Exhibit 10.5
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NON-COMPETITION AGREEMENT
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THIS AGREEMENT is entered into as of the 29th day of June, 2001, by and
among Silas ▇.▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. Stroll (each, an "Executive" and together,
the "Executives") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation (the "Company").
WHEREAS, the Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Eastern Hemisphere) Limited ("THEH")
and TH Europe Holdings Limited (the "Seller") are entering into a Stock Purchase
Agreement (the "Stock Purchase Agreement"), of even date herewith, pursuant to
which THEH will purchase from the Seller all of the outstanding capital stock of
T.H. International N.V. (together with its subsidiaries, "THNV") (the
"Acquisition"); and
WHEREAS, each of the Executives has an indirect beneficial ownership
interest in the Seller; and
WHEREAS, the Company's willingness to enter into the Stock Purchase
Agreement is based on the Executives' willingness to enter into this Agreement.
NOW, THEREFORE, in consideration of the Company's performance under the
Stock Purchase Agreement, the mutual promises and agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. TERM OF AGREEMENT. The term of this Agreement shall begin on the date of
the closing of the Acquisition and shall end on the second anniversary of the
date hereof (the "Non-Competition Period"). Notwithstanding the foregoing or any
other provision of this Agreement to the contrary, this Agreement shall
terminate and be null and void ab initio immediately upon the termination of the
Stock Purchase Agreement before consummation of the Acquisition.
2. NON-COMPETITION. During the Non-Competition Period, each of the
Executives agrees that, without the consent of the disinterested directors of
the Company, he will not become (a) an officer, director, employee, consultant
or partner in any entity that, directly or through its subsidiaries, is (or
proposes to become during the Non-Competition Period) a direct and substantial
competitor in Europe of the business engaged in by THNV as of the date of this
Agreement or (b) an investor in greater than 5% of the equity interests or
voting power in any entity that, directly or through is subsidiaries, is (or
proposes to become during the Non-Competition Period) a direct and substantial
competitor in Europe of the business engaged in by THNV as of the date of this
Agreement, other than investments in an entity in which the annual revenues for
such entity and its consolidated subsidiaries for the most recently completed
fiscal year relating to the business of such entity that directly competes with
THNV in Europe are less than 20% of such entity's consolidated total revenues
for such fiscal year. Notwithstanding the foregoing, each of the Executives may
own equity interests or voting power in and serve as directors and officers of
Pepe Holdings Limited and its direct and indirect wholly and majority-owned
subsidiaries ("Pepe"); provided, however, during the Non-Competition Period,
Pepe shall not become a direct and substantial competitor in Europe of the
business engaged in by THNV as
of the date of this Agreement other than in jeanswear and jeans-related apparel
and accessories businesses engaged in by Pepe as of the date of this Agreement.
For the purpose of clarification, it is understood that, A&G Holdings Ltd. and
its direct and indirect subsidiaries are not considered to be direct and
substantial competitors of the business engaged in by THNV as of the date of
this Agreement.
3. VIOLATION. Each Executive acknowledges that he has carefully read and
considered the terms of this Agreement and knows them to have been essential to
induce the Company to consummate the Stock Purchase Agreement and that remedies
at law will not be sufficient in the event of any breach of the provisions
contained herein. Therefore, in the event of a breach of this Agreement, the
Company shall be entitled, in addition to any other remedy at law or in equity
to which it may be fully entitled, to equitable relief against such Executive,
including, without limitation, an injunction to restrain such Executive from
such breach or threatened breach and to compel compliance with this Agreement in
protecting or enforcing its rights and remedies and enforcement of specific
performance by such Executive of this Agreement. Each Executive agrees to waive
any requirement for the posting of any bond in connection with such injunction
or equitable relief.
4. MODIFICATION. The parties further agree and acknowledge that the
duration, scope and geographic area of the covenant not to compete described in
Sections 1 and 2 are fair, reasonable and necessary in order to protect the
future operations and profitability of the Company and other legitimate
interests of the Company, that adequate consideration has been received by the
Executive for such obligations, and that these obligations do not prevent the
Executive from earning a livelihood. If, however, for any reason any court
determines that the restrictions in Sections 1 and 2 are not reasonable, that
consideration is inadequate or that the Executive has been prevented unlawfully
from earning a livelihood, such restrictions shall be interpreted, modified or
rewritten to include as much of the duration, scope and geographic area
identified in Sections 1 and 2 as will render such restrictions valid and
enforceable.
5. NOTICES. All notices hereunder, to be effective, shall be in writing and
shall be deemed delivered when delivered by hand, upon confirmation of receipt
by telecopy or three (3) days after mailing by first-class, certified mail,
postage and fees prepaid, as follows:
(a) For notices and communications to the Company:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ U.S.A., Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) For notices and communications to ▇▇. ▇▇▇▇:
▇▇▇▇▇ ▇▇▇▇
c/o Novel Enterprises Limited
12/F, Novel Industrial ▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Sha Wan, Kowloon
Hong Kong
Telecopier No.: ▇▇▇-▇▇▇▇-▇▇▇▇
(c) For notices and communications to Mr. Stroll:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Canada Inc.
▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
By notice complying with the foregoing provisions of this Section, each party
shall have the right to change the address for future notices and communications
to the other parties.
6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
7. MODIFICATION; WAIVER. No provision of this Agreement may be modified or
waived unless such modification or waiver is agreed to in writing and executed
by each Executive affected thereby and by a duly authorized officer of the
Company. No waiver by any party hereto at any time of any breach by another
party hereto of, or failure to comply with, any condition or provision of this
Agreement to be performed or complied with by such other party shall be deemed a
waiver of any similar or dissimilar conditions or provisions at the same or at
any prior or subsequent time. Failure by an Executive or the Company to insist
upon strict compliance with any provision of this Agreement or to assert any
right which such Executive or the Company may have hereunder shall not be deemed
to be a waiver of such provision or right or any other provision of or right
under this Agreement.
8. ASSIGNMENT. This Agreement and all rights hereunder are personal to each
of the Executives and may not, unless otherwise specifically permitted herein,
be assigned by him. Notwithstanding anything else in the Agreement to the
contrary, the Company may assign this Agreement to and all rights hereunder
shall inure to the benefit of any person, firm or corporation succeeding to all
or substantially all of the business or assets of the Company whether by
purchase, merger or consolidation.
9. CAPTIONS. Captions herein have been inserted solely for convenience of
reference and in no way define, limit or describe the scope or substance of any
provision of this Agreement.
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10. GOVERNING LAW. This Agreement and all disputes, controversies or claims
arising out of or related to this Agreement or a breach hereof shall be governed
by and construed in accordance with the laws of the State of New York as applied
to contracts to be performed in New York.
11. JURISDICTION; WAIVER OF TRIAL BY JURY. Each of the parties hereto
consents to the jurisdiction of the United States District Court for the
Southern District of New York and any of the courts of the state of New York in
any dispute arising under this Agreement and agrees further that service of
process or notice in any such action, suit or proceeding shall be effective if
in writing and delivered in person or sent as provided in Section 5 hereof. ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF THIS
AGREEMENT OR IN CONNECTION HEREWITH IS HEREBY WAIVED.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement in
a binding contract as of the day and year first above written.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
/s/ Silas ▇.▇. ▇▇▇▇
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Silas ▇.▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. Stroll
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▇▇▇▇▇▇▇▇ ▇. Stroll
