AGREEMENT
EXHIBIT
10.35
AGREEMENT
This Agreement is made as of this 8th day of January 2006 by and among W. Xxxxxxx
Xxxxx (“Xxxxx”), Phoenix Footwear Group, Inc. (“Phoenix”) and Altama Delta
Corporation (“Altama”).
WHEREAS, Xxxxx, Phoenix and Altama are parties to a Stock Purchase Agreement dated June 15,
2004 (the “Stock Purchase Agreement”) pursuant to which on at a closing on July 19, 2004
Xxxxx sold to Phoenix and Phoenix purchased from Xxxxx all of the issued and outstanding shares of
Altama capital stock; and
WHEREAS, pursuant to the Stock Purchase Agreement, at such closing (i) Phoenix issued in the
name of Manufacturers and Traders Trust Company, as escrow agent (the “Escrow Agent”)
196,967 shares of Phoenix common stock (the “Escrow Shares”) in accordance with the terms
of an Escrow Agreement among Xxxxx, Phoenix and the Escrow Agent; (ii) Phoenix and Xxxxx executed
and delivered a Registration Rights Agreement (the “Registration Rights Agreement”);(ii)
Xxxxx, Phoenix and Altama executed and delivered a Non-Competition and Confidentiality Agreement
(the “Non-Competition Agreement”); and (iii) Xxxxx and Altama executed and delivered a
Consulting Agreement (“Consulting Agreement”); and
WHEREAS, an action commenced August 31, 2005 against Xxxxx, Phoenix and Altama by Caribbean
Co-op in the United States District Court for the District of Puerto Rico, captioned Caribbean
Co-op v. Altama Delta Corporation d/b/a Altama Footwear, Phoenix Footwear Group, Inc. and W.
Xxxxxxx Xxxxx, C.A. 05-1923(CC) for damages (such action, as amended or otherwise re-filed by
Caribbean Co-op or its successor in interest for damages arising out of the same transactions or
occurrences, the “Carribean Co-op Action”); and
WHEREAS, a dispute has arisen among Xxxxx, Phoenix and Altama regarding the terms of the Stock
Purchase Agreement and the parties desire to resolve their dispute on the terms and conditions
herein;
NOW THEREFORE, the parties hereby agree as follows:
1. Waiver of Payment Rights and Future Obligations. Xxxxx hereby irrevocably waives
the right to receive any payments due or past due from Phoenix or Altama of any kind, including but
not limited to (i) payments provided for in Sections 2(c), 6(d) and 6(h) of the Stock Purchase
Agreement, (ii) payments under the Non-Competition Agreement and (iii) payments under the
Consulting Agreement. Phoenix and Altama make no claim to any previous funds paid to or by Xxxxx,
including the purchase price and post-closing adjustments for Altama stock and any payments made
under the Stock Purchase Agreement, the Non-Competition Agreement and the Consulting Agreement.
Neither Phoenix, nor Altama nor Xxxxx shall have any future obligations under the Stock Purchase
Agreement, the Non-Competition Agreement or the Consulting Agreement. Xxxxx represents and
warrants that he has not assigned, transferred, pledged, conveyed, granted a security interest or
lien with respect to his rights under the Stock Purchase Agreement or with respect to the foregoing
payment obligations and that he has full right, title and interest to take the actions provided in
this Section 1 and that no third party consent is necessary or required for him to do so, the
failure to obtain which would be a breach of an obligation to a third party or result in a lien or
security interest with respect to his rights under the Stock Purchase Agreement.
2. Escrow Release. Xxxxx hereby agrees to direct the Escrow Agent to transfer and
release the Escrow Shares and anything else constituting the Escrow Amount (as defined in the
Escrow Agreement) in such manner and at such time as Phoenix may direct. Xxxxx hereby waives any
right, title or interest in or to the Escrow Amount (including the Escrow Shares and the proceeds
thereof) and authorizes the Escrow Agent to vote the Escrow Shares at all times in such manner as
the Escrow Agent may determine in its sole and absolute discretion. Xxxxx represents and warrants
that he has not assigned, transferred, pledged, conveyed, granted a security interest or lien with
respect to his rights under the Escrow Agreement or with respect to the Escrow Amount (including
the Escrow Shares and the
proceeds thereof) and that he has full right, title and interest to take
the actions provided in this Section 2 and that no third party consent is necessary or required for
him to do so, the failure to obtain which would be a breach of an obligation to a third party or
result in a lien or security interest with respect to his rights under the Escrow Agreement or the
Escrow Amount. Phoenix and Xxxxx shall have no further obligations to one another under the
Registration Rights Agreement.
3. Caribbean Co-op Claims.
(a) Xxxxx shall indemnify, defend and hold harmless Phoenix and Altama and its officers,
directors and agents (“Phoenix Indemnitees”) for the entirety (other than the Defense Fund,
as defined below) of all out of pocket costs, losses, liabilities, obligations, damages,
deficiencies, claims, demands, and expenses, including interest, penalties, attorneys’ fees which
any of the Phoenix Indemnitees may suffer resulting from, arising out of, relating to any claim
made by Caribbean Co-op in the Carribean Co-op Action.
(b) On or before January 26, 2006, Phoenix shall deposit with the law firm of O’Neil & Xxxxxx
$50,000 (“Defense Fund”) to pay the costs of defending the Caribbean Co-op claims and any
settlement or judgment with Caribbean Co-op in the Carribean Co-op Action. Xxxxx shall be entitled
to retain the balance, if any, remaining of the Defense Fund after the full satisfaction of any
judgment by Caribbean Co-op against any of the Phoenix Indemnitees or a settlement which is fully
paid and provides for a full and complete release by Caribbean Co-op
against the Phoenix Indemnitees for all claims arising from the Caribbean Co-op Action. For
purposes of defending the Caribbean Co-op claims, Phoenix and Altama shall, at the sole cost and
expense of Xxxxx, cooperate in providing to Xxxxx Altama’s records relating to Caribbean Co-op’s
claims, subject to, upon request by Phoenix, a confidentiality undertaking in substance and form
satisfactory to it. Phoenix and Altama, shall exercise reasonable efforts to make their employees
with relevant and/or discoverable information available to Xxxxx as witnesses after reasonable
advance notice, and shall otherwise cooperate with reasonably request in the defense of the
Caribbean Co-op Action. Xxxxx shall keep Phoenix and Altama fully informed as to the status of the
Caribbean Co-op Action and, upon request, provide them with copies of all pleadings, motion papers,
discovery requests and responses or other materials identified by Phoenix.
4. Releases.
(a) Except for and subject only to the other provisions of this Agreement, for and in
consideration of the mutual covenants set forth herein, Phoenix and Altama shall, and each hereby
does on behalf of itself and its officers, directors, affiliates, subsidiaries, employees, agents,
successors and assigns release and discharge Xxxxx from any and all claims, complaints, contracts,
liabilities, obligations, demands, debts, damages, losses, costs, expenses, attorneys fees, rights
of action and causes of actions of any kind or character whatsoever, at law or in equity, whether
known or unknown, direct or indirect, fixed or contingent, suspected or unsuspected that they may
have against Xxxxx.
(b) Except for and subject only to the other provisions of this Agreement, for and in
consideration of the mutual covenants set forth herein, Xxxxx hereby does on behalf of himself and
his agents, successors and assigns release and discharge Phoenix and Altama and its officers,
directors, affiliates, subsidiaries, employees, agents, successors and assigns from any and all
claims, complaints, contracts, liabilities, obligations, demands, debts, damages, losses, costs,
expenses, attorneys fees, rights of action and causes of actions of any kind or character
whatsoever, at law or in equity, whether known or unknown, direct or indirect, fixed or contingent,
suspected or unsuspected that Xxxxx may have against Phoenix or Altama.
(c) Xxxxx on the one hand, and Phoenix and Altama, on the other hand, hereby represent and
warrant to one another that they are sole owner of the claims being released by it or him hereby
and such party has not assigned or otherwise transferred, voluntarily or involuntarily, any such
released claims.
5. Confidentiality. The parties hereby agree to abide by the terms of a separate
confidentiality letter agreement of even date herewith among them.
6. Miscellaneous. This agreement and the confidentiality letter agreement referred to
above constitute the entire agreement among the parties with respect to the subject matter hereof
and may not be amended or modified except pursuant to a written instrument executed by all parties
hereto. Phoenix and Altama and the undersigned representative for each hereby represent and warrant
that the undersigned representative of each has the authority to fully bind Phoenix and Altama to
this agreement. This agreement shall be governed by the internal laws of the State of Delaware
without reference to conflict principles. Any dispute regarding this Agreement may be adjudicated
by the parties only in a court located in the State of Delaware. The parties hereto irrevocably
consent to the jurisdiction and venue of the courts located in the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first set forth above.
| /s/ X. Xxxxxxx Xxxxx | ||||
| X. Xxxxxxx Xxxxx | ||||
| Phoenix Footwear Group, Inc. |
| By: | /s/ Xxxxx XxXxxxxxx | |||||
| Name: Xxxxx XxXxxxxxx | ||||||
| Title: Director | ||||||
| Altama Delta Corporation | ||||||
| By: | /s/ Xxxxx XxXxxxxxx | |||||
| Name: Xxxxx XxXxxxxxx | ||||||
| Title: Authorized Person | ||||||
