages of this dispute and has acted with the advice of such counsel in executing this Settlement Agreement or, by these words, informed of the parties’ right to independent counsel, afforded a reasonable time to seek such advice, but has knowingly and intelligently waived such right.  Without limitation of the foregoing, the Companies acknowledge that they have not been represented by Fish in connection with the matters contemplated hereby and have either obtained independent legal advice or waive the right to seek it.  Each party hereto and each person executing this Settlement Agreement acknowledges that the terms and conditions of this Settlement Agreement have been completely read, and that the terms and conditions are fully understood and voluntarily accepted and in connection therewith, the parties acknowledge that each of them has had the benefit of legal counsel in entering into the same and they warrant, represent and agreed that they, and each of them, understand all of the terms and are voluntarily executing the same of their own free will, without coercion or duress, or such party or parties has or have knowingly and intelligently waived such right.  Each party to this Settlement Agreement further represents and warrants that it has full authority to enter into this Settlement Agreement.

 

8.             Joint Drafting. The parties agree that they have jointly participated in the drafting and preparation of this Settlement Agreement, and that the language in this Settlement Agreement shall be construed as a whole according to its fair meaning and not strictly for or against either of the parties hereto.

 

9.             Execution. This Settlement Agreement may be' executed by each party on separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together constitute but one and the same instrument. Counterparts may be transmitted by the parties to their counsel via telecopier, or by email in .pdf format if convenient to do so, and such counterparts shall be deemed originals, for all purposes.

 

10.           Entire Agreement. This Settlement Agreement contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements, discussions and statements. No supplement, modification, waiver or termination of this Settlement Agreement shall be binding unless executed in writing by the party or parties to be bound thereby. No wai0ver of any of the provisions of this Settlement Agreement shall be deemed to constitute a waiver of any other provisions hereof, whether or not similar, nor shall such waiver constitute a continuing waiver.

 

11.           Severability. If any Paragraph of this Settlement Agreement or any portion thereof shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remainder of this Settlement Agreement shall not in any way be affected or impaired.

 

12.           Choice of Law. This Settlement Agreement shall be construed and enforced under the laws of the State of California.

 

IN WITNESS WHEREOF, the parties hereto have executed this Settlement Agreement as of the date first above written.

 

 

Who’s Your Daddy, Inc. (CA)		Fish & Richardson P.C.
By: ________________________		By: ________________________
Michael Dunn, CEO		Roger D. Feldman, Senior Principal and General Counsel
Who’s Your Daddy, Inc. (NE)
By: ________________________
Michael Dunn, CEO