Exhibit 10.5
Attachment to Section 5.20(b)
XXXXX XXXXX INTERNATIONAL, INC.
0000 XX 000/xx/ Xxxxxx
Xxxxx, Xxxxxxx 00000
February 3, 2003
Xx. Xxxxxxxx X. Xxxxx
000 Xxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Xx. Xxxxx:
Reference is made to that certain Agreement and Plan of Merger of even
date herewith being entered into concurrently with the execution and delivery
hereof (the "Merger Agreement"), by and among Xxxxx Xxxxx International, Inc., a
Florida corporation ("Parent"), Connor Acquisition Corp., a Delaware corporation
("Merger Sub"), and Xxxxxx Corporation, a Delaware corporation (the "Company"),
pursuant to which, upon the terms and subject to the conditions set forth
therein, Merger Sub will merge with and into the Company (the "Merger") and the
Company will be the surviving corporation in the Merger (the "Surviving
Corporation"), and become a direct, wholly owned subsidiary of Parent.
Capitalized terms used but not defined herein have the meanings ascribed thereto
in the Merger Agreement.
This letter agreement (this "Agreement") confirms our mutual agreement
and understanding with respect to the following:
1. As a material inducement for Parent and Merger Sub to enter into the
Merger Agreement and to consummate the Merger and the transactions contemplated
by the Merger Agreement, and in consideration for the sum of $10.00 and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Xxxxxxxx X. Xxxxx ("Sinha") hereby agrees that he shall not, for a
period of nine (9) months from and after the Effective Time (which period
automatically shall be extended for such time as Sinha is in breach of any of
the provisions hereof) (the "Restriction Period"), directly or indirectly (i)
solicit for hire, hire, offer employment to, engage, retain or accept the
services of, or otherwise employ, or assist any person, group of persons or any
entity with soliciting for hire, hiring, offering employment to, engaging,
retaining or accepting the services of, or otherwise employing, any person
currently employed as a full- or part-time employee, working for or otherwise
associated or affiliated with, the Company, the Surviving Corporation or any of
their respective subsidiaries in any sales, design, marketing, merchandising or
similar capacity (or any combination thereof) and whose annualized compensation
or remuneration (including, without limitation, salary, fees, bonuses,
perquisites, equity and other forms of incentive awards, options or
compensation) is greater than $100,000 (each such person, an "Employee") and
then only to the extent any of the prohibitions described above relate to or are
in connection with a business, venture or activity involving the wholesale or
retail manufacturing, distribution, sale or licensing of apparel goods
or services; (ii) facilitate, entice, encourage or induce in any manner any
Employee to terminate, abandon, resign, cease or otherwise alter his or her
employment, association, consultancy, business or other relationship with the
Company, the Surviving Corporation or any of their respective subsidiaries; or
(iii) interfere in any manner with the relationship of the Company, the
Surviving Corporation or any of their respective subsidiaries with any Employee.
2. Sinha acknowledges and agrees that it is fair and reasonable that he
make the covenants and perform the undertakings set forth in this Agreement and
has done so with the benefit of the advice of legal counsel and other business
advisors. Furthermore, Sinha agrees that any breach or attempted breach or
non-observance by him of any of the provisions of this Agreement will cause
material irreparable harm to Parent, the Company, the Surviving Corporation and
their respective subsidiaries and affiliates for which monetary damages will not
be an adequate remedy. Accordingly, Parent, the Company and/or the Surviving
Corporation shall be entitled to apply for and obtain injunctive and equitable
relief (whether temporary, preliminary and/or permanent) to restrain, prevent
and enjoin the breach or threatened breach of, and otherwise to specifically
enforce, the provisions of this Agreement, without the requirement of the
posting of a bond or providing any other form of security. Nothing contained
herein shall be construed as a limitation or waiver of any other right or remedy
that may be available to Parent, the Company and/or the Surviving Corporation
upon such breach, non-observance or threatened breach or non-observance. For
emergency relief (including temporary and preliminary injunctive relief), an
application may be made in any court of competent jurisdiction, in addition to
Parent's, the Company's and/or the Surviving Corporation's right to seek
injunctive, monetary and other forms of relief at law or in equity as provided
for in this Agreement. Sinha further agrees that the subject matter and duration
of the restrictions contained herein are reasonable in light of the facts as
they exist today. If any restriction contained in this Agreement is deemed to be
unreasonable in any respect by a court of competent jurisdiction, such
restriction shall be reduced (but not eliminated), in such manner as such court
determines is reasonable (but in all cases such reduction shall be only to such
extent as is legally permissible to carry out the intention of the parties
hereto and to maximize the effect of the provisions herein agreed to by the
parties). Sinha agrees that the provisions of this Agreement are several, such
that if any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void,
unenforceable or against its regulatory policy, the remainder of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
3. Each of the parties hereto hereby represents and warrants, as to
himself or itself, that (a) he or it has all requisite capacity, power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, (b) this Agreement is its legal, valid and binding obligation,
enforceable against him or it in accordance with its terms, (c) if applicable,
his or its entry into this Agreement and performance of the terms hereof has
been duly and validly authorized, (d) his or its entry into this Agreement and
performance of the terms hereof will not breach or conflict with any outstanding
obligation, contractual or otherwise, to which he or it is subject, nor will the
same violate any laws or regulations of any governmental or judicial authority
to which he or it is subject.
4. This Agreement contains the entire agreement, and supersedes all
prior agreements and understandings, oral or written, between the parties hereto
with respect to the
subject matter hereof. This Agreement may not be changed, modified, extended or
terminated except upon written amendment duly approved in writing by each of the
parties hereto.
5. This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, permitted assigns,
heirs and legal representatives. The rights and obligations of a party hereunder
may not be transferred or assigned, except that Parent may assign its rights and
obligations hereunder to any of its subsidiaries or affiliates.
6. All questions pertaining to the validity, construction, execution
and performance of this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of laws provisions thereof. Each of the parties hereto (a) consents to
submit himself or itself to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the matters that are the subject
of this Agreement, (b) agrees that he or it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court, and (c) agrees that he or it will not bring any action relating to this
Agreement or any of the matters that are the subject of this Agreement in any
court other than a Federal court sitting in the State of Delaware or a Delaware
state court. The parties irrevocably and unconditionally waive any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement or any of the matters that are the subject of this Agreement in any
Federal court located in the State of Delaware or any Delaware state court, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
7. Each party shall duly execute and deliver, or cause to be duly
executed and delivered, such further agreements, documents and instruments, and
do or cause to be done such further acts as may be reasonably necessary or
proper to effectuate the provisions or purposes of this Agreement and the
transactions contemplated hereby.
8. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which together shall constitute one and
the same instrument.
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If this Agreement correctly sets forth our understanding with respect
to the subject matters addressed herein, please execute this Agreement in the
space provided below, whereupon it shall become a binding agreement between us.
Very truly yours,
XXXXX XXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Page
-------------------------------------
Name: Xxxxxxx X. Page
Title: Chief Financial Officer
Agreed to and accepted as of the date first written above:
XXXXXX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman & CEO
/s/ Xxxxxxxx X. Xxxxx
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XXXXXXXX X. XXXXX
