NON-COMPETITION AGREEMENT
This Agreement is made and entered into this 1st day of May, 1996, by
and between BAB Holdings, Inc. ("Buyer") and Donald Nelson and Mary Ann Varichak
(together, "Principals")
W I T N E S S E T H :
WHEREAS, Buyer has entered into a purchase agreement of even date
herewith with Bagels Unlimited, Inc. ("Seller") and Principals (the "Agreement")
providing for the purchase by Buyer of certain of the assets of Seller used in
the conduct of Seller's business as a Big Apple Bagels franchisee.
WHEREAS, in order to consummate the transactions provided for in the
Agreement, Buyer has required that Principals assure that for a reasonable
period following consummation of the transactions provided for in the Agreement,
that neither of the Principals will engage in certain business in competition
with Buyer as provided herein;
NOW, THEREFORE, in consideration of the foregoing recited facts, the
terms and conditions hereinafter contained and contained in the Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
I.
RESTRICTIVE COVENANT
SECTION 1.1 NONCOMPETE. (a) In consideration of the Agreement and other
good and valuable consideration, including payment to the Principals of $100,000
on the date hereof, receipt of which is hereby acknowledged, Principals agree
that for a period of six (6) years from and after the date hereof, neither of
them shall, directly or indirectly, either as principal, agent, employee,
employer, shareholder, partner, consultant or in any other individual or
representative capacity whatsoever or as a partnership, corporation or any other
entity whatsoever, participate, engage in or have any financial or other
interest in any entity, business or activity which owns or operates a Business
(as that term is hereinafter defined) within the Trade Territory (as that term
is hereinafter defined). The parties specifically agree that any loans or other
financing arrangements with a son or daughter of a Principal or an entity owned
by a son or daughter of a Principal shall not be a violation of this restrictive
covenant.
(b) For purposes of this Agreement the following terms shall have the
following meanings:
(i) "Business" shall mean the sale of bagels (retail and
wholesale, alone or in combination with other products) and
the franchising of any business engaged in such sales.
(ii) "Trade Territory" shall mean the area within a four mile
radius of any then existing Big Apple Bagels store (franchised
and company-owned).
II.
BREACH
SECTION 2.1 ENFORCEMENT. The parties understand and agree that the
remedy at law for any breach of the terms of Article I of this Agreement would
be inadequate. In the event of a breach or threatened breached of Article I of
this Agreement, Buyer shall be entitled to petition for injunctive relief
restraining the breaching party, or any of its directors, officers, employees or
agents, from breaching or acting in any manner inconsistent with the conduct or
performance required by Article I of this Agreement. Principals hereby consent
to the personal jurisdiction of the courts of the State of Illinois, County of
Cook, with respect to any matter arising out of or in connection with this
Agreement.
SECTION 2.2 SCOPE. In the event it becomes necessary for Buyer to make
application to a court of competent jurisdiction for enforcement of the
provisions of Article I of this Agreement and such court shall determine that
any portion of Article I of this Agreement is unreasonably broad or
unenforceable, such court is hereby authorized and empowered to narrow the
provisions of Article I of this Agreement to such reasonable parameters and
limits as such court shall determine to be necessary to accomplish the intent of
the parties and to protect Buyer. The parties agree that the breaching party
shall pay all reasonable attorneys' fees incurred by Buyer in enforcing the
provisions of Article I of this Agreement. In determining what are reasonable
attorneys' fees, a court shall give primary consideration to the actual
attorneys' fees incurred and shall, unless unreasonable, award the actual
attorneys' fees incurred.
III.
MISCELLANEOUS
SECTION 3.1 WAIVER. The waiver by a party of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
SECTION 3.2 CONSTRUCTION. This Agreement contains the entire agreement
of the parties with respect to the subject matter hereof and shall not be
amended except by an agreement in writing, signed by all of the parties hereto.
The rights of Buyer under this Agreement shall inure to the benefit of its
successors and assigns. If any provisions of this Agreement is at any time
adjudged invalid to any extent by any court of competent jurisdiction, such
provisions shall be deemed modified to the extent necessary to render it
enforceable, and such invalidity shall not affect any other provision of this
Agreement.
SECTION 3.3 APPLICABLE LAW. The validity, construction and
interpretation of this Agreement shall be governed exclusively by and according
to the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
IN THE PRESENCE OF: BAB HOLDINGS, INC.
/s/ Sally A. Sullivan By /s/ Michael K. Murtaugh
Its Vice President and
General Counsel
/s/ Jim Lowe /s/ Donald Nelson
Donald Nelson
/s/ Jim Lowe /s/ Mary Ann Varichak
Mary Ann Varichak