EXHIBIT 10.26
XXXXXX'X, INC.
CONFIDENTIALITY AND NONCOMPETE AGREEMENT
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THIS AGREEMENT is made as of June 6, 2002 between Xxxxxx'x, Inc., a
Wisconsin corporation (the "Company"), and Xxxxxx X. Xxxxx ("Shareholder").
The Company and Shareholder desire to enter into an agreement (i) defining
the relative rights of the Company and Shareholder with respect to Intellectual
Property (as defined below) owned by the Company or its customers or clients to
which Shareholder may have had access or may have contributed as a result of
Shareholder's consulting or other employment relationship or arrangement with
the Company and (ii) setting forth the obligation of Shareholder to refrain from
competing with the Company.
This Agreement is executed and delivered by Shareholder in
conjunction with and in consideration of the purchase of 4,425 shares of the
Company's stock from Shareholder pursuant to that certain Share Exchange
Agreement dated as of April 8, 2002 by and among the Company and Xxxxxx'x
Acquisition Corp., a Delaware corporation (the "Exchange Agreement") and is not
being entered into in connection with any employment, consulting or other
similar relationship or arrangement between the Company and Shareholder.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Shareholder hereby agree as follows:
1. Nondisclosure and Nonuse of Confidential Information.
(a) Shareholder shall not disclose or use at any time any Confidential
Information (as defined below) of which Shareholder is or becomes aware, whether
or not such information is developed by him, except to the extent that such
disclosure or use is authorized by the Company or, in the event the Shareholder
hereafter performs any services at the request of the Company, is directly
related to and required by Shareholder's performance of such duties. Shareholder
shall take all appropriate steps to safeguard Confidential Information and to
protect it against disclosure, misuse, espionage, loss and theft to the extent
such Confidential Information is in Shareholder's possession or subject to his
control.
(b) As used in this Agreement, the term "Confidential Information" means
information that is not generally known to or ascertainable (through lawful and
proper means) by the public and that is used, developed or obtained by the
Company in connection with its business, including but not limited to (i)
products or services, (ii) fees, costs and pricing structures, (iii) designs,
(iv) analysis, (v) drawings, photographs and reports, (vi) computer software,
including operating systems, applications and program listings, (vii) flow
charts, manuals and documentation, (viii) data bases, (ix) accounting and
business methods, (x)
inventions, devices, new developments, methods and processes, whether patentable
or unpatentable and whether or not reduced to practice, (xi) customers and
clients and customer or client lists, (xii) copyrightable works, (xiii) all
technology and trade secrets, and (xiv) all similar and related information in
whatever form. Confidential Information shall not include any information (X)
that is generally known to or ascertainable (through lawful and proper means) by
the public prior to the date Shareholder proposes to disclose or use such
information or (Y) that has been independently acquired or developed by
Shareholder without violating any of his obligations under this Agreement.
Information shall not be deemed to have been published or available merely
because individual portions of the information have been separately published or
available, but only if all material features comprising such information have
been published in combination.
2. The Company's Ownership of Intellectual Property. In the event that
Shareholder, as part of any activities on behalf of the Company has generated,
authored or contributed to any invention, design, new development, device,
product, method or process (whether or not patentable or reduced to practice or
comprising Confidential Information), any copyrightable work (whether or not
comprising Confidential Information) or any other form of Confidential
Information relating directly or indirectly to the Company's business as now or
hereinafter conducted (collectively, "Intellectual Property"), Shareholder
acknowledges that such Intellectual Property is the exclusive property of the
Company and hereby assigns all right, title and interest in and to such
Intellectual Property to the Company. Any copyrightable work prepared in whole
or in part by Shareholder will be deemed "a work made for hire" under Section
201(b) of the 1976 Copyright Act, and the Company shall own all of the rights
comprised in the copyright therein. Shareholder shall promptly and fully
disclose all Intellectual Property to the Company and shall cooperate with the
Company to protect the Company's interests in and rights to such Intellectual
Property (including, without limitation, providing reasonable assistance in
securing patent protection and copyright registrations and executing all
documents as reasonably requested by the Company, including, without limitation,
such requests that occur after the date hereof).
3. Delivery of Materials. As requested by the Company from time to time,
Shareholder shall promptly deliver to the Company all copies and embodiments, in
whatever form, of all Confidential Information and Intellectual Property in
Shareholder's possession or within his control (including, but not limited to,
written records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
4. Noncompetition. Shareholder acknowledges and agrees with the Company
that the services provided by the Shareholder to the Company prior to the date
hereof were unique in nature and that the Company would be irreparably damaged
if Shareholder were to provide similar services to any person or entity
competing with the Company or engaged in a similar business. Shareholder
accordingly covenants and agrees with the Company that during the period
commencing with the date of this Agreement and ending on the third anniversary
of
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the date hereof (the "Noncompetition Period"), Shareholder shall not, directly
or indirectly, either for himself or for any other individual, corporation,
partnership, joint venture or other entity, participate in any business
(including, without limitation, any division, group or franchise of a larger
organization) located in the States of Illinois, Indiana, Michigan, Minnesota,
Ohio or Wisconsin (the "Protected Territory") which engages or which proposes to
engage in the business of the wholesale distribution and retail sale of food,
groceries, general merchandise and other goods and services related to the
wholesale or retail sale or distribution of food or groceries (a "Competitive
Business"); provided, that a "Competitive Business" shall not include what is
commonly referred to as a "food service" business such as those currently
conducted by Sysco Corporation and Xxxxxxxx Food Service, so long as such
business does not engage or propose to engage in a Competitive Business. For
purposes of this Agreement, the term "participate in" shall include, without
limitation, having any direct or indirect interest in any corporation,
partnership, joint venture or other entity, whether as a sole proprietor, owner,
stockholder, partner, joint venturer, creditor or otherwise, or rendering any
direct or indirect service or assistance to any individual, corporation,
partnership, joint venture and other business entity (whether as a director,
officer, manager, supervisor, employee, agent, consultant or otherwise). Nothing
herein shall prohibit Shareholder from being a passive owner of not more than 2%
of the outstanding securities of any class of a corporation which is publicly
traded, so long as Shareholder has no active participation in the business of
any such corporation.
5. Nonsolicitation. During the Noncompetition Period, Shareholder shall not
(i) induce or attempt to induce any employee of the Company to leave the employ
of the Company, or in any way interfere with the relationship between the
Company and any employee thereof, (ii) hire directly or through another entity
any person who was an employee of the Company at any time during the
Noncompetition Period, or (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of the Company to cease doing
business with the Company, or in any way interfere with the relationship between
any such customer, supplier, licensee or business relation and the Company.
6. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipient at the address below indicated:
To the Company: Xxxxxx'x, Inc.
0000 Xxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attn: Secretary
With Copies to: Xxxxxx Xxxxx & Partners
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
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and
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx
To Shareholder: Xxxxxx X. Xxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
7. General Provisions
(a) Company Subsidiaries. For purposes of this Agreement, the term
"Company" shall include all subsidiaries of the Company.
(b) Not an Employment Agreement. Shareholder and the Company acknowledge
and agree that this Agreement is not intended and should not be construed to
grant Shareholder any right to employment with the Company or to otherwise
define the terms of any consulting or other relationship or arrangement between
the Company and Shareholder.
(c) Absence of Conflicting Agreements. Shareholder hereby warrants and
covenants that (i) his execution, delivery and performance of this Agreement do
not and shall not result in a breach of the terms, conditions or provisions of
any agreement, instrument, order, judgment or decree to which Shareholder is
subject, (ii) Shareholder is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Shareholder, enforceable in accordance with its terms.
(d) Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. The parties
agree that a court of competent jurisdiction making a determination of the
invalidity or unenforceability of any term or provision of Section 4 of this
Agreement shall have the power to reduce the scope, duration or area of any such
term or provision, to delete specific words or phrases or to replace any invalid
or unenforceable term or provision in Section 4 with a term or provision that is
valid and enforceable and that comes
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closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.
(e) Complete Agreement. This Agreement, those documents expressly referred
to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(f) Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
(g) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Company and Shareholder and their respective successors and assigns; provided
that the rights and obligations of Shareholder under this Agreement may not be
assigned or delegated without the prior written consent of the Company.
(h) Choice of Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS HERETO SHALL
BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
WISCONSIN.
(i) Remedies. Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that Shareholder's breach of any
term or provision of this Agreement shall materially and irreparably harm the
Company, that money damages shall accordingly not be an adequate remedy for any
breach of the provisions of this Agreement by Shareholder and that the Company
in its sole discretion and in addition to any other remedies it may have at law
or in equity may apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
(j) Amendment and Waiver. The provisions of this Agreement may be amended
and waived only with the prior written consent of the Company and Shareholder.
(k) Sufficiency of Consideration, Reasonableness of Restrictions and
Nonapplicability of Wisconsin Statutes Section 103.465. Shareholder acknowledges
and agrees that the consideration Shareholder is receiving pursuant to the
Exchange Agreement is adequate and sufficient for the Shareholder's agreement to
the restrictions, agreements and covenants set forth in this Agreement,
including, without limitation, those set forth in Section 4 hereof. Shareholder
further acknowledges and agrees that the restrictions set forth in this
Agreement are
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fair and reasonable to Shareholder and have been specifically negotiated by
Shareholder (who was represented by counsel of his choosing in connection
therewith). The parties agree that this Agreement is being entered into in
connection with the transactions contemplated by the Exchange Agreement and not
in connection with any employment, consulting or other similar relationship or
arrangement between the Company and Shareholder. In light of the foregoing, it
is the intent of the Company and Shareholder that the provisions of Section
103.465 of the Wisconsin Statutes, as amended, or any successor statutory
provision, shall not apply to this Agreement.
(l) Law of Torts and Trade Secrets. Both parties agree that nothing in this
Agreement shall be construed to limit or negate the common or statutory laws of
torts or trade secrets where they provide the Company with broader protection
than that provided herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Confidentiality
and Noncompete Agreement on the date first written above.
XXXXXX'X, INC.
By /s/ Xxxxxx X. Xxxxxxx
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Its President
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
