Exhibit 10.1

 

AGREEMENT

 

This Agreement (the “Agreement”) is entered into as of February 18, 2013, by and
among Joe’s Jeans Inc., a Delaware corporation (“Joe’s”), Joe’s Jeans
Subsidiary, Inc., a Delaware corporation (“Joe’s Subsidiary”) (collectively, the
“Company”), and Joseph M. Dahan, a resident of California (“Dahan”).

 

W I T N E S S E T H:

 

WHEREAS, Innovo Group Inc. (now known as Joe’s Jeans Inc.), Joe’s Jeans, Inc.
(now known as Joe’s Jeans Subsidiary, Inc.), JD Holdings, Inc., (“Seller”) and
Joseph M. Dahan previously entered into that certain Agreement and Plan of
Merger dated February 6, 2007, which agreement was amended by the First
Amendment to the Agreement and Plan of Merger dated June 25, 2007 (collectively,
the “Merger Agreement”) pursuant to which Seller was merged with and into Joe’s
Subsidiary and, among other things, the Company acquired all of the goodwill of
Seller and the Company agreed to pay an Earn Out Amount (as defined in the
Merger Agreement) to Dahan, as the sole shareholder of Seller, for a 120 month
period following the closing date of the transactions contemplated by the Merger
Agreement;

 

WHEREAS, the Company desires to remove the contingencies related to the Earn Out
Amount to Dahan and to fix the overall amount to be paid by the Company for
years six through ten;

 

WHEREAS, in consideration of such amendment, Dahan desires to provide certainty
of payments to him by removing the contingencies related to the Earn Out Amount,
fixing the amount to be received by him and accelerating the timing of the
payments to be made to him.  Dahan also desires to receive a release in
connection with the amounts previously paid under the Earn Out Amount; and

 

WHEREAS, the parties wish to modify and specify a fixed period for the duration
of Dahan’s restrictive covenants in the Merger Agreement.

 

NOW THEREFORE, FOR AND IN CONSIDERATION of the mutual promises, releases,
covenants and conditions set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

 

1.             The Company agrees to pay to Dahan the aggregate amount of
$9,167,935.34, payable as set forth in this Agreement (the “Amended Payment
Amount”).  Such Amended Payment Amount shall be paid in full satisfaction of the
Earn Out Amount previously provided for in the Merger Agreement and no further
Earn Out Amounts shall be due or paid pursuant to the terms of the Merger
Agreement.  The Amended Payment Amount shall be paid in cash in accordance with
the following schedule:

 

--------------------------------------------------------------------------------

 

(1)   Payment in the amount of $63,227.14 shall be made on a weekly basis for a
period of one hundred forty five (145) weeks commencing on February 22, 2013 and
ending on November 27, 2015.

 

2.             Dahan shall be entitled to the Amended Payment Amount whether or
not he is employed by the Company or otherwise providing services to the
Company.

 

3.             Dahan warrants that he has not breached the Non-Competition
Covenants in section 5.15 (a)(i) or the Non-Solicitation Covenant in section
5.15 (a)(ii) (collectively, the “Restrictive Covenants”) of the Merger
Agreement.  Dahan agrees to continue to abide by the Restrictive Covenants
through November 30, 2016.  Dahan acknowledges that the Restrictive Covenants,
as modified herein, are necessary to protect the Company’s legitimate business
interests of the Company, including the acquisition of the goodwill of Seller in
the Merger Agreement, and that the Restrictive Covenants, as modified herein,
are reasonable in scope and duration.  Except as expressly set forth herein, the
provisions of section 5.15 remain in full force and effect.

 

4.             In consideration of the agreements set forth above, Dahan, on
behalf of himself and his agents, representatives, predecessors, successors,
successors-in-interest, heirs and assigns (each, a “Dahan Releasor” and
collectively, the “Dahan Releasors”), does hereby forever release, remise and
discharge each of Joe’s and Joe’s Subsidiary and each of their respective
affiliates and each of their present and former officers, directors,
stockholders, partners, employees, attorneys, agents, trustees, consultants and
other representatives, predecessors, successors, successors-in-interest, assigns
and heirs (the “Joe’s Releasees”) from any and all claims that are connected
with, arise out of, relate to the Merger Agreement and the Earn-Out Amounts (the
“Earn-Out Claims”), and hereby agrees and covenants not to assert or prosecute
against any or all of the Joe’s Releasees any Earn-Out Claims that any of the
Dahan Releasors ever had, may have or hereafter can, may or shall have against
or with respect to such person.

 

5.             In consideration of the agreements set forth above, the Company,
on behalf of itself and its affiliates, shareholders, partners, officers,
directors, managers, employees, subsidiaries, trustees, agents, representatives,
and its and their respective predecessors, successors, successors-in-interest
and assigns (each, a “Company Releasor” and collectively, the “Company
Releasors”), does hereby forever release, remise and discharge Dahan and each of
his affiliates, heirs, successors and assigns and each of their present and
former officers, directors, stockholders, partners, employees, attorneys,
agents, trustees, consultants and other representatives, predecessors,
successors, successors-in-interest, assigns and heirs (the “Dahan Releasees”)
from any and all Earn-Out Claims, and hereby agrees and covenants not to assert
or prosecute against any or all of the Dahan Releasees any Earn-Out Claims that
any of the Company Releasors ever had, may have or hereafter can, may or shall
have against or with respect to such person.

 

6.             California Civil Code §1542 Waiver.  Each Party acknowledges that
it has been advised by legal counsel and is familiar with California Civil Code
section 1542, which provides as follows:

 

2

--------------------------------------------------------------------------------

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

Having been informed of the provisions of California Civil Code section 1542,
the Dahan Releasors nevertheless hereby waives any rights that it may have under
said Section or any similar or equivalent statute or law that may be applicable.

 

7.             This Agreement supersedes any other agreement, including the
Merger Agreement, whether written or oral, that may have been made or entered
into by the parties hereto respecting the matters contemplated hereby and
constitutes the entire agreement of the parties with respect to the subject
matter hereof.  This agreement may not be modified, varied, amended or waived,
in whole or in part, except by a written agreement signed by each of the
parties.  This Agreement shall be governed and construed under and in accordance
with the laws of the State of California.  Any dispute arising hereunder shall
be resolved through binding arbitration in accordance with the Commercial
Arbitration Rules and Mediation Procedures of the American Arbitration
Association.  The parties agree that such binding arbitration before a single
arbitrator and that any arbitration will occur in Los Angeles, California.  Each
party shall bear their own respective costs, fees and expenses.

 

8.             This Agreement was negotiated at arms-length, with all parties
receiving advice from independent legal counsel.  The drafting and negotiation
of this Agreement has been participated in equally by each of the parties and
their legal counsel, and the language herein shall not be construed for or
against any particular party.  Accordingly, the parties hereby waive the benefit
of California Civil Code section 1654 and any similar or equivalent statute or
common law principle providing that in cases of uncertainty, language of a
contract should be interpreted most strongly against the drafter of the
contract.

 

9.             The parties acknowledge that no other party or its attorneys have
made any representations or rendered any advice regarding a party’s tax
liability, if any, from the payment to be made pursuant to this Agreement.  The
parties further acknowledge their sole responsibility for seeking said tax
advice and for remitting to federal and/or state tax authorities any applicable
taxes due or information.

 

10.          This Agreement and any agreement executed in connection herewith,
and any amendments hereto or thereto, to the extent signed and delivered by
means of a facsimile machine, PDF file or other means of electronic transmission
shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding effect as if it were
the original signed version thereof delivered in person.  At the request of any
party hereto or any party to any such other agreement contemplated hereunder,
each other party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties but the failure to do so shall not affect the
enforceability of any agreement, or effectiveness of any notice.  No party
hereto or to any other such agreement contemplated hereunder shall claim that

 

3

--------------------------------------------------------------------------------

 

this Agreement or such other agreement is invalid, not binding or unenforceable
based upon the use of a facsimile machine, PDF file or other means of electronic
transmission to deliver a signature, or the fact that any signature or agreement
or instrument was transmitted or communicated through the use of a facsimile
machine, PDF file or other means of electronic transmission and each such party
forever waives any such claim or defense.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.  SIGNATURE PAGE FOLLOWS.]

 

4

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first set forth above.

 

 

 

JOE’S JEANS INC.

 

 

 

 

 

/s/ Marc B. Crossman

 

Name:

Marc Crossman

:

Title:

CEO and President

 

 

 

 

 

JOE’S JEANS SUBSIDIARY, INC.

 

 

 

 

 

/s/ Marc B. Crossman

 

Name:

Marc Crossman

 

Title:

CEO

 

 

 

 

 

/s/ Joseph M. Dahan

 

JOSEPH M. DAHAN

 

--------------------------------------------------------------------------------