Noncompetition Agreement - Briazz Inc. and Victor D. Alhadeff
NONCOMPETITION AGREEMENT
This is an Agreement entered into on the date indicated below between
BRIAZZ, Inc., a Washington corporation ("BRIAZZ"), and VICTOR D. ALHADEFF
("Alhadeff"). Alhadeff acknowledges receiving adequate consideration for
entering into this Agreement, including but not limited to the substantial
personal benefit Alhadeff will receive from the investment in BRIAZZ by certain
investors (the "Investors") under the terms of a certain BRIAZZ, Inc. Series A
Convertible Preferred Stock Purchase Agreement dated even date herewith, which
investment is conditional upon Alhadeff's execution of this Agreement.
Background
BRIAZZ is engaged in the business of the specialty, quick-service retail
sale of "gourmet-to-go" pre-made branded sandwiches and salads, hot soups, fresh
baked pastries and a wide assortment of chips and beverages. BRIAZZ's success
depends in part on its exclusive access to Alhadeff's considerable expertise in
the retail industry and his experience in developing the BRIAZZ concept to date.
BRIAZZ employs people, including Alhadeff, whose financial and professional
interests could be jeopardized if this protection is not secured. Also, the
Investors are investing substantial sums of money in BRIAZZ on condition that
Alhadeff executes this Agreement. In order to promote these interests of
BRIAZZ, its employees and Investors, Alhadeff is willing to enter into this
Agreement.
Noncompetition
Alhadeff will perform services which have a unique value to BRIAZZ and
which, if used in competition with BRIAZZ, could cause serious and irreparable
harm to BRIAZZ. Also, Alhadeff will likely develop goodwill for BRIAZZ through
personal contact with suppliers, strategic partners or others who have business
relationships with BRIAZZ. This goodwill, which is a proprietary asset of
BRIAZZ, may follow Alhadeff after his employment with BRIAZZ terminates.
Accordingly, Alhadeff agrees that during his employment with BRIAZZ and during
his service as a director of BRIAZZ and for a period of two (2) years following
termination of his employment with BRIAZZ for any reason, Alhadeff will not,
without securing the written permission of BRIAZZ, directly or indirectly:
(1) be employed by, act as an agent for, or consult with or otherwise
perform services for a Competitor (as defined below);
(2) own any equity interest in, manage or participate in the management
(as an officer, director, partner, member or otherwise) of, or be
connected in any other manner with, a Competitor (except that this
shall not restrict Alhadeff from owning less than five percent (5%) of
the equity interests of any entity), or
(3) induce or attempt to induce any employee, officer, director, agent,
independent contractor, consultant, customer, strategic partner,
licensor, licensee, supplier or other service provider of BRIAZZ to
terminate a relationship with, cease providing services or products
to, or purchasing products or services from, BRIAZZ.
For purposes of this Agreement, a "Competitor" means any individual or entity
that is directly or indirectly engaged, or is preparing to engage, in any
business which is competitive with any business in which BRIAZZ is engaged, or
is preparing to engage, at the time Alhadeff's employment with BRIAZZ
terminates, including without limitation, the business described in the
Background section above. Alhadeff agrees that the duration of the restrictions
in this paragraph shall be extended by the duration of any period during which
Alhadeff is in violation of the restrictions.
Alhadeff acknowledges that, due to the nature of the business of BRIAZZ,
there is no geographical limitation on the restrictions in the preceding
paragraph. BRIAZZ and Alhadeff agree and stipulate that, in light of all of the
facts and circumstances relating to the relationship that exists and is expected
to exist between BRIAZZ and Alhadeff, these restrictions (including but not
limited to the scope of the restricted activities and the duration and lack of
geographic extent of the restrictions) are fair and reasonably necessary for the
protection of the goodwill and other protectable interests of BRIAZZ. If a
court of competent jurisdiction should decline to enforce any of these
restrictions, BRIAZZ and Alhadeff agree that the
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restrictions shall be deemed to be reformed to restrict Alhadeff s ability to
compete with BRIAZZ to the maximum extent, in time, scope of activities, and
geography, that the court shall find enforceable.
Other Matters
Alhadeff acknowledges that BRIAZZ will suffer immediate and irreparable
harm, which will not be compensable by damages alone, if Alhadeff repudiates or
breaches any of the provisions of this Agreement, or threatens or attempts to do
so. If any such actual, threatened or attempted repudiation or breach occurs,
Alhadeff agrees and stipulates that BRIAZZ, in addition to and not in limitation
of any other rights, remedies or damages available to it at law or in equity,
shall be entitled to obtain temporary, preliminary and permanent injunctions in
order to prevent or restrain any such breach, and BRIAZZ shall not be required
to post a bond as a condition for the granting of such relief.
Alhadeff acknowledges that BRIAZZ has not employed him to obtain any
information that is proprietary to any prior employer or business relation of
Alhadeff. Alhadeff shall not, in performing services for BRIAZZ, make use of
any such proprietary information of others. Alhadeff warrants to BRIAZZ that he
is not currently subject to any restriction that would prevent or materially
limit Alhadeff from carrying out his duties for BRIAZZ.
This Agreement does not constitute or create a contract of employment
between BRIAZZ and Alhadeff. Nothing in this Agreement shall confer upon
Alhadeff the right to continue in the employ of BRIAZZ and, unless otherwise
expressly provided in a written employment agreement between BRIAZZ and
Alhadeff, the employment of Alhadeff with BRIAZZ shall be terminable at will by
either party.
This Agreement is intended to be the parties' complete, integrated
expression of the terms of their agreement with respect to the subject matters
addressed herein. Any prior agreements, understandings or statements, oral or
written, with respect to such subject matters are superseded hereby and fully
merged herein. Alhadeff agrees that his obligations under this Agreement shall
survive termination of his employment with BRIAZZ, regardless of the reason, or
lack thereof, for the termination. All amendments to this Agreement shall be in
writing and signed by the parties, and no oral amendment shall be binding on the
parties. No waiver of any term or provision of this Agreement shall be valid
unless the waiver is in writing and signed by am waiving party. No waiver or
failure to enforce any right hereunder shall be deemed to be a waiver of the
same or any other right in any other instance.
BRIAZZ and Alhadeff intend that this Agreement be governed by and enforced
to the greatest extent permitted by the laws of the State of Washington. Each
party (1) agrees that any litigation or other dispute resolution proceeding
relating to this Agreement shall place in King County, Washington; (2) consents
to personal jurisdiction of, and venue in, the state and federal courts of that
county; and (3) waives to the fullest extent permitted by law any defense that
maintenance of the proceeding in any such court is inconvenient. If any
provisions of this Agreement, on their face or as applied to any person or
circumstance, are or became unenforceable to any extent and are not reformed
pursuant to this Agreement, the remainder of this Agreement and the application
of the provisions to any other person, circumstance or extent, shall not be
affected, and this Agreement shall continue in force. This Agreement shall
inure to the benefit of and be binding upon the parties and their respective
heirs, successors, assigns and personal representatives. If any dispute
relating to this Agreement occurs, the prevailing party shall be reimbursed by
the other for all costs incurred in connection therewith, including without
limitation reasonable attorney's fees.
DATED: October 18, 1996.
BRIAZZ, INC.
By /s/ James A. McDermet
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James A. McDermet
Its President
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I have read the entire Agreement and have had sufficient time to study it,
to understand it, and to obtain legal counsel to advise me respecting it if I so
desire, and I agree to be bound by all the terms and conditions of the
Agreement.
/s/ Victor D. Alhadeff
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Victor D. Alhadeff
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