Case 4:11-cv-00023 Document 1 Filed 01/14/11 Page 1 of 14IN THE
UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF
TEXASSHERMAN DIVISIONPAMELA F. JENKINS, Individually; andThe
Cupcakery LLC, a Nevada LimitedLiability CompanyCAUSE NO.
4:11-CV-23Plaintiffs,Defendant.RICKY B. PERRITT, Individually; The
Cupcakery, LLC, a Texas Limited Liability Company; Buster Baking,
LLC, a Texas Limited Liability Company; and the Woodlands Baking,
LLC, a Texas Limited Liability Company VS.PLAINTIFFS' ORIGINAL
COMPLAINT AND APPLICATION FOR TEMPORARYRESTRAING ORDER, PRELIMINARY
INJUNCTION, PERMANENT INJUNCTION,DECLARATORY JUDGMENT AND
DAMAGESRICKY B. PERRITT, individually, THE CUPPCAKERY, LLC, A TEXAS
LIMITED LIABILITYCOMPANY; BUSTER BAKING, LLC, ATEXAS LIMITED
LIABILITY COMPANY; and THE WOODLANDSBAKING, LLC, ATEXAS LIMITED
LIABILITY COMPANY, hereinafter called "Plaintiffs", complainof
PAMELA F. JENKINS, Individually, and THE CUPCAKERY LLC, ANEVADA
LIMITED LIABILITYCOMPANY and respectfully showthe Court as
follows:I. NATURE OF THE CASE1.01. This is a suit by RICKY B.
PERRITT, an individual resident of the Eastern Districtof Texas and
THE CUPPCAKERY, LLC, ATEXAS LIMITED LIABILITY COMPANY; BUSTER
BAKING,LLC, A TEXAS LIMITED LIABILITY COMPANY; and The Woodlands
Baking, LLC, a TexasPerritt, et af. v. Pamela F. Jenkins, et af. -
Plaintiffs' Original Complaint Page 1 of14Case 4:11-cv-00023
Document 1 Filed 01/14/11 Page 2 of 14Limited Liability Company
against PAMELA F. JENKINS, an individual resident of the State
ofNevada and THE CUPCAKERY LLC, ANEVADA LIMITED LIABILITY
COMPANY.1.02, In September 2009 PERRITT sued JENKINS concerning
disputed ownership andoperation OF THE CUPCAKERY LLC, ANEVADA
LIMITED LIABILITY COMPANY, THE CUPCAKERYLLC, A TEXAS LIMITED
LIABILITY COMPANY and BUSTER BAKING LLC, A TEXAS LIMITEDLIABILITY
COMPANY. That case was resolved by a written settlement agreement
and supportingdocuments executed pursuant to such settlement
agreement, a true copy of the settlement areattached hereto is
Exhibit A and made part hereoffor all purposes.1.03. The previous
lawsuit had at its core a dispute over the percentage of ownership
ofeach of the limited liability companies in question and the
refusal of Jenkins to abide by validwritten contractual
agreements.II. PARTIES2.01. RICKY B. PERRITT is an individual
resident and citizen of the State of Texas andresides in Denton
County, Texas in the Eastern District of Texas.2.02. THE CUPCAKERY
LLC, , ATEXAS LIMITED LIABILITY COMPANY has its principalplace of
business in Frisco, Collin County, Texas, within the Eastern
District of Texas. PlaintiffBUSTER BAKING LLC, ATEXAS LIMITED
LIABILITY COMPANY, has its principal place of businessin Dallas
County, Texas.2,03 Plaintiff THE WOODLANDS BAKING, LLC, A TEXAS
LIMITED LIABILITY COMPANYhas its principal place of business in
Montgomery County, Texas.2.04 All ofthe Plaintiff entities are
owned and controlled by RICKY B. PERRITT.2.05 Defendant PAMELA F.
JENKINS is individual resident of the State of Nevada andmay be
served with summons at 9680 South Eastern Avenue, Suite 100, Las
Vegas, NevadaPerritt, et al. y, Pamela F, Jenkins, et al. -
Plaintiffs' Original Complaint Page 2 of 14Case 4:11-cv-00023
Document 1 Filed 01/14/11 Page 3 of 1489123. Said Defendant is
presently residing in Jack County, Texas, on a temporary basis,
andmay be served with process at Rt 2, Jacksboro, Texas. Said
Defendant may further be servedwith process at her residence, 305
Rosemary Lane, Las Vegas, Nevada 89107.2.06 Defendant THE
CUPCAKERY, LLC, ANEVADA LIMITED LIABILITY COMPANY, isowned and
operated by Defendant JENKINS. Said Defendant may be served by
serving processon PAMELA F. JENKINS in her capacity as Managing
Member of THE CUPCAKERY, LLC, ANEVADA LIMITED LIABILITY
COMPANY.III. JURISDICTION AND VENUE3.01. This is a suit for
injunctive relief, including a temporary restraining order
withoutnotice, a preliminary injunction for declaratory judgment,
and for damages.3.02. Jurisdiction is proper in this case under 28
U.S.C. 1332 because this is a civilmatter where the amount in
controversy exceeds the sum of Seventy-Five Thousand
Dollars($75,000.00), exclusive of interest and costs, and is
between citizens of different states.3.03. Plaintiffs also invoke
the courts supplemental jurisdiction under 28 U.S.C. 1367because
certain questions of state law may be involved.3.04. Venue is
proper in this COUlt under 28 U.S.C. 1391 (a) (2) because the
EasternDistrict of Texas is a judicial district in which a
substantial part of the events or omissions givingrise to the claim
occurred and in which a substantial patt of the property that is
the subject of thisaction is situated. Moreover, this case requires
the Court to consltue and enforce a writtencontractual agreement
which is performable at least in part in the State of Texas and in
theEastern District of the State of Texas.3.05. Defendants have
substantial and significant contacts within the State of Texas
andwithin the Eastern District of Texas, in that a substantial patt
of the negotiations and agreementsPerritt, et al. v. Pamela F.
Jenkins, et al. - Plaintiffs' Original Complaint Page 3 of14Case
4:11-cv-00023 Document 1 Filed 01/14/11 Page 4 of 14that the
parties reached in settlement of the prior lawsuit, the enforcement
of which is now indispute were negotiated by the individual
Defendant while she was present in Texas and theEastern District,
and such negotiations by said Defendant were on behalf of her
company, theother Defendant. Moreover, a great volume of
telephonic, email and text communicationconcerning same have been
had between the Defendants in Nevada and Plaintiff in
Texas.Further, the threatened actions of the Defendant will
directly damage these Texas Plaintiffs. Theactions threatened to be
taken will cause damage directly to said Defendants in the State of
Texasand the Eastern District.IV, FACTS4.01. The Defendant PAMELA
JENKINS is the niece of Plaintiff RICKY PERRITT. In July2005,
PAMELA JENKINS along with LAURA SANTO PIETRO ("PIETRO") and DAWN
KALMAN("KALMAN") formed a Limited Liability Company in the State of
Nevada known as THECUPCAKERY, LLC. JENKINS, PIETRO, and KALMAN each
owned a one-third (Ih) interest in theBusiness and each was named a
Co-Manager of the Business.4.02. Defendant PAMELA JENKINS did not
have sufficient funds to pay any capitalcontribution when the
Business was formed. In 2005 she requested the Plaintiff RICKY
PERRITT,brother of her mother, to lend her the money. PERRITT
agreed and advanced the sum of Ninety-Five Thousand Dollars
($95,000.00) to JENKINS as a loan to her personally. JENKINS
laterexecuted a promissory note acknowledging the debt. The terms
and provisions of paying backthe note have been renegotiated
several times, but at present JENKINS owes approximately
SixtyThousand Dollars ($60,000.00) on the note she executed,
payable to PERRITT in Denton County,Texas.Perritt, et al. v. Pamela
F. Jenkins, et a1. - Plaintiffs' Original Complaint Page 40f14Case
4:11-cv-00023 Document 1 Filed 01/14/11 Page 5 of 144.03. In 2007,
JENKINS became embroiled in a dispute with her pal1ners PIETRO
andKALMAN. She confided in PERRITT that she believed KALMAN was
attempting to take control ofthe Business by purchasing PIETRO'S
interest.4.04. JENKINS asked PERRITT to lend her the sum of Two
Hundred Thousand Dollars($200,000.00) to buyout PIETRO and KALMAN.
PERRITT refused to lend the money, pat1icularlyin light of the fact
that the initial loan that he had made to JENKINS had not been paid
back and itsterms of payment had been renegotiated and extended on
several occasions.4.05. JENKINS implored PERRITT to act in order to
save her from the oppressive conductof KALMAN. PERRITT agreed to
advance JENKINS the funds to buyout the pat1ners conditionedupon
JENKINS agreement to immediately assign him a two-thirds e13)
interest in the Company.4.06. JENKINS agreed and on the 20thday of
April 2007 PERRITT attd JENKINS enteredinto a one (I) page written
Agreement which provided, among other things, that JENKINS
wouldpurchase the membership interest of LAURA SANTO PIETRO and
DAWN KALMAN in THECUPCAKERY, LLC; that PERRITT would pay to JENKINS
or directly to KALMAN or PIETRO the sumof that money necessary to
purchase the interests of PIETRO and KALMAN; that JENKINS
wouldimmediately transfer attd assign to PERRITT One Hundred
percent (100%) of the interest acquiredfrom PIETRO and KALMAN
"including but not limited to all voting, economic and
managementrights of PIETRO and KALMAN in THE CUPCAKERY, LLC". The
Agreement provided that JENKINSand PERRITT would execute an
Assignment and Assumption of Limited Liability
Companyinterest.4.07. On the same day, April 20th, 2007, PERRITT
and JENKINS executed the Assignmentand Assumption of Limited
Liability Company interest. The effect of that Agreement was
thatPerritt, el a1. v. Pamela F. Jenkins, el a1. - Plaintiffs'
Original Complaint Page 5 of14Case 4:11-cv-00023 Document 1 Filed
01/14/11 Page 6 of 14PERRITT stepped into the shoes of KALMAN and
PIETRO as a two-thirds CZh) owner of theCompany.4.08. Under the
terms of that document the Parties granted each other a
preferentialright to purchase each other's interest. Effectively,
each party got a right of first refusal wherethey had the right but
not the obligation to purchase the interest of the other under the
same telmsand conditions as a good faith purchaser of said
interest.4.09. After PERRITT approximately paid Two Hundred
Twenty-Five Thousand Dollars($225,000.00) to PIETRO and KALMAN to
became the majority owner of the Company, the Pal1iesdiscussed and
agreed that expanding the Company based upon the trademark, trade
name,intellectual property and goodwill attached to that name and
the excellent product produced bythe Company would be a desirable
and prudent thing to do.4.10. JENKINS proposed that LAS VEGAS open
a second (2nd) store in that city. PERRITTagreed to advance the
funds to open that store and did so by advancing the sum of One
HundredEighty-Seven Thousand Five Hundred Dollars ($187,500.00) as
a loan to LAS VEGAS. LASVEGAS is repaying that loan, which is set
up on a promissory note bearing interest at ten percent(10%) per
annum. The note has a present unpaid balance of approximately Sixty
ThousandDollars ( ~ $ 6 0 , 0 0 0 . 0 0 ) . The note is payable to
PERRITT in Denton County, Texas. That storeopened January
2008.4.11. Thereafter, PERRITT, with the full knowledge and
approval of JENKINS, and usinghis own funds, opened a store in
Frisco, Collin County, Texas called "THE CUPCAKERY." Thestore used
the same recipes, name, marks, and other intellectual property that
had beendeveloped by the Nevada Limited Liability Company. JENKINS
contributed no capital to theFrisco, Texas store but did appear at
the grand opening. The FRISCO location is organized as aPerritt, el
aJ. v. Pamela F. Jenkins, el aJ. - Plaintiffs' Original Complaint
Page 6 of14Case 4:11-cv-00023 Document 1 Filed 01/14/11 Page 7 of
14separate Texas Limited Liability Company, "THE CUPCAKERY. A TEXAS
LLC" is the name ofthat company. That company is in good standing
with the State of Texas and operated byPERRITT as the sole
member.4.12. Subsequently, PERRITT, using his own funds, opened
another store in Texas in theCity and County of Dallas. PERRITT has
formed a separate Texas Limited Liability Companyknown as BUSTER
BAKAKING, LLC to own and operate the store in question and has
entered intoa Lease Agreement in which he has personally guaranteed
the sum of Three Hundred ThousandDollars ($300,000.00) future
rentals.4.13 In September 2009 the Parties had a dispute over who
owned what. In order toresolve this PERRITT filed suit against
Jenkins in this Court seeking declaratory judgment andother relief.
Defendant Jenkins never answered that suit. However, she was
represented by anattomey named Kirk Kaplan in Las Vegas, Nevada.
Mr. Kaplan prevailed on counsel forPlaintiff to attempt to resolve
the matter and after negotiations a settlement agreement
wasreached. A true and correct copy of that settlement agreement
and certain documents executedpursuant thereto is attached hereto
as Exhibit A, incorporated by reference and made pali hereoffor all
purposes. The essence of the settlement agreement was that PERRITT
received anassignment from Jenkins and THE CUPCAKERY, LLC, a Nevada
Limited Liability Company,Defendants, herein, of an undivided 50%
interest in all trademarks, tradenames, and intellectualproperty
owned by them with respect to the cupcake business.4.14 The Parties
fuliher agreed as to a portion of the intellectual property a
website"TheCupcakery.com" that the landing page of the website
would direct all developmental andmedia inquires outside Nevada to
PERRITT and all such inside Nevada to JENKINS. PERRITTobtained the
right to hire any national media firm and to design the web's
landing page.Perritt, et aJ. v. Pamela F. Jenkins, et al. -
Plaintiffs' Original Complaint Page 7 of14Case 4:11-cv-00023
Document 1 Filed 01/14/11 Page 8 of 144.15 Jenkins received 100% of
the stores in Nevada and PERRITT received 100% of thestores in
Texas. The agreement provided that PERRITT and Jenkins individually
would each ownan undivided 50% interest in all THE CUPCAKERyTM
trademarks, tradenames and intellectualpropelty. Each Party had an
obligation to conduct their respective businesses in such a
manneras to protect the names and marks. All inquiries about
development opportunities were requiredto be directed by JENKINS to
PERRITT The Parties were to maintain a joint Cupcakery website,the
format to be agreed upon by the Patties and the website was
required fairly and prominentlyto direct all inquires about
development opportunities outside Nevada to PERRITT. Theagreement
fmther provided that the Patties agreed not to disparage each other
in any way or totake any action which might damage the trademarks,
tradenames or intellectual property of THECUPCAKERyTM.4.16 The
Parties executed the settlement agreement and all suppOlting
documents. Theparties agreed on the format for the website and the
same was set up.4.17 The website "TheCupcakery.com" is the first
website that appears when one doesan intemet search of the telm
"cupcakery". Although there are other "Cupcakery's" such as"Sift, a
cupcakery" no other person may use the tradename owned by these
patties, to: "THECUPCAKERyTM".4.18 The Plaintiffs incorporate
herein by reference as if copied fully at length verbatimherein the
AFFIDAVIT OF RICKY B. PERRITT in support of their Motion for
Temporary RestrainingOrder.4.19 Jenkins has apparently become
dissatisfied with the Agreement that she made andhas acted to
breach same in several respects. Although she has an obligation to
protect theintellectual property, including the trademark and
tradenames she has refused to pay her share ofPerritt, et al. v.
Pamela F. Jenkins, et al. - Plaintiffs' Original Complaint Page 8
of14Case 4:11-cv-00023 Document 1 Filed 01/14/11 Page 9 of 14legal
and other expenses to protect said tradenames and trademarks.
Plaintiff PERRITT has had tofinance a lawsuit in California against
a third party which was settled on favorable terms andreserved THE
CUPCAKERyTM for the parties to this case. PERRITT advanced
considerable sum ofhis own money. Jenkins has failed and refused
and continues to fail and refuse to pay her shareof these legal
expenses in the sum of approximately Eight Thousand Dollars
($8,000.00).JENKINS has further stated that she will not pay any
monies or take any measures necessary toprotect THE CUPCAKERyTM
intellectual property. She has further stated that she will give
theright to use the name to third patties without consideration of
any sort.4.20 PERRITT has attempted to discuss these differences in
a rationale manner but hasbeen unable to persuade Jenkins ofher
responsibilities under the agreement they reached.4.21 The website
"TheCupcakery.com" is hosted by a company calledBannerView.com
located in Las Vegas, Nevada. Because the THE CUPCAKERY, LLC, a
NevadaLimited Liability Company had a previous 5 year contract with
the company who hosted thewebsite, the Parties continued to have
that company host the website. The Patties agreed on thelanding
page and the format of the website and BannerView.com has hosted
the same since theParties reached their settlement.4.22 Jenkins has
recently said that she is gomg to "take down" the
website"TheCupcakery.com" because it is "hers", and use it as a
separate website and has told thePlaintiff PERRITT that he needs to
create another website. PERRITT owns a 50% undividedinterest in all
the intellectual property including the website and to switch
websites from the onewebsite that gets the most hits when
"Cupcakery" is entered on any search engine would causesubstantial
and irreparable harm.Perritt, et al. v. Pamela F. Jenkins, et al. -
Plaintiffs' Original Complaint Page 9 of14Case 4:11-cv-00023
Document 1 Filed 01/14/11 Page 10 of 144.23 On or about January 12,
2011 Jenkins sent PERRITT an email stating that she wasgoing to
"pull down" of the website. PERRITT attempted to discuss this with
her and althoughshe cursed and refused to discuss the matter
rationally, it is PERRITT'S belief that she intends totake the
website "TheCupcakery,com" and use it has her own website, leaving
PERRITT without awebsite and causing irreparable hatm,4.24
Plaintiff PERRITT'S Affidavit states in detail the reasons that
such conduct byJENKINS would cause immediate and irreparable harm
to him and to his restaurants. PERRITT hasthree restaurants in
Texas and is on the verge of opening another. This website gets
many hitseach day from people inquiring about location, catering,
and placing pick up orders. Moreover,the website directs all
inquiries about investments, development, franchising and licensing
in anylocation outside the State of Nevada to him, PERRITT
fi'equently receives inquiries and isseriously considering business
propositions to open stores in Massachusetts and Florida. Havingthe
website down for any length of time will cause PERRITT to be unable
to communicate withpotential investors, franchisees, or
licensees.4.25 Jenkins' threat concerning the website was specific
as to time. She said sheintends to take action on Monday, January
17, 20 II. There is insufficient time to notify Jenkinsor her
attorney and hold a hearing prior to the time of her threatened
action. As of the time offiling this suit, as stated in the
Certificate of the undersigned attorney, JENKINS' Nevada
attorney,Kirk Kaplan has been unable to confirm that his client
will enter into an Agreed TemporaryRestraining Order or otherwise
agree to conform to the terms and provisions ofthe agreement.4.26
Unless this Court grants appropriate relief in terms of a temporaty
restrainingorder without notice, PERRITT and the Plaintiff
companies will be reparably harmed and injuredwithout any adequate
legal remedy.Perritt, et al. v. Pamela F. Jenkins, et al. -
Plaintiffs' Original Complaint Page 10 of14Case 4:11-cv-00023
Document 1 Filed 01/14/11 Page 11 of 14V. FIRST CAUSE OF
ACTIONAPPLICATION FOR RESTRAINING ORDER AND PRELIMINARY
INJUCTION5.01 Plaintiffs move this Comt to grant a Temporary
Restraining Order restraining andenjoining the Defendants, their
agents, servants, employees, contractors and attorneys and
thosepersons in active concert and patiicipation with them from
interfering in any manner with theCutTent operation of the website
"TheCupcakery.com" or from pulling down, modifying,amending, or
otherwise changing any of the content of said website or fi'om
committing any actor omission calculated to cause any harm or
damage to the intellectual property owned byPERRITI in THE
CUPCAKERy pending the hearing and disposition of the Plaintiffs'
Motion forPreliminary Injunction filed on January 14,2011 on the
ground that immediate and irreparableloss, damage and injmy will
result to Plaintiffs as more fully appears from this
verifiedComplaint and the attached AFFIDAVIT OF RICKY B.
PERRITI.5.02 Plaintiffs further move that this Court, after proper
notice and hearing, grant apreliminary injunction granting the
injunctive relief specified in the application for
temporaryrestraining order, such illjunctive relief to be effective
until the conclusion of this lawsuit, oruntil fmther ORDER of this
Comt.VI. SECOND CAUSE OF ACTION-DECLARATORY JUDGMENT6.01.
PLAINTIFFS sue for declaratory judgment and request the Court after
construing allthe documentation in this case, along with the swom
testimony, to enter a DeclaratOlY Judgmentdetermining the
following:a. That PERRITT owns an undivided 50% interest in the
intellectual propertyof THE CUPCAKERyTM, including but not limited
to the trademarks and trade names.Perritt, et a1. v. Pamela F.
Jenkins, et a1. - Plaintiffs' Original Complaint Page 11 of 14Case
4:11-cv-00023 Document 1 Filed 01/14/11 Page 12 of 14b. That
JENKINS is obligated to pay 50% of the attorneys fees and
costsassociated with protecting said intellectual property
rights.c. That JENKINS is not entitled to change or alter content
or operation of thewebsite "The Cupcakery.com" or its Landing Page
without the express consent andpermission ofPERRITT.d. That JENKINS
owes a duty of loyalty to the brand name THECUPCAKERyTM.e. That
JENKINS may not act to hann the other, or to damage good
will,trademarks, trade names or business associated with THE
CUPCAKERyTM.f. That the Defendant JENKINS' conduct as heretofore
alleged constitutes abreach ofthe duty ofloyalty to the Brand Name
and to Plaintiff.g. That the Defendant JENKINS' conduct as
heretofore alleged constitutes abreach of her fiduciary duties to
the Brand Name and to Plaintiff.h. That JENKINS is obligated to
give PERRITT information about all inquiriesmade, past or future,
by third (3fd) parties seeking to do business with the Company.i.
That JENKINS has breached the settlement agreement.6.02. That
Plaintiff is entitled to recover his reasonable and necessary
attorney fees isthis declaratory judgment matter.VII. THIRD CAUSE
OF ACTION-BREACH OF THE DUTY OF LOYALTY7.01. Defendant JENKINS'
conduct as heretofore alleged constitutes a breach of the dutyof
loyalty imposed by common law and specifically incorporated in the
governing documentspeliaining to the Settlement.Perritt, et al. v.
Pamela F. Jenkins, et al. - Plaintiffs' Original Complaint Page 12
of14Case 4:11-cv-00023 Document 1 Filed 01/14/11 Page 13 of 147.02.
As a result Plaintiff has been damaged in an amount in excess of
Seventy-FiveThousand Dollars ($75,000.00).VIII. FOURTH CAUSE OF
ACTION-BREACH OF FIDUCIARY DUTY8.01. Plaintiff alleges that
Defendant owes him a fiduciary duty to act in a manner ofutmost
good faith and hust. Her conduct aforesaid constitutes a breach of
that duty.8.02. As a result Plaintiff has been damaged in an amount
in excess of Seventy-FiveThousand Dollars ($75,000.00).IX. FIFTH
CAUSE OF ACTION-BREACH OF CONTRACT9.01. As alleged previously,
Defendant has repeatedly made threats to hatm the name,mark,
website and intellectual property of THE CUPCAKERyTM. She has
refused and continues torefuse to pay her share of the expenses of
protecting same.9.02. Such acts are a breach of the Settlement
documents and have damaged Plaintiffsin excess of Seventy Five
Thousand Dollars ($75,000.00).9.03. Plaintiff is entitled to
recover this reasonable attorneys fees for such breach.X. PRAYER
FORRELIEF10.01. Plaintiff requests that summons issue requiring
Defendant PAMELA JENKINS toappear and answer this Complaint.10.02.
Plaintiff prays that the court issue a Temporary Restraining Order
without noticeand asks that after appropriate notice a hearing be
held on his request for Preliminmy Injunctionand that the Court
enter a preliminary injunction restraining and enjoining Defendant
asheretofore specified. Plaintiff prays that such injunction be
made permanent.Perritt, et al. v. Pamela F. Jenkins, et al. -
Plaintiffs' Original Complaint Page 13 ofl4Case 4:11-cv-00023
Document 1 Filed 01/14/11 Page 14 of 1410.03. Plaintiff prays that
the Court enter a DeclaratOlY Judgment granting the
reliefheretofore requested.10.04. Plaintiff requests that he have
and recover damages on account of Defendant'sbreach of the duty of
loyalty and breach of fiduciary duty and breach of contract in an
amount inexcess of Seventy-Five Thousand Dollars ($75,000.00) for
each violation..05. Plaintiff prays that he recover his reasonable
attorney fees, expenses of litigation,costs of court, and that he
have such other and further relief, general and special, in law or
inequity to which he may justly be entitled.Respectfully
submitted,MICHAEL J. WHITTEN & ASSOCIATES, PC218 North Elm
StreetDenton, TX 76201(940) 383-1618 or Metro (972) 434-3833Fax:
(94 ) 898-0 6VERIFICATION1 have read the above and foregoing
Complaint. 1 have personal knowledge of the factsalleged therein
and they are true and COlTect.RicKyB.Perritt, et al. v. Pamela F.
Jenkins, et al. - Plaintiffs' Original Complaint Page 14 of14Case
4:11-cv-00023-MHS -ALM Document 1-2 Filed 01/14/11 Page 1 of
22SETTLEMENTAGREEMENT RICKY B. PERRITT ("PERRITT") and JENKINS
("JENKINS") each own aninterest in THE CUPCAKERY, LLC, ANevada
Limited LiabiHty Compalry; alldWhereas PmuuTT has opened aM
operates two (2) companies, TIll! CUPCAKERY LLC, ATexas Limited
Liability Company and BUSTER BAKING, LLC, A Texas Limited
LiabilityCompany; andWhereas the Parties ltave a disagreement over
the operation, management, percentages ofownership and future
direction and development of the trade nalues and
intellectualpropel'ty; andWhereas, PERRITT filed suit JENKINS in
the Unlted States Dlstdct Court for theEastern District of Texas,
Sherman Division, in No. 4:09 CV 00406, Styled Ricky Perrilt1'.
Pamela Jenkins, andWhereas the Parties desire to resolve all
disputes betwcen them and to divide and separatethe ownership and
operation of the respective stores and future development.NOW,
TIlEREFORE, THE PARTIES AGREE AS FOLLOWS:I. PERRITT will sell
JENKINS all his interest in the Las Vegas TIlIl CUPCAKIlRy
stores.JIlNKINS will PERRITT at closing the sum of One Hundred
Thousand Dollars($100,000). At closing, THIl COPCAKERY, LLC,
ANevada Limited Liability Company andPamela Jenkins will transfer,
assiilll and convey to RlCKY PIlRRlTT or a company he maydesignate
an undivided fifty percent (50%) interest in all trademarks, trade
names andintellectual Pl'Operty owned by them with respect to the
cupcake business. Neither partyshall transfer his 01' her interest
in said intelleetnal property to any entity which he 01' shedoes
not control, except he 01' she may sell his or her stores, as a
group or individually andthe pmchaser shall have the l'ight to use
and develop the trade nallle and trademarks. Thisis subject to the
provisions ofparagraphs 7alld 13.2. Perritt and Jenkins that any
party opening a store shall be in charge of and have theexclusive
right to issue press releases and make media contacts for that
storc. On any pressreleases 01' media interview with national media
the parties shall consult and agl'ee on thecontent of any sUell
prcss release 01' media statements. The Landing Page of the
Websiteshall direct all development and media inquiries outside
Nevada to Pel'l'itt and all suchinquiries inside Nevada shall bc
directed to Jenkins. Pen'itt shall have the right to hire
anynational media finn and to design the webllage landing page.
Penitt shall consult withJenkins and shall not ul1l'casonably
refnse to incorporate her concepts into the LandingPage.3. JENKINS
will pay PERRin the balance of the original Ninety Five Thousand
Dollars($95,000) personal loan he made to her in the alllount of
Seventy Five Thousand, SixHundred Seven and Seventeen One
Hundredths Dollars ($75,607.17) and the balance of theloan PERRITT,
acting through CUSTOM VERSION, INC" made to the Las Vegas
THECUPCAKERY in the of One Hundred Twenty One Thousand Two
HundredEXHIBITI ACase 4:11-cv-00023-MHS -ALM Document 1-2 Filed
01/14/11 Page 2 of 22Selllemelli AgreementP(lge2of4Seventeen and
Sixty Eight One H\mdredths Dollars ($121,217.68). These payments
will bepaid per the Notes which will be amended to reflect that all
past due payments will bearinterest at (jighteen percent (18%) per
alUlum. Neither revised Nole shall have any penaltyfor
prepayment.4. Item 2 will be secured by a first lien on all
JENKINS' right, title and intcrcst in THEC\lPCAKERY, LLC
[Nevadaland its assets. JENKINS and 'filB CUPCAKllRY, LLC
[Nevada]will exeel1te lln llpproprillte Seourlty Agreement pledging
the intercst in thc NcvadaCompany and all real 01' personal
prollerty it owns, and such Agreemenl, Flnano/ngSinlemeni or other
appropriate evidence of this security interest shall be placed
ofrecord inCiark County llnd the State ofNevllda. JENKINS will have
the exclusive right In the State ofNevada to OWII and operate THIl
CUPCAKllRy stores.5. JENKINS will assign to PERRITT aU her right,
title alld interest, if any, itl THE CUPCAKBRY,LLC [Texas], the
Frisco store and BUSTER BAKERY, LLC rrexas], the proposed
DallasStore. PERRITT will have the exclusive right in the State of
Texas to own and operate 'filECUPCAKERY Stores.6. PERRITT shall
have the eXclusive right to develop 'filE CUPCAKBRyTMin all stlltes
exccptNevlldll for 11 period of fOUl' (4) years from date of
closing.7. PllRRlTT and JllNKlNS, individually, will each own an
111ldivided fifty percent (50%) interestin all THE CUPCAKBRy
trademarks, trade names and intellectual property. Each Partyshall
have the obligation to conduct their respective businesses in such
11 mlllmer as toprotect the names and marks. Any furtheJ' marks,
names OJ' intellectual property that eitherPERRITT or JENKINS
develop in connection with the cupcake business will be
ownedfifty/fifty (SO/50) and either may \Ise OJ' adapt the other's
work in his or her territory. Ifeither Patty sells his or her
interest to 11 Third Party, the other shall not be obligated
nutherto sharc his or her work with the Third Patty.8. Each Party
shall receive one and onc-half percent (1.5%) of gross receipts
from the othel'Party's stores to begin the first full month
following the closing of this Agreement. Suchpayments shall be made
by the twentieth (201h) day of the month following the month
inwhich the sales were made. In connection with sueh payments each
Party shall ful'nish theother with a written statement verifYing
the previous months' which stlltement shallbe by a check OJ' wire
transfer payment. All past due payments shall bearinterest llt the
rate of eighteen percent (18%) per rumum until paid, and ifeither
Pllrly have to suc to collect sueh payments he or she shall be
entitled to recover his 01' herreasonable attomey fees. Payments
due from JENKINS to PERRITT shall be due and payablein Denton
County, Texas. Pllyments due and payable from PERRIIT to JIJNKINS
shall bedue and payable in Clark County, Nevada. This obligation
shall survive the sale of anyPllrty's interest and become lln
obligation of llny Third Patty oWMr.9. Each Party shall receive
Five Thousand Dollars ($5,000.00) when the other opens a newstore
in the future, sueh payment to be made on 01' before thitty (30)
days from the datesuch store sells the first cupcake. This
obligation shall survive the sale of any Patty'sinterest and beeome
an obligation ofllny Third Pmty owner.Case 4:11-cv-00023-MHS -ALM
Document 1-2 Filed 01/14/11 Page 3 of 228efllemen/
AgreementPage3o[410. If, during a fOllr (4) yeal' period JENKINS
has all opportunity to open a storc in a state Othel'thall Nevada,
she shall bring the matter to PERRlTT'S inul1ediate allention. If
PERRITI hasnot 0IJened a store in that state, 01' has not committed
to do so, he shall evaluate the matterand if it is in the best
interest of THB CUPCAKBRy hc may, in his sole discretion,
giveJBNKINS permission to go illtO that state. After the expiration
of the fOUL' (4) y e ~ \ I ' IJeriodeach Party who has opened a
store in a state shall have excl\lsiW rights to devclop
theb\lsiness in that state. Thereafter the first Party to open a
store in a state shall haveexclusive rights in that state. Once a
Paliy has established exclusivc rights in a state theother Party
may not enter that state without written permission from the other.
Thisobligation shall survive tile sale of any Party's interest and
become an obligation of anyThird Party OW)ler.11. Each Party shall
execute global releases of the other for all past c()J\duct, and
uponexecution of the agreement PERRlIT wlil dismiss the lawsuit
wlth prejudice.12. All inquiries about development opportunities
shall be directed by JBNKINS to PBRRlIT.The Parties shall maintain
a joint CUPCAKBRY website which format shall be agreed to bythc
Parties. The website shall cleady and prominently direct all
inquiries abo\ltdevelopment opportunities outsidcNevada to
PBRRIIT.13. Should either Party to this Agreement desire to sell
any store or palt of a storc toa Third(3rd) Party, helshe must
first offer the store to the other Party by presenting a true copy
of awritten Sales Contract with the prospective purchaser spelling
out all terms and conditionsof the Sale. The other Party shall have
thiliy (30) days to match the offer and if he/shedoes not, the
Selling Pm'!)' shall be free to consununata the Sale to the Third
Parly.Nothing herein shaH impair the right of either Party to open
a new store in cOlUlectioll witha Third Patty in any state where
the Party has exclusive rights. The right of first refusalshall
apply to all stores developed by PERRITT and JENKINS, oither
individually 01' incooperation with a Third Party. If one Party
enters into a contract to sell a store 01' stores toa Third Party
and the other Pmty elects not to exeroise his 01' her right of
first refusal, thenew store shall neveliheless be obligatcd to pay
the Five Tho\lSand Dollars ($5,000.00) feeand pay the royalty of
one and one-halfPercent (1.5%) of gross sales. This obligation
shallsurvive the sale of any Party's interest and become an
obligation of any Third Party owner.14. Each Party shall keep
confidential all the terms and provisions ofthis Agreement exoept
itmay be disclosed to any bank 01' person who is finanoing the
Sale, on the condition that thefinancing Paliy agrees to honor the
Confidentiality Agreement. Nothing herein shallprohibit either
Party fi'om disolosing the terms of this Agreement to their
attorney, CPA,financial advisor, other professional 01' prospeotive
p\lrchaser or business parllier whoagrees to be bound by the
Cotifidenlia/ity Agreement. Nothing herein shall prohibit
cithcrParly frollll'esponding to a lawful sub110ena from a court of
oompetent jurisdiction whiohdemands production of this document. If
a Patiy reoeives a subpoena he or she shallTMMllDIATBLY inform the
other by providing a truc copy of the subpoena. A Party whoreoeives
such a subpoena shall request the issuing oourt to issue a
protective ol'der topl'Clhibit dissemination ofthe document to
those without a strict need to see the document inconnection with
the litigation.Case 4:11-cv-00023-MHS -ALM Document 1-2 Filed
01/14/11 Page 4 of 22Selllellleill AgteelllelltPage4of415. Each
Party agrees not to disparage the othcr ill allY way or to take any
action which mightdamage the trademarks, trade names or
intellectual property of THE CUPCAKERyTM.16. Time is of the
essence.Pamela Jenkins2009.Case 4:11-cv-00023-MHS -ALM Document 1-2
Filed 01/14/11 Page 5 of 22Promissory NoteDate:llorrower: Pamela
Jenkins and The Cupcakery, LLC, a Nevada Limited Liability
Company.llon'ower's Mailing Address:Pamela Jenkins9680 S. Eastem
AvenueLas Vegas, Nevada 89123Clark CountyThe Cupcakery, LLC9680 S.
Eastem AvenueLas Vegas, Nevada 89123Clark CountyLender: Custom
Version Corporation, a Texas corporation.Place for Payment:P.O. Box
858Denton, Denton County, Texas 76202,or any other place that
Lender may designate in writing.Principal Amount: $121,217.68Annual
Interest Rate: Ten Percent (10.00%)Matnrity Date: October
1,2012Annual Interest Rate on Matured, Unpaid Amounts: Eighteen
Percent (18%)Terms of Payment (principal and interest):The
Principal Amount and interest are due and payable in equal monthly
installments ofTHREE THOUSAND NINE HUNDRED ELEVEN AND 351100
DOLLARS ($3,911.35), onthe first day of each month, beginning
November 1, 2009 and continuing until the unpaid principaland
acclUed, unpaid interest have been paid in full. Payments will be
applied first to acclUedinterest and the remainder to reduction of
the Principal Amount.Security for Payment: This note is secured by
a security interest created in a securityagreement that covers all
of Borrower's membership interest in The Cupcakery, LLC, a
NevadaCase 4:11-cv-00023-MHS -ALM Document 1-2 Filed 01/14/11 Page
6 of 22Limited Liability Company, all assets, jncl ding int((1 c 5
0, Bo. (. nCt 1[-( .\ , on this day personallyappeared Pamela
Jenkins, known to me to be the person whose name is subscribed to
theforegoing instrument and acknowledged to me that Pamela Jenkins
executed the same as the act ofThe CupcakelY, LLC, a Nevada Limited
Liability Company, as its President, for the purposes
andconsideration therein expressed.Given under my hand and seal
ofoffice this Zf)'\ i'day of ():::,[-ot,e (-,2009.NOTARY
PUBLIOSTATE OF NEVADACounty of Ciark"... ALISSA BARNARD M. 1
2012AFTER RECORDINGRETURN TO:Ricky B. PelTittP.O. Box 858Dentoll,
Texas 76202O{1/0Q.... cb(Anf\,\c,-.0NotalYPublic, State of NevadaMy
commission expires: s- \- \")...