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EXHIBIT 10.26
RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
AGREEMENT made this 3rd day of April 1998, by and between THE
DELICIOUS FROOKIE COMPANY, INC., a Delaware corporation (the "Buyer"), and XXXXX
XXXXXX (the "Member").
W I T N E S S E T H :
WHEREAS, concurrently herewith Xxxxxxx Foods, L.L.C., a Delaware
limited liability company ("Xxxxxxx"), of which Member was a managing member
until ____________, 1998, is executing and delivering an Asset Purchase
Agreement (the "Asset Purchase Agreement") providing for the purchase by Buyer
of substantially all of the assets of Xxxxxxx; and
WHEREAS, Buyer, as an inducement for it to enter into and consummate
the transactions contemplated by the Asset Purchase Agreement, wishes to secure
Member's agreement that he will not compete, directly or indirectly, with Buyer
for acquisitions of other cookie, cracker and baked goods companies during the
term hereof; and
WHEREAS, as a condition to the execution and delivery of the Asset
Purchase Agreement, Buyer requires that Member agree to certain additional
restrictions with respect to his business activities, and Member is willing to
agree to such restrictions;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, each of the parties hereto agrees as follows:
1. During the period commencing on the date first written above and
ending on the first anniversary of such date, Member will not:
(a) directly or indirectly, own, manage, operate, join,
control, participate in, invest in, provide consulting services to or otherwise
be connected in any manner, whether as a shareholder, officer, director,
consultant or otherwise, Keebler Foods Company.
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(b) directly or indirectly advise, participate in,
assist in or otherwise be connected with, in any manner, whether as a
shareholder, director, consultant, partner, venturer, investor or otherwise, any
entity listed on Schedule I hereto, its respective successors or assigns by
merger, consolidation or otherwise in respect of an acquisition of any entity in
the snack food, cookie, cracker or other baked goods industry (the "Snack Food
Industry"); or
(c) for himself or on behalf of any other person, firm,
corporation or other entity, directly or indirectly or by action together with
others, (i) call on any person, firm, corporation or other entity that is or was
a customer of Buyer or Xxxxxxx for the purpose of soliciting, diverting or
taking away any of such customers or (ii) induce, influence or seek to induce or
influence, any person who has been engaged as an employee, representative or
consultant by Buyer or Xxxxxxx to terminate any relationship with Buyer or
Xxxxxxx or employ or retain such person.
2. From and after the date hereof, Member will not use, disclose or
divulge any information, knowledge or data specifically relating to or concerned
with Buyer or Xxxxxxx, their respective operations, business, methods of doing
business, revenues, results of operations, financial condition or customers to
any person, firm, corporation or other entity, provided, however, that (a) if
Member becomes legally compelled to disclose any such information, knowledge or
data, he will promptly advise Buyer in writing so that it may seek a protective
order or other appropriate judicial remedy and/or waive compliance with the
provisions of this Section 2 and (b) nothing contained herein shall prevent the
use or disclosure of any information which is generally known to the public and
which has not become known through the breach of this Agreement by Member.
Nothing set forth herein shall be deemed to prohibit Member from investing his
funds, solely on a passive basis, in securities of a corporation, partnership or
other entity engaged in the Snack Foods Industry if the securities of such
issuer are listed for trading on a national securities exchange, are quoted by
the National Association of Securities Dealers Automated Quotation System
(NASDAQ) or are traded in the over-the-counter market and Member's holdings
therein represent less than 2% of the total number of shares or principal amount
of other securities of such issuer outstanding.
3. Member acknowledges that the provisions of Sections 1 and 2
hereof are reasonable and necessary for the protection of Buyer and that each
provision, and the period of time, geographic areas and types and scope of
restrictions on the activities specified therein are, and are intended to be,
divisible. In the event that any provision of Sections 1 or 2 hereof, including
any sentence, clause or part thereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but
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shall, subject to the discretion of such court, remain in full force and effect
and any invalid and unenforceable provisions shall be deemed, without further
action on the part of the parties hereto, modified, amended and limited to the
extent necessary to render the same valid and enforceable.
4. All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when (i) delivered personally or by facsimile
transmission (and a copy is mailed by regular mail within 24 hours of such
transmission), in either case with receipt acknowledged, (ii) three business
days after being sent by registered or certified mail, return receipt requested,
or (iii) one business day after being sent by prepaid overnight carrier, with a
record of receipt, to the parties at the following addresses:
(1) If to Buyer:
The Delicious Frookie Company, Inc.
0000 Xxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
(2) If to Member:
Xxxxx Xxxxxx
c/o Basildon Enterprises
5. This Agreement and the various rights and obligations arising
hereunder shall inure to the benefit of and be binding upon the parties hereto
and their respective affiliates, successors and assigns. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be transferred
or assigned (by operation of law or otherwise) by either of the parties hereto
without the prior written consent of the other party except that Buyer shall
have the right to assign its rights but not its obligations hereunder to any
affiliate thereof. Any transfer
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or assignment of any of the rights, interests or obligations hereunder in
violation of the terms hereof shall be void and of no force or effect.
6. This Agreement embodies the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings, oral and written,
relative to said subject matter.
7. This Agreement may not be changed, amended, terminated,
augmented, rescinded or discharged (other than by performance), in whole or in
part, except by a writing executed by each of the parties hereto, and no waiver
of any of the provisions or conditions of this Agreement or any of the rights of
a party hereto shall be effective or binding unless such waiver shall be in
writing and signed by the party claimed to have given or consented thereto.
Except to the extent that a party hereto may have otherwise agreed to in
writing, no waiver by that party of any condition of this Agreement or breach by
the other party of any of its obligations hereunder shall be deemed to be a
waiver of any other condition or subsequent or prior breach of the same or any
other obligation or representation or warranty by such other party, nor shall
any forbearance by the first party to seek a remedy for any noncompliance or
breach by such other party be deemed to be a waiver by the first party of its
rights and remedies with respect to such noncompliance or breach.
8. (a) This Agreement shall in all respects be construed in
accordance with and governed by the laws of the State of Illinois, without
regard to the principles of conflicts of laws thereof.
(b) Each of the parties hereto hereby irrevocably consents to
arbitration of any dispute, controversy or claim arising out of or relating to
this Agreement. Each of the parties hereto hereby irrevocably waives, to the
fullest extent legally possible, any objection to the use of arbitration to
resolve any such dispute, controversy or claim. If the parties in good faith
cannot resolve any controversy or claim arising out of or related to this
Agreement or in connection with a breach thereof within 10 days after the
claimant gives written notice of such controversy or claim to the other party,
any party may demand and commence arbitration of the controversy or claim. In
the event of a demand for arbitration, Member shall select one arbitrator and
Buyer shall select one arbitrator, within 30 days after such demand shall have
been given (the "Demand Date") and the two arbitrators, within 45 days
thereafter shall select a third arbitrator. If the third arbitrator shall not be
selected within 45 days after the Demand Date, either Member or Buyer may apply
to the American Arbitration Association (or any successor thereto) for the
appointment of an arbitrator in Chicago, Illinois and the parties shall be bound
by
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the appointments made by such Association. The arbitration shall be held in
Chicago, Illinois as promptly as practicable thereafter under the rules of the
American Arbitration Association in effect at the time such controversy, claim
or breach is submitted to arbitration. The award or decision made in accordance
with such rules shall be delivered in writing to the parties hereto and shall be
final, binding and conclusive upon them in the absence of fraud and judgment
upon such award or decision may be entered in any court having jurisdiction
thereof. Member and Buyer shall bear equally the cost of such arbitration.
(c) Notwithstanding the provisions of Paragraph 8(b), the
parties hereto shall have the right to seek and obtain from a court of competent
jurisdiction a temporary restraining order, injunction, specific performance or
other equitable relief to enforce the provisions of this Agreement.
9. This Agreement may be executed in two counterparts, each of which
shall constitute an original instrument, but both of which when taken together
shall constitute one and the same instrument.
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Schedule I
Nabisco Corp.
Ripon
Mrs. Alison's
North American Bakery
President's
Mother's
Matt's
Consolidated Biscuit Co.
Hain Foods LLC
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
THE DELICIOUS FROOKIE COMPANY, INC.
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: President
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XXXXX XXXXXX
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