ARBITRATION AGREEMENT
THIS ARBITRATION AGREEMENT (the "Agreement") dated as of February 4, 1997, is
entered into by and among REDNECK FOODS, INC., a Delaware corporation
("Company"), XXXX XXXXXXXXX, an individual ("Xxxxxxxxx"), XXXXX XXXXXX, an
individual ("Xxxxxx"), XXXXXX X. XXXXXXXXX, an individual ("Xxxxxxxxx") and
X.X. XXXXXXXX, an individual, with reference to the following:
A. Simultaneously with the execution and delivery of this Agreement, (i)
Company, Xxxxxxxxx and Xxxxx Xxxxxx ("Xxxxxx") are entering into a Series A
Convertible Preferred Stock Purchase Agreement (the "Stock Purchase
Agreement") providing for, among other things, the acquisition by Xxxxxxxxx
of certain shares of Series A Convertible Preferred Stock (the "Preferred
Stock") of Company upon the terms and subject to the conditions set forth
therein.
B. Subject to and in compliance with the execution of the Stock Purchase
Agreement each of the parties hereto shall be a party to one or more of the
Transaction Documents (as such term is defined in the Stock Purchase
Agreement).
C. The parties hereto desire that any and all disputes that may arise
under the Transaction Documents be arbitrated through binding arbitration
instead of a lawsuit,
NOW, THEREFORE, in consideration of the obligations and agreements contained
herein and in the Stock Purchase Agreement and the Transaction Documents, the
parties hereto agree as follows:
1. Definitions. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Stock Purchase
Agreement.
2. Claims Subject to Arbitration. Each of the parties agrees to submit all
disputes and controversies which may arise between or among them with respect
to any or all of the Transaction Documents (including but not limited to
those brought by any party serving as an employee of Company against
Company's shareholders, officers, directors, agents and employees) which are
related to or arising out of (i) the employment or termination of employment
of a party by Company, or (ii) the interpretation, construction or
application of this Agreement any or all of the Transaction Documents,
(collectively, the "Arbitrable Claims") shall be resolved by binding
arbitration. Arbitrable Claims include, but shall not limited to, all
contract and tort claims of any nature, as well as all claims based upon the
application or enforcement of any federal, state, or local law, statute,
regulation or ordinance; however, only claims under applicable workers'
compensation law and unemployment insurance claims shall not be subject to
this Agreement. Arbitration shall be final and binding upon the parties and
shall be the exclusive remedy for all Arbitrable Claims.
3. Waiver of Jury Trial. Each of the parties hereby understands and
acknowledges that by executing this agreement they will be waiving any
constitutional rights that they may have to a trial by jury in regard to all
arbitrable claims.
4. Arbitration Procedure. All arbitrations of Arbitrable Claims shall be
conducted in accordance with the Rules adopted by the American Arbitration
Association ("AAA Rules"). All Arbitrable Claims must be initiated within
the time period specified in Section 7 below, or they shall be deemed to be
time barred. Arbitration shall be initiated by providing written notice to
the other party with a statement of the claim(s) asserted, the facts upon
which the claim(s) are based, and the remedy sought. In any arbitration, the
burden of proof shall be allocated as provided by applicable law. All
arbitration hearings under this Agreement shall be conducted in Los Angeles,
California. The Federal Arbitration Act shall govern the interpretation and
enforcement of this Agreement.
5. Arbitrator Selection and Authority. All disputes involving Arbitrable
Claims shall be decided by a single arbitrator. The arbitrator shall be
selected by mutual agreement of the parties within thirty (30) days of the
effective date of the notice initiating the arbitration. If the parties
cannot agree on an arbitrator, then the complaining party shall notify the
AAA and request selection of an arbitrator in accordance with the AAA Rules.
The arbitrator shall have the authority to award all equitable relief,
damages, costs, and fees provided by law for the particular claim(s)
asserted. The fees of the arbitrator shall be split between both parties
equally. The arbitrator shall have exclusive authority to resolve all
Arbitrable Claims, including, but not limited to, any claim that all or any
part of this Agreement is void or unenforceable.
6. Arbitration Confidentiality. All proceedings and all documents prepared
in connection with any Arbitrable Claim shall be confidential and, unless
otherwise required by law, the subject matter thereof shall not be disclosed
to any person. All documents filed with the arbitrator or with a court shall
be filed under seal. The parties shall stipulate to all arbitration and
court orders necessary to effectuate fully the provisions of this Section
concerning confidentiality.
7. Limitations on Bringing Claims. All Arbitrable Claims must be initiated
within 180 days ("Limitations Period") days after the occurrence of the acts
or omissions specified in the claim. Each of the parties hereby understands
and acknowledges that by executing this Agreement they will be waiving all
rights under statutes of limitations which provide different limitation
provisions for the commencement of actions.
8. Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by each of the parties.
No failure to exercise and no delay in exercising any right, remedy, or power
under this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, or power under this Agreement
preclude any other or further exercise thereof, or the exercise of any other
right, remedy, or power provided herein or by law or in equity.
9. Acknowledgment. Each of the parties hereto acknowledges that he or it
has had the opportunity to consult legal counsel in regard to this Agreement,
that he or it has read and fully understands the provisions of this
Agreement, is aware of and understands its legal effect, and has entered into
it freely and voluntarily.
IN WITNESS WHEREOF, the undersigned have executed this Arbitration Agreement
as of the date first written above.
REDNECK FOODS, INC.,
a Delaware corporation
XXXX XXXXXXXXX
By: _________________________
Xxxxx Xxxxxx,
President
XXXXX XXXXXX
XXXXXX XXXXXXXXX X.X. XXXXXXXX
