MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement") is entered into
as of this day of May 1996, by and between Decor Group, Inc, a Delaware
corporation, having an office at 320 Washington Street, Mt. Vernon, New York
10553 (hereinafter "Decor"), and Interiors, Inc. , a Delaware corporation,
having offices at 320 Washington Street, Mt. Vernon, New York 10553 (hereinafter
"Interiors").
NOW, THEREFORE, in consideration of the mutual promises of the
parties hereinafter set forth, Decor and Interiors hereto agree as follows:
1.Retention as Management Advisor. Subject to each of the terms,
conditions and provisions of this Agreement, Decor hereby retains Interiors and
Interiors hereby agrees to be retained by Decor to perform those managerial
functions set forth in Section 4 of this Agreement.
2. Term. Subject to the provisions for termination set forth herein,
this Agreement shall be from the date of this Agreement through the second
anniversary hereof, and automatically renewable annually thereafter unless the
non-terminating party receives written notice from the terminating party of
termination at least sixty (60) days prior to the renewal date.
3. Compensation. As compensation to Interiors for its management and
advisory services to Decor under this Agreement, Decor agrees to pay to
Interiors an annual fee (the "Management Fee") equal to the greater of (i)
$75,000 or (ii) 1 1/2% of Excess Cashflow of Artisan Acquisition Corporation.
"Excess Cashflow" shall mean operating cashflow as defined by generally accepted
accounting principles (a) less (i) principal and interest payable with respect
to indebtedness, (ii) taxes, and (iii) capital expenditures, and (b) adjusted to
reflect changes in working capital. The Management Fee shall be paid annually
within 90 days following the end of the relevant fiscal year.
4. Duties as Management Advisor. Interior's shall provide assistance
in the design, manufacturing marketing and distribution of Decor's products, as
well as providing accounting and administrative services and strategic planning
with regard to joint ventures, acquisitions and other long term business
initiatives (the "Services"). The Services shall be rendered upon the reasonable
request of Decor, and Interiors shall devote as much time as reasonably
necessary to complete its management services obligations to Decor.
5. Decisions. Decor reserves the right to make all decisions
with regard to any matter upon which Interiors has rendered its advice and
consultation, and there shall be no liability to Interiors for any such advice
accepted by Decor pursuant to the provisions of this Agreement, unless such
advice was the result of willful misconduct or gross negligence on the part of
Decor.
6. Authority of Management Advisor. Interiors shall have authority
only to act as a consultant and advisor to Decor. Interiors shall have no
authority to enter into any agreement or to make any representation, commitment
or warranty binding upon Decor or to obtain or incur any right, obligation or
liability on behalf of Decor.
7. Independent Contractor. Except as may be expressly provided
elsewhere in this Agreement, Interiors shall act as an independent contractor
and shall have complete charge of its personnel engaged in the performance of
the Services.
8. Books and Records. Interior's books and records with respect to
the Services and any reimbursable costs ("Books and Records") shall be kept at
Interior's offices located at 320 Washington Street, Mt. Vernon, New York. The
Books and Records shall be kept in accordance with recognized accounting
principles and practices, consistently applied, and shall be made available for
Decor or Decor's representatives, with inspection and copying at all times being
made available during regular office hours. Interiors shall not be required to
maintain the Books and Records for more than three (3) years after termination
of this Agreement.
9. Confidential Information.
9.1 The parties acknowledge that during the course of provision of
the Services, Decor may disclose information to Interiors or its affiliated
companies. Interiors shall treat such information as Decor's confidential
property and safeguard and keep secret all such information about Decor,
including reports and records, customer lists, trade lists, trade practices, and
prices pertaining to Decor's business.
9.2 Interiors shall exercise its best efforts and shall cause any of
its affiliated companies to exercise their best efforts to prevent any
confidential information from being disclosed to third parties, except as
necessarily required in the performance of the Services and except under terms
of confidentiality satisfactory to Decor. This obligation shall remain in effect
until Decor shall release Interiors or its affiliated companies from their
obligations under this paragraph 9, but in no event later than three (3) years
after the completion of the
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Services. Interiors shall not use any of Decor's confidential information in any
way that is or may be detrimental to the interests of Decor, directly or
indirectly, either during the term of this Agreement or at any time thereafter.
10. Indemnification. Decor agrees to indemnify and hold Interiors
and its officers, directors and agents harmless from damages, losses or
expenses, including, without limitation, reasonable attorneys' fees and
expenses, incurred or paid directly or indirectly, by Interiors as a result of
or arising out of any actions taken by Interiors in connection with the
performance of the Services under this Agreement. Interiors agrees to indemnify
and hold Decor and its officers, directors and agents harmless from damages,
losses or expenses, including, without limitation, reasonable attorneys' fees
and expenses, incurred or paid directly or indirectly, by Decor as a result of
or arising out of any actions taken by Interiors in connection with the
performance of the Services under this Agreement.
11. Notices and Communications.
11.1 All communications relating to the day-today activities
necessary to render the Services shall be exchanged between the respective
representatives of Decor and Interiors, who will be designated by the parties
promptly upon commencement of the Services.
11.2 All other notices, demands, and communications required or
permitted hereunder shall be in writing and shall be delivered personally to the
respective representatives of Decor and Interiors set forth below or shall be
sent by a nationally recognized overnight courier or mailed by registered mail,
postage prepaid, return receipt requested. Notices, demands and communications
hereunder shall be effective: (i) if delivered personally, on delivery; or (ii)
if mailed, forty-eight (48) hours after deposit thereof in the United States
mail addressed to the party to whom such notice, demand, or communication is
given. Until changed by written notice, all such notices, demands and
communications shall be addressed as follows:
If to Decor:
320 Washington Street
Mt. Vernon, New York 10553
Attn: Donald Feldman
President
If to Interiors:
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320 Washington Street
Mt. Vernon, New York 10553
Attn: Max Munn
President
12. Assignments. Interiors shall not assign this Agreement in whole
or in part without the prior written consent of Decor.
13. Applicable Law and Severability. This document shall, in all
respects, be governed by the laws of the State of New York applicable to
agreements executed and to be wholly performed within the State of New York.
Nothing contained herein shall be construed so as to require the commission of
any act contrary to law, and wherever there is any conflict between any
provisions contained herein and any contrary present or future statute, law,
ordinance or regulation, the latter shall prevail, but the provision of this
document which is affected shall be curtailed and limited only to the extent
necessary to bring it within the requirements of the law.
14. Further Assurances. Each of the parties hereto shall execute and
deliver any and all additional papers, documents and other assurances, and shall
do any and all acts and things reasonably necessary in connection with the
performance of their obligations hereunder and to carry out the intent of the
parties hereto.
15. Attorneys' Fees. In the event any action is instituted by a
party to enforce any of the terms and provisions contained herein, the
prevailing party in such action shall be entitled to such reasonable attorneys'
fees, costs and expenses as may be fixed by the court.
16. Successors and Assigns. Subject to the foregoing, all the terms
and conditions contained herein shall inure to the benefit of and shall be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
17. Captions. The captions appearing at the commencement of the
paragraphs hereof are descriptive only and for convenience and reference. Should
there be any conflicts between any such caption and the paragraph at the head of
which it appears, the paragraph and not such caption shall control and govern in
the construction of this document.
18. Modifications or Amendments. No amendment, change
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or modification of this document shall be valid unless it is in writing and
signed by all the parties hereto and expressly states that it is an amendment,
change or modification of this Agreement is intended.
19. Separate Counterparts. This document may be executed in one or
more separate counterparts, each of which, when so executed, shall be deemed to
be an original. Such counterparts shall, together, constitute and be one and the
same.
20. Entire Agreement. This Agreement shall constitute the entire
understanding and agreement between the parties hereto and shall supersede any
and all letters of intent, whether written or oral, pertaining to the subject
matter of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers on the date first appearing above.
DECOR GROUP, INC.
By ______________________________________
Donald Feldman,
President
INTERIORS, INC.
By ______________________________________
Max Munn
President
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