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EXHIBIT 10.8
NON-COMPETITION AND
CONFIDENTIALITY AGREEMENT
This
NON-COMPETITION AND CONFIDENTIALITY AGREEMENT (this "AGREEMENT")
is
made and entered into as of this 28th day
of June, 2005, by and between CHAMBERS
DELAWARE ACQUISITION COMPANY, a Delaware
corporation (the "COMPANY") and KELLY
GREEN (the "STOCKHOLDER").
R E C I T A L S :
A. The
Company is a wholly-owned subsidiary of Phoenix Footwear Group,
Inc. ("PHOENIX FOOTWEAR" and together with
the Company, the "BUYER").
B. The
Company, Chambers Belt Company (the "SELLER"), Stockholder and
the
other Chambers Belt stockholders entered
into an Asset Purchase Agreement dated
April 18, 2005 (such agreement, together
with any and all agreements and
instruments to be executed and delivered
pursuant thereto and all schedules and
exhibits thereto, all as the same may be
amended, supplemented or modified from
time to time, the "ASSET PURCHASE
AGREEMENT") pursuant to which the Seller
agreed to sell to the Company and the
Company agreed to purchase from Seller
certain properties, goodwill and tangible
and intangible business assets and
assume certain liabilities of Seller
necessary for the Company to continue
Seller's business of designing,
manufacturing, sourcing, importing, warehousing,
marketing, distributing, and selling men's,
women's, boy's and girl's western
dress and casual belts and related leather
accessories and products
(collectively, the "BUSINESS").
C. Phoenix
Footwear has guaranteed certain obligations of the Company
pursuant to a Guaranty dated April 18, 2005
executed by Phoenix Footwear in
favor of Seller and the Stockholders, has
issued shares of its common stock to
the Seller in partial payment of the
purchase price due under the Asset Purchase
Agreement, may issue additional shares of
its common stock to Seller under the
earn-out provisions of the Asset Purchase
Agreement and has granted registration
rights to Seller with respect to such
shares.
D. The
Stockholder has served as a President of Seller's Prestige
Division
and as such, has unique knowledge and
experience regarding the Business, and the
Buyer desires to be assured that
confidential information and relationships
pertaining to the Business and the goodwill
associated with the Business will be
preserved and protected and will inure to
the benefit of the Buyer after the
closing of the transactions contemplated by
the Asset Purchase Agreement (the
"CLOSING").
E. As an
inducement for, and to fulfill a material condition to the
obligation of the Buyer to consummate the
transactions contemplated in the Asset
Purchase Agreement (the "CLOSING"),
Stockholder is entering into this Agreement
and agreeing to abide by and observe the
terms and restrictions hereof.
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NOW,
THEREFORE, in consideration of the foregoing recitals and the
mutual
covenants and agreements hereinafter set
forth and other good and valuable
consideration, the receipt and sufficiency
of which is hereby acknowledged, the
parties hereto agree as follows:
1.
ACKNOWLEDGMENTS. Stockholder acknowledges that: (a) the
goodwill
associated with the Business, customers and
assets of the Seller prior to the
Closing are an integral component of the
value being purchase by the Buyer
pursuant to the Asset Purchase Agreement
and that Stockholder's agreement as set
forth herein is important to preserve that
value following the Closing; and (b)
in connection with the acquisition of the
Business, Stockholder is receiving
substantial economic benefits which
constitute consideration in addition to the
payments provided for below for the
covenants in this Agreement.
2.
PAYMENTS. In consideration for observing his covenants herein,
the
Company shall pay to the Stockholder twenty
(20) equal quarterly payments in
immediately available funds in the amount
of $60,000 each, for a maximum total
payment hereunder of $1,200,000. Subject to
the terms and conditions herein, the
first such quarterly payment shall be paid
on June 28, 2005 and each remaining
payment shall be due on the last day of
each successive ninety (90) day period
thereafter. If the Company fails to make a
timely payment due hereunder, the
Company shall not be in breach of this
Agreement unless the Stockholder has
first given written notice thereof to the
Company and Phoenix Footwear and the
Company fails to pay such amount within
five (5) business days after being given
such notice in accordance with the terms
hereof.
3.
RESTRICTIVE COVENANTS.
(a) Non-Competition and Non-Solicitation.
(i) Except as provided below, during the Restrictive Period
(as defined below), the Stockholder shall
not, within the United States of
America and all territories, possessions
and commonwealths thereof (including
Puerto Rico, Guam and the U.S. Virgin
Islands), Canada, Mexico or anywhere in
the World where the Company conducts or
solicits business after the date hereof:
(A) directly or indirectly, alone or with others, engage
in any activity that is the same as,
similar to or otherwise competitive with
the Business or any other business engaged
in by Phoenix Footwear or the Company
or any direct or indirect subsidiary
thereof (collectively, the "PHOENIX
GROUP");
(B) be or become an employee, officer, director,
stockholder, owner, corporate affiliate,
salesperson, co-owner, partner,
trustee, promoter, founder, technician,
engineer, analyst, stockholder, agent,
representative, supplier, investor or
lender, compensated consultant, advisor or
manager of or to, or otherwise acquire or
hold any interest in or otherwise
engage in the providing of services to, any
person or entity that engages in a
business that is the same as, similar to or
otherwise competitive with the
Business or any other business engaged in
by any member of the Phoenix Group; or
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(C) permit Stockholder's name to be used in connection
with a business that is the same as,
similar to or otherwise competitive with
the Business or any other business engaged
in by any member of the Phoenix
Group;
provided, however, that nothing in this
Section 3 shall prevent Stockholder from
(1) owning as a passive investment less
than 1% of the outstanding shares of the
capital stock of a publicly-held
corporation if Stockholder is not otherwise
associated directly or indirectly with such
corporation or any affiliate of such
corporation or from, (2) serving as an
employee or consultant to the Company or
its successors in interest or (3) during
the first twelve (12) months following
the date of this Agreement, continuing to
have an ownership interest in
Maquiladora Chambers de Mexico, S.A. De C.
V. ("CHAMBERS DE MEXICO"), provided
that the Stockholder shall not devote any
time or perform any services for
Chambers de Mexico other than
administrative functions consistent with
historical practices. As of the last day of
such twelve (12) month period,
Stockholder shall not directly or
indirectly have any ownership interest
whatsoever in Chambers de Mexico and he
shall provide evidence thereof to the
Company and Phoenix Footwear which is
satisfactory to them; provided that if
Chambers de Mexico has ceased all
operations by the last day of such twelve (12)
month period, Stockholder may take such
actions to the extent reasonably
necessary to dissolve Chambers de Mexico or
dispose of his ownership interest
therein during a period of time up to a
maximum of six additional months.
(ii) Without the prior written consent of the Chief Executive
Officer of Phoenix Footwear, during the
Restrictive Period, Stockholder shall
not either in his individual capacity or as
an agent for or on behalf of
another: (A) hire or offer to hire (as an
employee, independent contractor or
otherwise) any of the directors, officers,
employees or independent sales staff
of the Company or any other member of the
Phoenix Group; (B) entice away or in
any other manner persuade or attempt to
persuade any of the directors, officers,
employees or independent sales staff of the
Company or any other member of the
Phoenix Group, to discontinue their
relationship with Phoenix Footwear or the
Company or their respective direct and
indirect subsidiaries; (C) contract,
solicit, divert or attempt to divert from
the Company or any other member of the
Phoenix Group any business whatsoever by
influencing or attempting to influence
any client or customer of the Company or
any member of the Phoenix Group; or (D)
contract, solicit, divert, or attempt to
divert from the Company or any member
of the Phoenix Group any supplier, vendor,
manufacturer or distributor.
(iii) Stockholder agrees that he will not at any time engage
in any action or make any public or private
comments (A) that disparages,
disrupts or impairs the normal operations
or harms the reputation of or
relationship between the directors,
officers or employees of the Company or any
other member of the Phoenix Group and any
of their respective customers,
prospective customers, suppliers, vendors,
manufacturers, distributors or
lenders, or (B) that interferes with the
existing contractual relationships of
the Company or any other member of the
Phoenix Group.
(iv) Stockholder agrees to, and agrees that Phoenix Footwear
or the Company or any of their respective
officer
