Exhibit 10.1
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LOCK-UP AGREEMENT
by and among
XXXXX XXXXXXXX CORPORATION,
PEPE JEANS LONDON CORPORATION,
BLACKWATCH INVESTMENTS LIMITED,
AIHL INVESTMENT GROUP LIMITED,
ANASTA HOLDINGS LIMITED,
SPORTSWEAR HOLDINGS LIMITED,
WESTLEIGH LIMITED,
GADWAL LIMITED,
XXXXXX X. XXXXXXXX
and
XXXX X. XXXXXXXX
Dated as of January 31, 1998
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LOCK-UP AGREEMENT
THIS AGREEMENT, dated as of January 31, 1998 (the
"Agreement"), is by and among Xxxxx Xxxxxxxx Corporation, a British Virgin
Islands corporation (the "Company"), Pepe Jeans London Corporation, a British
Virgin Islands corporation ("PJLC"), Blackwatch Investments Limited, a British
Virgin Islands corporation ("Blackwatch"), AIHL Investment Group Limited, a
British Virgin Islands corporation ("AIHL"), Anasta Holdings Limited, a British
Virgin Islands corporation ("Anasta"), Sportswear Holdings Limited, a British
Virgin Islands corporation ("Sportswear"), Westleigh Limited, a British Virgin
Islands Corporation ("Westleigh"), Gadwal Limited, a Hong Kong corporation
("Gadwal"), Xxxxxx X. Xxxxxxxx ("TJH") and Xxxx X. Xxxxxxxx ("JJH" and, together
with TJH, the "Management Stockholders"). The parties hereto other than the
Company are sometimes collectively referred to herein as the "Stockholders."
RECITALS
WHEREAS, the Company, certain subsidiaries of the Company and
PJLC have entered into a Stock Purchase Agreement dated of even date herewith
(the "Stock Purchase Agreement") (all capitalized terms used but not defined
herein have the meanings given to them in the Stock Purchase Agreement);
WHEREAS, pursuant to the Stock Purchase Agreement, upon
consummation of the Stock Purchases, among other things, the Company will
deliver to TH USA and TH USA will deliver to PJLC 9,045,930 Ordinary Shares, par
value $.01 per share, of the Company (the "Shares"), upon which Westleigh,
Gadwal, TJH and JJH collectively will beneficially own (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended
("Beneficially Own")) 97% of the Shares (the "Partner Shares") and Anasta will
Beneficially Own 3% of the Shares (the "Anasta Shares");
WHEREAS, AIHL has entered into a Guarantee, dated of even date
herewith, pursuant to which AIHL has guaranteed all of the obligations of PJLC
under the Stock Purchase Agreement;
WHEREAS, pursuant to the Stock Purchase Agreement, at the
Closing the Company and the Stockholders will enter into a registration rights
agreement (the "Registration Rights Agreement") pursuant to which the
Stockholders will have certain registration rights with respect to the Shares;
and
WHEREAS, the parties hereto desire to restrict the sale,
assignment, transfer, encumbrance or other disposition of the Shares and
obligations in respect thereof as hereinafter provided.
NOW THEREFORE, in consideration of the premises and of the
terms and conditions contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
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Section 1. Prohibition on Transfers.
(a) Prohibition on Transfers During Restricted Period. Except
as set forth in Section 3, no Stockholder shall, at any time prior to the second
anniversary of the Closing Date (the "Restricted Period"), directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of, directly
or indirectly, any of the Shares or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any of the Shares, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Shares, in
cash or otherwise (any such transaction, whether or not for consideration, being
referred to herein as a "Transfer" and each Person to whom a Transfer is made,
regardless of the method of Transfer, is referred as a "Transferee").
(b) Prohibition on Transfers Following Restricted Period.
Except for Transfers described in the next sentence of this paragraph, from the
end of the Restricted Period through the fifth anniversary of the Closing Date,
no Stockholder shall, without the consent of the Company, directly or
indirectly, Transfer any Shares to any Person who would, to such Stockholder's
knowledge, immediately following such Transfer Beneficially Own 5% or more of
the then outstanding Ordinary Shares, par value $.01 per share, of the Company
("Ordinary Shares"). The requirements set forth in this paragraph shall not
apply to Transfers (i) to a Person described in Rule 13d-1(b)(1) promulgated
under the Securities Exchange Act of 1934, as amended (as in effect on the date
hereof), provided that immediately following such Transfer such Person would
not, to the Transferring Stockholder's knowledge, Beneficially Own 10% or more
of the then outstanding Ordinary Shares, (ii) pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), (iii) to an Affiliate of such Stockholder, to another
Stockholder or to an Affiliate of another Stockholder or (iv) in connection with
any merger, consolidation or other business combination of the Company. For
purposes of this Paragraph (b), "Stockholder's knowledge" means, in the case of
an individual Stockholder, the actual knowledge of such Stockholder or, in the
case of any other Stockholder, the actual knowledge of the officers and
directors of such Stockholder.
(c) Obligations of Transferees. Except for Transfers
described in the last sentence of this paragraph, no Transfer by a Stockholder
(including a permitted Transfer pursuant to clause (a), (b) or (c) of Section
3), shall be effective unless the Transferee shall have executed and delivered
to the Company an appropriate document in form and substance reasonably
satisfactory to the Company confirming that the Transferee takes such Shares
subject to all the terms and conditions of this Agreement and the Registration
Rights Agreement to the same extent as its transferor was bound by such
provisions (including without limitation that the Transferred Shares bear
legends substantially in the forms required by Section 4(a) of this Agreement).
Transfers by such Transferees shall be subject to the terms of this Agreement.
The requirements set forth in this paragraph shall not apply to Transfers (i) in
conformity with Rule 144 (a "Rule 144 Transfer") under the Securities Act, (ii)
pursuant to an effective registration statement under the Securities Act, or
(iii) to another Stockholder permitted by clause (a) or (b) of Section 3 of this
Agreement or (iv) permitted by clause (d) of Section 3.
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Section 2. Compliance with Securities Laws. No Stockholder
shall at any time during or following the Restricted Period make any Transfer
(other than a Transfer permitted pursuant to clause (d) of Section 3), except
(a) Transfers pursuant to an effective registration statement under the
Securities Act, (b) Rule 144 Transfers or (c) if such Stockholder shall have
furnished the Company with an opinion of counsel, if reasonably requested by the
Company, which opinion and counsel shall be reasonably satisfactory to the
Company, to the effect that the Transfer is otherwise exempt from registration
under the Securities Act and that the Transfer otherwise complies with the terms
of this Agreement.
Section 3. Permitted Transfers. The restrictions on Transfers
set forth in Section 1(a) of this Agreement shall not apply to a Transfer (a) of
Anasta Shares to (i) any Stockholder or any permitted Transferee of a
Stockholder pursuant to clause (b) or (c) of this Section 3 or (ii) any Person
so long as immediately following such Transfer the Anasta Shares are
Beneficially Owned by Anasta; (b) of Partner Shares to any Person so long as
immediately following such Transfer the Partner Shares are Beneficially Owned by
Westleigh, Gadwal, TJH and JJH in the respective percentages set forth in
Exhibit 1 hereto; (c) by a Management Stockholder to a legal representative of
such Management Stockholder in the event such Management Stockholder becomes
mentally incompetent or to such Management Stockholder's personal representative
following the death of such Management Stockholder in which event such
Transferred Shares shall be deemed to be Beneficially Owned by such Management
Stockholder following such Transfer for purposes of clause (b) above; or (d) in
connection with any merger, consolidation or other business combination of the
Company.
Section 4. Other Restrictions.
(a) Legends. Each of the Stockholders hereby agrees that each
outstanding certificate representing Shares and issued during the Restricted
Period shall bear legends reading substantially as follows:
(i) The securities represented by this certificate have
not been registered under the Securities Act of 1933, as amended, or
under the securities laws of any state and may not be transferred, sold
or otherwise disposed of except while such a registration is in effect
or pursuant to an exemption from registration under said Act and
applicable state securities laws.
(ii) The securities represented by this certificate are
subject to the terms and conditions set forth in a Lock-up Agreement,
dated as of January 31, 1998, copies of which may be obtained from the
issuer or from the holder of this security. No transfer of such
securities will be made on the books of the issuer unless accompanied
by evidence of compliance with the terms of such agreement.
(b) Termination of Restrictive Legends. The restrictions
referred to in Section 4(a)(i) shall cease and terminate as to any particular
Shares (x) when, in the opinion of counsel for the Company, such restriction is
no longer required in order to assure compliance with the Securities Act or (y)
when such Shares shall have been transferred in a Rule 144 Transfer or
effectively registered under the Securities Act. The restrictions referred to in
Section 4(a)(ii)
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shall cease and terminate at the end of the Restricted Period. Whenever such
restrictions shall cease and terminate as to any Shares, the Stockholder holding
such shares shall be entitled to receive from the Company, in exchange for such
legended certificates, without expense (other than applicable transfer taxes, if
any, if such unlegended Shares are being delivered and transferred to any Person
other than the registered holder thereof), new certificates for a like number of
Shares not bearing the relevant legend(s) set forth in Section 4(a). The Company
may request from any Stockholder a certificate or an opinion of such
Stockholder's counsel with respect to any relevant matters in connection with
the removal of the legend(s) set forth in Section 4(a)(i) from such
Stockholder's stock certificates, any such certificate or opinion of counsel to
be reasonably satisfactory to the Company.
(c) Copy of Agreement. A copy of this Agreement shall be
filed with the corporate secretary of the Company and shall be kept with the
records of the Company and shall be made available for inspection by any
stockholder of the Company.
(d) Recordation. The Company shall not record upon its books
any Transfer to any Person except Transfers in accordance with this Agreement.
Section 5. No Other Rights. The Stockholders understand and
agree that the Company is under no obligation to register the sale, transfer or
other disposition of the Shares by such Stockholder or on such Stockholder's
behalf under the Securities Act or to take any other action necessary in order
to make compliance with an exemption from such registration available, other
than pursuant to the Registration Rights Agreement.
Section 6. Effectiveness; Term. This Agreement shall become
effective simultaneously with the consummation of the Stock Purchases under the
Stock Purchase Agreement and shall terminate without liability or penalty on the
part of any party or its directors, officers, fiduciaries, employees and
stockholders to any other party or such other party's Affiliates upon
termination of the Stock Purchase Agreement prior to the consummation of the
Stock Purchases pursuant to Article XI thereof.
Section 7. Specific Performance. The Stockholders acknowledge
that there would be no adequate remedy at law if any Stockholder fails to
perform any of its obligations hereunder, and accordingly agree that the
Company, in addition to any other remedy to which it may be entitled at law or
in equity, shall be entitled to compel specific performance of the obligations
of any Stockholder under this Agreement in accordance with the terms and
conditions of this Agreement. Any remedy under this Section 7 is subject to
certain equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought.
Section 8. Notices. All notices, statements, instructions or
other documents required to be given hereunder shall be in writing and shall be
given either personally or by mailing the same in a sealed envelope, first-class
mail, postage prepaid and either certified or registered, return receipt
requested, or by telecopy, and shall be addressed to the Company at its
principal offices and to one or more Stockholders at the respective addresses
furnished to the Company by such Stockholders.
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Section 9. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
successors and assigns.
Section 10. Recapitalizations and Exchanges Affecting Shares.
The provisions of this Agreement shall apply, to the full extent set forth
herein with respect to the Shares, to any and all shares of capital stock or
equity securities of the Company which may be issued by reason of any stock
dividend, stock split, reverse stock split, combination, recapitalization,
reclassification or otherwise.
Section 11. Governing Law. This Agreement 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.
Section 12. Jurisdiction; Waiver of Trial by Jury. The
parties hereby consent 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 agree 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 8 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.
Section 13. Descriptive Headings, Etc. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning of terms contained herein. Unless the context of this
Agreement otherwise requires, references to "hereof," "herein," "hereby,"
"hereunder" and similar terms shall refer to this entire Agreement.
Section 14. Amendment. This Agreement may not be amended or
supplemented except by an instrument in writing signed by each of the parties
hereto; provided, however, that no amendment may be made to Paragraph (a) of
Section 1, Section 3 or this Section 14 without the approval of a majority of
the votes cast at a meeting of the Company's stockholders excluding votes cast
by the Stockholders or their Affiliates.
Section 15. Severability. If any term or provision of this
Agreement shall to any extent be invalid or unenforceable, the remainder of this
Agreement shall not be affected thereby, and each term and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
Section 16. Complete Agreement; Counterparts. This Agreement
(together with the Stock Purchase Agreement and the Registration Rights
Agreement) constitutes the entire agreement and supersedes all other agreements
and understandings, both written and oral, among the parties or any of them,
with respect to the subject matter hereof. This Agreement may be executed by any
one or more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed on the date first written above.
XXXXX XXXXXXXX CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer
and President
PEPE JEANS LONDON CORPORATION
By: /s/ Xxxxxxxx X. Stroll
Name: Xxxxxxxx X. Stroll
Title: Group CEO
BLACKWATCH INVESTMENTS LIMITED
By: /s/ Xxxxxxxx X. Stroll
Name: Xxxxxxxx X. Stroll
Title: Chairman
AIHL INVESTMENT GROUP LIMITED
By: /s/ Xxxxxxxx X. Stroll
Name: Xxxxxxxx X. Stroll
Title: Chairman
ANASTA HOLDINGS LIMITED
By: /s/ Gath A. T. Hewlett
Name: Gath A. T. Hewlett
Title: Vice President and
Treasurer
SPORTSWEAR HOLDINGS LIMITED
By: /s/ Silas X. X. Xxxx
Name: Silas X. X. Xxxx
Title: Director
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WESTLEIGH LIMITED
By: /s/ Silas X. X. Xxxx
Name: Silas X. X. Xxxx
Title: Director
GADWAL LIMITED
By: /s/ Xxxxxxxx X. Stroll
Name: Xxxxxxxx X. Stroll
Title: Director
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
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Exhibit 1
Stockholder Beneficial Ownership
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Westleigh 35.0%
Gadwal 35.0%
TJH 22.5%
JJH 7.5%
