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EXHIBIT 10.8
CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT
This Confidentiality and Non-competition Agreement ("Agreement") is made
and entered into this 20th day of February, 1997, by and between Eatertainment
Inc. (the "Company") and Xxxxxx X. Xxxxxxxx ("Xxxxxxxx").
WHEREAS, the Company is in the business of developing, owning and
operating sports bar/grille facilities which include specific types and layouts
of pool tables, televisions, music and sound systems and a distinctive ambiance
(hereafter the "Business");
WHEREAS, the Company is possessed of certain Confidential Information, as
hereafter defined, and preserving the confidentiality of such Confidential
Information is of extreme importance to the Company;
WHEREAS, the Company has expended, and will continue to expend,
considerable time, effort and resources to develop the Business;
WHEREAS, Xxxxxxxx will have continuing access to Confidential Information
of the Company;
WHEREAS, the Company has required that Xxxxxxxx enter into this Agreement
as a condition to the consummation of the exchange of property as provided in
Section 351 of the Internal Revenue Code of 1986, as amended (the "Exchange")
contemplated in that certain Exchange Agreement dated as of the date hereof
among the Company and each of the persons listed on the signature pages thereto;
and
WHEREAS, Xxxxxxxx will recognize substantial and immediate valuable
consideration from the Exchange and the Company's intended development and
expansion of the Business.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the parties agree as follows:
1. Consideration. Xxxxxxxx acknowledges that the Exchange constitutes
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged by Xxxxxxxx.
2. Confidential Information and Restrictive Covenants.
2.1 Acknowledgment and Definition.
x. Xxxxxxxx acknowledges that the Business includes
specialized, proprietary, confidential and trade secret information
and that the Company have a legitimate need to protect such
information.
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b. Definition of Confidential Information. For purposes of
this Agreement, the term "Confidential Information" means that
secret proprietary information of the Company not otherwise publicly
disclosed. Without limiting the generality of the foregoing, such
proprietary information shall include information not generally
known in the industry which concerns (i) operating and other cost
data, including information regarding salaries and benefits of
employees; (ii) sales, cost and pricing data; (iii) acquisition,
expansion, marketing, financial and other business plans and
methods; (iv) recipes, manuals, files, records, memoranda, plans,
drawings and designs, specifications and computer programs and
records; (v) identification of suppliers and contractors; and (vi)
all information which is a "trade secret" as defined in the Uniform
Trade Secrets Act as adopted in Kansas at K.S.A. 60-3320.
Confidential Information shall include all such information whether
or not legended or otherwise identified as Confidential Information.
2.2 Confidential Information. Xxxxxxxx will have access to and
become familiar with Confidential Information of the Company. Xxxxxxxx
acknowledges that such Confidential Information is owned and shall continue to
be owned solely by the Company. Xxxxxxxx shall not use or divulge Confidential
Information to any person or entity other than the Company, or persons to whom
the Company have given their written consent, unless such information has become
common knowledge and is no longer Confidential Information.
2.3 Return of Documents. Upon termination of Xxxxxxxx'x
participation as an officer or director of the Company, or his ownership of an
equity interest in the Company, all procedural manuals, guides, specifications,
plans, drawings, designs, records, lists, notebooks, diskettes, customer lists,
pricing documentation and similar documentation which is or contains
Confidential Information, including all copies thereof, in the possession or
control of Xxxxxxxx, whether prepared by Xxxxxxxx or others, shall be forthwith
delivered by Xxxxxxxx to Company.
2.4 Covenant Restricting Competition. For a period of either (i)
two years from the date of this Agreement or (ii) one year from the date on
which Xxxxxxxx terminates his relationship as an employee, consultant or
director providing services to one or more of the Company or any successor
entity, whichever is later (the "Restricted Period"), Xxxxxxxx shall not compete
with the Company, or any successor to the Business, as an owner, officer,
director, employee, agent, consultant, lender or otherwise with any person or
entity engaged in a business involving Sports Bars (a "Competing Business");
provided, however, Xxxxxxxx may continue his involvement with the small brew pub
concept presently operating under the name "Stool Pigeons" so long as it does
not have at any time pool tables and multiple television sets. As used herein,
the term "Sports Bar" shall mean a facility having pool tables and multiple
television sets. Xxxxxxxx acknowledges the intention of the Company to develop
the Business on a nationwide basis and agrees that, accordingly, the geographic
scope of the covenants set forth in this Section 2.4 shall include the entire
United States.
Notwithstanding any other provision herein, the parties agree that
Xxxxxxxx may, during the period covered by this Agreement, invest Xxxxxxxx'x
personal, private assets as a
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passive investor in not more than three percent (3%) of the total outstanding
shares of any publicly traded company engaged in a Competing Business, so long
xx Xxxxxxxx does not participate in the management or operations of the affairs
of such company.
2.5 Solicitation of Employees. During the Restricted Period,
Xxxxxxxx shall not, without the prior written approval of the President of the
Company, directly or indirectly solicit, raid, entice, or induce any person who
presently is, or at any time during the term hereof shall be an employee
(manager level or above) of the Company or any other entity indirectly providing
management services to any of the Company, excluding Xxxxx Xxxxxxx, to become
employed by any other person, firm, or corporation in any business in which
Xxxxxxxx has an interest. Furthermore, Xxxxxxxx shall inform the Company in
writing if any other person employed by the Company contacts Xxxxxxxx for the
purpose of seeking employment during such Restricted Period.
2.6 Reasonableness of Restrictions, Reformation, and Severability.
x. Xxxxxxxx has carefully read and considered the provisions
of this Section 2 and, having done so, agrees that the restrictions
set forth herein, including, but not limited to, the duration of the
Restricted Period and the scope of the restriction, are fair and
reasonable and are reasonably required for the protection of the
interests of the Company.
b. In the event that, notwithstanding the foregoing, any part
of the covenants set forth in Section 2 shall be held to be invalid
or unenforceable, the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that
any provision of this Section 2 relating to the time period and/or
scope of restrictions shall be declared by a court of competent
jurisdiction to exceed the maximum time period or area as such court
deems reasonable and enforceable, said time period and/or areas of
restrictions shall be deemed to become and thereafter be the maximum
time period and/or scope which such court deems reasonable and
enforceable.
c. Any provision hereof otherwise prohibited by or
unenforceable under any applicable law or public policy in any
jurisdiction which cannot be reformed in accordance with the
provisions herein, shall, as to such jurisdiction, be ineffective
without affecting any other provision of this Agreement, or shall be
deemed to be severed or otherwise modified to conform with such law
or public policy; and the remaining provisions of this Agreement
shall remain in force, provided that the purpose of this Agreement
can be effected. To the full extent, however, that the provisions of
such applicable law or public policy may be waived, this Agreement
shall be deemed to be a waiver thereof. The parties hereto
understand and agree that all the covenants set forth herein are and
shall be separately enforceable, each to the full extent permitted
by applicable law.
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2.7 Tolling Period. If it should become desirable or necessary for
the Company to seek compliance with this Section 2 by judicial proceedings, the
period during which Xxxxxxxx shall comply with its provisions shall extend to
the first anniversary of the date of the final, nonappealable order requiring
such compliance.
2.8 Remedies. It is agreed that the Company would be irreparably
damaged by reason of any violation of the provisions of this Agreement, and that
any remedy at law for a breach of the provisions of this Agreement would be
inadequate. Therefore, the Company shall be entitled to seek injunctive or other
equitable relief in a court of competent jurisdiction against Xxxxxxxx,
Xxxxxxxx'x agents, Xxxxxxxx'x affiliates, partners, or other associates, for any
breach or threatened breach of this Agreement, without the necessity of proving
actual monetary loss. It is expressly understood that the remedy described in
this Paragraph 2.8 shall not be the exclusive remedy of the Company for any
breach of this Agreement, and the Company shall be entitled to seek such other
relief or remedy at law or in equity to which it may be entitled as a
consequence of any breach of this Agreement.
3. Miscellaneous.
3.1 Definition. For purposes of this Agreement, "Company" shall
include any successor to the Business.
3.2 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of its subject matter and supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
3.3 Amendment; Waiver. This Agreement may not be amended,
supplemented, canceled or discharged except by written instrument executed by
the party affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof. No
waiver of any breach of any provision of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision.
3.4 Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of any successor of the Company by
reorganization, merger or consolidation, or any assignee of all or substantially
all of the Company's businesses and properties. Xxxxxxxx'x rights or obligations
under this Agreement may not be assigned by Xxxxxxxx.
3.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
3.6 Governing Law; Interpretation. This Agreement shall be
construed in accordance with, and governed for all purposes by, the laws and
public policy of the State of Kansas applicable to contracts executed and to be
wholly performed within such State.
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3.7 Further Assurances. Each of the parties agree to execute,
acknowledge, deliver and perform, and/or cause to be executed, acknowledged,
delivered and performed, at any time and/or from time to time, as the case may
be, all such further acts, assignments, transfers, conveyances, powers of
attorney and/or assurances as may be necessary and/or proper to carry out the
provisions and/or intent of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
EATERTAINMENT INC.
/s/ Xxxxxx X. Xxxxxxxx By:/s/ Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Chairman
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