exv10w3



 










Exhibit 10.3









ARBITRATION AND NOTICE OF FINAL AGREEMENT




	 	 	 
	To:

	 	Craftmade International, Inc., a Delaware corporation
	 

	 	650 S. Royal Lane
	 

	 	Coppell, Texas 75019
	 

	 	(collectively, whether one or more, “Borrower”)






As of the effective date of this Notice, Borrower and THE FROST NATIONAL BANK, a national banking
association (“Lender”) have consummated a transaction pursuant to which Lender has agreed
to renew and extend an existing loan to Borrower, in an aggregate amount up to $23,000,000.00
(collectively, whether one or more, the “Loan”).



ARBITRATION




Upon written request of either Lender or Borrower, any controversy or claim between or among the
parties hereto including but not limited to those arising out of or relating to the Loan, any of
the loan documents or any related agreements or instruments executed in connection with the Loan
(the “Loan Documents”), including any claim based on or arising from an alleged tort, shall
be determined by binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state law), the Commercial Arbitration Rules of the American Arbitration
Association, and the “Special Rules” set forth below unless both Lender and Borrower, in their
respective sole discretion, agree in writing to mediate the dispute prior to submitting to binding
arbitration. In the event of any inconsistency, the Special Rules shall control. Judgment upon any
arbitration award may be entered in any court having jurisdiction. Any party to this Agreement may
bring an action, including a summary or expedited proceeding, to compel arbitration of any
controversy or claim to which this agreement applies in any court having jurisdiction over such
action. The party that requests arbitration has the burden to initiate the arbitration proceedings
pursuant to and by complying with the Commercial Arbitration Rules of the American Arbitration
Association and shall pay all associated administrative and filing fees.



The arbitration shall be conducted in the City of Fort Worth, Tarrant County, Texas and
administered by the American Arbitration Association. All arbitration hearings will be commenced
within sixty (60) days of the written request for arbitration, and if the arbitration hearing is
not commenced within the sixty (60) days, the party that requested arbitration shall have waived
its election to arbitrate. Nothing in this Agreement shall be deemed to (i) limit the applicability
of any otherwise applicable statutes of limitation or repose and any waivers contained in this
Agreement; or (ii) be a waiver by Lender of the protection afforded to it by 12 U.S.C. Sec. 91 or
any substantially equivalent state law; or (iii) limit the right of Lender hereto (A) to exercise
self help remedies such as (but not limited to) setoff, or (B) to foreclose against any real or
personal property collateral in accordance with applicable law, or (C) to obtain from a court
provisional or ancillary remedies such as (but not limited to) injunctive relief or the appointment
of a receiver in accordance with applicable law. Lender may exercise such self help remedies,
foreclose upon such property, or obtain such provisional or ancillary remedies before, during or
after the pendency of any arbitration proceeding brought pursuant to this Agreement or



 









 





any other
Loan Document. At Lender’s option, foreclosure under a deed of trust or mortgage may be
accomplished by any of the following: the exercise of a power of sale under the deed of trust or
mortgage, or by judicial sale under the deed of trust or mortgage, or by judicial foreclosure.
Neither this exercise of self help remedies nor the institution or maintenance of an action for
foreclosure or provisional or ancillary remedies shall constitute a waiver of the right of any
party, including the claimant in any such action, to arbitrate the merits of the controversy or
claim occasioning resort to such remedies.



FACSIMILE DOCUMENTS AND SIGNATURES




For purposes of negotiating and finalizing the Written Loan Agreement (as hereinafter defined), if
this document or any document executed in connection with the Loan is transmitted by facsimile
machine (“fax”), it shall be treated for all purposes as an original document.
Additionally, the signature of any party on this document transmitted by way of a facsimile machine
shall be considered for all purposes as an original signature. Any such faxed document shall be
considered to have the same binding legal effect as an original document. At the request of any
party, any faxed document shall be re-executed by each signatory party in an original form.



WAIVER OF RIGHT TO TRIAL BY JURY




THE PARTIES TO THIS AGREEMENT HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER TO ENFORCE THIS AGREEMENT, TO COLLECT
DAMAGES FOR THE BREACH OF THIS AGREEMENT, OR WHICH IN ANY OTHER WAY ARISE OUT OF, ARE CONNECTED TO
OR ARE RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. ANY SUCH ACTION SHALL BE
TRIED BY THE JUDGE WITHOUT A JURY.



NOTICE OF FINAL AGREEMENT




In connection with the Loan, Borrower and Lender and the undersigned guarantors and other obligors,
if any (collectively, whether one or more, “Other Obligors”) have executed and delivered
and may hereafter execute and deliver certain agreements, instruments and documents (collectively
hereinafter referred to as the “Written Loan Agreement”).



It is the intention of Borrower, Lender and Other Obligors that this Notice be incorporated by
reference into each of the written agreements, instruments and documents comprising the Written
Loan Agreement. Borrower, Lender and Other Obligors each warrants and represents that the entire
agreement made and existing by or among Borrower, Lender and Other Obligors with respect to the
Loan is and shall be contained within the Written Loan Agreement, as amended and supplemented
hereby, and that no agreements or promises exist or shall exist by or among, Borrower, Lender and
Other Obligors that are not reflected in the Written Loan Agreement.



 









 





THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.



THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.




Executed effective as of October 31, 2005.



	 	 	 	 	 	 	 	 	 
	BORROWER	 	LENDER:	 	 
	 
	 	 	 	 	 	 	 	 
	CRAFTMADE INTERNATIONAL, INC.,	 	THE FROST NATIONAL BANK,	 	 
	a Delaware corporation	 	a national banking association	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	          /s/ Brad Heimann
	 	By:
	 	          /s/ D. Michael Randall	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	Brad Heimann, Executive Vice President	 	 	 	D. Michael Randall, Senior Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	OTHER OBLIGORS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DESIGN TRENDS, LLC,	 	 	 	 	 	 
	a Delaware limited liability company	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	Craftmade International, Inc.,	 	 	 	 	 	 
	 

	 	a Delaware corporation, Manager	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	          /s/ Brad Heimann	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Brad Heimann, Executive Vice President	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DUROCRAFT INTERNATIONAL, INC.,	 	 	 	 	 	 
	a Texas corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	          /s/ Brad Heimann	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Brad Heimann, Secretary	 	 	 	 	 	 






 









 






	 	 	 	 	 	 	 	 	 
	TRADE SOURCE INTERNATIONAL, INC.,	 	 	 	 	 	 
	a California corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	          /s/ Brad Heimann	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Brad Heimann, Secretary	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	C/D/R INCORPORATED,	 	 	 	 	 	 
	a Delaware corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	          /s/ Clifford Crimmings	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Clifford Crimmings, V.P. Marketing