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EXHIBIT 99.4
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of July 1,
1998 by Trade Source International, Inc. a Delaware corporation (the
"Employer"), Xxxxx Xxxxxxxx, an individual resident in El Dorado Hills,
California (the "Executive") and Craftmade International, Inc., a Delaware
corporation ("Craftmade").
RECITALS
Concurrently with the execution and delivery of this Agreement,
Craftmade is acquiring all of the outstanding capital stock of Trade Source
International, Inc., a California corporation ("TSI California"), through a
merger (the "Merger") of TSI California with and into Employer, pursuant to a
Merger Agreement dated as of July 1, 1998 among Craftmade, Employer, Xxxxx and
Xxxxxx Xxxxxxxx, Xxxx XxXxxxx, the Xxxxx Family Trust, Xxxxx Xxxxxxxxxx, the
Bezzco Inc. Employee Retirement Trust and TSI California (the "Merger
Agreement"). Craftmade and the Employer desire the Executive's continued
employment with Employer, and the Executive wishes to accept such continued
employment, upon the terms and conditions set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Article I.
"Basic Compensation"--Salary and Benefits.
"Board of Directors"--the board of directors of Craftmade.
"Confidential Information"--information that is used in the Company's
business and
(a) is proprietary to, about or created by the Company;
(b) gives the Company some competitive advantage, the opportunity
of obtaining such advantage or the disclosure of which could be detrimental to
the interests of the Company;
(c) is not typically disclosed to non-employees by the Company, or
otherwise is treated as confidential by the Company; or
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(d) is designated as Confidential Information by the Company or
from all the relevant circumstances should reasonably be assumed by the
Employee to be confidential to the Company.
Confidential Information shall not include information publicly known (other
than as a result of a direct or indirect disclosure by the Executive). The
phrase "publicly known" shall mean readily accessible to the public in a
written publication.
"Effective Date"--the date stated in the first paragraph of the
Agreement.
"Employee Invention"--any idea, invention, technique, modification,
process, or improvement (whether patentable or not), any industrial design
(whether registerable or not) and any work of authorship (whether or not
copyright protection may be obtained for it) created, conceived, or developed
by the Executive, either solely or in conjunction with others, during the
Employment Period, or a period that includes a portion of the Employment
Period, that relates in any way to the business then being conducted or
proposed to be conducted by the Employer, and any such item created by the
Executive, either solely or in conjunction with others, following termination
of the Executive's employment with the Employer, that is based upon or uses
Confidential Information.
"Employment Period"--the term of the Executive's employment under this
Agreement.
"Fiscal Year"--the Employer's fiscal year, as it exists on the
Effective Date or as changed from time to time.
"person"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or governmental body.
"Post-Employment Period"--for purposes of Section 8.2, the two-year
period beginning on the date of termination of the Executive's employment with
the Employer.
ARTICLE II
EMPLOYMENT TERMS AND DUTIES
2.1 Employment. The Employer hereby employs the Executive, and
the Executive hereby accepts employment by the Employer, upon the terms and
conditions set forth in this Agreement.
2.2 Term. Subject to the provisions of Article VI, the term of the
Executive's employment under this Agreement will initially be three years,
beginning on the Effective Date and ending on the third anniversary of the
Effective Date (the "Initial Term"). After the Initial Term, the Agreement
shall be extended for two additional one- year terms (the "First Additional
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Term" and the "Second Additional Term," respectively), unless the Executive
provides written notice of electionnot to renew at least 45 days before the
commencement of the First Additional Term and the Second Additional Term,
respectively.
2.3 Duties. The Executive will initially serve as President of
the Employer and will have such duties as are typically commensurate with such
position, subject to the assignment or delegation of duties by the Board of
Directors or Chief Executive Officer of Craftmade. The Executive will devote
his entire business time, attention, skill, and energy exclusively to the
business of the Employer, will use his best efforts to promote the success of
the Employer's business, and will cooperate fully with the Board of Directors
in the advancement of the best interests of the Employer. If the Executive is
elected as a director of the Employer or Craftmade, or as a director or officer
of any of their affiliates, the Executive will fulfill his duties as such
director or officer with the same compensation as is paid to the other
directors that are employees of Craftmade, if any.
ARTICLE III
COMPENSATION
3.1 Basic Compensation.
(a) Salary. The Executive will be paid an annual salary of
$225,000.00, subject to adjustment as provided below (the "Salary"), which will
be payable in equal periodic installments according to the Employer's customary
payroll practices, but no less frequently than monthly. The Salary will be
reviewed by the Board of Directors not less frequently than annually, and the
Board of Directors, subject to its fiduciary obligations, shall provide for an
increase in the Salary proportionate to that of Craftmade's Chief Executive
Officer.
(b) Bonus. The Chief Executive Officer of Craftmade will review
the performance of the Executive not less frequently than annually, and the
Chief Executive Officer of Craftmade shall provide for an annual bonus to the
Executive (the "Bonus") based on the performance of the Employer; such
standards for the performance of Employer shall be comparable to those
standards established concerning the receipt of any bonus by the Chief
Executive Officer of Craftmade with respect to the performance of Craftmade.
(c) Benefits. The Executive will, during the Employment Period,
be entitled to such pension, profit sharing, life insurance, hospitalization,
major medical, disability and other employee benefits as are provided to
Craftmade's Chief Executive Officer, to the extent the Executive is eligible
under the terms of any applicable benefit plan (collectively, the "Benefits").
3.2 Stock Options. The Executive shall be entitled to participate
in any stock option plan, employee stock ownership plan or similar plan of
Craftmade that is provided to Craftmade's Chief Executive Officer, to the
extent the Executive is eligible under the terms of such plan.
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ARTICLE IV
FACILITIES AND EXPENSES
4.1 General. The Employer will furnish the Executive office
space, equipment, supplies, and such other facilities and personnel as the
Employer deems necessary or appropriate for the performance of the Executive's
duties under this Agreement. The Employer will pay on behalf of the Executive
(or reimburse the Executive for) reasonable expenses incurred by the Executive
at the request of, or on behalf of, the Employer in the performance of the
Executive's duties pursuant to this Agreement, and in accordance with the
Employer's employment policies, including reasonable expenses incurred by the
Executive in attending conventions, seminars, and other business meetings, in
appropriate business entertainment activities, and for promotional expenses.
The Executive must file expense reports with respect to such expenses in
accordance with the Employer's policies.
4.2 Automobile. During the term of Executive's employment,
Employer shall provide Executive with an automobile comparable to the one
provided to Executive prior to the date hereof and shall assume and pay all
expenses related thereto.
4.3 Facilities. Executive shall be based in California during the
term of this Agreement. Notwithstanding the preceding, Executive agrees to
spend such time in the Dallas/Fort Worth area as is, in the mutual opinion of
Craftmade's Chief Executive Officer and Executive, necessary to fulfill
Executive's job responsibilities. During the term of this Agreement, while
Executive is in the Dallas/Fort Worth area, the Employer shall provide and pay
for a condominium and an automobile to be utilized by Executive at no expense
to the Executive.
ARTICLE V
VACATIONS AND HOLIDAYS
The Executive will be entitled to the amount of paid vacation as is
provided to the Chief Executive Officer of Craftmade, in accordance with the
vacation policies of the Employer in effect for its executive officers from
time to time. Vacation must be taken by the Executive at such time or times as
approved by the Chairman of the Board or Chief Executive Officer of Craftmade.
The Executive will also be entitled to the paid holidays set forth in the
Employer's policies. Vacation days and holidays during any Fiscal Year that are
not used by the Executive during such Fiscal Year may not be used in any
subsequent Fiscal Year.
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ARTICLE VI
TERMINATION
6.1 Events of Termination. The Employment Period, the Executive's
Basic Compensation, the Executive's Bonus and any and all other rights of the
Executive under this Agreement or otherwise as an employee of the Employer will
terminate (except as otherwise provided in this Article VI):
(a) upon the death of the Executive;
(b) upon the disability of the Executive (as defined in Section
6.2) immediately upon notice from either party to the other;
(c) upon termination of the Executive for Cause (as defined in
Section 6.3), immediately upon notice from the Employer to the Executive, or at
such later time as such notice may specify;
(d) upon termination by the Executive for Good Reason (as defined
in Section 6.4) upon not less than thirty days' prior notice from the Executive
to the Employer;
(e) upon termination of the Executive without Cause; or
(f) upon termination by the Executive for other than Good Reason.
6.2 Definition of Disability. The Executive will be deemed to
have a "disability" if, for physical or mental reasons, the Executive is unable
to perform the Executive's duties under this Agreement for 120 consecutive
days, or 180 days during any twelve month period, as determined in accordance
with this Section 6.2. The disability of the Executive will be determined by a
medical doctor selected by written agreement of the Employer and the Executive
upon the request of either party by notice to the other. If the Employer and
the Executive cannot agree on the selection of a medical doctor, each of them
will select a medical doctor and the two medical doctors will select a third
medical doctor who will determine whether the Executive has a disability. The
determination of the medical doctor selected under this Section 6.2 will be
binding on both parties. The Executive must submit to a reasonable number of
examinations by the medical doctor making the determination of disability under
this Section 6.2, and the Executive hereby authorizes the disclosure and
release to the Employer of such determination and all supporting medical
records. If the Executive is not legally competent, the Executive's legal
guardian or duly authorized attorney-in-fact will act in the Executive's stead,
under this Section 6.2, for the purposes of submitting the Executive to the
examinations, and providing the authorization of disclosure, required under
this Section 6.2.
6.3 Definition of "Cause". "Cause" means: (a) the Executive's
material breach of this Agreement; (b) the Executive's failure to adhere to any
material written Employer policy if the
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Executive has been given a reasonable opportunity to comply with such policy or
cure his failure to comply (which reasonable opportunity must be granted during
the ten-day period precedingtermination of this Agreement); (c) the
appropriation (or attempted appropriation) of a material business opportunity
of the Employer, including attempting to secure or securing any personal profit
in connection with any transaction entered into on behalf of the Employer; (d)
the misappropriation (or attempted misappropriation) of any of the Employer's
funds or property; or (e) the conviction of or the entering of a guilty plea
or plea of no contest with respect to, a felony, the equivalent thereof, or any
other crime with respect to which imprisonment is a possible punishment.
6.4 Definition of "Good Reason". The phrase "Good Reason" means
any of the following: (a) the Employer's or Craftmade's material breach of this
Agreement; (b) the assignment of the Executive without his consent to a
position, responsibilities, or duties of a materially lesser status or degree
of responsibility than his position, responsibilities, or duties at the
Effective Date; or (c) the relocation of the Executive outside El Dorado Hills,
California; (d) the requirement by the Employer that the Executive be based
anywhere other than the Employer's principal executive offices, in either case
without the Executive's consent; or (e) any material reduction in Benefits.
6.5 Termination Pay. Effective upon the termination of this
Agreement, the Employer will be obligated to pay the Executive (or, in the
event of his death, his designated beneficiary as defined below) only such
compensation as is provided in this Section 6.5, and in lieu of all other
amounts and in settlement and complete release of (i) all claims the Executive
may have against the Employer or Craftmade, or any of its affiliates, arising
out of or pursuant to this Agreement and (ii) all claims the Employer or
Craftmade may have against the Executive arising out of or pursuant to this
Agreement. For purposes of this Section 6.5, the Executive's designated
beneficiary will be such individual beneficiary or trust, located at such
address, as the Executive may designate by notice to the Employer from time to
time or, if the Executive fails to give notice to the Employer of such a
beneficiary, the Executive's estate. Notwithstanding the preceding sentence,
the Employer will have no duty, in any circumstances, to attempt to open an
estate on behalf of the Executive, to determine whether any beneficiary
designated by the Executive is alive or to ascertain the address of any such
beneficiary, to determine the existence of any trust, to determine whether any
person or entity purporting to act as the Executive's personal representative
(or the trustee of a trust established by the Executive) is duly authorized to
act in that capacity, or to locate or attempt to locate any beneficiary,
personal representative, or trustee.
(a) Termination by the Executive for Good Reason or Termination by
the Employer Without Cause. If the Executive terminates this Agreement for Good
Reason or if Employer terminates this Agreement without Cause, the Employer
will pay the Executive (i) the Executive's Salary for the remainder, if any, of
the Initial Term, the First Additional Term or the Second Additional Term, as
applicable, (ii) the value of any accrued but unpaid or unused vacation or sick
leave for the calendar year and (iii) that portion of the Executive's Bonus, if
any, for the Fiscal Year during which the termination is effective, prorated
through the date of termination.
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(b) Termination by the Employer for Cause or Termination by the
Executive Without Good Reason. If the Employer terminates this Agreement for
Cause or if the Executive terminates this Agreement for other than Good Reason,
the Executive will be entitled to receive his Salary onlythrough the date such
termination is effective, but will not be entitled to any Bonus for the Fiscal
Year during which such termination occurs or any subsequent Fiscal Year.
(c) Termination upon Disability. If this Agreement is terminated
by either party as a result of the Executive's disability, as determined under
Section 6.2, the Employer will pay the Executive his Salary through the
remainder of the calendar month during which such termination is effective and
the period until disability insurance benefits commence under the disability
insurance coverage furnished by the Employer to the Executive.
(d) Termination upon Death. If this Agreement is terminated
because of the Executive's death, the Executive will be entitled to receive his
Salary through the end of the calendar month in which his death occurs, and
that part of the Executive's Bonus, if any, for the Fiscal Year during which
his death occurs, prorated through the end of the calendar month during which
his death occurs.
(e) Benefits. The Executive's accrual of, or participation in
plans providing for, the Benefits will cease at the effective date of the
termination of this Agreement, and the Executive will be entitled to accrued
Benefits pursuant to such plans only as provided in such plans.
Notwithstanding the preceding, the Executive shall be entitled to receive all
accrued but unpaid salary, Benefits and vacation pay upon the termination of
this Agreement.
ARTICLE VII
NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
7.1 Acknowledgments by the Executive. The Executive acknowledges
that (a) during the Employment Period and as a part of his employment, the
Executive will be afforded access to Confidential Information; (b) public
disclosure of such Confidential Information could have an adverse effect on the
Employer and its business; (c) because the Executive possesses substantial
technical expertise and skill with respect to the Employer's business, the
Employer desires to obtain exclusive ownership of each Employee Invention, and
the Employer will be at a substantial competitive disadvantage if it fails to
acquire exclusive ownership of each Employee Invention; (d) Craftmade has
required that the Executive make the covenants in this Article VII as a
condition to the Merger; and (e) the provisions of this Article VII are
reasonable and necessary to prevent the improper use or disclosure of
Confidential Information and to provide the Employer with exclusive ownership
of all Employee Inventions.
7.2 Agreements of the Executive. In consideration of the
compensation and benefits to be paid or provided to the Executive by the
Employer under this Agreement, the Executive covenants as follows:
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(a) Confidentiality.
(i) During and following the Employment Period, the
Executive will hold in confidence the Confidential Information and
will not disclose it to any person except (A) with the specific prior
written consent of the Employer, (B) as necessary to carry out the
Executive's duties under this Agreement or (C) except as otherwise
expressly permitted by the terms of this Agreement.
(ii) Any trade secrets of the Employer will be entitled to
all of the protections and benefits under applicable law. If any
information that the Employer deems to be a trade secret is found by a
court of competent jurisdiction not to be a trade secret for purposes
of this Agreement, such information will, nevertheless, be considered
Confidential Information for purposes of this Agreement. The Executive
hereby waives any requirement that the Employer submit proof of the
economic value of any trade secret or post a bond or other security.
(iii) None of the foregoing obligations and restrictions
applies to any part of the Confidential Information that the Executive
demonstrates was or became generally available to the public other
than as a result of a direct or indirect disclosure by the Executive.
(iv) The Executive will not remove from the Employer's
premises (except to the extent such removal is for purposes of the
performance of the Executive's duties at home or while traveling, or
except as otherwise specifically authorized by the Employer) any
document, record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or in any other
form (collectively, the "Proprietary Items"). The Executive recognizes
that, as between the Employer and the Executive, all of the
Proprietary Items, whether or not developed by the Executive, are the
exclusive property of the Employer. Upon termination of this Agreement
by either party, or upon the request of the Employer during the
Employment Period, the Executive will return to the Employer all of
the Proprietary Items in the Executive's possession or subject to the
Executive's control, and the Executive shall not retain any copies,
abstracts, sketches, or other physical embodiment of any of the
Proprietary Items.
(b) Employee Inventions. Each Employee Invention will belong
exclusively to the Employer. The Executive acknowledges that all of the
Executive's writing, works of authorship, specially commissioned works and
other Employee Inventions are works made for hire and the property of the
Employer, including any copyrights, patents or other intellectual property
rights pertaining thereto. If it is determined that any such works are not
works made for hire, the Executive hereby assigns to the Employer all of the
Executive's right, title, and interest, including all rights of copyright,
patent and other intellectual property rights, to or in such Employee
Inventions. The Executive covenants that he will promptly:
(i) disclose to the Employer in writing any Employee
Invention;
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(ii) assign to the Employer or to a party designated by
the Employer, at the Employer's request and without additional
compensation, all of the Executive's right to the Employee Invention
for the United States and all foreign jurisdictions;
(iii) execute and deliver to the Employer such
applications, assignments, and other documents as the Employer may
request in order to apply for and obtain patents or other
registrations with respect to any Employee Invention in the United
States and any foreign jurisdictions;
(iv) sign all other papers necessary to carry out the
above obligations; and
(v) give testimony and render any other assistance in
support of the Employer's rights to any Employee Invention.
7.3 Disputes or Controversies. The Executive recognizes that
should a dispute or controversy arising from or relating to this Agreement be
submitted for adjudication to any court, arbitration panel, or other third
party, the preservation of the secrecy of Confidential Information may be
jeopardized. To the extent permitted by law, all pleadings, documents,
testimony, and records relating to any such adjudication will be maintained in
secrecy and will be available for inspection by the Employer, the Executive,
and their respective attorneys and experts, who will agree, in advance and in
writing, to receive and maintain all such information in secrecy, except as may
be limited by them in writing.
ARTICLE VIII
NON-COMPETITION AND NON-INTERFERENCE
8.1 Acknowledgments by the Executive. The Executive acknowledges
that: (a) the services to be performed by him under this Agreement are of a
special, unique, unusual, extraordinary, and intellectual character; (b) the
Employer's business is international in scope and its products are marketed
throughout the world; (c) the Employer competes with other businesses that are
or could be located in any part of the world; (d) Craftmade has required that
the Executive make the covenants set forth in this Article VIII as a condition
to the Merger; and (e) the provisions of this Article VIII are reasonable and
necessary to protect the Employer's business.
8.2 Covenants of the Executive. In consideration of the
acknowledgments by the Executive, and in consideration of the compensation and
benefits to be paid or provided to the Executive by the Employer, the Executive
covenants that he will not, directly or indirectly:
(a) during the Employment Period, except in the course of his
employment hereunder, directly or indirectly, engage or invest in, own,
manage, operate, finance, control, or participate in the ownership, management,
operation, financing, or control of, be employed by, associated
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with or in any manner connected with, lend the Executive's name or any similar
name to, lend Executive's credit to or render services or advice to, any
business whose products compete in whole or in part with the products or market
areas of the Employer; provided, however, that the Executive may purchase or
otherwise acquire up to (but not more than) one percent of any class of
securities of any enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934;
(b) during the Post-Employment Period, directly or indirectly,
engage or invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the Executive's name or
any similar name to, lend Executive's credit to or render services or advice
to, any business whose products compete in whole or in part with the product
lines and the market areas utilized by the Employer and Craftmade on the last
day of the Employment Period; provided, however, that the Executive may
purchase or otherwise acquire up to (but not more than) one percent of any
class of securities of any enterprise (but without otherwise participating in
the activities of such enterprise) if such securities are listed on any
national or regional securities exchange or have been registered under Section
12(g) of the Securities Exchange Act of 1934;
(c) whether for the Executive's own account or for the account of
any other person, at any time during the Employment Period and the
Post-Employment Period, solicit business of the same product lines being
carried by the Employer in the same market areas as the Employer, from any
person known by the Executive to be a customer of the Employer, whether or not
the Executive had personal contact with such person during and by reason of the
Executive's employment with the Employer;
(d) whether for the Executive's own account or the account of any
other person (i) at any time during the Employment Period and the
Post-Employment Period, solicit, employ, or otherwise engage as an employee,
independent contractor, or otherwise, any person who is an employee of the
Employer or in any manner induce or attempt to induce any employee of the
Employer to terminate his employment with the Employer; or (ii) at any time
during the Employment Period and the Post-Employment Period, interfere with the
Employer's relationship with any person, including any person who at any time
during the Employment Period was an employee, contractor, supplier, or customer
of the Employer; or
(e) at any time during or after the Employment Period, disparage
the Employer or any of its shareholders, directors, officers, employees, or
agents.
If any covenant in this Section 8.2 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the
Executive.
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The period of time applicable to any covenant in this Section 8.2 will
be extended by the duration of any violation by the Executive of such covenant.
The Executive will, while the covenant under this Section 8.2 is in
effect, give notice to the Employer, within ten days after accepting any other
employment, of the identity of the Executive's employer. Craftmade or the
Employer may notify such employer that the Executive is bound by this Agreement
and, at the Employer's election, furnish such employer with a copy of this
Agreement or relevant portions thereof.
ARTICLE IX
GENERAL PROVISIONS
9.1 Injunctive Relief and Additional Remedy. The Executive
acknowledges that the injury that would be suffered by the Employer as a result
of a breach of the provisions of this Agreement (including any provision of
Articles VII and VIII) would be irreparable and that an award of monetary
damages to the Employer for such a breach would be an inadequate remedy.
Consequently, the Employer will have the right, in addition to any other rights
it may have, to obtain injunctive relief to restrain any breach or threatened
breach or otherwise to specifically enforce any provision of this Agreement,
and the Employer will not be obligated to post bond or other security in
seeking such relief.
9.2 Covenants of Articles VII and VIII Are Essential and
Independent Covenants. The covenants by the Executive in Articles VII and VIII
are essential elements of this Agreement, and without the Executive's agreement
to comply with such covenants, Craftmade would not have consented to the Merger
and Craftmade would not have entered into this Agreement or employed or
continued the employment of the Executive. The Employer and the Executive have
independently consulted their respective counsel and have been advised in all
respects concerning the reasonableness and propriety of such covenants, with
specific regard to the nature of the business conducted by the Employer.
The Executive's covenants in Articles VII and VIII are independent
covenants and the existence of any claim by the Executive against the Employer
under this Agreement or otherwise, or against Craftmade, will not excuse the
Executive's breach of any covenant in Articles VII or VIII.
If the Executive's employment hereunder expires or is terminated, this
Agreement will continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Executive in Articles VII and
VIII.
9.3 Representations and Warranties by the Executive. The
Executive represents and warrants to the Employer that the execution and
delivery by the Executive of this Agreement do not, and the performance by the
Executive of the Executive's obligations hereunder will not, with
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or without the giving of notice or the passage of time, or both: (a) violate
any judgment, writ,injunction, or order of any court, arbitrator, or
governmental agency applicable to the Executive; or (b) conflict with, result
in the breach of any provisions of or the termination of, or constitute a
default under, any agreement to which the Executive is a party or by which the
Executive is or may be bound.
9.4 Obligations Contingent on Performance. The obligations of the
Employer hereunder, including its obligation to pay the compensation provided
for herein, are contingent upon the Executive's performance of the Executive's
obligations hereunder.
9.5 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any
delay by either party in exercising any right, power, or privilege under this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement.
9.6 Binding Effect; Delegation of Duties Prohibited. This
Agreement shall inure to the benefit of, and shall be binding upon, the parties
hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.
9.7 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and facsimile numbers set forth below (or to such other addresses and
facsimile numbers as a party may designate by notice to the other parties):
If to Employer:
Trade Source International, Inc.
X.X. Xxx 0000
Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
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Executive:
Xxxxx Xxxxxxxx
c/o Trade Source International, Inc.
0000 Xxxxxxxxx Xxxxxx
Xx Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxx
Xxxxxxxxx Genshlea & Xxxxxx
000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Craftmade:
Craftmade International, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxx 000
P.O. Box #1037
Coppell, Texas 75019-1037
Attention: Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxx
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
9.8 Entire Agreement; Amendments. This Agreement, the Merger
Agreement, and the documents executed in connection with the Merger Agreement,
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or
written, between the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended orally, but only by an agreement in writing
signed by the parties hereto.
9.9 Governing Law. This Agreement will be governed by the laws of
the State of Texas without regard to conflicts of laws principles.
9.10 Jurisdiction. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement shall be
brought against any of the parties in
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the courts of the State of Texas, County of Dallas, or, if it has or can
acquire jurisdiction, in the United States District Court for the Northern
District of Texas, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any
action or proceeding referred to in the preceding sentence may be served on
either party anywhere in the world.
9.11 Section and Article Headings, Construction. The headings of
Sections and Articles in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "Section"
or "Sections" and "Article" or "Articles" refer to the corresponding Section or
Sections and Article or Articles of this Agreement unless otherwise specified.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
9.12 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or
unenforceable.
9.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
9.14 Dispute Resolution. Subject to the Company's right to seek
injunctive relief in court as provided in Section 9.1 of this Agreement, any
dispute, controversy or claim arising out of or in relation to or connection to
this Agreement, including without limitation any dispute as to the
construction, validity, interpretation, enforceability or breach of this
Agreement, shall be exclusively and finally settled by arbitration, and any
party may submit such dispute, controversy or claim, including a claim for
indemnification under this Section 9.14, to arbitration.
(a) Arbitrators. The arbitration shall be heard and
determined by one arbitrator, who shall be impartial and who shall be
selected by mutual agreement of the parties; provided, however, that
if the dispute involves more than $50,000, then the arbitration shall
be heard and determined by three (3) arbitrators. If three (3)
arbitrators are necessary as provided above, then (i) each side shall
appoint an arbitrator of its choice within thirty (30) days of the
submission of a notice of arbitration and (ii) the party-appointed
arbitrators shall in turn appoint a presiding arbitrator of the
tribunal within thirty (30) days following the appointment of the last
party-appointed arbitrator. If (x) the parties cannot agree on the
sole arbitrator, (y) one party refuses to appoint its party-appointed
arbitrator within said thirty (30) day period or (z) the
party-appointed arbitrators cannot reach agreement on a presiding
arbitrator of the tribunal, then the appointing authority for the
implementation of such procedure shall be the Senior United States
District Judge for the Northern District of Texas, who shall appoint
an independent arbitrator who does not have any financial interest in
the dispute, controversy or claim.
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If the Senior United States District Judge for the Northern District of Texas
refuses or fails to act as the appointing authority within ninety (90) days
after being requested to do so, then the appointing authority shall be the
Chief Executive Officer of the American Arbitration Association, who shall
appoint an independent arbitrator who does not have any financial interest in
the dispute, controversy or claim. All decisions and awards by the arbitration
tribunal shall be made by majority vote.
(b) Proceedings. Unless otherwise expressly agreed in
writing by the parties to the arbitration proceedings:
(i) The arbitration proceedings shall be held in
Dallas, Texas, at a site chosen by mutual agreement of the
parties, or if the parties cannot reach agreement on a
location within thirty (30) days of the appointment of the
last arbitrator, then at a site chosen by the arbitrators;
(ii) The arbitrators shall be and remain at all
times wholly independent and impartial;
(iii) The arbitration proceedings shall be
conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association, as amended from time
to time;
(iv) Any procedural issues not determined under
the arbitral rules selected pursuant to item (iii) above shall
be determined by the law of the place of arbitration, other
than those laws which would refer the matter to another
jurisdiction;
(v) The costs of the arbitration proceedings
(including attorneys' fees and costs) shall be borne in the
manner determined by the arbitrators;
(vi) The decision of the arbitrators shall be
reduced to writing; final and binding without the right of
appeal; the sole and exclusive remedy regarding any claims,
counterclaims, issues or accounting presented to the
arbitrators; made and promptly paid in United States dollars
free of any deduction or offset; and any costs or fees
incident to enforcing the award shall, to the maximum extent
permitted by law, be charged against the party resisting such
enforcement;
(vii) The award shall include interest from the
date of any breach or violation of this Agreement, as
determined by the arbitral award, and from the date of the
award until paid in full, at 6% per annum; and
(viii) Judgment upon the award may be entered in any
court having jurisdiction over the person or the assets of the
party owing the judgment or
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application may be made to such court for a judicial acceptance of
the award and an order of enforcement, as the case may be.
9.15 Guarantee of Performance. In the event that Employer fails to
comply with any of its obligations pursuant to this Agreement, Craftmade shall
use its best efforts to fulfill such obligations of Employer.
* * * * *
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date above first written above.
EXECUTIVE:
/s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
CRAFTMADE INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------------
Title: President
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TRADE SOURCE INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title: President
-----------------------------
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