EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
November 25, 1997, by and among Apparel Technologies France, SARL ("Purchaser"),
Cactus Europe SARL dba Ginko, a French corporation (the "Seller") and Xxxxx
Tick, an individual ("Tick") and is based upon the following facts:
RECITALS
WHEREAS, Seller is in the business of providing digital production of
designs, both on paper materials and on fabrics and digital production systems
and computers, and related services (the "Business"); and
WHEREAS, Purchaser desires to purchase and Seller wishes to sell certain of
the Seller's Assets, including the clientele, upon the terms and conditions
contained herein.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and agreements hereinafter
set forth, the parties hereto agree as follows:
1. TRANSFER OF ASSETS AND ASSUMPTION OF PERMITTED LIABILITIES;
1.1 SALE OF ASSETS On and subject to the terms, provisions, and
conditions of this Agreement, at the closing of the transactions contemplated
hereby (the "Closing"), Seller shall sell, convey, assign, transfer and deliver
to Purchaser, and Purchaser shall acquire, all of the assets, property and
rights of Seller, which shall include, without limitation, those items listed on
Schedule "A," attached hereto and incorporated herein by this reference
(collectively, the "Assets"):
1.2 LIABILITIES As partial consideration for the transfer of the
Assets provided for above, Purchaser shall assume and become responsible for all
those certain liabilities (i) specifically listed on Schedule "B," attached
hereto and incorporated herein by this reference which includes such liabilities
through November 7, 1997 and (ii) all liabilities incurred since November 7
,1997 which were incurred in the ordinary course of Seller's Business, but in no
event to exceed Two Hundred Fifty Thousand French Francs (all of such
liabilities being referred to as the "Assumed Liabilities"). Purchaser shall
not assume or become liable or responsible for any liability, debt, obligation,
duty or responsibility of Seller concerning Seller's Business or the Assets
other than the Assumed Liabilities.
1.3 CONSIDERATION. As consideration for the transfer of the Assets,
Purchaser has paid Seller the sum of Twenty Thousand Dollars (U.S.$20,000).
Such sum was delivered to Seller in reliance upon the anticipated closing of the
transactions contemplated herein.
1.4 THE PURCHASE PRICE. The purchase price shall be apportioned as
follows:
For intangible assets 14,000 Francs
------
For operating equipment 968,000 Francs
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For inventory pursuant 735,000 Francs
-------
For receivables 871,000 Francs
-------
TOTAL 2,588,000 Francs
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Such purchase price shall be paid by (i) the assumption of the debts
mentioned in Annex b and (ii) by a cash payment of 120,898 Francs.
1.5 DECLARATIONS. The seller declares:
1.5.1 That the FONDS DE COMMERCE hereby transferred, which it
created in the course of 1994, belongs to it;
1.5.2 That the FONDS DE COMMERCE and the Assets are subject to the
liens and security interests described in Schedule none hereto;
1.5.3 That the operation of the FONDS DE COMMERCE hereby
transferred produced annual sales (pre-tax) as follows:
Fiscal year ended Dec. 31, 1994 5,389,957 Francs
Fiscal year ended Dec. 31, 1995 7,681,410 Francs
Fiscal year ended Dec. 31, 1996 10,414,447 Francs
1.5.4 That the result of operations relating to the said FONDS DE
COMMERCE in respect of the past three fiscal years:
Fiscal year ended Dec. 31, 1994 -(658,194) Francs
Fiscal year ended Dec. 31, 1995 -(551,205) Francs
Fiscal year ended Dec. 31, 1996 -(1,227,200) Francs
1.5.5 That the premises where the FONDS DE COMMERCE is operated
were let to it pursuant to a 9 year lease effective as of September 1, 1995
signed with SCI Les Sablieres.
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1.6 ACCOUNTING DOCUMENTS.
1.6.1 Seller has made available to Purchaser for three (3) years
from the date hereof all books of general accounts and all records relating to
the Business sold. The accounting documents shall remain Seller's property.
1.6.2 The parties have inventoried on the date hereof the
accounting books referred to in the foregoing paragraph.
1.6.3 In addition, within fifteen (15) days from the date hereof,
the parties shall initial the accounting books kept by Seller referring to the
past three (3) years prior to execution hereof.
1.7 REGISTRATION DUTIES. The Purchase Price which is subject to the
registration duty referred to under articles 719, 1584 and 1595 of the General
Tax Code shall be as follows:
Intangible assets 14,000 Francs
Operating assets 968,000 Francs
Total amount subject to registration Tax: 982,000 Francs
1.8 AFFIRMATION. Each of the undersigned parties hereby affirms,
subject to penalties set forth under article 1837 of the General Tax Code, that
the present Agreement sets forth the entire agreed price.
1.9 REGULARIZATION OF V.A.T. Cette cession etant constitutive du
transfert d'une universalite de biens (transmission d'une branche complete
d'activites ou de mutation de fonds de commerce) et l'acquereur assujetti a
T.V.A., les parties entendent beneficier de la dispense de taxation a la T.V.A.
de biens mobiliers d'investissement objet de ce transfert.
En consequence, l'acquereur s'engage a la T.V.A. les cessions
ulterieures desdits biens et a proceder le cas echeant aux regularisaions
prevues aux articles 210 et 215 de lAnnexe II C.G.I. qui auraient ete exigibles
si le vendeur avait continnue a utiliser ces biens. Il incombera a l'acquereur
de declarer en double exemplaire le present engagement aupre du Service des
Impots dont il releve.
2. CONDITIONS PRECEDENT TO THE PERFORMANCE OF THIS AGREEMENT.
2.1 As conditions precedent to the delivery of the Assets to Purchaser,
Purchaser shall have available for immediate delivery to Tick two employment
agreements, one agreement with Purchaser, and another with Digital Group, Inc.,
a U.S. subsidiary of Purchaser's parent corporation, Apparel Technologies, Inc.,
which agreements shall be in the forms attached hereto as Exhibits "A" and "B"
(the "Employment Agreements").
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2.2 As conditions precedent to the transfer of the Assets and
assumption of the Liabilities and the delivery of the Employment Agreements to
Tick, the Seller shall have available for delivery to Purchaser the following
documents:
A. Xxxx of Sale transferring all of Seller's Assets;
B. Sublet to Purchaser of any and all Leases;
C. Assignment of any and all contract rights necessary to
transfer any material contracts of Seller;
D. All cash and cash equivalents of the Business; and
E. Any other instrument reasonably requested by Purchaser to
vest in Purchaser title to the Assets.
3. The Purchaser hereby expressly waives the escrow formalities provided for
by the law of 17 March 1909 and by Article 1684 of the Xxxxxx Xxxxxxx Tax Code.
The Seller undertakes to use its best efforts to obtain, as soon as possible the
release of any objections to the sale and transfer of the Assets which may be
made by the creditor's of the Seller, pursuant to Article 3 et seq. of the Law
of 17 March 1909, following the required publication of the transfer of the
Business provided for herein. The Seller and Tick, further agree to indemnify
the Purchaser for any claims made against the Purchaser by any creditor of the
Seller objecting to the sale and transfer of the Assets other than claims for
Assumed Liabilities, provided that the Purchaser shall promptly notify the
Seller and Tick as soon as any such claim may arise.
4. Intentionally Omitted.
5. ELEMENTS OF THE BUSINESS.
5.1 ASSETS TO BE PURCHASED. The Assets to be transferred to the
Purchaser upon the closing the this transaction are as follows:
A. GOODWILL. The clientele of the Seller attached to the
Business at the time of the Closing.
B. TANGIBLE ASSETS AND INVENTORY. All the tangible assets of
Seller including those listed on Schedule "A" attached hereto.
C. INTANGIBLE ASSETS. All other intangible assets of the
Seller.
D. CONTRACTS OF SELLER. All material contracts of Seller
listed on Schedule "A" attached hereto.
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5.2 EMPLOYEES.
A. It is hereby acknowledged and agreed that upon the closing
of this transaction the employment contracts of each employee of the Seller,
specifically including those listed on Schedule 5.2, shall be transferred from
the Seller to the Purchaser either by application of Article L122-12 of the Code
du Travail or, failing its application, by express agreement between the parties
on terms as if it had applied.
B. It is further expressly acknowledged that upon the transfer
of the employment contacts, as provided for above, the Purchaser shall assume
all legal and contractual liabilities in respect of all such contracts,
including, without limitation, each employee's accrued rights in respect of
severance pay and accrued vacation pay, all as further provided in Schedule 6.7
hereof.
6. REPRESENTATIONS AND WARRANTIES OF TICK AND THE SELLER. Tick and the Seller
hereby represent and warrant to Purchaser as follows:
6.1 AUTHORITY. Tick and the Seller have the full right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
6.2 THE SHARES. Tick owns one hundred percent (100%) of the issued
and outstanding shares of the Seller (the "Shares"). There are no other
individuals, corporations, partnerships or other entities which own any shares
of the Seller.
6.3 NO PROHIBITION. No injunction or other court order restraining or
prohibiting the consummation of the transactions contemplated hereby has been
issued or is in effect against the Seller or the Assets.
6.4 EFFECT OF AGREEMENT. Neither the execution, delivery and
performance of this Agreement nor the consummation of the terms and conditions
contained herein will: (i) conflict with or result in a breach of any provision
of the Bylaws of the Seller; (ii) constitute or result in the breach of or
conflict with any term, condition or provision of any note, bond, mortgage,
indenture or other material contract to which the Seller is a party or by which
the Seller or any of its assets may be bound except as set forth on Schedule 6.4
attached hereto; (iii) violate any law, statute, regulation, judgment, order,
injunction or decree applicable to the Seller or any of its assets; or (iv)
result in any third party having the right to enjoin, rescind or otherwise
prevent or impede the consummation of the transaction contemplated herein or to
obtain any other judicial or administrative relief as a result of any
transaction carried out in accordance with the provisions of this Agreement.
6.5 APPROVALS, CONSENTS AND NOTICES. Except as otherwise disclosed on
Schedule 6.5 attached hereto, the consummation of this Agreement shall not
require the consent, approval or notice to any landlord, mortgagee, secured
party or other third party.
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6.6 DUE ORGANIZATION. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of France and has full
power and authority and all requisite licenses, permits and franchises to own,
operate or lease its assets and properties and carry on the business as
currently conducted and at all times conducted prior to the effective date.
6.7 EMPLOYEES - REPRESENTATION OF PERSONNEL.
A. Attached hereto as Schedule 6.7(A) is a list of all of the
name, job description and salary of each of Seller's employees and any accrued
vacation time due to each such employee. In addition such schedule shall
provide the years of continuous service of each such employee for dismissal
purposes.
B. Attached hereto as Schedule 6.7(B) is a list of the terms of
all of the collective bargaining agreements or similar arrangements which the
Seller and\or its employees are subject.
C. Attached hereto as Schedule 6.7(C) is a description of any
benefit paid to any Employee other than in cash and of any cash benefit paid to
any employee who earns annually an amount in excess of two hundred and fifty
thousand French francs (FF 250,000) which is related to sales, profits or
performance.
D. Each contract of employment with each employee, other than
those listed on Schedule 6.7(D) hereof, may be terminated by the Purchaser, or
any subsequent transferee, at any time without the payment of damages or other
compensation not required by law, and upon only the minimum period of notice
required.
E. No director or employee has delivered notice to the Seller
of his or her desire to terminate his or her employment. Further, Seller does
not owe any amount to any current or former directors or employees, other than
the amount due for such individual's current salary and accrued vacation, all as
provided herein.
F. The Seller has not unilaterally granted any employee, and is
not required to pay, any employee any pension or other benefit on such
employee's retirement, death or disability or on the attainment of a specified
age or the completion of a certain number of years of service to the Seller
except as required by French law.
G. Seller is not a party to any dispute with any trade union or
other similar organization, nor is Seller aware of any pending or threatened
disputes with any trade union or similar organization.
H. The Seller has, at all times, fully complied with all of its
legal obligations relating to the health and safety of its employees and the
work environment, and there are no claims for any failure to maintain such a
workplace either possible, pending or foreseen whether
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by any employee or any third party in connection with any accident or injury
not fully covered by insurance maintained by the Seller.
I. The Seller has fulfilled all of its obligations with respect
to the prior consultation with all representative's of Seller's employees with
respect to the transfer of the business provided for herein.
J. None of Seller's senior employees have expressed an
objection to the Purchaser's acquiring the Business or offered to purchase any
part of the Business.
6.8 FINANCIAL AND BUSINESS RECORDS. The financial statements as of
June 30, 1997 and November 7, 1997 which have been delivered to Purchaser are
accurate, correct and complete in all material respects. Further, such
financial statements were prepared in accordance with the books of account and
records of the Seller and they present fairly the financial condition and
results of operations as of the date and for the periods indicated. There have
been no significant changes in the accounting methods or practices of the Seller
for the periods evidenced by the financial statements. The Seller has made and
kept books and records in sufficient detail to reflect accurately and fairly its
activities and transactions. All of the corporate and business books and
records have been made available to Purchaser and are in all material respects
complete and correct and have been maintained in accordance with good, sound and
consistent business practices and the applicable standards for reporting
financial information in France.
6.9 ABSENCE OF CHANGES. Except as set forth on Schedule 6.9 attached
hereto, since June 30, 1997, the Seller has not taken, caused, allowed to occur
or agreed or committed to do, whether in writing or otherwise, any of the
following actions or events:
A. Create or allow to be created or assume any lien in
connection with any Assets of the Seller;
B. Extend credit in the sale of products, collection of
receivables, or otherwise, other than in the ordinary and
regular course of business consistent with past business
practices;
C. Borrow any money or guaranty any debt for borrowed money
except in the ordinary course of business consistent with
past practices, nor has the company incurred any material
liability or obligation or issued any debt securities or
assumed, guarantied, endorsed, or otherwise as an
accommodation, become responsible for the obligations of any
other individual or entity;
D. Enter into any employment contracts or agreements whether
written or oral or any amendments of any existing employment
bonus, severance, overtime or contracts, nor increased any
salary or other form of compensation payable to any
director, officer, executive or employee of
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the Seller, except for such increases which are consistent
with the Seller's past practices and which are in the
ordinary course of business;
E. Dispose of, mortgage or encumber any of the Assets,
properties, rights or claims of the Seller other than sales
of inventory in the ordinary course of business and in a
manner consistent with past practice;
F. Engage in or enter into any material transaction of any
nature not expressly provided for herein involving the
Seller except transactions which are in the ordinary course
of business and consistent with past practice and prudent
business practices;
G. Purchase, lease or otherwise acquire any real estate or any
interest therein;
H. Declare, set aside or pay any dividend or transfer any funds
or assets from the Seller to Tick or make any distribution
in connection with the Seller's capital stock; and
I. Authorize for issuance, issue, sell or deliver any
additional shares of its capital stock of any class or any
securities or obligations convertible into shares of its
capital stock of any class, or grant any option, warrant or
other right to purchase any shares of its capital stock.
6.10 ASSETS. Seller has and will transfer to Purchaser good and
marketable fee simple title to the Assets, free and clear of any liens, claims
or encumbrances. The Assets include without limitation all assets necessary for
the conduct of the Business as currently conducted.
6.11 RECEIVABLES. All of the Seller's receivables are due and valid and
have arisen in the ordinary course of business against account debtors for goods
or services delivered or rendered. Such receivables will not be subject to any
set offs, discounts, credits, reductions, defenses off-sets or counterclaims
except as specifically provided for on Schedule 6.11 attached hereto or as
provided for on the Seller's financial statements delivered pursuant to this
Agreement.
6.12 CUSTOMERS, CONTRACTORS AND SUPPLIERS. Except as set forth on
Schedule 6.12 attached hereto, all outstanding contracts and orders with
customers, contractors and suppliers were entered into by or on behalf of the
Seller in the ordinary course of business and consistent with past practice.
Except as otherwise set forth herein there are no agreements with customers,
contractors or suppliers which presently adversely effects the business of the
Seller, nor will the execution, delivery and performance of this Agreement, the
consummation of the transaction contemplated hereby, or the fulfillment of the
terms hereof materially adversely effect the relationship of the Seller with
any major customer, contractor or supplier.
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6.13 INTELLECTUAL PROPERTY.
A. TRADEMARKS, PATENTS, ETC.. Schedule 6.13(A) attached hereto
sets forth an accurate, correct and complete list and
summary description of: (i) all patents, patent licenses,
copyrights, trade secrets, trademarks, service marks,
franchises, service names, trade names, and
assumed/fictitious business names and all registrations and
applications therefor which the Seller owns or has rights
to, used in, or necessary for, the operation of the Business
as currently conducted; and (ii) all licenses and other
agreements relating to any designs, drawings, patterns,
specifications, patents, patent licenses, copyrights, trade
secrets, trademarks, service marks, franchises, service
names, trade names, and assumed/fictitious business names
and all registrations and applications therefor which the
Seller owns or has rights to, including, all existing
designs, drawings, patterns and specifications owned by the
Seller for all articles offered for sale, used in
production, or for all forthcoming articles, designs,
drawings, patterns and specifications produced for but not
used by the Seller and all copyrights related thereto, used
in, or necessary for, the operation of the Seller's business
as currently conducted (collectively, the "Intellectual
Property"). To the best of the Seller's or Tick's
knowledge, after due inquiry, the Seller is not infringing
upon any patent, patent license, trade secret, trademark,
trade secret, copyright, service xxxx, franchise, service
name, trade name, or assumed name or application or
registration therefor which is owned or held by or pending
with respect to any person or entity, and there is no claim
or action by any such person or entity pending or threatened
with respect thereto. Seller and Tick have no right to use
the name "Cactus Europe SARL" or any similar name and will
discontinue use of such name as of the Closing Date.
B. TRADE SECRETS, PROPRIETARY INFORMATION AND KNOW-HOW. All
information in the nature of trade secrets or proprietary
information relating to the Business is owned solely and
exclusively by the Seller and the Seller has been
responsible for the development of such information. All
such information has been maintained in confidence and shall
be in the possession of the Seller at Closing.
C. SOFTWARE AND INFORMATION SYSTEMS. The Seller has all
necessary right, title and interest to all electronic data
processing systems, information systems, computer software
programs, program specifications, charts, procedures, source
codes, input data, routines, data bases and report layouts
and formats, record file layouts, diagrams, functional
specifications and narrative descriptions, flow charts and
other related material used in the Seller's business
(collectively the "Software").
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Schedule 6.13(C) attached hereto sets forth an accurate,
correct and complete list and summary description of all
Software and identifies (i) Software which is owned by the
Seller and any licenses thereof; (ii) Software which is
licensed to the Seller ; (iii) any other Software in which
the Seller has any use, possessory or proprietary rights;
and (iv) all pending Software development projects,
together with an identification of the persons undertaking
such projects. Except as set forth on Schedule 6.13(C),
with respect to the Software: (i) all Software
documentation is current, accurate and sufficient in detail
and content to identify and explain the nature thereof, and
to allow its full and proper use by the Purchaser; (ii) no
proprietary rights in any Software have been transferred,
whether by sale, assignment or license, or have been lost
for any reason, within the past five (5) years; (iii) no
Software has been used, divulged or appropriated for the
benefit of any other person to the detriment of the Seller;
(iv) the Seller's rights in the Software are free and clear
of any Liens; (v) the Seller has taken appropriate
measures to protect the value of the Software; and (vi) the
Seller has received no notice of any violation of trade
secret rights, copyrights or other proprietary rights with
respect to any Software and knows of no basis therefor.
D. The Seller has conducted a review of its Software and
computer systems to determine what, if any, impact the year
2000 will have upon its operations. Schedule 6.13(D)
contains an analysis of the impact of the year 2000 upon the
business and operations of the Seller.
6.14 NO UNDISCLOSED LIABILITIES, CLAIMS, ETC. Except for (i)
liabilities fully reflected or reserved against in the financial statements
provided pursuant hereto and (ii) regular and usual liabilities and obligations
incurred in the ordinary course of business consistent with past practices after
the date of the financial statements, the Seller has no liabilities, obligations
or claims (absolute, accrued, fixed or contingent, matured or unmatured, or
otherwise). Such representation and warranty includes liabilities, obligations
or claims which may become known or arise only after the Closing and which
result from actions, omissions or occurrences of the Seller prior to the
Closing.
6.15 CONTRACTS. Schedule 6.15 contains a schedule of, and copies of,
all Contracts to which the Seller is a party. The term "Contracts" shall be
deemed to include, but shall not be limited to, all oral or written contracts,
agreements, agency agreements, loan agreements, mortgages, indentures, deeds of
trust, guarantees, commitments, joint venture agreements, purchase and/or sale
agreements, collective bargaining, union, consulting and/or employment
contracts, leases of real or personal property, easements, distribution or
dealer agreements, service agreements, license agreements and advertising
agreements (except there shall not be included (a) agreements with supplies or
subcontractors in the ordinary course of the Seller's business which do not
exceed, in the case of any one agreement, an obligation of $10,000 and in
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the case of all agreements with a single party, an aggregate obligation of
$50,000, and (b) any agreement not with a supplier or subcontractors which is
in the ordinary course of the Seller's business and (i) which does not
exceed, in the case of any one agreement, an obligation of $5,000 and in the
case of all agreements with a single party, an aggregate obligation of
$10,000). Any Contract listed on and included as part of any other Schedule
to this Agreement shall be deemed to be listed on and included as part of
Schedule 6.15. The Seller is not in default or alleged to be in default
under any Contract nor is the Tick aware of any default by any other party
to any Contract, and there exists no event, condition or occurrence which,
after notice or lapse of time, or both, would constitute a default under any
Contract. All of the Contracts are in full force and effect and constitute
legal, valid and binding obligations of the parties thereto in accordance
with their terms, and will remain in full force and effect after the Closing
without any notice to or consent by the other parties thereto. The
enforceability of the Contracts is limited by the rights of the other party
in the event of bankruptcy, moratorium, insolvency and other laws affecting
the enforceability of creditors' rights generally, provided, however, the
Seller has not received notice and does not have reason to believe that any
of the other parties to the Contracts that are a party to bankruptcy
proceedings.
6.16 TRUE AND COMPLETE COPIES. The copies of all Contracts and other
documents delivered and to be delivered hereunder by Tick and\or the Seller are
and will be true and complete copies of such agreements, contracts and
documents.
6.17 TITLE AND RELATED MATTERS. Except as set forth in Schedule 6.17
(i) the Seller has good and marketable title to all of the properties and assets
reflected in the Seller's financial statements delivered pursuant hereto or
acquired after the date thereof (except properties sold or otherwise disposed of
since the date thereof in the ordinary course of business consistent with past
practices) including, without limitation, the specific assets referred to in
paragraphs (A) and (B) below, free and clear of all mortgages, security
interests, liens, pledges, claims, escrows, options, rights of first refusal,
indentures, easements, licenses, security agreements or other agreements,
arrangements, contracts, commitments, understandings, obligations, charges or
encumbrances of any kind or character, except as reflected in the Seller's
financial statements delivered pursuant hereto. The Seller owns or leases,
directly or indirectly, all of the assets and properties, and is a party to all
licenses and other agreements, presently used or necessary to carry on the
Business of the Seller as presently conducted.
A. REAL PROPERTY. The Seller has not owned in the past, now
owns, nor will own prior to or on the Closing Date, any real
property or interest in real property other than the leases
(and improvements thereon) described in Schedule 6.17. The
Seller is not a tenant under any lease of real property
except as described in Schedule 6.17. With respect to the
leased real property described on Schedule 6.17 and except
as otherwise specifically set forth herein: (i) all such
leases are in full force and effect and constitute valid and
binding obligations of the respective parties thereto; (ii)
there have not been and there currently are not any defaults
thereunder by any party thereto; (iii) no event has occurred
which (whether with or without
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notice, lapse of time or the happening or occurrence of
any other event) would constitute a default thereunder
entitling the lessor to terminate the lease; and (iv) the
continuation, validity and effectiveness of all such
leases under the current rentals and other current terms
thereof will in no way be affected by the transactions
contemplated by this Agreement. Except as shown on
Schedule 6.17, each parcel of real property, building,
structure and improvement leased by the Seller
(collectively the "Premises") conforms to all applicable
Laws, including zoning regulations, none of which will,
upon the sale of the Assets to Purchaser, prohibit the use
of such properties, buildings, structures or improvements,
for the purposes for which they are now utilized.
B. INVENTORIES. The Seller has the proper amount of inventories
to conduct its Business consistent with past practices.
There has not been since the date of the financial
statements delivered pursuant hereto, any provision for
markdowns or shrinkage with respect to inventories other
than in the ordinary and regular course of business
consistent with past practices or as otherwise consented to
by Purchaser.
6.18 TAX MATTERS. All taxes arising under the Code Generale des Imports
or any other jurisdiction within which the Seller is subject to tax including,
without limitation, any income, profits, employment, social security, sales,
use, occupation, excise, real property, personal property or ad valorem taxes or
any license or franchise fees or taxes (collectively, "Taxes"), due and payable
by the Seller have been paid; all Taxes not yet due have been fully accrued on
the books of the Seller and adequate reserves have been established therefor;
the charges, accruals and reserves which have been provided on the financial
statements delivered pursuant hereto for all fiscal periods prior to and ending
at June 30, 1997 and November 7, 1997, respectively, are adequate; there are no
unpaid assessments for additional Taxes for any fiscal period nor is there any
basis therefor not provided for in said financial statements. The Seller has
duly and timely filed all federal, state, local and foreign income tax returns
and all other returns heretofore required to be filed with respect to all Taxes.
Attached hereto as Schedule 6.18 are copies of all foreign, federal, state
and\or local tax returns filed by the Seller over the past three (3) years.
There are no tax liens on any assets of the Seller and no basis exists for
the imposition of any such liens. No adjustment of or deficiency for any Tax or
claim for additional Taxes has been proposed, threatened, asserted or assessed
against the Seller. The Seller is not involved in any dispute with any taxing
authority as to Taxes of any nature. There are no audit examinations being
conducted or threatened, and there is no deficiency or refund litigation or
controversy in progress or threatened, with respect to any Taxes previously paid
by the Seller or with respect to any tax returns previously filed by or on
behalf of the Seller. The Seller has not filed any extension or waiver of any
statute of limitations relating to the assessment or collection of Taxes. There
are in effect no powers of attorney or other authorizations to any persons to
represent the Seller with respect to any Tax. No consent, agreement or other
undertaking has been filed by the Seller in connection with any Tax.
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6.19 ENVIRONMENTAL. Except as described on Schedule 6.19:
A. The operations and activities of the Seller comply, and have
in the past complied, in all respects, with all
Environmental Laws and Regulations (as hereinafter defined).
There are no pending or currently proposed changes to any
Environmental Laws and Regulations which, when implemented
or effective, may affect the operations of the Seller.
B. The Seller has obtained and is and has been in full
compliance with all requirements, permits, licenses and
other authorizations which are required with respect to the
Seller's operations, as well as the transactions
contemplated hereby under all Environmental Laws and
Regulations. Schedule 6.19 lists each such permit, license
or other authorization.
C. There is no civil, criminal, administrative or other action,
suit, demand, claim, hearing, notice of violation,
proceeding, investigation, notice or demand pending,
received, or, to the best knowledge of Tick or the Seller,
threatened against the Seller relating in any way to any
Environmental Laws and Regulations.
D. The Seller has not caused or experienced any past or present
events, conditions, circumstances, plans or other matters
which: (i) are not in compliance with all Environmental
Laws and Regulations; (ii) may give rise to any statutory,
common law, or other legal liability, or otherwise form the
basis of any claim, action, demand, suit, proceeding,
hearing, notice of violation or investigation based on or
relating to Hazardous Materials (as defined hereinafter)
including, without limitation, such matters relating to any
property owned, leased or utilized by the Seller at any
time; (iii) arise from inventory of or waste from Hazardous
Materials; or (iv) arise from any off-site disposal, release
or threatened release of Hazardous Materials.
E. Intentionally left blank.
F. No employee or former employee of the Seller has been
exposed to any Hazardous Material owned, produced or
utilized by the Seller.
G. The Seller has not received any notice or indication from
any governmental agency or private or public entity advising
it that it is or may be responsible for any investigation or
response costs with respect to a release, threatened release
or cleanup of chemicals or materials produced by or
resulting from any business, commercial or industrial
activities, operations or processes, including, without
limitation, any Hazardous
13
Materials. Neither Seller, nor Tick is aware of any facts
which might give rise to such notices.
H. Intentionally left blank.
I. Schedule 6.19 contains complete copies of all environmental
investigations, assessments, audits, studies, tests and
related materials in possession of either the Seller or Tick
known to exist, which relate to the current or prior
operations of the Seller or any real property now or
previously owned, operated, leased or utilized by the
Seller.
J. As used in this Agreement:
(1) "ENVIRONMENTAL LAWS AND REGULATIONS" means all limitations,
restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables
contained in any federal, state, European Union, foreign or
local law, ordinance, regulation, code, plan, order, decree,
judgment, injunction, notice, decision or demand letter
issued, entered or promulgated pursuant to any federal,
state, European Union, local or foreign law, applicable in
all countries where the Corporation carries out or has
carried out its business or activities or with which it has
or has had a direct or indirect contractual relationship,
relating to pollution, nuisance, health and safety, the
environment, the installations class ees (as defined under
French Law n /6-663 of 19 July 1976) or any Hazardous
Material.
(2) "HAZARDOUS MATERIALS" means any hazardous, infectious or
toxic substance, chemical, pollutant, contaminant, emission
or waste which is or becomes regulated by any local, state,
federal, European Union or foreign authority. Hazardous
Materials include, without limitations, petroleum, asbestos,
polychlorinated biphenyl and anything which is defined as
pollutant and/or hazardous substance and/or contaminant
under the laws of any federal, state, local, European Union
or foreign authority, applicable in all countries where the
Corporation carries out or has carried out its business or
activities or with which it has or has had a direct or
indirect contractual relationship.
6.20 LITIGATION. Except as set forth on Schedule 6.20 attached hereto,
neither the Seller nor Tick is engaged in or a party to or threatened with any
suit, action, proceeding, investigation or legal, administrative, arbitration or
other method of settling disputes or
14
disagreements or governmental investigation relating to the Seller, its
business or the Assets, and further, neither the Seller nor Tick knows of,
anticipates or has notice of any basis for any such action. There is no
order or injunction issued prohibiting consummation of the transactions
contemplated hereby. There is no judicial, administrative or other
proceeding, investigation or inquiry pending or threatened seeking to enjoin,
restrain or prohibit, or to obtain damages in respect of, or which is related
to or arises out of, this Agreement or the consummation of the transactions
contemplated hereby, or which could reasonably be expected to: (i) impair or
interfere in any material respect with Purchaser's ownership or operation of
the Business; (ii) reduce or materially adversely affect the value of the
Business; or (iii) result in any material liability to the Purchaser.
6.21 NO BROKERS. The Seller has not retained or engaged an investment
banker, broker, finder, agent or similar intermediary or incurred a liability or
obligation for brokerage fees, commissions or finders fees with respect to this
Agreement or the transactions contemplated hereby.
6.22 FULL DISCLOSURE AND CONTINUITY. The representations and warranties
of the Seller and Tick contained in this Agreement and each Schedule,
certificate or other written statement delivered pursuant to this Agreement or
in connection with the transactions contemplated herein are accurate, correct
and complete in all material respects, do not contain any untrue statement of a
material fact or, considered in the context in which presented, omit to state a
material fact necessary in order to make the statements and information
contained herein or therein not misleading. There is no fact, presently known
to the Seller and\or Tick which materially adversely affects the Business,
operations, properties, prospects or condition, financial or otherwise, of the
Seller or its business or the ability of the Seller to fully perform under the
terms of this Agreement and the transactions contemplated hereby, which has not
been set forth or described in this Agreement or in a Schedule, certificate or
other written statement delivered pursuant to this Agreement. All of the
Seller's and Tick's representations and warranties contained herein shall
survive for a period of one (1) year following the Closing.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents
and warrants to Seller as follows:
7.1 EFFECT OF AGREEMENT. Neither the execution, delivery and
performance of this Agreement nor the consummation of the terms and conditions
contained herein will: (i) conflict with or result in a breach of any provision
of the Bylaws of the Purchaser; (ii) constitute or result in the breach of or
conflict with any term, condition or provision of any note, bond, mortgage,
indenture or other material contract to which the Purchaser is a party or by
which the Purchaser or any of its assets may be bound except as set forth on
Schedule 7.1 attached hereto; (iii) violate any law, statute, regulation,
judgment, order, injunction or decree applicable to the Purchaser or any of its
assets; or (iv) result in any third party having the right to enjoin, rescind or
otherwise prevent or impede the consummation of the transaction contemplated
herein or to obtain any
15
other judicial or administrative relief as a result of any transaction
carried out in accordance with the provisions of this Agreement.
7.2 APPROVALS, CONSENTS AND NOTICES. Except as otherwise disclosed on
Schedule 7.2 attached hereto, the consummation of this Agreement shall not
require the consent, approval or notice to any landlord, mortgagee, secured
party or other third party.
7.3 DUE ORGANIZATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of France and has full
power and authority and all requisite licenses, permits and franchises to own,
operate or lease its assets and properties and carry on the business as
currently conducted and at all times conducted prior to the effective date.
Purchaser is duly licensed and qualified to do business as a foreign corporation
or otherwise, as appropriate, and is in good standing in all other jurisdictions
where by the nature of its business or the character and location of its
property, a failure to be so licensed or qualified would have a material adverse
affect upon its business or its assets, or where such failure to qualify would
materially affect the ability of Purchaser to enforce any of its rights. The
authorizations, approvals, orders and certificates of and from and all
declarations and filings with all federal, provincial, local, and other
governmental authorities and all courts and other tribunals to own, lease,
license, xxx and operate its properties and assets and conduct is business as
presently conducted and at all times conducted prior to the effective date where
the failure to possess such consents and other documents would have a material
adverse effect on its condition, financial or otherwise.
7.4 AUTHORITY. Purchaser has the full right, power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby.
7.5 NO BROKERS. The Purchaser has not retained or engaged an investment
banker, broker, finder, agent or similar intermediary or incurred a liability or
obligation for brokerage fees, commissions or finders fees with respect to this
Agreement or the transactions contemplated hereby.
7.6 COMPLETENESS OF INFORMATION. The representations and warranties of
the Purchaser contained in this Agreement and each Schedule, certificate or
other written statement delivered pursuant to this Agreement or in connection
with the transactions contemplated herein are accurate, correct and complete in
all material respects, do not contain any untrue statement of a material fact
or, considered in the context in which presented, nor to the best of Purchaser's
knowledge after due diligence, omit to state a material fact necessary in order
to make the statements and information contained herein or therein not
misleading. There is no fact, presently known to the Purchaser, which
materially adversely affects the ability of the Purchaser to fully perform this
Agreement and the transactions contemplated hereby, which has not been set forth
or described in this Agreement or in a Schedule, certificate or other written
statement delivered pursuant to this Agreement.
16
8. PRE-CLOSING REQUIREMENTS.
8.1 NOTIFICATION OF MATERIAL EVENTS. The Seller and Tick, on the one
hand, and the Purchaser, on the other hand, will each give prompt notice to the
other of material events or matters, as follows:
A. the occurrence, or failure to occur, of any event the
occurrence or failure of which would, or would be likely to,
cause any of their respective representations or warranties
contained in this Agreement to be untrue or incorrect in any
material respect at any time from the date hereof to the
Closing;
B. any failure on their respective parts or on the part of any
of their officers, directors, employees, representatives or
agents, if any, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfy any
covenant, condition or agreement to be complied with or
satisfied by each of them under this Agreement;
C. any notice or communication from any governmental or
regulatory agency or authority in connection with the
transactions contemplated by this Agreement; and
D. any actions, suits, claims, investigations or proceedings
commenced or, threatened, against, relating to or involving
or otherwise affecting the Seller or its business that, if
pending on the date of this Agreement, would have been
required to have been disclosed hereunder or that relate to
the consummation of the transactions contemplated by this
Agreement.
8.2 DISCLOSURE SCHEDULES. Each Party shall have the right to deliver
to any other party a written disclosure schedule as to any material matter of
which it becomes aware following execution of this Agreement which would
constitute a breach of any representation, warranty or covenant of this
Agreement by such party, identifying on such disclosure schedule the
representation, warranty or covenant which would be so breached. Each such
disclosure schedule shall be delivered as soon as practicable after such party
becomes aware of the matter disclosed therein. The non-disclosing party shall
have until Closing to notify the disclosing party that: (i) it will close
notwithstanding the new disclosure; or (ii) it will not close based on such new
disclosure.
8.3 INSURANCE. The Seller shall maintain all insurance coverage
insuring the Seller and the Business through the Closing.
8.4 TRANSACTIONS WITH AFFILIATES. Neither the Seller or Tick will, nor
will they permit, any of their affiliates to, purchase any asset or services of
any description from, or sell
17
any asset or service of any description to, the Seller, except as set forth
on Schedule 8.4 attached hereto.
8.5 EXCLUSIVITY. From the date hereof, Tick shall not, nor shall he
permit the Seller to take any action to seek, encourage, solicit or support any
inquiry, proposal, expression of interest or offer from any other person or
entity with respect to an acquisition, combination or similar transaction
involving the Seller or its Business or any property, assets or securities
related thereto, and Tick will promptly inform the Purchaser of the existence of
any such inquiry, proposal, expression of interest or offer and shall not
without the written consent of the Purchaser furnish any information to or
participate in any discussions or negotiations with any other person or entity
regarding the same.
8.6 BEST EFFORTS AND COOPERATION. Each of the parties shall use his or
its best efforts to consummate the transactions contemplated hereby and to
cooperate with each other in any reasonable arrangement to achieve that end.
9. ANNOUNCEMENT. Following the execution of this Agreement, the parties shall
approve a joint announcement so as to satisfy the requirements of public
disclosure applicable to the parties, such approval not to be unreasonably
withheld by any party. In addition, the parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except as
may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
10. EXPENSES. Each party shall bear all of his or its own costs and expenses
incurred in connection with the transactions contemplated hereby.
Notwithstanding the foregoing, Purchaser shall bear all costs, duties,
registration duties, V.A.T., legal publication fees and registration charges and
any similar expenses incurred in relation to the transaction provided for
herein.
11. INDEMNIFICATION.
11.1 SURVIVAL OF INDEMNIFICATION. The obligation of indemnification set
out in this Article 11 shall: (i) in the case of indemnification arising from
the breach of any of the representations or warranties contained herein, survive
for a period of one (1) year following the Closing (the "Survival Period") and
(ii) in the case of indemnification for all other matters, survive the Closing
for a period of one (1) year from the date of the applicable breach. Any
Indemnification Claim (as hereinafter defined) for breach of any of the
representations and warranties subject to the Survival Period must be asserted
in writing prior to the end of the Survival Period, and if asserted in writing
on or before the Survival Period, such claims shall survive until resolved or
judicially determined, and if not so asserted, then the Parties shall be forever
estopped and prohibited from asserting any such indemnification claim hereunder.
18
11.2 INDEMNIFICATION OF THE PURCHASER. In addition to his and its
obligation to indemnify the Purchaser as otherwise set forth herein, Tick and
the Seller shall indemnify and hold the Purchaser harmless against and in
respect of the following: any and all claims, demands, losses, costs, expenses
(including court costs and reasonable attorney fees), obligations, liabilities,
damages, suits, causes of action, deficiencies, taxes, interest on taxes, or
penalties (collectively the "Indemnification Claims") that the Purchaser and\or
the Business may suffer or incur which arise or result from or relate to any
misrepresentation, breach of warranty, or nonfulfillment of any covenant or
agreement on the part of the Seller hereunder or under any other agreement,
certificate, or other document contemplated or furnished (or to be furnished)
hereunder. Any amount due hereunder shall bear interest at the reference rate
at the Bank of America, N.A., from the date any such expense or cost is incurred
or any claim, liability or other payment is made to a third party claimant, or
in connection with any such claim. The Purchaser's rights hereunder are
cumulative and shall be in addition to all other rights and remedies available
at law or in equity.
11.3 MAXIMUM AMOUNT OF INDEMNIFICATION. Notwithstanding the amount of
the claim for indemnification, in no event shall either Seller or Tick be
obligated to indemnify Purchaser for any amount in excess of the then current
fair market value of forty thousand (40,000) shares of Apparel Technologies,
Inc. common shares, as traded on the NASDAQ Stock Exchange which shares shall be
valued as of the date the claim is settled, or, if such shares are sold by Tick
prior thereto, the value of the shares as of the date of sale. Seller and
Tick's maximum liability for indemnification claims shall be an aggregate amount
to apply to any and all claims made pursuant to this provision.
11.3 INDEMNIFICATION OF THE SELLER AND TICK. In addition to its
obligation to indemnify the Seller and Tick as otherwise set forth herein, the
Purchaser shall indemnify and hold Tick harmless against and in respect of any
and all Indemnification Claims, plus interest at the reference rate set forth
in Section 11.2 herein, from the date the Indemnification Claim is actually
incurred by Tick, that Tick may suffer or incur which arise or result from or
relate to any misrepresentation, breach of warranty, or nonfulfillment of any
covenant or agreement on the part of the Purchaser hereunder or under any other
agreement, certificate, or other document contemplated or furnished (or to be
furnished) hereunder.
11.4 NOTICE AND CLAIM PROCEDURE.
A. GENERAL REQUIREMENTS. Any party who or which may be
entitled to a right to recover indemnification pursuant to
this Agreement (the "Indemnified Party"): (i) shall give the
persons or entities required to make such indemnification
(the "Indemnifying Party") notice (which shall include all
facts known to the Indemnified Party giving rise to such
right and an estimate of the amount thereof) of the
Indemnification Claim and any Third Party Claim (as
hereinafter defined) relating to such right promptly after
receipt or becoming aware thereof; (ii) prior to taking any
material action with respect to a Third Party Claim, shall
19
consult with the Indemnifying Party as to the procedure to
be followed in defending, settling, or compromising the
Third Party Claim; (iii) shall not consent to any settlement
or compromise of the Third Party Claim without the written
consent of the Indemnifying Party (which consent, unless the
Indemnifying Party has elected to assume the exclusive
defense of such Claim, shall not be unreasonably withheld or
delayed); and (iv) shall permit the Indemnifying Party, if
it so elects, to assume the defense of such Third Party
Claim (including, except as provided below, the compromise
or settlement thereof) at its own cost and expense,
PROVIDED, HOWEVER, that in such event the Indemnified Party
shall have the right to approve the Indemnifying Party's
choice of legal counsel, which approval shall not be
unreasonably withheld. For the purposes of this Agreement,
"Third Party Claim" shall mean any Indemnification Claim by
any third party which gives rise or could reasonably be
expected to give rise to a right of indemnification
hereunder.
B. CONSULTATION AND CONSENT. If the Indemnified Party shall:
(i) fail to notify or to consult with the Indemnifying Party
with respect to any Third Party Claim in accordance with
subparagraph (a)(i) or (a)(ii) above (which failure shall
have a material and adverse effect upon the Indemnifying
Party); or (ii) consent to the settlement or compromise of
any Third Party Claim without having received the written
consent of the Indemnifying Party (unless, if the
Indemnifying Party has not elected to assume the defense of
such Claim, the consent of the Indemnifying Party is
unreasonably withheld or delayed), then the Indemnifying
Party shall be relieved of its indemnification obligation
with respect to such Third Party Claim under this Agreement.
C. DEFENSE OF CLAIM. If the Indemnifying Party shall elect to
assume the defense of any Third Party Claim pursuant to this
Agreement, it shall notify the Indemnified Party in writing
of such election. The Indemnifying Party shall not
compromise or settle any such Third Party Claim without the
written consent of the Indemnified Party (which consent
shall not be unreasonably withheld or delayed).
Notwithstanding the foregoing, the party which defends any
Third Party Claim shall, to the extent required by
applicable insurance policies, share or give control thereof
to any insurer with respect to such Claim.
12. CONDITIONS TO THE OBLIGATIONS OF PURCHASER. Each and every obligation of
Purchaser under this Agreement shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions unless waived in
writing by Purchaser:
12.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties made by the Seller and Tick herein shall be true and correct on
the date of this Agreement and on
20
the date of the Closing with the same effect as though made on such date; the
Seller and Tick shall have performed and complied with all agreements,
covenants and conditions required by this Agreement to be performed and
complied with by him prior to the Closing. Tick shall have, and shall have
caused the Gerant of the Seller to have delivered to Purchaser a certificate,
dated as of the Closing Date, in the form designated Schedule 12.1 hereto,
certifying to such matters and conditions contained in this Section 12 of
this Agreement.
12.2 CONSENTS AND APPROVALS. All consents from third parties,
regulators and governmental agencies required to consummate the transactions
contemplated hereby, or which, either individually or in the aggregate, if not
obtained, would cause an adverse effect on the Seller's financial condition or
business shall have been obtained and delivered to Purchaser.
12.3 OPINION. Purchaser shall have received an opinion of Tick's and
the Seller's counsel, dated as of the Closing Date, substantially in the form
attached hereto as Schedule 12.3.
12.4 NO ADVERSE CHANGE. There shall have been no adverse change since
the date of the financial statements which were delivered in conformity with the
provisions hereof in the business, prospects, financial condition, or
operations of the Seller.
12.5 NO PROCEEDING OR LITIGATION. No action, suit or proceeding before
any court or any governmental or regulatory authority shall have been commenced
or threatened, and no investigation by any governmental or regulatory authority
shall have been commenced or threatened against Tick, the Seller or the
Purchaser or any of their respective principals, officers or directors seeking
to restrain, prevent or change the transactions contemplated hereby or
questioning the validity or legality of any of such transactions or seeking
damages in connection with any of such transactions.
12.6 FINANCIAL AND OTHER REVIEW. Purchaser, its legal counsel,
accountants, consultants and other appointed representatives shall have
completed a full review of the Seller and its business and prospects (at
Purchaser's expense), the results of which shall be satisfactory to Purchaser in
its sole and absolute discretion.
12.7 OTHER DOCUMENTS. Tick will furnish or cause the Seller to furnish
Purchaser with such other and further documents and certificates as Purchaser
shall reasonably request to evidence compliance with the conditions set forth in
this Agreement.
13. CONDITIONS TO THE OBLIGATIONS OF THE SELLER AND TICK. Each and every
obligation of the Seller and Tick under this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each of the following conditions
unless waived in writing by the Tick:
13.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties made by Purchaser herein shall be true and correct on the date of
this Agreement and on the Closing with the same effect as though made on such
date; Purchaser shall have performed and complied with all agreements, covenants
and conditions required by this Agreement to be performed and complied with by
it prior to the Closing; Purchaser shall have delivered to the
21
Seller a certificate of its President, dated as of the Closing certifying to
the fulfillment of the conditions set forth herein, in the form designated
Exhibit "B" and the other conditions contained in this Section 13 of this
Agreement.
13.2 NO PROCEEDING OR LITIGATION. No action, suit or proceeding before
any court or any governmental or regulatory authority shall have been commenced
or threatened, and no investigation by any governmental or regulatory authority
shall have been commenced, or threatened, against Purchaser, the Seller or Tick,
or any of their respective principals, officers or directors, seeking to
restrain, prevent or change the transactions contemplated hereby or questioning
the validity or legality of any of such transactions or seeking damages in
connection with any of such transactions.
13.3 OPINION OF COUNSEL. The Seller shall have received an opinion of
counsel to Purchaser dated the Closing Date substantially in the form of
Schedule 13.3.
13.4 EMPLOYMENT AGREEMENT. Purchaser shall furnish Tick with
Employment Agreements in the forms provided for in Section 2.1 hereof.
14. CLOSING. The closing shall take place at the offices of Xxxxxx & Okoshken,
Paris, France at 10:00 a.m. on the 25th day of November, 1997, or such other day
as the parties here to shall determine (the "Closing").
15. NOTICES. All notices, requests, demands and other communications which are
required to be or may be given under this Agreement shall be in writing and
shall be deemed to have been duly delivered: (i) on the date of delivery if by
personal delivery; (ii) on the date of transmission with confirmed receipt by
telephone if delivered by telecopier; or (iii) on the date on which return
receipt is signed or delivery is refused if dispatched by certified or
registered first class mail, Federal Express or similar service, postage
prepaid, return receipt requested, to the Party to whom the same is so given or
made:
If to Tick: Xxxxx Tick
00 Xxxx xx Xx Xxxxx
00000 Xxxxx Xxxxxx
Telephone 00 00000000
If to the Seller: Cactus of Europe
00 Xxx xxx Xxxxxxxxxxxxx
00000 Xxxxxxxxx Xxx Seine
Telephone 00 0000 0000
Facsimile 01 3086 2106
If to the Purchaser: Apparel Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
22
A Copy of all
Notices to: Xxxxxxx X. Xxxxx, Esq.
Katz, Hoyt, Xxxxxx & Xxxxx LLP
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
16. CHANGES. This Agreement may not be modified or amended except pursuant to
an instrument in writing signed by each of the parties hereto.
17. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors and
assigns.
18. HEADINGS. The headings of the various sections of this Agreement have been
included for convenience of reference only and shall not be deemed to be part of
this Agreement.
19. SEVERABILITY. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
20. TERMINATION. This Agreement and the terms and provisions hereof may be
terminated: (i) by the mutual agreement of the parties at any time prior to the
Closing; (ii) by the Seller in the event of a material misrepresentation or
breach of warranty hereunder by the Purchaser; (iii) by the Purchaser in the
event of a material misrepresentation or breach of warranty hereunder by either
Tick or the Seller; (vi) by either party if such terminating party shall
determine in its reasonable judgement that the transaction has become
inadvisable or impracticable by reason of the institution of the threat by
state, local or federal governmental authorities or by any other person of
material litigation or proceedings against Purchaser or Tick; (v) by either
Tick, Seller or the Purchaser if the transactions contemplated herein have not
been consummated by November 30, 1997 and no extensions have been agreed to by
both parties or (vi) by any party in the event the business, assets or financial
condition of either the Purchaser or the Seller have been materially adversely
affected since June 30, 1997, whether by changes in development or operations in
the ordinary course of business or otherwise. In any of such events, this
Agreement shall become void and have no effect, and each Party shall pay all of
its own expenses incurred in connection herewith, without any liability on the
part of any Party or its directors, officers or shareholders.
21. GOVERNING LAW. This Agreement is to be governed by and construed according
to the laws of the State of California and the United States of America without
reference to its rules regarding conflicts of laws, and any claims arising
hereunder shall be prosecuted therein. The parties consent to the exclusive
jurisdiction of the courts of the State of California and hereby waive all
objections to such jurisdiction and venue.
22. INTERPRETATION. All pronouns and any variations thereof shall be deemed
to refer to the masculine feminine or neuter, singular or plural as the context
requires. Unless otherwise specified, all dollar amounts in this Agreement are
in U.S. Dollars. The parties each agree that each of them and their respective
counsel have reviewed carefully this Agreement and
23
participated in its negotiation and preparation. Accordingly, the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of
this Agreement.
23. ENTIRE AGREEMENT. This Agreement and the exhibits, schedules, and
attachments hereto sets forth the entire agreement by and among the parties and
supersedes all other agreements and understandings, whether oral or written, by
and between the parties and their respective officers, directors, or employees
relating to the subject matter hereof.
24. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
The Seller:
Cactus of Europe SARL, a French corporation
By: /s/ Xxxxx Tick
-------------------------------
Its: Gerant
-------------------------------
Tick:
/s/ Xxxxx Tick
-------------------------------
Xxxxx Tick, individually
Purchaser:
Apparel Technologies France SARL,
a French corporation
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx, Attorney in Fact
24
DIGITAL GROUP, INC.
0000 X. Xxxxxxx Xxxxxx
Xxxx xx Xxxxxxxx, XX 00000
November 25, 1997
EXHIBIT A
Xxxxx Tick
00 Xxxx Xx Xx Xxxxx
00000 Xxxxx Xxxxxx
EMPLOYMENT AGREEMENT
Dear Mr. Tick:
When executed by you ("Employee"), and by a duly authorized representative
of Digital Group, Inc., a California corporation ("Company"), and upon the
successful closing of the transaction between Apparel Technologies, France SARL,
yourself and Cactus Europe SARL, a French corporation, this Employment Agreement
("Agreement") will set forth the terms and conditions of Employee's employment
with Company.
1. SERVICES
1.1. EMPLOYMENT Company employs Employee during the Term (as
hereinafter defined) to serve as a Vice President ("Services"). Employee's
duties shall be determined by the President and the Board of Directors of
Company reasonably consistent with Employee's position. Employee shall comply
with all of the reasonable and customary employment policies of the Company.
The Services shall be generally performed at the principal offices of Company.
In addition, the Services may be performed by Employee from time to time on a
temporary travel basis at such other locations as Company shall reasonably
request, consistent with its reasonable business needs. Employee agrees to
perform such Services in a competent and professional manner, consistent with
the skills to be possessed by an employee in Company's business.
1.2 REPORTING REQUIREMENTS Employee shall report to Company's
President and Board of Directors.
Page 2
1.3 DUTIES Employee's responsibilities hereunder shall be determined
from time to time by the President and the Board of Directors of Company and
shall be reasonably consistent with Employee's position and past employment
duties.
1.4 TERM/EXCLUSIVITY
1.4.1 The Term of this Agreement shall commence on the closing
date of the transaction referred to in the first paragraph hereof and shall end
on the third anniversary of the said Closing, unless sooner terminated in
accordance with the provisions of this Agreement (the "Term"). The parties may
agree to extend the Term of this Agreement for an additional three (3) year
period (the "Renewal Period"). The financial terms and conditions applicable
during any Renewal Period shall be negotiated by the parties during the last
sixty (60) days of the Term hereof.
1.4.2 The Services shall be rendered on a part-time basis and
shall require approximately twenty five percent (25%) of Employee's time
throughout the course of each year in the United States. Employee acknowledges
that his performance and services hereunder are of a special, unique, unusual,
extraordinary and intellectual character which gives them peculiar value, and
that a breach by Employee of the terms of this Paragraph and Paragraph 1.5 will
cause Company irreparable injury. Employee acknowledges that Company is closing
the transaction referred to in the first paragraph hereof in reliance upon
Employee entering into and performing under this Agreement. Employee agrees
that Company is entitled to injunctive and other equitable relief to prevent a
breach or threatened breach of this Paragraph or Paragraph 1.5, which shall be
in addition to any other rights or remedies to which Company may be entitled.
Any action for breach of this Paragraph or Paragraph 1.5 is not subject to
arbitration pursuant to Paragraph 4.6.
1.5 CONFIDENTIALITY Employee acknowledges that his services will,
throughout the Term, bring Employee into contact with many confidential affairs
of Company, including, without limitation, information about costs, profits,
markets, sales, products, key personnel, pricing policies, operational methods,
technical processes and other business affairs, methods, plans for future
development, and other information not readily available to the public and which
gives Company a competitive advantage in the market, or the ability to obtain
such competitive advantage. In recognition of the foregoing, Employee covenants
and agrees as follows:
Page 3
1.5.1 Employee will keep secret all confidential matters of
Company (unless such confidential matters become public through no fault of
Employee) and will not disclose them to anyone outside of Company, either during
or after the Term, except with Company's written consent and except for such
disclosure as is necessary in the performance of Employee's Services during the
Term or as may be required by law; and
1.5.2 Employee will deliver promptly to Company on termination of
the Term or at any other time Company may so request, at Company's expense, all
memoranda, notes, records, reports and other documents (and all copies thereof)
relating to Company's business, which Employee obtained while employed by
Company or otherwise serving or acting on behalf of Company, or which Employee
may then possess or have under his control.
2. COMPENSATION
As compensation and consideration for all Services provided by Employee
during the Term pursuant to this Agreement, Company agrees to pay to Employee
the compensation set forth below:
2.1 FIXED COMPENSATION.
2.1.1 GENERALLY Employee shall be entitled to receive fixed
compensation in the amount of Thirty Five Thousand Dollars (US$35,000) payable
on the Company's regular paydays subject to any statutory withholdings which
Company may make for income tax or other purposes ("Fixed Compensation").
2.1.2 ADJUSTMENTS TO FIXED COMPENSATION Employee's Fixed
Compensation may be adjusted by Company at the sole and absolute discretion of
the Company's President and Board of Directors. However, the parties agree that
during the Term, Employee's Fixed Compensation shall not be less than Thirty
Five Thousand Dollars (US$35,000) annually.
2.2 BONUS COMPENSATION. If Employee receives compensation from his
French Employer equal to or in excess of One Hundred Fifty Seven Thousand
Dollars ($157,000) and Apparel Technologies, Inc., the Company's parent
corporation is operating profitably, Employee shall be paid an addition
Eighteen Thousand Dollars ($18,000) as bonus compensation ("Bonus
Compensation"). All Bonus Compensation is subject to statutory withholdings
which Company may make for income tax or other purposes. Any such Bonus
Page 4
Compensation shall be paid in accordance with the schedule provided by the
President and Board of Directors in the profitability plan.
2.3 ADDITIONAL COMPENSATION IN THE FORM OF SHARES. On the date
which is one year from the date first written above, Company's parent
corporation, Apparel Technologies, Inc. ("APTX") will issue Employee forty
thousand (40,000) shares of APTX authorized and outstanding common stock which
shares are listed on the NASDAQ National Market. In addition, Employee is
hereby granted options to purchase forty thousand (40,000) shares of APTX common
stock at an exercise price equal to the market value on November 25, 1997,
subject to approval and amendment of APTX's Stock Option Plan by its
shareholders increasing the number of authorized option shares. The Option
granted herein shall vest in two equal installments of twenty thousand shares,
first on November 25, 1998 and then on November 25, 1999 (collectively the
shares granted herein shall be referred to as "APTX Shares"). In the event
that between the date of execution hereof and the date of any grant of APTX
shares provided for herein, APTX shall effect a stock split, stock dividend,
reverse stock split, spin off or similar change in its common stock, there shall
be an equitable adjustment of the number of APTX Shares to be issued to
Employee under this Agreement. Employee represents and warrants that he has
been advised of the nature of the issuance of the APTX Shares and that he
recognizes that such shares are subject to Rule 144 of the Securities and
Exchange Commission. Employee acknowledges that he must hold the APTX Shares at
least one year from the date of their issuance and any subsequent sale of the
APTx Shares must be effected through a brokers transaction. The 40,000 shares
to be issued on November 25, 1998, shall vest immediately upon effectiveness of
this Agreement. Options shall vest only if (a) Employee is employed on the
vesting date or (b), Employee is terminated by the Company without "good cause"
prior to any scheduled vesting date.
2.3 VACATION AND OTHER BENEFITS. Due to the part-time nature of
Employee's employment hereunder, Employee is not entitled to receive any
vacation, nor any other benefits available to other employees of the Company.
3 EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Company that Employee has the capacity
to execute, deliver and perform pursuant to this Agreement, and that his
execution, delivery and performance pursuant to this Agreement will not result
in a breach of any contract or agreement to which Employee is a party. Employee
agrees to indemnify Company for any and all claims, demands, damages,
liabilities, losses and causes of actions arising out of a breach by Employee of
the foregoing representations and warranties.
Page 5
4 TERMINATION
4.1 TERMINATION BY COMPANY
4.1.1 EMPLOYEE'S MATERIAL BREACH Company shall have the right,
at its election, to terminate the Term for breach, by written notice to Employee
to that effect, only for "good cause" defined for this purpose to mean (i)
material and repeated instances of misconduct or habitual inability to perform
the Services, or a violation of Company's published policies or procedures; (ii)
a single act so grievous as to constitute the equivalent of such repeated
instances, including, without limitation, theft, misappropriation of Company's
assets or sexual harassment; (iii) unauthorized disclosure of confidential
information related to customers, employees or general business practices or
strategies or a material breach of any material covenant, condition, agreement
or term of this Agreement; (iv) Employee's breach of any of his fiduciary duties
of loyalty to Company; or (v) failure to obey any specific written direction
from Company's President or Board of Directors ("Employee's Material Breach"),
and only if Company shall have given written notice to Employee specifying the
claimed cause or breach, and, provided such breach is curable, Employee fails to
correct the claimed breach or fails to alter the objectionable pattern of
conduct specified in the applicable written notice as soon as practical
thereafter but no later than fifteen (15) days after receipt of the applicable
written notice or such longer time as may be reasonably required by the nature
of the claimed breach, but in no event more than thirty (30) days; and in no
event shall a breach of Paragraph 3.1.1(ii) be considered curable.
4.1.2 EFFECT OF TERMINATION BY COMPANY Should the Term be
terminated by Company by reason of Employee's Material Breach, Employee shall
have no right to any further Fixed Compensation or Bonus Compensation accruing
from the date of termination or thereafter. Company shall pay to Employee all of
Employee's Bonus Compensation on a pro-rata basis accruing through the effective
date of termination sixty (60) days after the end of the fiscal year of
termination.
4.2 EMPLOYEE'S DEATH OR DISABILITY
4.2.1 DEATH The Term shall immediately terminate upon
Employee's death as certified in accordance with the provisions of California
law ("Death").
4.2.2 DISABILITY As used herein, the term "Disability"
shall mean Employee becoming materially unable to perform the Services as a
result of his permanent or temporary, total or partial, physical or mental
injury or illness continuing for any sixty (60) days
Page 6
during any twelve (12) consecutive months of the Term ("Disability Period").
The Term shall terminate at the end of the Disability Period.
4.2.3 EFFECT OF DEATH OR DISABILITY
4.2.3.1 EMPLOYEE COMPENSATION Should the Term be
terminated in accordance with the provisions of Paragraphs 4.2.1 or 4.2.2 by
reason of Employee's Death or Disability, Employee or his estate (as the case
may be) shall have no right to any further Fixed Compensation or any other sums
or benefits accruing to Employee after the date of termination. Employee or his
estate (as the case may be) shall be entitled to receive such Employee Bonus
Compensation accruing through the effective date of termination on a pro rata
basis during the fiscal year of such Death or Disability.
5. GENERAL
5.1 APPLICABLE LAW CONTROLS Nothing contained in this Agreement shall
be construed to require the commission of any act contrary to law and wherever
there is any conflict between any provisions of this Agreement and any material
statute, law, ordinance or regulation contrary to which the parties have no
legal right to contract, then the latter shall prevail, provided that (i) in any
such event, the provisions of this Agreement so affected shall be curtailed and
limited only to the extent necessary to bring them within applicable legal
requirements; and (ii) if any obligation to pay Employee Fixed Compensation,
Bonus Compensation or Additional Compensation or any other amount due Employee
hereunder is so curtailed, such compensation or amount shall be paid as soon
thereafter, either during or subsequent to the Term, as permissible.
5.2. ARBITRATION Except as otherwise set forth in this Agreement,
any claim, dispute or controversy arising out of, or relating to any section of
this Agreement or the making, performance or interpretation of the rights and
obligations explicitly set forth in this Agreement, including, without
limitation, the determination of "Good Cause," shall, upon the election by
written notice of either Employee or Company, be settled on an expedited basis
by binding arbitration in California before a single arbitrator from the
Judicial Arbitration Mediation Service ("JAMS") mutually agreeable to the
parties hereto, and, if no agreement is reached, before the arbitrator from JAMS
selected in accordance with the rules of JAMS then in effect, which arbitration
shall be conducted in accordance with such rules, and judgment upon any award
rendered may be entered in any court having jurisdiction thereof. The decision
of the arbitrator shall be binding on all of the parties, and any right to
judicial action on any matter subject to arbitration hereunder is hereby waived,
unless otherwise provided by
Page 7
applicable law or in any Paragraph of this Agreement, except suit to enforce
the arbitration award or in the event arbitration is not available for any
reason. The arbitrator shall be bound by the terms and conditions of this
Agreement and shall not extend, modify or suspend any of the provisions of
this Agreement. The parties to this Agreement agree that no punitive damages
may be assessed by the arbitrator against any party before the arbitrator.
The costs associated for the payment of arbitration services with JAMS shall
be shared equally by the Company and Employee.
5.3 PROVISIONAL REMEDIES The parties shall have all rights to
provisional remedies which they would have at law or equity with respect to
matters not subject to arbitration, including, but not limited to, those matters
set forth in Paragraphs 1.4 and 1.5 of this Agreement, notwithstanding the
existence of the agreement to arbitrate set forth in Paragraph 5.2 of this
Agreement.
5.4 WAIVER/ESTOPPEL Any party hereto may waive the benefit of any
provision, condition or covenant set forth in this Agreement or any right or
remedy at law or in equity to which any party may be entitled, but only by an
instrument in writing signed by the parties to be charged. No estoppel may be
raised against any party except to the extent the other party relies upon an
instrument in writing, signed by the party to be charged, specifically reciting
that the other party may rely thereon. The parties' rights and remedies under
and pursuant to this Agreement or at law or in equity shall be cumulative, and
the exercise of any rights or remedies under one provision hereof or rights or
remedies at law or in equity shall not be deemed an election of remedies, and
any waiver or forbearance of any breach of this Agreement or remedy granted
hereunder or at law or in equity shall not be deemed a waiver of any preceding
or succeeding breach of the same or any other provision hereof or of the
opportunity to exercise such right or remedy or any other right or remedy,
whether or not similar, at any preceding or subsequent time.
5.5 NOTICES Any notice which Company is required or may desire to
give to Employee hereunder shall be in writing and may be served by delivering
it to Employee, or by sending it to Employee by mail, telex, telecopy or
telegraph, at the address set forth on page 1 hereof, or any substitute address
as Employee may from time to time designate by notice to Company. Any notice
which Employee is required or may desire to serve upon Company hereunder shall
be served in writing and may be served by delivering it personally or by sending
it by mail, telex or telegraph to the address set forth on page 1 hereof,
to the attention of the President, or such other substitute addresses as Company
may from time to time designate by notice to Employee, with copies to:
Page 8
Katz, Hoyt, Xxxxxx & Xxxxx LLP
Attn.: Xxxxxxx X. Xxxxx, Esq.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000 0000
Any notices or communications sent by telex or telecopy shall be also sent by
mail.
5.6 GOVERNING LAW This Agreement shall be governed by, construed and
enforced, and the legality and validity of each term and condition shall be
determined in accordance with the internal, substantive laws of the State of
California.
5.7 MODIFICATION/ENTIRE AGREEMENT This Agreement may not be altered,
modified or amended except by an instrument in writing signed by all of the
parties hereto. No person, whether or not an officer, agent, employee or
representative of any party, has made or has any authority to make for or on
behalf of that party any agreement, representation, warranty, statement,
promise, arrangement or understanding not expressly set forth in this Agreement
or in any other document executed by the parties concurrently herewith, if any
("Parol Agreements"). This Agreement and all other documents executed by the
parties concurrently herewith constitute the entire agreement between the
parties and supersede all express or implied, prior or concurrent, Parol
Agreements and prior written agreements with respect to the subject matter
hereof. The parties acknowledge that in entering into this Agreement, they have
not relied and will not in any way rely upon any Parol Agreements.
5.8 PROVISIONAL REMEDIES The parties shall have all rights to
provisional remedies which they would have at law or equity with respect to
matters not subject to arbitration, including, but not limited to, those matters
set forth in Paragraphs 1.4 and 1.5 of this Agreement, notwithstanding the
existence of the agreement to arbitrate set forth in Paragraph 4.6 of this
Agreement.
5.9 CORPORATE INTERFERENCE Employee agrees that for a period of two
(2) years following the date upon which Employee ceases to be employed by
Company, Employee shall not directly or indirectly, or by action or in concert
with others, induce or influence any person who is engaged (as an employee,
agent, independent contractor or otherwise) by the
Page 9
Company to terminate his engagement or to engage or otherwise participate in
a business activity directly or indirectly competitive with the Company's
business.
5.10 DEROGATORY COMMENTS The parties promise to refrain from making
derogatory comments about each other and their partners, subsidiaries,
divisions, affiliated companies, joint venturers, employers or employees. In
response to any inquiries or requests for references, the Company will confirm
only the dates of Employee's employment and will state that the employment
relationship was terminated by mutual agreement.
Please confirm your agreement to the foregoing by signing below where
indicated.
Very truly yours,
Digital Group Inc.,
a California corporation
By:/s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx,
Attorney in Fact
AGREED AND ACCEPTED
this 25th day of November, 1997
EMPLOYEE
/s/ Xxxxx Tick
--------------------------------
Xxxxx Tick
APPAREL TECHNOLOGIES FRANCE, SARL
00 Xxx xxx Xxxxxxxxxxxxx
00000 Xxxxxxxxx Xxx Seine
November 25, 1997
EXHIBIT B
Xxxxx Tick
00 Xxxx Xx Xx Xxxxx
00000 Xxxxx Xxxxxx
EMPLOYMENT AGREEMENT
Dear Mr. Tick:
When executed by you ("Employee"), and by a duly authorized representative
of Apparel Technologies France SARL, a French corporation ("Company"), and upon
the successful closing of the transaction between Company, yourself and Cactus
Europe SARL, a French corporation, this Employment Agreement ("Agreement") will
set forth the terms and conditions of Employee's employment.
1. SERVICES
1.1. EMPLOYMENT Company employs Employee during the Term (as hereinafter
defined) to serve as a sales manager and to provide services generally incumbent
upon a sales manager including managing the sales force and planning strategies
to improve and increase the Company's sales ("Services"). Employee's duties
shall be determined by the President and the Board of Directors of Company
reasonably consistent with Employee's position and past employment duties.
Employee shall comply with all of the reasonable and customary employment
policies of the Company. The Services shall be generally performed at the
principal offices of Company in France. In addition, the Services may be
performed by Employee from time to time on a temporary travel basis at such
other locations as Company shall reasonably request, consistent with its
reasonable business needs. Employee agrees to perform such Services in a
competent and professional manner, consistent with the skills to be possessed by
an employee in Company's business.
Page 2
1.2 REPORTING REQUIREMENTS Employee shall report to Apparel
Technologies, Inc or where more than one manager is appointed, to both Apparel
Technologies, Inc. and the Company's Management Board.
1.3 DUTIES Employee's responsibilities hereunder shall be determined from
time to time by Apparel Technologies, Inc., and the Company's Management Board
and shall be reasonably consistent with Employee's position and past employment
duties.
1.4 TERM/EXCLUSIVITY
1.4.1 The Term of this Agreement shall commence on the closing date
of the transaction referred to in the first paragraph hereof and shall continue
until terminated in accordance with the provisions of this Agreement or French
law (the "Term").
1.4.2 The Services shall generally be rendered on a full-time basis,
however the Company acknowledges Employee's additional obligations to Digital
Group, Inc. and further acknowledges that approximately twenty five percent of
Employee's time, on the whole, will be spent in service to Employee's other
employer. Employee acknowledges that his performance and services hereunder are
of a special, unique, unusual, extraordinary and intellectual character which
gives them peculiar value, and that a breach by Employee of the terms of this
Paragraph and Paragraph 1.5 will cause Company irreparable injury. Employee
acknowledges that Company is closing the transaction referred to in the first
paragraph hereof in reliance upon Employee entering into and performing under
this Agreement. Employee agrees that Company is entitled to injunctive and
other equitable relief to prevent a breach or threatened breach of this
Paragraph or Paragraph 1.5, which shall be in addition to any other rights or
remedies to which Company may be entitled.
1.5 CONFIDENTIALITY Employee acknowledges that his services will,
throughout the Term, bring Employee into contact with many confidential affairs
of Company, including, without limitation, information about costs, profits,
markets, sales, products, key personnel, pricing policies, operational methods,
technical processes and other business affairs, methods, plans for future
development, and other information not readily available to the public and which
gives Company a competitive advantage in the market, or the ability to obtain
such competitive advantage. In recognition of the foregoing, Employee covenants
and agrees as follows:
1.5.1 Employee will keep secret all confidential matters of Company
(unless such confidential matters become public through no fault of Employee)
and will not disclose
Page 3
them to anyone outside of Company, either during or after the Term, except
with Company's written consent and except for such disclosure as is necessary
in the performance of Employee's Services during the Term or as may be
required by law; and
1.5.2 Employee will deliver promptly to Company on termination of the
Term or at any other time Company may so request, at Company's expense, all
memoranda, notes, records, reports and other documents (and all copies thereof)
relating to Company's business, which Employee obtained while employed by
Company or otherwise serving or acting on behalf of Company, or which Employee
may then possess or have under his control.
2. COMPENSATION
As compensation and consideration for all Services provided by Employee
during the Term pursuant to this Agreement, Company agrees to pay to Employee
the compensation set forth below:
2.1 FIXED COMPENSATION.
2.1.1 GENERALLY Employee shall be entitled to receive fixed
compensation in the amount of One Hundred Five Thousand Dollars (US$105,000)
payable on the Company's regular paydays subject to any statutory withholdings
which Company may make for income tax or other purposes ("Fixed Compensation").
2.1.2 ADJUSTMENTS TO FIXED COMPENSATION Employee's Fixed Compensation
may be adjusted by Company. However, any reduction in Employee's Fixed
Compensation shall require the consent of the Employee.
2.1.3 TRAVEL BONUS Employee, in his capacity as sales manager will
be expected to travel in and around Europe and Asia. Consequently, twenty five
percent (25%) of the Fixed Compensation due and payable to Employee under the
terms of Section 2.1.1 shall be deemed to be a travel bonus. Such travel bonus
shall be prorated over the course of each year as a part of Employee's regular
paycheck.
2.2 BONUS COMPENSATION. If Company meets the profitability goals set
forth in a plan approved by the Manger or the Management Board of the Company
and Apparel Technologies, Inc, Company's parent corporation is operating
profitably, Employee shall be paid an addition Fifty Two Thousand Dollars
(US$52,000) as bonus compensation
Page 4
("Bonus Compensation"). All Bonus Compensation is subject to statutory
withholdings which Company may make for income tax or other purposes and
shall be paid in French Francs, converted by using the Conversion Ratio in
effect at the time of payment. Any such Bonus Compensation shall be paid in
accordance with the schedule provided by the Manager or the Management Board
in the profitability plan.
2.3 SPECIAL INDUCEMENTS As a special inducement to Employee to enter into
this Agreement, during the Term, Company agrees as follows:
2.3.1 During each full twelve (12) month period of the Term, to
provide Employee five (5) weeks of vacation each year. Said vacation shall be
taken at such time or times during the applicable year as may be determined by
Employee, subject to Company's business needs ("Vacation Benefits"); and
2.3.2 Employee will be entitled to reimbursement of his reasonable
and customary and documented business expenses incurred on behalf of Company
("Reimbursed Expenses").
2.3.3 Employee shall participate in any health plan and/or retirement
plan that may be in effect from time to time with the Company.
2.3.4 Company shall purchase for Employee, during the Term, a term
life insurance policy with a benefit value that is no lower than Employee's
Fixed Compensation. Employee shall have the sole and absolute right to name the
beneficiaries of such policy. The company issuing such policy shall have "AA"
rating or better from at least two (2) national insurance rating companies. In
addition, the Company shall purchase civil liability "general director"
insurance for the benefit of Employee. Any life insurance purchased pursuant to
this provision shall comply in all respects with the requirements of French law.
2.4 CONVERSION TO FRANCS. All compensation including but not limited to
Fixed Compensation, Bonus Compensation and Additional Compensation shall be paid
to Employee in French francs. All amounts are provided for herein are state in
U.S. Dollars and shall be converted to French francs at a conversion rate of
6.25 French francs per one U.S. dollar (the "Conversion Ratio"). The Conversion
Ratio will be reviewed by the parties hereto every six months to determine
whether or not an adjustment in such ratio is warranted. Notwithstanding the
foregoing schedule of review, in the event the daily quoted conversion rates of
the French Franc to the U.S. Dollar should fluctuate by one franc per U.S.
dollar or
Page 5
more (in either direction) within any thirty (30) day period, such
fluctuation shall cause an immediate review of the Conversion Ratio provided
for herein.
3 EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Company that Employee has the capacity
to execute, deliver and perform pursuant to this Agreement, and that his
execution, delivery and performance pursuant to this Agreement will not result
in a breach of any contract or agreement to which Employee is a party. Employee
agrees to indemnify Company for any and all claims, demands, damages,
liabilities, losses and causes of actions arising out of a breach by Employee of
the foregoing representations and warranties.
4 TERMINATION
4.1 TERMINATION BY COMPANY
4.1.1 EMPLOYEE'S MATERIAL BREACH Company shall have the right, at
its election, to terminate the Term for breach, by written notice to Employee to
that effect, only for "good cause" as defined by the French labor laws. Any
such notice of breach shall be delivered to Employee in conformity with the
requirements of French labor law. If curable, Employee shall be given notice of
the breach and an opportunity to cure such breach. If Employee shall fail to
cure any such breach, the Company shall have the right to terminate the Term by
following the dismissal procedure as required under French labor laws.
4.1.2 EFFECT OF TERMINATION BY COMPANY Should the Term be terminated by
Company by reason of Employee's Material Breach, Employee shall have no right to
any further Fixed Compensation, Bonus Compensation, Vacation Benefits or
Reimbursed Expenses accruing from the date of termination or thereafter. Company
shall pay to Employee all of Employee's Bonus Compensation on a pro-rata basis
accruing through the effective date of termination sixty (60) days after the end
of the fiscal year of termination. Following Employee's termination by Company,
Employee shall receive any remaining amount of the Additional Compensation due
to Employee within a period of no more than two years from the date of
Employee's termination. Any payment by Company of any remaining Additional
Compensation shall be in cash.
Page 6
4.2 EMPLOYEE'S DEATH OR DISABILITY
4.2.1 DEATH The Term shall immediately terminate upon Employee's
death as certified in accordance with the provisions of French law ("Death").
4.2.2 DISABILITY As used herein, the term "Disability" shall mean
Employee becoming materially unable to perform the Services as a result of his
permanent or temporary, total or partial, physical or mental injury or illness
continuing for any sixty (60) days during any twelve (12) consecutive months of
the Term ("Disability Period"). The Term shall terminate at the end of the
Disability Period. These disability provisions shall be governed by and subject
to French law.
5. GENERAL
5.1 WAIVER/ESTOPPEL Any party hereto may waive the benefit of any
provision, condition or covenant set forth in this Agreement or any right or
remedy at law or in equity to which any party may be entitled, but only by an
instrument in writing signed by the parties to be charged. No estoppel may be
raised against any party except to the extent the other party relies upon an
instrument in writing, signed by the party to be charged, specifically reciting
that the other party may rely thereon. The parties' rights and remedies under
and pursuant to this Agreement or at law or in equity shall be cumulative, and
the exercise of any rights or remedies under one provision hereof or rights or
remedies at law or in equity shall not be deemed an election of remedies, and
any waiver or forbearance of any breach of this Agreement or remedy granted
hereunder or at law or in equity shall not be deemed a waiver of any preceding
or succeeding breach of the same or any other provision hereof or of the
opportunity to exercise such right or remedy or any other right or remedy,
whether or not similar, at any preceding or subsequent time.
5.2 NOTICES Any notice which Company is required or may desire to give to
Employee hereunder shall be in writing and may be served by delivering it to
Employee, or by sending it to Employee by mail, telex, telecopy or telegraph, at
the address set forth on page 1 hereof, or any substitute address as Employee
may from time to time designate by notice to Company, or when required, notice
shall be sent to Employee via registered mail, return receipt requested. Any
notice which Employee is required or may desire to serve upon Company hereunder
shall be served in writing and may be served by delivering it personally or by
sending it by mail, telex or telegraph to the address set forth on page 1
hereof, to the attention of the President, or such other address of Company
which may from time to
Page 7
time be applicable. Any notices or communications sent by telex or telecopy
shall be also sent by mail.
5.3 GOVERNING LAW This Agreement shall be governed by, construed and
enforced, and the legality and validity of each term and condition shall be
determined in accordance with the internal, substantive laws of France.
5.4 MODIFICATION/ENTIRE AGREEMENT This Agreement may not be altered,
modified or amended except by an instrument in writing signed by all of the
parties hereto. No person, whether or not an officer, agent, employee or
representative of any party, has made or has any authority to make for or on
behalf of that party any agreement, representation, warranty, statement,
promise, arrangement or understanding not expressly set forth in this Agreement
or in any other document executed by the parties concurrently herewith, if any
("Parol Agreements"). This Agreement and all other documents executed by the
parties concurrently herewith constitute the entire agreement between the
parties and supersede all express or implied, prior or concurrent, Parol
Agreements and prior written agreements with respect to the subject matter
hereof. The parties acknowledge that in entering into this Agreement, they have
not relied and will not in any way rely upon any Parol Agreements.
5.5 PROVISIONAL REMEDIES The parties shall have all rights to provisional
remedies which they would have at law or equity with respect to matters not
subject to arbitration, including, but not limited to, those matters set forth
in Paragraphs 1.4 and 1.5 of this Agreement.
5.6 CORPORATE INTERFERENCE Employee agrees that for a period of two (2)
years following the date upon which Employee ceases to be employed by Company,
Employee shall not directly or indirectly, or by action or in concert with
others, induce or influence any person who is engaged (as an employee, agent,
independent contractor or otherwise) by the Company to terminate his engagement
or to engage or otherwise participate in a business activity directly or
indirectly competitive with the Company's business.
5.7 DEROGATORY COMMENTS The parties promise to refrain from making
derogatory comments about each other and their partners, subsidiaries,
divisions, affiliated companies, joint venturers, employers or employees. In
response to any inquiries or requests for references, the Company will confirm
only the dates of Employee's employment and will state that the employment
relationship was terminated by mutual agreement.
Page 8
Please confirm your agreement to the foregoing by signing below where
indicated.
Very truly yours,
Apparel Technologies France SARL
a French corporation
By /s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, Attorney in Fact
AGREED AND ACCEPTED
this 25th day of November, 1997
EMPLOYEE
/s/ Xxxxx Tick
------------------------
Xxxxx Tick
