SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT ("Agreement") is made and entered into this 17th
day of March 1999, by and among INTERIORS, INC., a Delaware corporation
("Interiors"), XXXX XXXXXXX, an individual ("X. Xxxxxxx"), XXXXXXXXXXX XXXXXXX
("X. Xxxxxxx"), and PETALS, INC., a Delaware corporation ("Petals").
W I T N E S S E T H:
WHEREAS, DMB Property Ventures Limited Partnership, a Delaware limited
partnership. ("DMB"), Xxxx X. Xxxxx, Xxxx X. Xxxxx, the Xxxxxxx Xxxxxxxx Trust,
the Xxxxxxx Xxxxxxxx Jr. Trust, the Xxxxxx Xxxxxxxx Trust and the Xxxxxxxx 1995
Issue Trust (hereinafter collectively referred to as the "Majority
Stockholders") own an aggregate of 411 shares of the common stock, without par
value per share, of Petals (the "Petals Stock"), and X. Xxxxxxx and X. Xxxxxxx
(collectively hereinafter referred to as the "Minority Stockholders") each own
40 shares of Petals Stock; and
WHEREAS, the Majority Stockholders, Petals, the Minority Stockholders and
Xxxxxxx Xxxxxxx ("X. Xxxxxxx") and Xxxxxxx Xxxxxxx ("X. Xxxxxxx") have entered
into a stockholders agreement, dated as of June 22, 1993 (the "Stockholders
Agreement") which, inter alia, grants certain contractual rights to the Minority
Stockholders, X. Xxxxxxx and X. Xxxxxxx, including the right to: (a) require
Petals to purchase at a formula price set forth in Section 3.1(c) of the
Stockholders Agreement all of the Petals Stock owned by any one or more of the
Minority Stockholders, X. Xxxxxxx and X. Xxxxxxx (the "Put Right"); and (b) be
offered an opportunity, pursuant to Section 2.4 of the Stockholders Agreement,
to negotiate for the purchase of shares of Petals Stock which the Majority
Stockholders, X. Xxxxxxx and X. Xxxxxxx elect to sell; and
WHEREAS, on November 6, 1998, X. Xxxxxxx and X. Xxxxxxx elected to
exercise their Put Right pursuant to the Stockholders Agreement, with respect to
their 80 shares of Petals Stock; and
WHEREAS, pursuant to a settlement agreement entered into in February 1999
(the "Separate Settlement Agreement") among Petals, the Majority Stockholders,
X. Xxxxxxx and X. Xxxxxxx, Petals agreed to pay $850,000 to each of X. Xxxxxxx
and X. Xxxxxxx, in exchange for an aggregate of 80 shares of Petals Stock owned
equally by X. Xxxxxxx and X. Xxxxxxx; and
WHEREAS, on December 11, 1998, the Majority Stockholders and Interiors
entered into a stock purchase agreement (the "Interiors Purchase Agreement")
pursuant to which the Majority Stockholders agreed to sell all of their shares
of Petals Stock to Interiors for a purchase price of $6.0 million, payable $4.0
million in cash and $2.0 million in the form of a convertible note of Interiors;
and
WHEREAS, X. Xxxxxxx and X. Xxxxxxx commenced an action against the
Majority Stockholders in the Supreme Court of the State of New York County of
Westchester, case number 98-20397 (the "Westchester County Litigation"), which
Westchester County Litigation was settled pursuant to the provisions of the
Separate Settlement Agreement; and
WHEREAS, X. Xxxxxxx and X. Xxxxxxx commenced a separate action against the
Majority Stockholders in the Supreme Court of the State of New York, County of
New York, case number 600342/99 ( the "New York County Litigation"), seeking to
enjoin the sale by the Majority Stockholders of their Petals Stock to Interiors;
and
WHEREAS, the parties hereto mutually desire to (a) settle and resolve all
disputes and controversies among them, including the New York County Litigation,
(b) consummate the sale by the Majority Stockholders of their shares of Petals
Stock to Interiors pursuant to the terms of the Interiors
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Purchase Agreement; and (c) consummate Petals' repurchase of the shares of
Petals Stock owned by the Minority Stockholders; and (d) make arrangements for
an orderly transition of management and control of Petals; all upon the terms
and subject to the conditions set forth in this Agreement and the Exhibits
annexed hereto and made a part hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and the Exhibits hereto, the parties intending to be
bound hereby and thereby, it is mutually agreed as follows:
1. COVENANTS AND AGREEMENTS OF THE PARTIES. On the "Closing Date" (as herein
defined), the parties hereto do hereby mutually covenant and agree that
the following transactions shall be consummated:
1.1 Consummation of Purchase of Majority Stockholders' Petals Stock. On
the Closing Date:
(a) In accordance with the terms and conditions of the Interiors
Purchase Agreement, on the Closing Date Interiors shall
purchase from the Majority Stockholders, and the Majority
Stockholders shall sell, assign, convey, transfer and deliver
(collectively, "Transfer") to Interiors, all and not less than
all of the 411 shares of Petals Stock owned of record and
beneficially by the Majority Stockholders (the "Majority
Stockholders Petals Stock"). The Majority Stockholders Petals
Stock represents 100% of the shares of capital stock of Petals
owned by the Majority Stockholders, and 83.7% of the 491
shares of Petals stock outstanding after giving effect to the
redemption consummated pursuant to the Separate Settlement
Agreement.
(b) Certificates evidencing the Majority Stockholders Petals Stock
shall be delivered by the Majority Stockholders to Interiors,
duly endorsed for Transfer, against delivery by Interiors of
the $6.0 million purchase price for such Majority Stockholders
Petals Stock, of which $4.0 million shall be payable by bank
cashiers' checks or wire transfer of immediately available
funds, and the balance by delivery of Petals $2.0 million
convertible note, as specified in the Interiors Purchase
Agreement.
(c) The consummation of the purchase of the Majority Stockholders
Petals Stock shall occur on the Closing Date simultaneous with
the purchase of the Petals Stock from X. Xxxxxxx and X.
Xxxxxxx, as contemplated by Section 1.2 below.
1.2 Consummation of Purchase of Petals Stock from X. Xxxxxxx and X.
Xxxxxxx.
(a) Each of the Majority Stockholders, Petals, Interiors and X.
Xxxxxxx and X. Xxxxxxx do hereby mutually agree, subject only
to consummation of the transactions contemplated hereby, that
on the Closing Date, each of X. Xxxxxxx and X. Xxxxxxx shall
be deemed to have exercised their redemption Put of all of
their 80 shares of Petal Stock (the "X. Xxxxxxx and X. Xxxxxxx
Petals Stock") pursuant to Section 3.1 of the Stockholders
Agreement.
(b) On the Closing Date, and in accordance with the terms and
conditions of the Stockholders Agreement and this Agreement,
Petals shall redeem and purchase from X. Xxxxxxx and X.
Xxxxxxx, and X. Xxxxxxx and X. Xxxxxxx shall each Transfer to
Petals, all and not less than all of the eighty (80) shares of
X. Xxxxxxx and X. Xxxxxxx Petals Stock owned of record and
beneficially by them, representing 100% of the shares of
capital stock of Petals owned by X. Xxxxxxx and X. Xxxxxxx.
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(c) On the Closing Date, certificates evidencing the X. Xxxxxxx
and X. Xxxxxxx Petals Stock shall be delivered by X. Xxxxxxx
and X. Xxxxxxx to Petals, duly endorsed for Transfer, against
delivery by Petals of $2.150 million, representing the entire
purchase price for such X. Xxxxxxx and X. Xxxxxxx Petals
Stock, which amounts shall be payable by bank cashiers' checks
or wire transfer of immediately available funds in equal
$1,075,000 amounts to one or more bank account(s) designated
by X. Xxxxxxx and X. Xxxxxxx.
(d) Interiors shall unconditionally and irrevocably guaranty all
of Petals' obligations pursuant to this Section 1.2.
1.3 Settlement of New York County Litigation; General Releases. On the
Closing Date:
(a) The Minority Stockholders shall cause to be dismissed with
prejudice, the New York County Litigation and all arbitration
proceedings associated therewith, and shall cause to be filed
with the relevant courts such Stipulations of Dismissal and
related instruments as counsel for Interiors and the Majority
Stockholders may reasonably require.
(b) The Minority Stockholders, Petals and Interiors shall execute
and deliver the mutual releases in substantially the form of
Exhibit A-1 annexed hereto and made a part hereof.
(c) The Majority Stockholders, Petals and Interiors shall execute
and deliver the mutual releases in substantially the form of
Exhibit A-2 annexed hereto and made a part hereof.
1.4 Resignations; Termination of Agreements and Severance Agreement. On
the Closing Date:
(a) Each of the Majority Stockholders and their designees and each
of the Minority Stockholders and their designees shall resign
as members of the Board of Directors of Petals;
(b) Each of X. Xxxxxxx and X. Xxxxxxx shall resign as executive
officers and employees of Petals;
(c) Three persons designated by Interiors shall be elected to
serve as entire board of directors of Petals. Xxx Xxxx shall
be elected as President and Chief Executive Officer, Xxxxxxx
Xxxxxxxx shall be elected as Vice President and Chief
Financial Officer, and Xxxxx X. Xxxxxxxx, Esq. shall be
elected as corporate Secretary of Petals, respectively, and
all bank accounts and bank and/or commercial finance borrowing
resolutions of Petals shall be amended to reflect the new
officers and directors of Petals;
(d) except for the Lease referred to in Section 3(e) below, the
Stockholders Agreement and all employment agreements,
consulting agreements, management agreements or other
agreements and instruments between or among Petals, the
Majority Stockholders, the Minority Stockholders, or any of
them, shall terminate as at the Closing Date and thereafter
shall be without any further force or effect; and
(e) Petals shall enter into a severance agreement with each of X.
Xxxxxxx and X. Xxxxxxx in substantially the form of Exhibit B
annexed hereto and made a part hereof (the "Severance
Agreement"). As indicated in said Exhibit B (i) payment of
the amounts
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due under the Severance Agreement shall be made quarterly in
advance, and (ii) Interiors shall irrevocably guaranty the
financial obligations of Petals to X. Xxxxxxx and X. Xxxxxxx
under the Severance Agreement; which payment obligations shall
be unconditional, save and except only for a violation by X.
Xxxxxxx or X. Xxxxxxx of their respective covenants set forth
in the Non-Competition Agreement described in Section 1.6
below; provided, that in the event that Petals or Interiors
shall allege any such violation by X. Xxxxxxx or X. Xxxxxxx,
Petals shall nonetheless continue to make all such severance
payments, as and when due, and deposit the same in escrow
pending a final settlement or determination of such dispute,
all as provided in the Severance Agreement.
1.5 Non-Competition Agreement. On the Closing Date, each of the Minority
Stockholders and the Majority Stockholders shall execute and deliver to Petals
and Interiors a non-competition, non-disclosure and non-solicitation agreement
substantially in the form of Exhibit C annexed hereto and made a part hereof
(the "Non-Competition Agreement"). It is expressly understood and agreed that
the obligations of the Minority Stockholders under the Non-Competition Agreement
and of the "Corelli Group" (as herein defined) under Section 4(c) below, shall
be subject to the payment by Petals or Interiors of the quarterly payments, when
due, under the Severance Agreements and the payment of the Fixed Rent, when due,
under the Lease referred to in Section 3(e) below. In the event that a default
in any such payment shall occur and not be cured within the time period, if any,
provided in the relevant agreement, the Non-Competition Agreement shall
terminate and shall be of no further force or effect.
1.6 Interiors Warrants. On the Closing Date, Interiors shall deliver and
issue to each of X. Xxxxxxx and X. Xxxxxxx three year warrants (the "Warrants")
to purchase 50,000 shares of Interiors Common Stock, $.001 par value per share,
at an exercise price of $3.25 per share; which Warrants shall be in
substantially the form of Exhibit D annexed hereto and made a part hereof. In
addition, on the Closing Date, Interiors shall execute and deliver to each of X.
Xxxxxxx and X. Xxxxxxx an agreement to register the shares of Interiors Common
Stock issuable upon exercise of the Warrants (the "Warrant Shares"), pursuant
to the registration rights agreement in substantially the form of Exhibit E
annexed hereto and made a part hereof. In the event that the Closing Date shall
occur prior to the filing of Interiors first amendment to its Form S-3
Registration Statement currently filed with the Securities and Exchange
Commission (the "Pending Registration Statement"), to the extent legally
permitted Interiors shall include the 100,000 shares of Interiors Common Stock
issuable upon exercise of the Warrants in the next amendment to such Pending
Registration Statement.
1.7 Certain Federal Income Tax Obligations. The parties hereto do hereby
agree as follows:
(a) Prior to the Closing Date, Petals shall have declared, as a
dividend and distribution to each of the Minority
Stockholders, an amount in cash as shall be equal to (i)
forty-three and seventy four one-hundredths (43.74%) percent
of their individual proportionate share of the net income
before taxes of Petals for its fiscal year ended December 31,
1998 (the "1998 Pre-Tax Income"), being the estimated amount
of federal, state and local income taxes that each of the
Minority Stockholders would be required to pay on their 1998
individual federal, state and local income tax returns, as a
result of Petals' Subchapter S election under Section 1372,
et. seq. of the Internal Revenue Code of 1986, as amended,
less (ii) all cash payments or distributions previously made
by Petals to each of the Minority Stockholders at any time
from and after January 1, 1998 through and including the
Closing Date, other than (A) regular salaries, medical
insurance or reimbursement of verified out-of-pocket business
expenses paid to X. Xxxxxxx or X. Xxxxxxx, and (B) payments
made during such period to defray any of such person's 1997
federal income tax payment obligations in respect of the
earnings and profits before taxes of Petals for its year ended
December 31, 1997 (collectively, the "Accrued 1998 Income Tax
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Obligations"). On or before April 15, 1999 Petals shall cause
to be distributed to the Minority Stockholders an amount in
cash as shall be equal to the Accrued 1998 Income Tax
Obligations.
(b) In the event and to the extent that for the period commencing
January 1, 1999 and ending on the Closing Date (the "1999
Interim Period") Petals shall generate net income before taxes
(the "1999 Interim Pre-Tax Income") or incur a net loss (the
"1999 Interim Net Loss"), the Minority Stockholders shall
report on their respective 1999 Form 1040 individual,
partnership or other applicable federal income tax returns
their respective pro-rata share of such 1999 Interim Pre-Tax
Income or 1999 Interim Net Loss, as the case may be.
Accordingly, in the event and to the extent that the Minority
Stockholders shall be required to report any 1999 Interim
Pre-Tax Income on their 1999 Form 1040 individual tax returns,
prior to the April 15, 2000 date of filing of such tax returns
with the Internal Revenue Service, Petals shall pay to the
Minority Stockholders an amount in cash as shall be equal to
forty-three and seventy four one-hundredths (43.74%) percent
of their individual proportionate share of the 1999 Interim
Pre-Tax Income (the "Accrued 1999 Income Tax Obligations").
Notwithstanding the foregoing, if there shall be any 1999
Interim Pre-Tax Income which shall require the Minority
Stockholders to file and pay estimated quarterly income taxes
prior to April 2000, Petals shall pay to the Minority
Stockholders prior to June 15, 1999 forty-three and seventy
four one-hundredths (43.74%) percent of their individual
proportionate share of the 1999 Interim Pre-Tax Income, if
any.
(c) Notwithstanding the foregoing provisions of Section 1.7(a) and
Section 1.7(b) above, the amounts payable to the Minority
Stockholders pursuant to the provisions of this Section 1.7
shall be subject to reduction on a dollar-for-dollar basis, in
the event and to the extent (and only to the extent) of any
actual tax savings realized by either or both of the Minority
Stockholders from (i) the Accrued 1998 Income Tax Obligations
and/or Accrued 1999 Income Tax Obligations as paid by Petals
reducing the capital gains tax obligations of either of the
Minority Stockholders in respect of the purchase or redemption
of their Petals Stock, (ii) the Minority Stockholders' payment
of their individual capital gains taxes reducing, in whole or
in part, the Accrued 1998 Income Tax Obligations and/or
Accrued 1999 Income Tax Obligations of either of the Minority
Stockholders, or (iii) the pro rata portion of any 1999
Interim Net Loss reportable by the Minority Stockholders on
their 1999 Form 1040 income tax returns reducing any taxable
income or capital gain reportable by such Minority
Stockholders for such tax year.
(d) In the event that the audit of the financial statements of
Petals as at December 31, 1998 and for the fiscal year then
ended (the "Audited 1998 Financial Statements") currently
being conducted by Xxxxxx Xxxxxxxx & Co. shall result in an
increase or a decrease in the Accrued 1998 Income Tax
Obligations and an adjustment to the amount of the dividend
payable or paid pursuant to Section 1.7(a) above, the adjusted
amount of Accrued 1998 Income Tax Obligations shall be paid by
Petals to the Minority Stockholders or reimbursed by the
Minority Stockholders to Petals, as the case may be, on or
before April 15, 1999.
(e) Petals agrees to indemnify, defend and hold harmless each of
the Minority Stockholders from any liability with respect to
all tax obligations of Petals for all periods from January 1,
1999 to and including the Closing Date.
1.8 Settlement of Accounts. On the Closing Date: (a) all indebtedness for
money borrowed owed by Petals to each of the Majority Stockholders, X. Xxxxxxx,
X. Xxxxxxx and the Minority Stockholders
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shall be paid in full, and (b) all loans, advances and other obligations owned
by any of the Majority Stockholders, X. Xxxxxxx, X. Xxxxxxx or the Minority
Stockholders to Petals shall be repaid in full, either in cash or as a reduction
and offset against amounts owed by Petals to such person(s).
1.9 Payment of Year End Bonuses. On the Closing Date, all bonuses which
shall have accrued on the books of Petals for the year ended December 31, 1998
to employees shall be paid in full; provided, that no such bonuses shall be
payable to any party to this Agreement or any of their affiliates, whether or
not accrued on the financial statements of Petals.
1.10 Access to Information; Cooperation. Each of the Minority Stockholders
do hereby covenant and agree that from and after March 1, 1999 and at all times
through and including the Closing Date, they have and will (a) provide
representatives of Interiors with full and complete access during reasonable
business hours to the premises of Petals; (b) permit Interiors and its legal and
financial representatives to examine all financial statements, books, records,
agreements, customer lists and other written data pertaining to Petals, its
business, legal and financial condition, and to make extracts or copies of such
documents; and (c) permit Interiors to contact or communicate with key suppliers
and customers of Petals; it being understood that all of the foregoing is
intended to permit Interiors and its legal and financial representatives to
complete their due diligence investigation of the business, financial condition,
legal affairs and prospects of Petals (the "Due Diligence Investigation"), which
was suspended as a result of the commencement of the New York County Litigation
and Westchester County Litigation.
2. CLOSING DATE. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxxxx Traurig,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, upon written notice by Interiors to
the other parties hereto, on a date which shall be not earlier than March 22,
1999 and not later than March 25, 1999.
3. CONDITIONS TO CLOSING.
(a) The obligations of the parties hereto to consummate the transactions
contemplated by this Agreement shall be subject to satisfaction or
performance of all of the covenants and agreements of the respective
parties set forth in Section 1 above, each of which shall be
conditions precedent to the obligations of all parties hereto;
provided, that a party in whose favor a specific covenant and
agreement is to be performed may either (i) waive in writing
performance of such covenant or agreement, or (ii) commence an
action at law or in equity to enforce their rights under this
Agreement and the Exhibits hereto.
(b) Notwithstanding the foregoing, it is expressly understood and agreed
by and between all parties hereto, that the purchase by Interiors of
all of the shares of the Majority Stockholders Petals Stock in
accordance with the provisions of the Interiors Purchase Agreement
and this Agreement shall be a condition precedent to the obligations
of each of the Minority Stockholders under this Agreement.
(c) In the event and to the extent that on the Closing Date any of the
Minority Stockholders shall fail or refuse to deliver certificates
evidencing their shares of Petals Stock or otherwise fail or refuse
to execute and deliver the Exhibits to this Agreement to which they
are parties signatory, for any reason, other than (i) a breach of
the provisions of Section 3(b) above, or (ii) the failure of Petals
or Interiors to tender delivery of the payments or the securities to
such Minority Stockholder(s) in the amounts and in the manner
provided herein or executed copies of this Agreement and the
exhibits hereto, Interiors and the Majority Stockholders shall have
the absolute right to immediately consummate the purchase of the
Majority Stockholders Petals Stock in accordance with the terms of
the Interiors Purchase Agreement (notwithstanding any pending
litigation, this Agreement or the Stockholders Agreement or any
provisions hereof or thereof to the contrary) and either (A)
terminate this Agreement, or (B) seek specific performance of the
obligations of the Minority Stockholder(s) hereunder.
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(d) On the Closing Date, Petals and Interiors shall have received a
certificate from each of the Majority Stockholders and the Minority
Stockholders in substantially the form of Exhibit F annexed hereto
and made a part hereof (the "Ownership Certificate") ; which
Ownership Certificate shall provide, in substance, that as at the
Closing Date the representations and warranties of each of such
Majority Stockholders and Minority Stockholders as to their
respective ownership interests in and to the shares of Petals Stock
set forth therein shall be true and correct in all material
respects. Except for the aforesaid representations and warranties,
the Minority Stockholders make no other representations or
warranties herein concerning the business, financial condition or
prospects of Petals and Interiors is not relying on any statements
or representations of such Minority Stockholders in making the
investment contemplated by this Agreement.
(e) In addition to satisfaction and performance of the covenants and
agreements set forth in Section 1 and in Section 3(d) of this
Agreement, on the Closing Date Petals and Interiors shall have
entered into an amendment (the "Lease Amendment") to the existing
lease between Petals, as lessee, and Cafco LP (an affiliate of the
Minority Stockholders), as lessor (the "Landlord") of the principal
executive offices and warehouse facilities of Petals located in
White Plains, New York (the "Lease"). Such Lease Amendment, in
substantially the form of Exhibit G annexed hereto, shall provide,
inter alia:
(i) the Landlord shall consent to the transactions contemplated by
the Interiors Purchase Agreement and this Agreement;
(ii) Interiors and its Stylecraft Lamps, Inc. subsidiary shall
unconditionally guaranty the obligations of Petals under the Lease;
(iii) in the event that Petals or the guarantors shall, for any
reason, fail to pay the monthly rent under the Lease, when due, the
Landlord may, at its option, commence a summary proceeding to require
Petals to vacate the leased premises within thirty (30) days of such
payment default, without resorting to any other form of eviction
proceedings, and Petals and the guarantors shall remain liable for any
unpaid rent, subject only to the Landlord's obligation to mitigate damages
and re-rent the leased premises; and
(iv) the Landlord shall have the right (in addition to and not in
lieu of the provisions of clause (iii) of this Section 3(e) ) to terminate
the Lease on or after December 31, 2000 (the "Early Lease Termination
Date") ; provided, that (A) the Landlord shall provide Petals with not
less than twelve (12) months prior written notice of such termination (the
"Lease Termination Notice"), (B) as at the time of such Lease Termination
Notice, the Landlord shall have received a bona fide written offer from an
unaffiliated third party to either purchase or lease the leased premises,
and (C) an unaffiliated third party shall either take actual title to or
possession of the leased premises on or before the Early Lease Termination
Date. In the event that an unaffiliated third party shall not be prepared
to either take actual title to or possession of the leased premises on or
before the Early Lease Termination Date, the Landlord shall give prompt
written notice of such event to Petals and, if such fact is then known,
include in such notice the revised date of the proposed taking of title or
possession. In such event Petals shall have the right (but not the
obligation), by giving written notice to the Landlord within ten business
days of receipt of the Landlord's notice, to extend the Early Lease
Termination Date for a period equal to a date which shall be the earlier
to occur of (A) the date on such unaffiliated third party shall take
actual title to or possession of the leased premises, or (B) the date on
which the Landlord shall be required to commence construction or relating
workover activities to the leased premises under the terms of any
agreements or instruments then existing between the Landlord and any such
unaffiliated third party.
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4. MISCELLANEOUS.
(a) In the event that following the Closing Date Petals shall request that
X. Xxxxxxx and/or X. Xxxxxxx provide advise and services to Petals, if such
Minority Stockholders elect to provide such services they shall do so on a
consulting basis and on terms and conditions as shall be mutually satisfactory
to Petals and such person(s) ; provided, that any compensation paid in respect
of such services shall be in addition to, and not in lieu of, the severance
payments to which such persons are entitled under Exhibit B hereto.
(b) Petals hereby agrees that X. Xxxxxxx and X. Xxxxxxx shall have a
period of two weeks following the Closing Date to remove their personal property
and files from the Petals premises. Such property shall not, however, include
any business files or other confidential business materials.
(c) Petals hereby agrees that on and after the Closing, the Minority
Stockholders, X. Xxxxxxx, X. Xxxxxxx and Xxxxxx Xxxxxxx (collectively, the
"Corelli Group") shall be granted a non-exclusive world-wide royalty free
license to use the name "Corham;" provided, that the right to use such name
shall be limited to uses that would otherwise be permitted to the Minority
Stockholders under the terms of the Non-Competition Agreement.
(d) This Agreement and the Exhibits hereto and all covenants, agreements,
representations and warranties made herein and therein shall survive the Closing
Date. Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such party; and all covenants, promises and agreements in this Agreement
contained, by or on behalf of any one party hereto shall inure to the benefit of
and be binding upon the successors and assigns of such party.
(e) This Agreement and the Exhibits shall (irrespective of where same are
executed and delivered) be governed by and construed in accordance with the laws
of the State of New York (without giving effect to principles of conflicts of
laws).
(f) No amendment or modification of this Agreement or any Exhibit hereto
shall be deemed to be effective unless contained in a writing executed by all
relevant parties hereto or thereto.
(g) All notices, requests, demands and other communications under or in
respect of this Agreement or any transactions hereunder shall be in writing
(which may include telegraphic or telecopied communication) and shall be
personally delivered or mailed (by prepaid registered or certified mail, return
receipt requested), sent by prepaid recognized overnight courier service, or
telegraphed or telecopied by facsimile transmission to the applicable party at
its address or telecopier number indicated in Exhibit H annexed hereto and made
a part hereof. All such notices, requests, demands and other communications
shall be deemed given when personally delivered or when deposited in the mails
with postage prepaid (by registered or certified mail, return receipt requested)
or delivered to the telegraph company or overnight courier service, addressed as
aforesaid, or when submitted by facsimile transmission to a telecopier number
designated by such addressee. No other method of written notice is precluded.
(h) All disputes relating to or arising out of this Agreement or the
interpretation or application of this Agreement or any exhibit hereto shall be
resolved by final and binding arbitration before an arbitrator selected by the
Company from among the list of arbitrators set forth on Exhibit A. Any
arbitration before the selected arbitrator shall be administrated by JAMS
Endispute or the American Arbitration Association in New York. If such
arbitration shall be commenced by The Company it shall, with its demand for
arbitration, select the arbitrator and two alternatives in its demand. If such
arbitration shall be commenced by either Employee, then the Company shall select
an arbitrator and two alternatives within 5 days of being served with a copy of
the demand for arbitration. Each of the parties hereto do
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hereby consent to the jurisdiction of the courts of the State of New York and
the United States District Court for the Southern District of New York, as well
as to the jurisdiction of all courts from which an appeal may be taken from such
courts, for the purpose of enforcing the award of the arbitrator, or any suit,
action or other proceeding arising out of or with respect to this Agreement, or
any of the transactions contemplated hereby or thereby. The parties hereto
hereby expressly waive any and all objections which any of them may have as to
venue in any of such courts, and also waives trial by jury in any such suit,
action or proceeding.
(i) If any provision of this Agreement is held invalid or unenforceable,
either in its entirety or by virtue of its scope or application to given
circumstances, such provision shall thereupon be deemed modified only to the
extent necessary to render same valid, or not applicable to given circumstances,
or excised from this Agreement, as the situation may require, and this Agreement
shall be construed and enforced as if such provision had been included herein as
so modified in scope or application, or had not been included herein, as the
case may be.
(j) The Article and Section headings in this Agreement are included herein
for convenience of reference only, and shall not affect the construction or
interpretation of any provision of this Agreement.
(k) This Agreement, the Exhibits hereto and the Interiors Purchase
Agreement constitute the sole and entire agreement and understanding between the
parties hereto as to the subject matter hereof, and supersede all prior
discussions, agreements and understandings of every kind and nature between the
parties as to such subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers on the date set forth below, but
all as of the day and year first above written.
PETALS, INC.
By: /s/ Illegible Signature
------------------------------------
INTERIORS, INC.
By: /s/ Xxx Xxxx
------------------------------------
Xxx Xxxx, President
/s/ Xxxx Xxxxxxx
---------------------------------------
XXXX XXXXXXX
/s/ Xxxxxxxxxxx Xxxxxxx
---------------------------------------
XXXXXXXXXXX XXXXXXX
9
EXHIBITS
Mutual Releases (X. Xxxxxxx and X. Xxxxxxx) Exhibit A-1
Mutual Releases (X. Xxxxxxx and X. Xxxxxxx) Exhibit A-2
Severance Agreements Exhibit B
Non-Competition Agreements Exhibit C
Interiors Warrants Exhibit D
Registration Rights Agreement Exhibit E
Ownership Certificates Exhibit F
Amendment to Lease Exhibit G
Addresses for Notices Exhibit I
10
