EXHIBIT 10.29
AGREEMENT
REGARDING LAMPS PLUS, INC. LITIGATION
THIS AGREEMENT ("Agreement") is made effective as of (although not
executed on) February 21, 2003 by and among Craftmade International, a Delaware
corporation ("Craftmade"), Design Trends, LLC, a Delaware limited liability
company ("Design Trends"), Xxxxx Northwest, LLC, an Oregon limited liability
company ("Xxxxx Northwest") and Xxxxxxx X. Xxxxx, an individual ("Xxxxx")
(collectively "the Parties").
WHEREAS, Lamps Plus, Inc. and Pacific Coast Lighting filed a lawsuit
against Xxxxx, Design Trends and Craftmade in the United States District Court
for the Northern District of Texas, Dallas Division, Case No. 3:01-cv-01537
("the Lawsuit"); and
WHEREAS, the Parties desire to alter the terms by which they have been
paying the expenses of the Lawsuit; and
WHEREAS, the Parties are entering into this Agreement to set forth the
responsibilities of the Parties for payment of additional fees, costs and
expenses of the Lawsuit, along with the rights to any recovery that might be had
by reason of the Lawsuit.
IT IS HEREBY AGREED:
1. Effective for legal services rendered after February 21, 2003,
Design Trends will pay the first $150,000 of legal fees and expenses incurred by
the Parties in the defense (which term includes both the defense of the claims
brought against the Parties and the prosecution of counter-claims brought by the
Parties) of the Lawsuit.
2. After the Parties have incurred $150,000 in legal fees and expenses
in the defense of the Lawsuit for the period after February 21, 2003 (which the
Parties agree occurred on April 16, 2003), then Xxxxx Northwest shall assume and
be responsible for all legal fees and expenses incurred by the Parties, or any
of them, in the defense of the Lawsuit from that date forward, and will
indemnify and hold harmless Craftmade and Design Trends from and against any and
all claims, liabilities, or losses arising out of the legal fees and expenses
incurred in the defense of the Lawsuit after February 21, 2003.
3. Xxxxx Northwest shall be solely responsible for the payment or other
satisfaction of any judgment which may be rendered in the Lawsuit against any of
the Parties, including any judgment for actual damages, exemplary damages,
attorney's fees, court costs or any other basis whatsoever, and will indemnify
and hold harmless Craftmade and Design Trends from and against any and all
liabilities, losses, damages, costs or other expenses associated with said
judgment.
4. In the event any party to the Lawsuit should perfect an appeal of a
final Judgment rendered in the Lawsuit, Xxxxx Northwest shall be responsible for
all additional legal fees and expenses which may be incurred in the prosecution
or defense of any such appeal.
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5. In the event a judgment is entered against the Parties in the
Lawsuit by the District Court and an appeal is taken by the Parties, Xxxxx
Northwest shall ensure that the Parties post a supersedeas bond in an amount
sufficient to supercede enforcement of the judgment pending appeal, and Xxxxx
Northwest shall be responsible for the payment of all premiums and other
expenses incurred to obtain said bond.
6. Without limiting the effect of or obligations imposed by the
preceding four paragraphs, Design Trends agrees that, solely as an accommodation
and convenience for Xxxxx Northwest, it will advance the funds necessary to pay
the legal fees and expenses for which Xxxxx Northwest will be responsible (by
paying the attorneys and other vendors directly) as well as any final Judgment
which may be entered against any of the Parties in the Lawsuit. Design Trends
shall treat said advances as a loan and charge said expenses and payments
against Xxxxx Northwest's capital account in Design Trends, which is maintained
pursuant to the terms of the August 3, 1999, Limited Liability Company Agreement
of Design Trends, LLC. In the event that Xxxxx Northwest's capital account
should be insufficient to pay any fees or expenses for which Xxxxx Northwest is
responsible under the terms of this Agreement, Design Trends shall notify both
Xxxxx and Xxxxx Northwest of such deficiency by written notice addressed to
Xxxxx and Xxxxx Northwest at the addresses shown below (or at such other address
or addresses as Xxxxx or Xxxxx Northwest may from time to time provide to Design
Trends for that purpose) and Xxxxx Northwest shall, within ten days after the
date of Design Trends' written notice of such deficiency, reimburse Design
Trends for any such fees, expenses, costs, or liabilities (including the
satisfaction of any final Judgments) advanced by Design Trends. In consideration
of the benefit Xxxxx is deriving from these advances, Xxxxx shall
unconditionally guarantee this obligation of Xxxxx Northwest and shall pay or
otherwise satisfy this obligation of Xxxxx Northwest within said ten day period
if Xxxxx Northwest shall fail to do so.
7. In the event of a net recovery in the Lawsuit in favor of any or all
of the Parties to this agreement, Xxxxx shall be entitled to retain all of the
proceeds of such recovery.
8. Xxxxx Northwest shall assume and be responsible for all obligations
of Design Trends to indemnify Xxxx'x Companies, Inc. (or any of its
subsidiaries) for any loss or damage incurred as a result of the Lawsuit,
including but not limited to any obligations of Design Trends arising under the
provisions of Article V of Lowe's Master Standard Buying Agreement entered into
by Design Trends and Xxxx'x Companies, Inc. on June 8, 2000, a copy of which is
attached as Exhibit "A."
9. The Parties shall continue to cooperate in the defense of the
Lawsuit (including any appeal) and shall provide all assistance reasonably
necessary to Counsel for the Parties or to each other throughout the continued
pendency of the Lawsuit (including any appeal).
10. This Agreement may be executed in any number of counterparts with
the same effect as if all the parties had signed the same document. All
counterparts shall be construed together and shall constitute one and the same
instrument.
11. A facsimile transmitted counterpart to this agreement will be
deemed as original for purposes of entering into this agreement.
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SIGNED on the dates shown, but to be effective in all things as of
February 21, 2003.
CRAFTMADE INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board, President
and Chief Executive Officer
Date: December 31, 2003
DESIGN TRENDS, LLC
By: Craftmade International, Inc., Manager
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board, President
and Chief Executive Officer
Date: December 31, 2003
XXXXX NORTHWEST, LLC
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member
Address: 0000 XX 00xx Xxx., Xxxxxxxx, Xxxxxx
Date: 12-31-2003
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
XXXXXXX XXXXX, Individually
Address: 0000 XX Xxxx Xxx
Date: 12-31-03
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