EXHIBIT 10.11
EXHIBIT G
CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") made as of the ____ day of
December 2001 (the "Effective Date"), by and between INTERIORS, INC., a Delaware
corporation ("Interiors"), on the one hand, and XXX XXXX, an individual
("Consultant"), on the other hand.
RECITALS:
A. As at the Effective Date, Interiors has sold the assets and
properties of it's A.P.F. Master Framemakers division (the "APF Division") to
A.P.F. Acquisition Corp., a newly formed New York corporation controlled by the
Consultant (the "APF Buyer"), pursuant to the terms of an asset purchase
agreement, dated December 24, 2001 (the "Purchase Agreement"). Unless otherwise
defined herein, all capitalized terms used in this Agreement shall have the same
meaning as is defined in the Purchase Agreement.
B. Interiors desires to engage Consultant to provide consulting and
advisory services to Interiors, and Consultant desires to become so engaged.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter stated, Consultant and Interiors agree as follows:
1. Term of Agreement. Unless sooner terminated, as provided herein,
Interiors agrees to and hereby does engage Consultant, and Consultant hereby
agrees to provide Consulting Services (defined below) to Interiors, all upon the
terms and subject to the conditions hereinafter set forth, for the period
commencing on the Effective Date and continuing until June 30, 2002 (the
"Consulting Period").
2. Duties of Consultant.
(a) During the Consulting Period, Consultant shall consult
with and advise Interiors with respect to matters relating to resolution and
compromise of the claims of certain creditors of Interiors and in respect of the
disposition of certain businesses and assets of Interiors (the "Consulting
Services"). During the Consulting Period, the Consultant shall devote not less
than fifteen (15%) percent of his business and professional time to providing
the Consulting Services on behalf of Interiors. Interiors shall provide
Consultant with reasonable advance notice as to when Consulting Services are to
be provided.
3. Compensation.
3.1 Consulting Fee. As payment for the Consulting Services
rendered by Consultant during the Consulting Period, Interiors agrees to pay
Consultant, a fee (the "Consulting Fee") at the rate of Ten Thousand Dollars
($10,000) per month for the period from the Effective Date of this Agreement
through June 30, 2002. Such monthly Consulting Fee shall be payable in advance
on the first day of each month, commencing as of January 1, 2002.
3.2 Bonus Payment. In the event that the $750,000 Purchase
Note payable by APF Buyer to Interiors under the Purchase Agreement shall be
paid in full, together with all accrued interest thereon, by a date which shall
be on or before December 31, 2002, the Consultant shall receive a cash bonus
from Interiors, simultaneous with such Purchase Note prepayment, of One Hundred
and Fifty Thousand Dollars ($150,000).
3.3 No Other Payments. In no event shall Interiors be
obligated to pay Consultant any amounts other than as specifically set forth in
this Agreement.
3.4 Termination. This Agreement may be terminated by Interiors
"for cause" or upon the occurrence of and during the continuation of any "Event
of Default" as that term is defined in the Purchase Note or upon the occurrence
of and during the continuation of any Event of Default specified in Section 4
below. For purposes of this Agreement "for cause" shall be defined as: (a) the
Consultant's conviction of, plea of nolo contendere to, or written admission of
the commission of, a felony, (b) any act by the Consultant involving moral
turpitude, fraud or misrepresentation with respect to his duties for Interiors
or its affiliates, or (c) gross negligence or willful misconduct on the part of
the Consultant in the performance of his duties hereunder.
4. Events of Default. Regardless of the terms of any other terms or
provisions of this Agreement, if any of the following conditions or events shall
occur and be continuing (each individually an "Event of Default" and
collectively, the "Events of Default"), Interiors may by thirty (30) days
written notice to Consultant, terminate this Agreement without any further
liability or obligation to Consultant (other than the payment of all accrued
Consulting Fees through and including the date of termination):
4.1 the Consultant shall breach any provision hereof;
4.2 The Consultant shall no longer be the principal
shareholder, President and Chief Executive Officer of APF Buyer;
4.3 Consultant shall, for any reason, fail to faithfully and
to the best of his ability devote not less than fifteen (15%) of his continuous
business and professional time to the performance of his Consulting Duties
hereunder;
4.5 the Consultant or the APF Buyer shall breach any of the
material terms and conditions of the Purchase Agreement, the Purchase Note, the
Security Agreement, the Guaranty, the Pledge Agreement or any other material
covenant or agreement on the part of the APF Buyer or Consultant to be performed
following the Closing Date under the Purchase Agreement and Exhibits thereto;
4.6 the Consultant shall engage in any action or conduct, or
any act of omission, as shall constitute, with respect to Interiors, fraud,
self-dealing, breach of fiduciary duty, misappropriation of corporate
opportunity or property, gross negligence or malfeasance in the performance of
the Consulting Services;
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4.7 the Consultant shall be convicted of a felony or shall
wilfully engage in conduct which is demonstrably and materially injurious to
Interiors; or
4.8 the Consultant shall fail or refuse, after request to do
so, to follow the reasonable directions of the Board of Directors of Interiors;
or
The Company shall give prompt notice to the Consultant if it
believes an Event of Default hereunder shall exist, and the Consultant shall
have a reasonable period of time but in no event more than 10 days (during which
time the Consultant's Consulting Services can be suspended) to respond to and
cure any such Event of Default, if and to the extent curable. Termination of
this Agreement shall be warranted only if the Board of Directors of Interiors
has determined, in good faith, that an Event of Default has occurred and is
continuing after having afforded the Consultant an opportunity to respond to or
cure such Event of Default, as set forth above.
5. Return of Documents. Consultant shall, upon termination of the
Consulting Period for any reason whatsoever, return to Interiors all records,
papers, documents, and copies thereof, pertaining to transactions or information
handled by Consultant while associated with Interiors and relating to the
Business, and all other property belonging to Interiors. Consultant acknowledges
that all such material to be returned, as set forth above, is the property of
Interiors and it has no ownership interest therein. Without limiting any other
provision of this Agreement, in particular, the obligations under this Section 5
shall survive the termination of this Agreement.
6. Confidentiality. Consultant acknowledges that it now has and as a
result of its Consulting Services may hereafter obtain knowledge of technology,
know-how, production and marketing practices, raw materials sources, commercial
and financial data and other information of a confidential or proprietary nature
which is or may become the property of Interiors and which concerns or pertains
to the Business. Consultant agrees that, during the Consulting Period and
thereafter, it will keep secret from every person all such confidential and
proprietary information and will neither disclose any such information to any
other person nor itself make any use thereof without Interiors' prior written
consent. Interiors' consent is not required with respect to any such information
now or hereafter in the public domain through no act or failure to act of
Consultant, or any such information available to Consultant from third parties
under no obligation to Interiors to maintain the confidentiality thereof.
Consultant's obligations under this Section 6 shall not in any way limit any
obligations which Consultant may otherwise have to Interiors pursuant to any
other Agreements which Consultant may have entered into (or enter into in the
future) with Interiors or at law.
7. Damage from Violations of Covenants. Consultant acknowledges and
agrees that a violation on its part of any covenant contained in the preceding
Section 6 will cause irreparable damage to Interiors, the amount of which will
be impossible to estimate or determine. Therefore, Consultant further agrees
that Interiors shall be entitled, in addition to all of its other remedies at
law and in equity, to injunctive or other equitable relief, restraining any
violation of any such covenant or covenants by Consultant, its members,
partners, agents or affiliates, or any of them.
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8. Consultant as an Independent Contractor. In performing this
Agreement, Consultant shall be and act as an independent contractor in all
respects, and shall not, for any purpose, be or act as an agent or employee of
Interiors or any of its affiliates, successors or assigns. Consultant shall not
be eligible to participate in any benefits or privileges given or extended by
Interiors or any of its subsidiaries or affiliates, successors or assigns, to
their respective employees. It is further agreed by the parties that the
payments to be made by Interiors to Consultant are not for services as an
employee and that Interiors shall not make any deductions from the fees to be
paid to Consultant, including but not limited to, social security, income tax
withholding, unemployment insurance and other such deductions.
9. Assignment. Interiors may assign all or any portion of its rights
under this Agreement. However, Consultant's services are personal in nature and
Consultant shall not, without the written consent of Interiors (which consent
may be withheld in Interiors's sole and absolute discretion), assign or transfer
this Agreement or any of its rights or obligations hereunder, whether in whole,
in part, expressly or implied, by operation of law, or otherwise, and any such
attempted or purported assignment shall be of no legal or equitable force or
effect.
10. Miscellaneous.
10.1 Attorneys' Fees. If any of the parties to this Agreement
initiates an action for the interpretation or enforcement of the terms and
provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and costs.
10.2 Successors and Assigns. Subject to the provisions of
Section 9, above, this Agreement is binding upon and shall inure to the benefit
of the parties hereto, their heirs, legatees, devisees, personal
representatives, assigns and successors in interest of every kind and nature
whatsoever.
10.3 Entire Agreement. This Agreement embodies the entire
Agreement and understanding between Interiors and Consultant with respect to the
subject matter hereof, and supersedes any and all negotiations, prior
discussions and all prior agreements entered or taken relating to the subject
matter hereof.
10.4 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of New York.
10.5 Recitals. The parties hereto acknowledge and agree that
the recitals set forth herein are true and correct and are hereby incorporated
herein by this reference.
10.6 Arbitration. Any controversy or claim arising out of this
Agreement, or any breach thereof, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
located in New York, New York,
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California. The award rendered in such arbitration shall be final and a judgment
upon the award may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
INTERIORS, INC.,
a Delaware corporation
By:
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Name:
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Title:
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CONSULTANT:
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XXX XXXX
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