NON-COMPETITION AGREEMENT
Exhibit 10.10
This Non-Competition Agreement (this “Agreement”) is made as of July 15, 2013 by and among Joe’s Jeans, Inc., a Delaware corporation (“Buyer”), Xxxxxx Clothing Holdings, Inc., a Delaware corporation (“Company”) and Xxxxx Xxx (“Stockholder”) but shall not be effective until the Closing of the Transactions pursuant to the Stock Purchase Agreement (the “Closing Date”).
BACKGROUND:
A. Pursuant to a Stock Purchase Agreement, dated as of July 15, 2013 (the “Stock Purchase Agreement”), by and among Buyer, Company, and the stockholders of the Company signatory thereto, Buyer is purchasing all of the outstanding stock of the Company in accordance with the terms of the Stock Purchase Agreement.
B. Stockholder is a major shareholder of Xxxxxx Clothing Holdings, Inc. Stockholder acknowledges that he is entering into this Agreement in consideration for the sale of the goodwill of the Company and his substantial ownership interest pursuant to the Stock Purchase Agreement.
C. Pursuant to the Stock Purchase Agreement, Stockholder is required to execute and deliver this Agreement in connection with the Closing.
D. Buyer would not have entered into the Stock Purchase Agreement if Stockholder did not enter into this Agreement, and Stockholder is receiving substantial benefits under the Stock Purchase Agreement.
E. Undefined capitalized terms herein are defined in the Stock Purchase Agreement.
NOW THEREFORE, Buyer, Company and Stockholder, intending to be legally bound, hereby agree as follows:
1. Restrictive Covenants. To assure that Buyer and Company will realize the benefits of the Transactions and in consideration of the substantial benefits that Stockholder is receiving under the Stock Purchase Agreement, Stockholder hereby agrees with Buyer and Company that Stockholder shall not:
1.1 From the Closing Date until the earlier of (i) the third (3rd) anniversary after the Closing Date, (ii) six months after a Change of Control (as defined in the Buyer Note) of Buyer or the Company, or (iii) 45 days after the occurrence any Event of Default (as defined in the Buyer Note; for purposes of this Agreement, the term “Company” as used in the definition of Event of Default shall be deemed to also apply the Company) of the Buyer Note, which Event of Default has not been previously cured by Buyer or waived by the Stockholder or (iv) the termination of Stockholder’s employment without Cause or for Good Reason (the earlier of (i)-(iv), the “Termination Date”) directly or indirectly, alone or as an officer, director, employee, owner, partner, joint venturer, member, manager, consultant, agent, independent contractor, or
Equity Interest holder of, or lender to, any Person or business, engage in, compete with, or permit his name to be used by or in connection with the business of developing, manufacturing, selling, marketing, distributing and/or licensing of premium denim apparel wear of the type sold by the Company or the Buyer and each of their respective subsidiaries (the “Company Group”) as of the Closing (“Restricted Business”). At any time, Stockholder shall be permitted to, directly or indirectly, own an interest in and, when not employed by Xxxxxx Clothing LLC, take part in and/or manage or operate the Historical Family Businesses (as defined below). “Historical Family Businesses” means the business of manufacturing, selling, distributing, transporting, delivering and marketing junior and missy moderate sportswear and such additional apparel business as conducted by Stockholder’s family from time to time which is not competitive with the Company Group.
1.2 From the Closing Date until the Termination Date, either directly or indirectly, for any reason, whether for Stockholder’s own account or for the account of any other person, natural or legal, without the prior written consent of the Buyer: attempt to cause any employee, officer, director or any independent contractor of the Acquired Entities to terminate or cease, the same relationships with the Company Group, or hire any executive employee of the Company Group while such person is employed by or associated with the Acquired Entities or in the case of former employees within one year of the termination of such person’s employment with the Acquired Entities (unless any such person was terminated by the Company Group, in which case such tail shall not apply). In no event shall the foregoing apply to Xxxxxx Xxxxx.
1.3 Stockholder, Company and Buyer agree and acknowledge that the restrictions in this Section 1 are reasonable in scope and duration and are necessary to protect Company and Buyer, and their respective Affiliates after the Closing. If any provision of this Section 1, as applied to any party hereto or to any circumstance, is adjudged by a Governmental Authority, arbitrator, or mediator to be unenforceable, illegal or invalid in accordance with its terms, the same will in no way affect any other circumstance or the enforceability of the remainder of this Agreement. If any such provision, or any part thereof, is held not to be enforceable in accordance with its terms because of the duration of such provision, the area covered thereby, or the scope of the activities covered, Buyer, Company and Stockholder agree that the Governmental Authority, arbitrator, or mediator making such determination will have the power (and is hereby instructed by the parties) to reduce the duration, area, and/or scope of activities of such provision, and/or to delete or modify specific words or phrases (it being the intent of the parties that any such reduction or modification be limited to the minimum extent necessary to render such provision enforceable) and in its reduced or modified form such provision will then be legal, valid and enforceable in accordance with its terms and will be enforced.
2. Conflicts of Interest. Stockholder represents to Buyer and Company that there are no restrictions, agreements or understandings, oral or written, to which Stockholder is a party or by which Stockholder is bound that prevents or makes unlawful Stockholder’s execution or performance of the terms and conditions of this Agreement.
3. Miscellaneous
3.1 Entire Agreement. This Agreement and each of other Transaction Documents and the certificates, documents, instruments and writings that are delivered pursuant hereto and thereto, constitute the entire agreement and understanding of the parties hereto in respect of the subject hereof and supersede all prior understandings, agreements, or representations by or among the parties, written or oral, to the extent they relate in any way to the subject matter hereof. Except as expressly contemplated hereby and except for Buyer’s Affiliates, each of which will be deemed a third party beneficiary of all obligations of Stockholder under this Agreement, there are no third party beneficiaries having rights under or with respect to this Agreement. Notwithstanding the provisions of this Section 3.1, the Parties acknowledge that Stockholder, Xxxxxx Clothing Holdings, Inc., Buyer and certain of their Affiliates have entered into a separate Employment Agreement and nothing stated herein affects the enforceability of that Employment Agreement.
3.2 Successors. All of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure to the benefit of and are Enforceable by, the parties hereto and their respective successors.
3.3 Assignment. No party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties hereto; provided, however, that Buyer may (a) assign any or all of its rights and interests hereunder to one or more of its Affiliates (b) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases Buyer nonetheless will remain responsible for the performance of all of its obligations hereunder), and (c) assign its rights and delegate its duties to any successor entity resulting from any liquidation, merger, consolidation, reorganization, or transfer of all or substantially all of the assets or stock of Buyer or Company.
3.4 Notices. All notices, requests, demands, claims and other communications hereunder will be in writing. Any notice, request, demand, claim or other communication hereunder will be deemed duly given if (and then three (3) Business Days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:
If to Buyer or Company:
Joe’s Jeans, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Attn: Xxxx Xxxxxxxx
Fax: 000-000-0000
Copy to (which will not constitute notice):
Joe’s Jeans, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
Fax: 000-000-0000
If to Stockholder:
Xxxxx Xxx
0000 Xxxxxx Xx
Xxx Xxxxxxx, XX 00000
Any party hereto may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party hereto may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other parties hereto notice in the manner herein set forth.
3.5 Specific Performance. Each party hereto acknowledges and agrees that the other parties hereto would be damaged irreparably if any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, and that money damages alone would be an inadequate remedy to compensate the non-breaching party and its Affiliates for any such breach. Accordingly, each party hereto agrees that the other parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and its terms and provisions in any Action instituted in any court of the United States or any state thereof having jurisdiction over the parties hereto and the matter, in addition to any other remedy to which they may be entitled at Law or in equity, which other remedies, including Losses, will in no way be limited by the foregoing.
3.6 Submission to Jurisdiction; No Jury Trial.
(a) Submission to Jurisdiction. Each party hereto submits to the jurisdiction of any state or federal court sitting in Los Angeles, California, in any Action arising out of or relating to this Agreement and agrees that all claims in respect of the Action may be heard and determined in any such court. Each party hereto also agrees not to bring any Action arising out of or relating to this Agreement in any other court. Each party hereto agrees that a final judgment in any Action so brought will be conclusive and may be enforced by Action on the judgment or in any other manner provided at Law or in equity, with all rights to appeal. Each party hereto waives any defense of inconvenient forum to the maintenance of any Action so brought and waives any bond, surety, or other security that might be required of any other party hereto with respect thereto.
(b) Waiver of Jury Trial. THE PARTIES HERETO EACH HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. The scope of this waiver is intended to be all encompassing of any and all Actions that may be filed in any court and that relate to the subject matter hereof and of the Transactions, including, contract claims, tort claims, breach of duty claims and all other
common Law and statutory claims. The parties hereto each acknowledge that this waiver is a material inducement to enter into a business relationship and that they will continue to rely on the waiver in their related future dealings. Each party hereto further represents and warrants that it has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of an Action, this Agreement may be filed as a written consent to trial by a court.
3.7 Time. Time is of the essence in the performance of this Agreement.
3.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.
3.9 Headings. The article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.
3.10 Governing Law. This Agreement and the performance of Buyer, Company and Stockholder’s obligations hereunder will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of Law principles that would apply any other Law.
3.11 Effectiveness. This Agreement shall only become effective as of the date of consummation of the transactions contemplated by the Stock Purchase Agreement.
3.12 Amendments and Waivers. No amendment, modification, replacement, termination, or cancellation of any provision of this Agreement will be valid, unless the same will be in writing and signed by the Buyer, Company and Stockholder. Neither any failure nor any delay by any party hereto in exercising any right, power or privilege under this Agreement or any of the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or any of the documents referred to in this Agreement can be discharged by one party hereto, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other parties hereto; (b) no waiver that may be given by a party hereto will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party hereto will be deemed to be a waiver of any obligation of that party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement.
3.13 Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Agreement, as applied to any party hereto or to any circumstance, is adjudged by a Governmental Authority, arbitrator or mediator not to be enforceable in accordance with its terms, the parties hereto agree that the Governmental Authority, arbitrator, or mediator making such determination will have the power to modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.
3.14 Expenses. Except as otherwise expressly provided in this Agreement or the Stock Purchase Agreement, each party hereto will bear its own costs and expenses incurred in connection with the preparation, execution and performance of this Agreement and the Transactions including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.
3.15 Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. Any reference to any federal, state, local, or foreign Law will be deemed also to refer to Law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached will not detract from or mitigate the fact that such party is in breach of the first representation, warranty, or covenant.
3.16 Remedies. Except as expressly provided herein, the rights, obligations and remedies created by this Agreement are cumulative and in addition to any other rights, obligations, or remedies otherwise available at Law or in equity. Except as expressly provided herein, nothing herein will be considered an election of remedies.
3.17 Electronic Signatures.
(a) Notwithstanding the Electronic Signatures in Global and National Commerce Act (15 U.S.C. Sec. 7001 et.seq.), the Uniform Electronic Transactions Act, or any other Law relating to or enabling the creation, execution, delivery, or recordation of any Contract or signature by electronic means, and notwithstanding any course of conduct engaged in by the
parties hereto, no party hereto will be deemed to have executed this Agreement or other document contemplated thereby (including any amendment or other change thereto) unless and until such party shall have executed this Agreement or other document on paper by a handwritten original signature or any other symbol executed or adopted by a party with current intention to authenticate this Agreement or such other document contemplated.
(b) Delivery of a copy of this Agreement or such other document bearing an original signature by facsimile transmission (whether directly from one facsimile device to another by means of a dial-up connection or whether mediated by the worldwide web), by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature. “Originally signed” or “original signature” means or refers to a signature that has not been mechanically or electronically reproduced.
[Signature page follows]
IN WITNESS WHEREOF, Buyer, Company and Stockholder have executed and delivered this Non-competition Agreement as of the date first above written.
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JOE’S JEANS, INC. | |
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By: |
\s\ Xxxx X. Xxxxxxxx |
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Name: |
Xxxx X. Xxxxxxxx |
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Title: |
President and CEO |
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XXXXXX CLOTHING HOLDINGS, INC. | |
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By: |
\s\ Xxxxxxxxxxx X. Xxxxx |
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Name: |
Xxxxxxxxxxx X. Xxxxx |
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Title: |
CFO & Secretary |
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\s\ Xxxxx Xxx | |
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XXXXX XXX | |
Signature Page to Non-Competition Agreement
