NON-COMPETITION AGREEMENT
This Agreement is made and entered into this 21 day of May, 1996, by
and between BAB Holdings, Inc. ("Buyer") and Strathmore Bagels Franchise Corp.,
Jack Freedman and Glen Steuerman ("Strathmore," "Freedman," and "Steuerman,"
respectively).
W I T N E S S E T H :
WHEREAS, Buyer has entered into a purchase agreement of even date
herewith with Strathmore (the "Agreement") providing for the purchase by Buyer
of certain assets of Strathmore.
WHEREAS, in order to consummate the transactions provided for in the
Agreement, Buyer has required that Strathmore, Freedman and Steuerman assure
that for a reasonable period following consummation of the transactions provided
for in the Agreement, that they will not 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, receipt of which is hereby acknowledged,
Strathmore, Freedman and Steuerman agree that for a period of two (2) years from
and after the date hereof, none 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 derives
thirty percent (30%) or more of its revenues from a Business (as that term is
hereinafter defined) within the Trade Territory (as that term is hereinafter
defined).
(b) For purposes of this Agreement the following terms shall have the
following meanings:
(i) "Business" shall mean the production and/or sale of
bagels (retail and wholesale, alone or in combination
with other products) and the franchising of any
business engaged in such production and/or sales.
(ii) "Trade Territory" shall mean (A) with respect to
Business which directly or indirectly involves Host
International, anyplace throughout the world where
Host International has a presence in an airport or
tollway concession, and (B) with respect to all other
Business, the United States.
(c) Notwithstanding the foregoing, Steuerman shall not be restricted as
to any Business which does not, directly or indirectly, involve the sale of
bagels (baked or parbaked, fresh or frozen) to or through Host International or
any of its affiliates or successors in interest.
(d) Notwithstanding the foregoing, Strathmore, Freedman, and Steuerman
shall not be restricted from passive equity investment of not more than five
percent (5%) in any entity engaged in a Business. "Passive investment" means
that the investor shall have no management authority beyond that afforded to
holders of common stock or limited partnership interests, as examples.
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. Strathmore, Freedman and
Steuerman 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.
MICHAEL W. EVANS By: MICHAEL K. MURTAUGH
Its: VICE PRESIDENT/GENERAL COUNSEL
MICHAEL W. EVANS JACK FREEDMAN
Jack Freedman
NONE GLEN STEUERMAN
Glen Steuerman
STRATHMORE BAGELS FRANCHISE CORP.
NONE By: GLEN STEUERMAN
Its: PRESIDENT