Jamba Juice 2007 Annual Report Download - page 123

Table of Contents
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NOTE 1. ORGANIZATION
JJC Florida, LLC (the “Company”), is a Florida limited liability company established on August 13, 1999, pursuant to an operating agreement (the
“Agreement”) between Juice Partners Florida, LLC (JPF), a Florida limited liability company, and Jamba Juice Company (JJC), a California corporation
(herein referred to collectively as the “Members”). The Company was established for the purpose of developing, owning and operating Jamba Juice retail stores
in the State of Florida under an exclusive development and licensing agreement (the “License Agreement”) with JJC (Note 4). The Company offers a wide
variety of fresh blended-to-order smoothies, fresh-squeezed juices, baked goods and snacks through retail stores. The Company manages its operations by
store. The Company operated thirteen stores as of December 13, 2005.
JPF is the managing member and is responsible for administering the affairs of the Company. Certain major decisions, as defined, require the approval
of a management committee, which is comprised of representatives from JPF and JJC. Prior to the Agreement Amendments discussed below, the Members
committed to make up to $9 million in capital contributions if requested by JPF. As of December 13, 2005, accumulated Members capital contributions
approximated $7,687,500.
On October 20, 2003, the Company entered into two amendments to the Agreement and License Agreement (“Amendments”), whereby JJC shall provide
additional capital contributions of up to $2 million (“Additional Contribution”), thereby increasing the Members total commitment in capital contributions to
$11 million. Under the Amendments, profits and losses are to be allocated to the Members in proportion to their cash contributions to the Company until the
end of the fiscal year during which the cumulative profits of the Company equal or exceed the cumulative losses previously realized. Thereafter, profits shall
be allocated to the Members in proportion to their recalculated interests. Under the Amendments, the recalculated interests of the Members are based on the
commitment of the Additional Contribution, except that the commitment of the Additional Contribution made by JJC shall include a 25 percent premium.
On June 28, 2005, the Company entered into a third amendment (the “Third Amendment”) to the Agreement and License Agreement, whereby JJC is
provided the option to purchase 100 percent of JPF’s interest in the Company for a period of 90 days commencing on October 1, 2008. Furthermore, if in the
future, the Company requests additional capital contributions, the actual contribution will contain a 25 percent premium, if only one of the Members
participates in the additional capital contribution. In addition, JJC gave notice terminating the Company’s right to develop additional Jamba Juice stores and
canceling the Company’s previously exclusive right to operate Jamba Juice stores in the State of Florida.
The Agreement shall continue through the earlier of the dissolution of the License Agreement or August 31, 2019.
At December 13, 2005, the allocation of profits and losses are based on cash contributions received by the Company are as follows:
JPF 64.8%
JJC 35.2%
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During the year ended December 13, 2005, members made capital contributions of $983,553. This caused the percentages of allocation of profit and
losses to vary during the year.
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