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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)*
CRAFTMADE INTERNATIONAL, INC.
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(Name of Issuer)
Common Stock, $0.01, par value per share
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(Title of Class of Securities)
22413E-10-4
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(CUSIP Number)
Mr. Neall W. Humphrey
5005 Hillsdale Circle
El Dorado Hills, California 95762
(916) 933-3943
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
July 1, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisitions which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
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Check the following box if a fee is being paid with the statement [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be 'filed' for the purpose of Section 18 of the Securities Exchange
Act of 1934 ('Act') or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 22413E-10-4
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only).
Neall W. Humphrey
Leslie D. Humphrey
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ x ] The Reporting Persons are husband and wife and hold the
shares jointly as community property.
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3) SEC Use Only
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4) Source of Funds (See Instructions)
PF
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5) Check if Disclosure of Legal Proceedings in Required Pursuant to Items
2(d) or 2(e).
[ ]
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6) Citizenship or Place of Organization.
Both Reporting Persons' citizenship is the United States of America.
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Number of (7) Sole Voting Power -0-
Shares Bene-
ficially -----------------------------------------------------------------
Owned by (8) Shared Voting Power 396,967
Each Report-
ing Person -----------------------------------------------------------------
With (9) Sole Dispositive Power -0-
-----------------------------------------------------------------
(10) Shared Dispositive Power 357,270 (1)
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11) Aggregate Amount Beneficially owned by Each Reporting Person.
396,967 (Shares are held jointly as community property.)
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
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13) Percent of Class Represented by Amount in Row (11).
7.88%
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14) Type of Reporting Person (See Instructions)
IN; IN
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(1) The number of shares indicated does not include 39,697 shares of stock held
in an escrow account ("Escrow Shares") pursuant to the terms of that
certain escrow agreement, dated July 1, 1998 ("Escrow Agreement"). The
Escrow Agreement provides that Mr. and Mrs. Humphrey do not have
dispositive power over the Escrow Shares until July 1, 2000. Additionally,
after July 1, 1999, Craftmade International, Inc., (the 'Company'), in its
sole discretion, may release some or all the Escrow Shares.
Item 1. Security and Issuer
This statement relates to the common stock, $0.01 par value (the 'Common
Stock') of Craftmade International, Inc., (the 'Company'). The Company's
principal executive offices are located at 650 South Royal Lane, Suite 100,
Coppell, Texas.
Item 2. Identity and Background
(a) Name: Neall W. Humphrey
Leslie D. Humphrey
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(b) Residence or Business Address: 5005 Hillsdale Circle
El Dorado Hills, California 95762
(c) Present Principal Occupation or Employment:
Neall Humphrey is president and chief executive officer of Trade
Source International, Inc., a Delaware corporation, and a wholly
owned subsidiary of the Company ("TSI"). Leslie Humphrey is a vice
president with TSI.
(d) Criminal Proceeding Convictions (Excluding traffic violations or
similar misdemeanors):
During the past five years, neither Reporting Person has been
convicted in any criminal proceedings.
(e) Securities Laws Proceedings:
During the past five years, neither Reporting Person has been a
party to any civil proceeding which resulted in or made them subject
to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to federal or state
securities laws, or finding any violation of such laws.
(f) Citizenship:
Both Reporting Persons' citizenship is the United States of
America.
Item 3. Source and Amount of Funds and Other Consideration.
The Humphreys acquired their shares pursuant to the terms of the Agreement
and Plan of Merger ("Merger Agreement") between Craftmade International, Inc.,
TSI, Trade Source International, Inc., a California corporation, Neall and
Leslie Humphrey, John DeBlois, the Wiley Family Trust, James Bezzerides, and the
Bezzco Inc. Employee Retirement Trust, dated July 1, 1998. In accordance with
the Merger Agreement, the Humphreys elected to waive their right to receive up
to twenty-five percent (25%) of their share of the consideration in cash and
have instead elected to receive all of their share of the consideration in the
form of common shares, $0.01 par value per share, of the Company.
Item 4. Purpose of the Transaction.
The purpose of the acquisition of the shares of Common Stock by the
Humphreys is for personal investment. The acquisition of the shares of Common
Stock was made pursuant to the
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terms of the Merger Agreement and was not made for the purpose of acquiring
control of the Company.
In accordance with the terms of the Merger Agreement, the Company has
agreed that the board of directors will use its best efforts, subject to its
fiduciary obligations, to nominate Neall Humphrey for a seat on the Company's
board of directors, should Neall Humphrey so desire. Additionally, a Voting
Agreement between James Ridings, John DeBlois and Neall Humphrey was entered
into on July 1, 1998. Pursuant to the Voting Agreement Mr. Ridings, who serves
as Chairman, Chief Executive Officer and president of the Company, has committed
to vote all shares of Common Stock he owns or over which he has a sole proxy in
favor of Messrs. DeBlois and Humphrey's election to the Company's board of
directors. Mr. Humphrey has been nominated to serve as a director of the
Company at the next annual meeting of the shareholders to be held on October 30,
1998.
Mr. and Mrs. Humphrey beneficially own 396,967 shares, however, 39,697 of
the shares are Escrow Shares held pursuant to the terms of that certain Escrow
Agreement, dated July 1, 1998. The Escrow Agreement provides that Mr. and Mrs.
Humphrey do not have dispositive power over the Escrow Shares until July 1,
2000. Additionally, the Escrow Agreement provides that after July 1, 1999, the
Company, in its sole discretion, may release some or all the Escrow Shares.
The Humphreys may make further purchases of shares of Common Stock from
time to time and may dispose of any or all of the shares of Common Stock held by
them at any time. Except as set forth above, the Humphreys do not have any
specific plans or proposals which relate to, or could result in, any of the
matters referred to in paragraphs (b) through (j), inclusive, of Item 4 of the
Schedule 13D. The Humphreys may, at any time and from time to time, review or
reconsider their position and formulate plans or proposals with respect
thereto, but have no present intention of doing so.
Item 5. Interest in Securities of the Issuer.
(a) Aggregate Number and Percentage of Shares Beneficially Owned:
396,967 shares; 7.88%
(b) 1. Shares that Reporting Party has sole power to vote or direct
vote:
-0-
2. Shares that Reporting Party has shared power to vote or direct
vote:
396,967
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3. Shares that Reporting Party has sole power to dispose or direct
the disposition:
-0-
4. Shares that Reporting Party has shared power to dispose or direct
the disposition:
357,270
The number of shares indicated does not include 39,697 Escrow
Shares held pursuant to the terms of that certain Escrow Agreement,
dated July 1, 1998. The Escrow Agreement provides that Mr. and Mrs.
Humphrey do not have dispositive power over the Escrow Shares until
July 1, 2000. Additionally, the Escrow Agreement provides that after
July 1, 1999, the Company, in its sole discretion, may release some or
all the Escrow Shares.
(c) Transactions during past 60 days by Reporting Person:
No transactions have been effected.
(d) Not applicable.
(e) See the response to Item 5(b)(3).
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Other than the Merger Agreement, Voting Agreement and Escrow Agreement set
forth in Items 3 and 4, and the separate employment agreements dated July 1,
1998 for Neall Humphrey and Leslie Humphrey with the Company and TSI, the
Humphreys are not aware of any other contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 hereof and
between such persons and any person with respect to any securities of the
Company, including but not limited to transfer or voting of any other
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, divisions of profits or loss, or the giving or
withholding of proxies.
Item 7. Materials to be Filed as Exhibits.
1* Escrow Agreement between Craftmade International, Inc., Trade Source
International, Inc., a Delaware corporation, Neall and Leslie
Humphrey, and John DeBlois, dated July 1, 1998.
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2.1 Agreement and Plan of Merger ("Merger Agreement") between Craftmade
International, Inc., Trade Source International, Inc., a Delaware
corporation, Trade Source International, Inc., a California
corporation, Neall and Leslie Humphrey, John DeBlois, the Wiley
Family Trust, James Bezzerides, and the Bezzco Inc. Employee
Retirement Trust, dated July 1, 1998. (Incorporated herein by
reference, and filed as Exhibit 2.1 to the Company's July 15, 1998,
Form 8-K filing (File No. 33-33594-FW.))
99.1 Voting Agreement between James Ridings, John DeBlois and Neal
Humphrey dated July 1, 1998. (Incorporated herein by reference, and
filed as Exhibit 99.1 to the Company's July 15, 1998, Form 8-K
filing (File No. 33-33594-FW.))
99.4 Employment Agreement dated July 1, 1998, between Craftmade
International, Inc., Trade Source International, Inc., a Delaware
Corporation, and Neall Humphrey. (Incorporated herein by
reference, and filed as Exhibit 99.4 to the Company's July 15, 1998,
Form 8-K filing (File No. 33-33594-FW.))
99.5 Employment Agreement dated July 1, 1998, between Craftmade
International, Inc., Trade Source International, Inc., a Delaware
Corporation, and Leslie Humphrey. (Incorporated herein by
reference, and filed as Exhibit 99.5 to the Company's July 15, 1998,
Form 8-K filing (File No. 33-33594-FW.))
* Filed herewith.
SIGNATURE.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: /s/
-------------------- -------------------------
(Name/Title)
Date: /s/
-------------------- -------------------------
(Name/Title)
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ESCROW AGREEMENT
This Escrow Agreement ("Escrow Agreement"), dated as of July 1, 1998
(the "Closing Date"), is by and among Craftmade International, Inc., a
Delaware corporation ("Buyer"), Trade Source International, Inc., a Delaware
corporation ("Subsidiary"), Neall and Leslie Humphrey, individuals resident
in El Dorado Hills, California (collectively, "Humphrey"), John DeBlois, an
individual resident in Dedham, Massachusetts ("DeBlois" and, together with
Humphrey, the "Majority Shareholders") and The Frost National Bank, a
national banking association, as escrow agent ("Escrow Agent").
This is the Escrow Agreement referred to in the Merger Agreement dated
as of July 1, 1998 (the "Merger Agreement") among Buyer, Sellers (as defined
in the Merger Agreement), Subsidiary and Trade Source International, Inc., a
California Corporation (the "Company").
The parties, intending to be legally bound, hereby agree as follows:
1. ESTABLISHMENT OF ESCROW
(a) Pursuant to the Merger Agreement, Buyer and Subsidiary are
depositing (i) a certificate representing 39,697 shares of common stock,
$0.01 par value per share ("Buyer Shares"), of the Buyer in the name of
Humphrey and (ii) a certificate representing 25,895 shares of Buyer Shares
in the name of DeBlois (collectively, the "Escrow Shares") with Escrow
Agent. Escrow Agent acknowledges receipt thereof.
(b) Escrow Agent hereby agrees to act as escrow agent and to hold,
safeguard and disburse the Escrow Shares pursuant to the terms and
conditions hereof.
2. CLAIMS
(a) From time to time on or before July 1, 2000, Buyer or Subsidiary
may give notice (a "Notice") to the Majority Shareholders and Escrow Agent
specifying in reasonable detail the nature and dollar amount (the "Dollar
Amount") of any claim (a "Claim") it may have under Article XII of the
Merger Agreement, along with the exact number of Buyer Shares to be
disbursed with respect to such Claim; Buyer or Subsidiary may make more
than one claim with respect to any underlying state of facts. If the
Majority Shareholders give notice to Buyer, Subsidiary and Escrow Agent
disputing any Claim (a "Counter Notice") within thirty (30) days following
receipt by Escrow Agent of the Notice regarding such Claim, such Claim
shall be resolved as provided in Section 2(b). If no Counter Notice is
received by Escrow Agent within such 30-day period, then the Dollar Amount
of damages claimed by Buyer or Subsidiary as set forth in its respective
Notice shall be deemed established for purposes of this Escrow Agreement
and the Merger Agreement and, at the end of such 30-day period (the "Claim
Date"), Escrow Agent shall disburse to Buyer or Subsidiary the amount of
Buyer Shares specified in such Notice. The
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number of Buyer Shares specified by Buyer or Subsidiary in the Notice
shall be equal to (i) the dollar amount claimed in the Notice divided by
(ii) the last reported sale price of the Buyer Shares on the Nasdaq
National Market System, as of the New York Stock Exchange, Inc. trading
day immediately preceding the Claim Date; provided, however, that such
disbursement shall be only to the extent of the Escrow Shares. Escrow
Agent shall not inquire into or consider whether a Claim complies with
the requirements of the Merger Agreement.
(b) If a Counter Notice is given with respect to a claim, Escrow
Agent shall make a disbursement of the Escrow Shares with respect
thereto only in accordance with (i) joint written instructions of Buyer,
Subsidiary and the Majority Shareholders or (ii) a final non-appealable
order of a court of competent jurisdiction. Any court order shall be
accompanied by a legal opinion by counsel for the presenting party
satisfactory to Escrow Agent to the effect that the order is final and
non-appealable. Escrow Agent shall act on such court order and legal
opinion without further question.
3. TERMINATION OF ESCROW; VOLUNTARY RELEASE OF ESCROW SHARES
On July 1, 2000 (the "Disbursement Date"), Escrow Agent shall pay and
distribute the then Escrow Shares to the Majority Shareholders (60.5217545%
to Humphrey and 39.4782455% to DeBlois), unless (i) any Claims are then
pending, in which case an amount of Escrow Shares equal to (A) the aggregate
Dollar Amount of such Claims (as shown in the Notices of such Claims) divided
by (B) the last reported sale price of the Buyer Shares on the Nasdaq
National Market System, as of the New York Stock Exchange, Inc. trading day
immediately preceding the Disbursement Date shall be retained by Escrow Agent
(and the balance disbursed to the Majority Shareholders in such proportions)
or (ii) Buyer or Subsidiary has given notice to the Majority Shareholders and
Escrow Agent specifying in reasonable detail the nature of any other claim it
may have under Article XII of the Merger Agreement with respect to which it,
in good faith, is unable to specify the amount of Damages, in which case the
entire Escrow Shares shall be retained by Escrow Agent, in either case until
it receives joint written instructions of Buyer, Subsidiary and the Majority
Shareholders or a final non-appealable order of a court of competent
jurisdiction as contemplated by Section 2(b).
After July 1, 1999, Buyer, in its sole discretion, may, by written
notice, cause the Escrow Agent to pay and distribute some or all of the
Escrow Shares to the Majority Shareholders (60.5217545% of such released
amount to Humphrey and 39.4782455% of such released amount to DeBlois). Any
such written notice delivered to Escrow Agent shall specify the exact number
of Escrow Shares to be delivered to each of Humphrey and DeBlois.
4. DUTIES OF ESCROW AGENT
(a) Escrow Agent shall not be under any duty to give the Escrow
Shares held by it hereunder any greater degree of care than it gives its
own similar property and shall
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not be required to invest any funds held hereunder except as directed in
this Escrow Agreement. Uninvested funds held hereunder shall not earn or
accrue interest.
(b) Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct and, except with respect to claims
based upon such gross negligence or willful misconduct that are
successfully asserted against Escrow Agent, the other parties hereto
shall jointly and severally indemnify and hold harmless Escrow Agent
(and any successor Escrow Agent) from and against any and all losses,
liabilities, claims, actions, damages and expenses, including reasonable
attorneys' fees and disbursements, arising out of and in connection with
this Escrow Agreement. Without limiting the foregoing, Escrow Agent
shall in no event be liable in connection with its investment or
reinvestment of any cash held by it hereunder in good faith, in
accordance with the terms hereof, including, without limitation, any
liability for any delays (not resulting from its gross negligence or
willful misconduct) in the investment or reinvestment of the Escrow
Shares, or any loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact stated therein or the
propriety or validity of the service thereof. Escrow Agent may act in
reliance upon any instrument or signature believed by it to be genuine
and may assume that the person purporting to give receipt or advice or
make any statement or execute any document in connection with the
provisions hereof has been duly authorized to do so. Escrow Agent may
conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless
written notice to the contrary is delivered to Escrow Agent. If the
Escrow Agent obeys or complies with any court order, judgment or decree,
it shall not be liable to any of the parties, their respective
successors or assigns, or to any other person or entity because of such
compliance, even if such court order, judgment or decree is
substantially reversed, modified, annulled, set aside or vacated.
(d) Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Escrow Agreement and shall not be
liable for any action taken or omitted by it in good faith in accordance
with such advice. Escrow Agent shall never be required to calculate the
value, or determine the number of Escrow Shares necessary to satisfy a
Claim or to be distributed to the Majority Shareholders.
(e) Escrow Agent does not have any interest in the Escrow Shares
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Any payments of income from this Escrow Shares shall
be subject to withholding regulations then in force with respect to
United States taxes. The parties hereto will provide Escrow Agent with
appropriate Internal Revenue Service Forms W-9 for tax identification
number certification, or non-resident alien certifications. This
Section 4(e) and Section 4(b) shall
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survive notwithstanding any termination of this Escrow Agreement or the
resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the validity, value,
genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
(g) Escrow Agent shall not be called upon to advise any party as to
the wisdom in selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Shares to any successor Escrow
Agent jointly designated by the other parties hereto in writing, or to
any court of competent jurisdiction, whereupon Escrow Agent shall be
discharged of and from any and all further obligations arising in
connection with this Escrow Agreement. The resignation of Escrow Agent
will take effect on the earlier of (a) the appointment of a successor
(including a court of competent jurisdiction) or (b) the day which is
thirty (30) days after the date of delivery of its written notice of
resignation to the other parties hereto. If at that time Escrow Agent
has not received a designation of a successor Escrow Agent, Escrow Agent
may, at Escrow Agent's election, (i) retain and safeguard the Escrow
Shares until receipt of a designation of successor Escrow Agent or a
joint written disposition instruction by the other parties hereto or a
final non-appealable order of a court of competent jurisdiction or (ii)
interplead the Escrow Shares with a court of competent jurisdiction in
Tarrant County, Texas, and recover from the other parties hereto,
jointly and severally, its attorneys' fees and costs in connection with
such interpleader.
(i) If there is any disagreement or dispute in connection with the
Escrow Shares or the subject matter hereof, or in the event of adverse
or inconsistent claims or demands upon, or inconsistent instructions to,
the Escrow Agent, or if the Escrow Agent in good faith is in doubt as to
what action to take pursuant to the Escrow Agreement, the Escrow Agent
may, at its election, refuse to comply with any such claims, demands or
instructions, or refuse to take any other action pursuant to this Escrow
Agreement until:
(i) the rights of all persons involved in the dispute have
been fully and finally adjudicated by a court of competent
jurisdiction or the Escrow Agent has resolved any such doubts to
its good faith satisfaction; or
(ii) all disputes have been resolved between the parties
involved, and the Escrow Agent has received written notice thereof
satisfactory to it from all such persons.
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Without limiting the generality of the foregoing, the Escrow Agent may,
at its election, interplead the Escrow Shares or any portion thereof
with a court of competent jurisdiction in Tarrant County, Texas, or
commence judicial proceedings for declaratory judgment, and the Escrow
Agent shall be entitled to recover from the other parties to this Escrow
Agreement, jointly and severally, its attorneys' fees and costs in
connection with any such interpleader or declaratory judgment action.
(j) Buyer shall pay Escrow Agent compensation (as payment in full)
for the services to be rendered by Escrow Agent hereunder in the amounts
set forth on EXHIBIT A attached hereto. Buyer agrees to reimburse
Escrow Agent for all reasonable expenses, disbursements and advances
incurred or made by Escrow Agent in performance of its duties hereunder
(including reasonable fees, expenses and disbursements of its counsel).
Any fees or expenses of Escrow Agent or its counsel that are not paid as
provided for herein may be taken from any property held by Escrow Agent
hereunder.
(k) No printed or other matter in any language (including, without
limitation, prospectuses, notices, reports and promotional material)
that mentions Escrow Agent's name or the rights, powers, or duties of
Escrow Agent shall be issued by the other parties hereto or on such
parties' behalf unless Escrow Agent shall first have given its specific
written consent thereto.
(l) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States
central securities depository it reasonably deems appropriate,
including, without limitation, the Depositary Trust Company and the
Federal Reserve Book Entry System.
(m) If the number of Escrow Shares to be disbursed at any time by
Escrow Agent to any other party pursuant to the terms of this Escrow
Agreement is less than the total amount of Escrow Shares held by Escrow
Agent, Escrow Agent shall tender the certificates representing the
Escrow Shares to North American Transfer, the transfer agent for Buyer,
to reduce such certificates into smaller denominations sufficient to
permit such partial disbursement.
5. LIMITED RESPONSIBILITY
This Escrow Agreement expressly sets forth all the duties of Escrow
Agent with respect to any and all matters pertinent hereto. No implied duties
or obligations shall be read into this Escrow Agreement against Escrow Agent.
Escrow Agent shall not be bound by, or charged with notice of, the provisions
of any agreement among the other parties hereto except this Escrow Agreement.
6. OWNERSHIP FOR TAX PURPOSES; VOTING AND PECUNIARY BENEFITS
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(a) The parties agree that, for purposes of federal and other taxes
based on income, Humphrey and DeBlois will be treated as the owner of
60.5217545% and 39.4782455% the Escrow Shares, respectively, and that
Humphrey and DeBlois will report all income, if any, that is earned on, or
derived from, the Escrow Shares as their income, in such proportions, in
the taxable year or years in which such income is properly includible and
pay any taxes attributable thereto.
(b) The Majority Shareholders shall have all voting and pecuniary
benefits associated with the Escrow Shares but shall not have dispositive
power over the Escrow Shares, while the Escrow Shares remain in escrow.
Humphrey shall exercise the voting rights and receive the pecuniary
benefits with respect to 60.5217545% of the Escrow Shares, and DeBlois
shall exercise the voting rights and receive the pecuniary benefits with
respect to 39.4782455% of the Escrow Shares.
7. NOTICES
All notices, consents, waivers and other communications under this
Escrow 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 telecopier (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 telecopier numbers set forth below (or to such other addresses
and telecopier numbers as a party may designate by notice to the other
parties):
Majority Shareholders:
Neall and Leslie Humphrey
c/o Trade Source International, Inc.
5005 Hillsdale Circle
El Dorado Hills, California 95762
Facsimile No.: (916) 933-6047
John DeBlois
30 Eastbrook Road #301
Dedham, Massachusetts 02026
Facsimile No.: (781) 329-6683
with a copy to:
Gary L. Bradus
Weintraub Genshlea & Sproul
400 Capitol Mall
Eleventh Floor
Sacramento, California 95814
Facsimile No.: (916) 446-1611
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Buyer:
Craftmade International, Inc.
650 South Royal Lane
Suite 100
P.O. Box #1037
Coppell, Texas 75019-1037
Attention: James Ridings
Facsimile No.: (972) 304-3754
with a copy to:
Brian D. Barnard
Haynes and Boone, LLP
201 Main Street
Suite 2200
Fort Worth, Texas 76102
Facsimile No.: (817) 347-6650
Subsidiary:
Trade Source International, Inc.
650 South Royal Lane
Suite 100
P.O. Box #1037
Coppell, Texas 75019-1037
Attention: James Ridings
Facsimile No.: (972) 304-3754
with a copy to:
Brian D. Barnard
Haynes and Boone, LLP
201 Main Street
Suite 2200
Fort Worth, Texas 76102
Facsimile No.: (817) 347-6650
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Escrow Agent:
The Frost National Bank
4200 South Hulen
Fort Worth, Texas 76109
Attention: Mike Smith
Facsimile No.: (817) 731-9123
with a copy to:
Nicholas S. Pappas
Bruner, Jamieson & Pappas, L.L.P.
306 West 7th Street
Suite 701
Fort Worth, Texas 76102
Facsimile No.: (817) 332-6619
8. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Escrow Agreement shall be brought against
any of the parties in the courts of the State of Texas, County of Tarrant,
or, if it has or can acquire jurisdiction, in the United States District
Court for the Northern District of Texas, Fort Worth Division, 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 any party anywhere in the world.
9. COUNTERPARTS
This Escrow Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original and all of which, when taken
together, will be deemed to constitute one and the same.
10. SECTION HEADINGS
The headings of sections in this Escrow Agreement are provided for
convenience only and will not affect its construction or interpretation.
11. WAIVER
The rights and remedies of the parties to this Escrow Agreement are
cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Escrow
Agreement or the documents referred to in this Escrow Agreement will operate
as a waiver of such right, power, or privilege, and no single or partial
exercise of any
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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 Escrow Agreement or the documents referred to in
this Escrow 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 parties; (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
Escrow Agreement or the documents referred to in this Escrow Agreement.
12. EXCLUSIVE AGREEMENT AND MODIFICATION
This Escrow Agreement supersedes all prior agreements among the parties
with respect to its subject matter and constitutes a complete and exclusive
statement of the terms of the agreement among the parties with respect to its
subject matter. This Escrow Agreement may not be amended except by a written
agreement executed by the Buyer, Subsidiary, the Majority Shareholders and
the Escrow Agent.
13. GOVERNING LAW
This Escrow Agreement shall be governed by the laws of the State of
Texas, without regard to conflicts of law principles.
14. SUBSIDIARY
As used in this Escrow Agreement, the term "Subsidiary" shall refer to
Trade Source International, Inc., a Delaware corporation, and any successor
in interest thereto.
* * * * *
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IN WITNESS WHEREOF, the parties have executed and delivered this Escrow
Agreement as of the date first written above.
/s/ Neall Humphrey
---------------------------------
Neall Humphrey
/s/ Leslie Humphrey
---------------------------------
Leslie Humphrey
/s/ John DeBlois
---------------------------------
John DeBlois
CRAFTMADE INTERNATIONAL, INC.
By: /s/ James R. Ridings
---------------------------------
Name: James R. Ridings
Title: President and Chief Executive Officer
TRADE SOURCE INTERNATIONAL, INC.
a Delaware corporation
By: /s/ James R. Ridings
---------------------------------
Name: James R. Ridings
Title: President and Chief Executive Officer
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THE FROST NATIONAL BANK
By: /s/ Michael L. Smith
---------------------------------
Name: Michael L. Smith
---------------------------------
Title: Senior Vice President
---------------------------------
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EXHIBIT A
ESCROW AGENT COMPENSATION
$1,000 annually.
