Exhibit 10.60
NON-COMPETITION AGREEMENT
This
Non-Competition Agreement (the "Agreement") is made and entered
into
as of August 23, 2005, by and between The
Hain Celestial Group, Inc. a Delaware
corporation ("Parent") and Neil Blomquist
("Equity Holder").
RECITALS
--------
A. This
Agreement is entered into in connection with that certain
Agreement
and Plan of Merger dated as of August 23,
2005 (the "Merger Agreement"), by and
between Parent and Spectrum Organic
Products, Inc., a California corporation
(the "Company"). Pursuant to and subject to
the terms of the Merger Agreement,
at the Effective Time (as defined in the
Merger Agreement) the Company will be
merged with and into a limited liability
company ("Merger Sub") whose sole
member is Parent (the "Merger"), the
separate corporate existence of the Company
shall cease and Merger Sub shall continue
as the surviving company.
B. In order to
induce Parent to consummate the transactions contemplated by
the Merger Agreement (including but not
limited to acquisition by Parent of the
Company and the settlement of all of Equity
Holder's stock and other equity
interests in the Company comprising, as of
the date hereof, 817,168 shares of
common stock of the Company and stock
options and/or warrants to acquire an
additional 1,665,515 shares of common stock
of the Company), and to protect for
Parent all of the goodwill associated with
the business of the Company and to be
acquired by Parent and in consideration of
$200,000 payable January 2, 2006 (as
provided in Section 2.2(d) hereof), Equity
Holder is willing to enter into this
Agreement.
C. This
Agreement is a material inducement to the willingness of the
parties to enter into the Merger Agreement
and consummate the transactions
contemplated thereby.
AGREEMENT
The parties
hereby agree as follows:
1. Experience
and Skill of Equity Holder. As an owner, Director, President,
Chief Executive Officer, former Chief
Operating Officer and former Director of
Sales and Marketing of the Company, Equity
Holder has been actively involved in
the management, development and strategic
direction of the Company's business,
has thereby acquired considerable
experience and skill and has contributed to
the goodwill of the Company's business.
Parent wishes to protect its investment
in the business acquired pursuant to the
Merger Agreement by restricting the
activities of Equity Holder which might
compete with or otherwise harm such
business, and, as part of the consideration
and inducement to Parent for
acquiring the business, Equity Holder is
willing to agree to and abide by such
restrictions as hereinafter provided.
2.
Non-Competition and Non-Solicitation of Employee Covenants.
2.1 General. Equity Holder acknowledges that he holds a
substantial
number of shares of the Common Stock of the
Company, as the owner of 817,168
shares of common stock of the Company and
stock options to acquire an additional
<PAGE>
1,665,515 shares of common stock of the
Company. Equity Holder further
acknowledges that the value of the
consideration paid by Parent in connection
with its acquisition of the Company
pursuant to the Merger Agreement is
substantial and that preservation of the
goodwill associated with the Company is
a part of the consideration which Parent is
receiving in the Merger Agreement.
Parent desires that Equity Holder enter
into a non-competition agreement with
Parent as set forth in this section, and
Equity Holder is willing to agree to
such non-competition provisions as set
forth below. The Company and Equity
Holder agree that such non-competition
provisions are separately bargained-for
consideration and are material inducements
to Parent to enter into the Merger
Agreement. Accordingly, Equity Holder and
the Company agree to the
non-competition and non-solicitation
provisions set forth in this Section 2.
2.2 Non-Competition.
(a) During the period beginning at the Effective Time and ending on
the
date that is (1) with respect to the
Restricted Business (as defined below), two
years following the Effective Time (the
"Restricted Period") and (2) with
respect to the Branded/Private Label
Restricted Business (as defined below),
three years following the Effective Time
(the "Branded/Private Label Restricted
Period"), Equity Holder covenants and
agrees that he will not, directly or
indirectly either for Equity Holder or for
any other person or business entity,
do any of the following:
(i) engage (as defined below) (A) during the Restricted Period, in
the
Restricted
Business and (B) during the Branded/Private Label Restricted
Period, in the
Branded/Private Label Restricted Business, in each case
anywhere
(without regard to the distribution channel used) the Company
sells products
or services at the time of the Merger and the Company is
then providing
such products and services; however, nothing in this
agreement shall
prevent Equity Holder from serving as an employee,
consultant or
contractor of any entity that engages in a Restricted
Business or
Branded/Private Label Restricted Business, as the case may be,
so long as
Equity Holder does not directly or indirectly engage or
participate in
the Restricted Business or Branded/Private Label Restricted
Business, as the
case may be, or otherwise assist that entity in engaging
or participating
in the Restricted Business or Branded/Private Label
Restricted
Business, as the case may be;
(ii) solicit, induce or attempt to solicit or induce any then
current
employee,
temporary worker or independent contractor of the Company to
discontinue
employment or engagement with the Company for the purpose of
seeking or
commencing employment or engagement with any third party; or
(iii) persuade or attempt to persuade any person accepting products
and
services from
the Company or providing services, products or facilities to
the Company not
to do business with the Company or to reduce the amount of
business it does
with the Company.
(iv) For purposes of this agreement, the term:
-2-
<PAGE>
(A) "Branded/Private Label Restricted Business" shall mean that
portion
of the
Restricted Business relating to any branded or private label
finished
products including, without limitation, the Spectrum Naturals
or
Spectrum
Essentials portions of the Company's business;
(B) "engage" in a business shall include, without limitation,
any
relationship as
an officer, director, stockholder, owner, investor,
salesperson,
affiliate, co-owner, partner, member, trustee, promoter,
founder,
technician, engineer, analyst, employee, agent, representative,
distributor,
re-seller, sublicensor, supplier, investor or lender,
consultant or
contractor, advisor or manager of or to the particular
business, or
otherwise acquiring or holding any interest in, or otherwise
engaging in the
provision of service to, any person or entity that engages
in the
particular business; and
(C) "Restricted Business" shall mean the business of
developing,
producing,
purchasing, selling, marketing, sourcing or otherwise
distributing or
providing (i) consumer packaged oils (including, without
limitation,
bottled cooking oils, sprays and shortenings), mayonnaises,
vinegars, salad
dressings, crackers or non-dairy buttery spreads, (ii)
essential fatty
acid nutritional supplements, (iii) flax seeds for retail
consumption,
(iv) expeller pressed conventional non-GMO canola, hi-oleic
safflower,
hi-oleic sunflower, and hi-oleic canola oils, certified organic
flax seed,
olive, canola, soy, palm fruit, coconut, sesame, and hi-oleic
sunflower oils,
organic vinegars, mayonnaise, buttery spreads, and non-GMO
natural vitamin
E for use
