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EXHIBIT 10.9
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. Xxxxx ("Xxxxx").
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, Xxxxx will have continuing access to Confidential Information
of the Company;
WHEREAS, the Company has required that Xxxxx 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, Xxxxx 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. Xxxxx acknowledges that the Exchange
constitutes good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged by Xxxxx.
2. Confidential Information and Restrictive Covenants.
2.1 Acknowledgment and Definition.
x. Xxxxx 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. Xxxxx will have access to and
become familiar with Confidential Information of the Company. Xxxxx acknowledges
that such Confidential Information is owned and shall continue to be owned
solely by the Company. Xxxxx 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 Xxxxx'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 Xxxxx, whether prepared by Xxxxx or others, shall be forthwith
delivered by Xxxxx 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 Xxxxx 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"), Xxxxx 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"). As used
herein, the term "Sports Bar" shall mean a facility having pool tables and
multiple television sets. Xxxxx 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 Xxxxx may, during the period covered by this Agreement, invest Xxxxx'x
personal, private assets as a passive investor in not more than three percent
(3%) of the total outstanding shares of any publicly traded
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company engaged in a Competing Business, so long as Xxxxx does not participate
in the management or operations of the affairs of such company.
2.5 Solicitation of Employees. During the Restricted
Period, Xxxxx 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
Xxxxx has an interest. Furthermore, Xxxxx shall inform the Company in writing if
any other person employed by the Company contacts Xxxxx for the purpose of
seeking employment during such Restricted Period.
2.6 Reasonableness of Restrictions, Reformation, and
Severability.
x. Xxxxx 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 Xxxxx 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 Xxxxx, Xxxxx'x agents, Xxxxx'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. Xxxxx'x rights or
obligations under this Agreement may not be assigned by Xxxxx.
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. Xxxxx By: /s/ Xxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Chairman
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