Document:

ex10-2.htm

Exhibit 10.2

 

PLACEMENT AGENCY AGREEMENT

 

 

May 28, 2015

 

Nova Lifestyle, Inc.

6565 E. Washington Blvd.

Commerce, CA 90040

 

Ladies and Gentlemen:

 

This letter (the “Agreement”) constitutes the agreement between Maxim Group LLC (“Maxim” or the “Placement Agent”) and Nova Lifestyle, Inc. (the “Company”), that Maxim shall serve as the lead placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of registered shares (the “Shares”) of the Company’s common stock, par value $.001 per share (the “Common Stock”) and unregistered warrants to purchase shares of Common Stock (The “Warrants” and collectively with the Shares, the “Securities”) directly to various investors. The terms of the Placement shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”) and nothing herein constitutes that Maxim would have the power or authority to bind the Company or any Purchaser or an obligation for the Company to issue any Securities or complete the Placement. This Agreement and the documents executed and delivered by the Company and the Purchasers in connection with the Placement shall be collectively referred to herein as the “Transaction Documents.” The date of the closing of the Placement shall be referred to herein as the “Closing Date.” The Company expressly acknowledges and agrees that Maxim’s obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by Maxim to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of Maxim with respect to securing any other financing on behalf of the Company. The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement.  The sale of the Securities to any Purchaser will be evidenced by a purchase agreement (the “Purchase Agreement”) between the Company and such Purchaser in a form reasonably acceptable to the Company and Maxim.  Prior to the signing of any Purchase Agreement, officers of the Company will be available to answer inquiries from prospective Purchasers.

Notwithstanding anything herein to the contrary, in the event Maxim determines that any of the terms provided for hereunder shall not comply with a FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall agree to amend this Agreement in writing upon the request of Maxim to comply with any such rules; provided that any such amendments shall not provide for terms that are less favorable to the Company.

 

SECTION 1.        COMPENSATION.  As compensation for the services provided by Maxim hereunder, the Company agrees to pay to Maxim:

(A)           A cash fee equal to:

 

  

  

  

 

(i) 7.0% of the gross proceeds received by the Company in the Placement, which shall be paid at the Closing of the Placement from the gross proceeds of the Shares sold; and

 

(ii) 4.0% of the gross cash proceeds received by the Company from time to time in connection with the exercise of any Warrant (the “Warrant Solicitation Fee”), payable within three (3) business days of receipt by the Company of any proceeds from the exercise of such Warrant.

(B)           Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company also agrees to reimburse Maxim for out-of-pocket expenses actually incurred, including the reasonable fees of legal counsel and all travel expenses approved in advance by the Company, which shall be limited to $135,000.  The Company will reimburse Maxim directly out of the Closing of the Placement.  In the event this Agreement shall terminate prior to the consummation of the Placement, Maxim shall be entitled to reimbursement for actual expenses incurred, including but not limited to all travel expenses approved in advance by the Company; provided, however, such expenses shall not exceed $50,000.  Maxim shall submit receipts or other evidence of any expenses in excess of $1,000 eligible to be reimbursed pursuant to this Section 1(B) in a form which is market standard, to the Company prior to reimbursement of such expenses.

(C)           Upon the successful consummation of the sale of the Shares pursuant to the Purchase Agreement, for a period of fifteen (15) months from the Closing Date, the Company hereby grants to the Placement Agent the right of first refusal to act as lead managing underwriter and sole book runner or lead placement agent with at least seventy percent (70%) of the economics for any and all future public and private equity, equity-linked and debt offerings during such fifteen (15) month period of the Company, or any successor to or any subsidiary of the Company.

SECTION 2.        REGISTRATION STATEMENT.

 

The Company represents and warrants to, and agrees with, the Placement Agent that:

 

(A)         The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Registration No. 333-193746) under the Securities Act of 1933, as amended (the “Securities Act”), which became effective on March 7, 2014, for the registration under the Securities Act of the Shares. At the time of such filing, the Company met the requirements of Form S-3 under the Securities Act. Such registration statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a supplement to the form of prospectus included in such registration statement relating to the placement of the Shares and the plan of distribution thereof and has advised the Placement Agent of all further information (financial and other) with respect to the Company required to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the date of this Agreement, is hereinafter called the “Registration Statement”; such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter called the “Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules and other information which is “contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company's knowledge, is threatened by the Commission. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act and the “Time of Sale Prospectus” means the preliminary prospectus, if any, the information set forth on Schedule 2(A), together with the free writing prospectuses, if any, used in connection with the Placement, including any documents incorporated by reference therein.

 

  

  

  

 

(B)         The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the Securities Act and the applicable Rules and Regulations and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities Act and the applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus Supplement), in the light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which (x) have not been described or filed as required or (y) will not be filed within the requisite time period.

 

  

  

  

 

(C)           The Company is eligible to use free writing prospectuses in connection with the Placement pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. The Company will not, without the prior consent of the Placement Agent, prepare, use or refer to, any free writing prospectus.

 

 

(D)         The Company has delivered, or will as promptly as practicable deliver, to the Placement Agent complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests. Placement Agent acknowledges that all such materials as exist on the date of this letter are available on EDGAR. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Shares pursuant to the Placement other than the Base Prospectus, the Time of Sale Prospectus, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference therein and any other materials permitted by the Securities Act.

 

  

  

  

 

SECTION 3.       REPRESENTATIONS AND WARRANTIES INCORPORATED BY REFERENCE. Each of the representations and warranties (together with any related disclosure schedules thereto) made by the Company to the Purchasers in that certain Purchase Agreement dated as of May 28, 2015, between the Company and each Purchaser, is hereby incorporated herein by reference (as though fully restated herein) and is, as of the date of this Agreement, hereby made to, and in favor of, the Placement Agent.

 

SECTION 4.       REPRESENTATIONS OF MAXIM. Maxim represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered as a broker/dealer under the Securities Exchange Act of 1934 (the “Exchange Act”), (iii) is licensed as a broker/dealer under the laws of the States applicable to the offers and sales of Shares by Maxim, (iv) is and will be a body corporate validly existing under the laws of its place of incorporation, (v) has full power and authority to enter into and perform its obligations under this Agreement. Maxim will immediately notify the Company in writing of any change in its status as such. Maxim covenants that it will conduct the Transaction hereunder in compliance with the provisions of this Agreement and the requirements of applicable law, including the Rules and Regulations.  

 

SECTION 5.       INDEMNIFICATION. Maxim and the Company agrees to the indemnification and other agreements set forth in the Indemnification Provisions (the “Indemnification”) attached hereto as Addendum A, the provisions of which are incorporated herein by reference and shall survive the termination or expiration of this Agreement.

 

SECTION 6.       ENGAGEMENT TERM. Maxim’s engagement hereunder will be until the earlier of (i) June 19, 2015 and (ii) the completion of the Placement. The engagement may be terminated by either the Company or Maxim at any time upon 30 days’ written notice. If the Company elects to terminate the engagement pursuant to this Section even though the Placement Agent was prepared to proceed with the Placement and, if within twelve (12) months following such termination, the Company completes any financing of equity, equity-linked or debt or other capital raising activity with any of the investors contacted by Maxim during the term of its engagement, then the Company will pay to Maxim upon the closing of such financing the compensation set forth in Section 1(A) hereof. Upon such termination, Maxim shall deliver to the Company a list of all investors contacted by Maxim during the term of its engagement.  Notwithstanding anything to the contrary contained herein, the provisions concerning the Company’s obligation to pay any fees actually earned pursuant to Section 1 hereof and which are permitted to be reimbursed under FINRA Rule 5110(f)(2)(D), and the confidentiality, indemnification and contribution provisions contained herein and the Company’s obligations contained in the Indemnification Provisions will survive any expiration or termination of this Agreement.

 

SECTION 7.      MAXIM INFORMATION. The Company agrees that any information or advice rendered by Maxim in connection with this engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without Maxim’s prior written consent.

 

  

  

  

 

SECTION 8.       NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges and agrees that Maxim is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of Maxim hereunder, all of which are hereby expressly waived.

SECTION 9.       CLOSING. The obligations of the Placement Agent, and the closing of the sale of the Shares hereunder are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company and its Subsidiaries contained herein and in the Purchase Agreement, to the accuracy of the statements of the Company and its Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the Company and its Subsidiaries of their obligations hereunder, and to each of the following additional terms and conditions:

 

(A)        No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the Commission, and any request for additional information on the part of the Commission (to be included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or otherwise,) shall have been complied with to the reasonable satisfaction of the Placement Agent.

 

(B)         The Placement Agent shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

 

(C)         All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Shares, the Registration Statement, the Base Prospectus and the Prospectus Supplement, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Placement Agent, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

 

(D)         The Placement Agent shall have received as of the Closing Date the favorable opinions of legal counsel to the Company identified in the Purchase Agreement, dated as of such Closing Date, including, without limitation, a negative assurance letter from PRC and U.S. counsel, addressed to the Placement Agent in form and substance satisfactory to the Placement Agent.

 

(E)         (i) Neither the Company nor any of its Subsidiaries shall have sustained since the date of the latest audited or unaudited financial statements included or incorporated by reference in the Base Prospectus, any material loss or interference with its business from fire, explosion, flood, terrorist act or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in or contemplated by the Base Prospectus and (ii) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any change, or any development involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its Subsidiaries, otherwise than as set forth in or contemplated by the Base Prospectus, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of the Placement Agent, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Shares on the terms and in the manner contemplated by the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement.

 

  

  

  

 

(F)         The Shares are registered under the Exchange Act. The Company shall have taken no action designed to, or likely to have the effect of terminating the registration of the Shares under the Exchange Act, nor has the Company received any information suggesting that the Commission is contemplating terminating such registration.

 

(G)         Subsequent to the execution and delivery of this Agreement and up to the Closing Date, there shall not have occurred any of the following: (i) trading in securities generally on the Nasdaq Stock Market shall have been suspended or minimum or maximum prices or maximum ranges for prices shall have been established on any such exchange or such market by the Commission or by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (iii) the United States shall have become engaged in hostilities in which it is not currently engaged, the subject of an act of terrorism, there shall have been an escalation in hostilities involving the United States, or there shall have been a declaration of a national emergency or war by the United States, or (iv) there shall have occurred any other calamity or crisis or any change in general economic, political or financial conditions in the United States or elsewhere, if the effect of any such event in clause (iii) or (iv) makes it, in the sole judgment of the Placement Agent, impracticable or inadvisable to proceed with the sale or delivery of the Shares on the terms and in the manner contemplated by the Base Prospectus and the Prospectus Supplement.

 

(H)        No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Shares or materially and adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal, state or foreign court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Shares or materially and adversely affect the business or operations of the Company.

 

(I)          The Company shall have prepared and filed with the Commission a Current Report on Form 8-K with respect to the Placement and sale of Warrants, including as an exhibit thereto this Agreement.

 

  

  

  

 

(J)         The Company shall have entered into a Purchase Agreement with each of the Purchasers and such agreements shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed between the Company and the Purchasers.

 

(K)         FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer Filing with FINRA pursuant to FINRA Rule 5110 with respect to the Registration Statement and pay all filing fees required in connection therewith.

  

(L)         Prior to the Closing Date, the Company shall have furnished to the Placement Agent such further information, certificates and documents as the Placement Agent may reasonably request.

 

(M)        On or prior to the Closing Date, the Placement Agent shall have received a Lock-Up Agreement from each of the Company’s officers, directors and holders of three percent (3%) of the Company’s common stock issued and outstanding as of the date hereof.

 

All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Placement Agent.

 

SECTION 10.    DELIVERY OF COLD COMFORT LETTER. As of the Closing Date, Placement Agent shall have received a letter, addressed to the Placement Agent and in form and substance satisfactory in all respects to the Placement Agent from each of Marcum Bernstein & Pinchuk LLP and Crowe Horwath (HK) CPA Limited.

 

SECTION 11.     GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived. Each of the Placement Agent and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Placement Agent and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Placement Agent mailed by certified mail to the Placement Agent’s address shall be deemed in every respect effective service process upon the Placement Agent, in any such suit, action or proceeding. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

  

  

  

  

 

SECTION 12.     ENTIRE AGREEMENT/MISC. This Agreement (including the attached Indemnification Provisions) embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both Maxim and the Company. The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement and delivery and/or exercise of the Shares, as applicable. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof. The Company agrees that the Placement Agent may rely upon, and is a third party beneficiary of, the representations and warranties, and applicable covenants set forth in any such purchase, subscription or other agreement with the Purchasers in the Placement.  All amounts stated in this Agreement are in US dollars unless expressly stated.

 

SECTION 13.     NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.

 

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Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Maxim the enclosed copy of this Agreement.

 

	  	
Very truly yours,

	  	  
	  	
MAXIM GROUP LLC

	  	  
	  	
By: 

	  
	  	  	
Name: Clifford A. Teller

	  	  	
Title: Executive Managing Director, IB

	  	  
	  	
Address for notice:

	  	
405 Lexington Avenue

	  	
New York, NY 10174

	  	
Attention: James Siegel, General Counsel

Email: jsiegel@maximgrp.com

 

Accepted and Agreed to as of

the date first written above:

 

NOVA LIFESTYLE, INC.

 

	
By: 

	  	  
	  	
Name:

	  
	  	
Title:

	  

 

Address for notice:

6565 E. Washington Blvd.

Commerce, CA 90040

Attention:

Email: 

 

  

  

  

 

ADDENDUM A

 

INDEMNIFICATION PROVISIONS

 

In connection with the engagement of Maxim Group LLC (“Maxim”) by Nova Lifestyle, Inc. (the “Company”) pursuant to a letter agreement dated May 28, 2015, between the Company and Maxim, as it may be amended from time to time in writing (the “Agreement”), the Company hereby agrees as follows:

 

	  	
1.

	
The Company hereby agrees to indemnify and hold Maxim, its officers, directors, principals, employees, affiliates, and stockholders, and their successors and assigns, harmless from and against any and all loss, claim, damage, liability, deficiencies, actions, suits, proceedings, costs and legal expenses or expense whatsoever (including, but not limited to, reasonable legal fees and other expenses and reasonable disbursements incurred in connection with defending any action, suit or proceeding, including any inquiry or investigation, commenced or threatened, or any claim whatsoever, or in appearing or preparing for appearance as witness in any proceeding, including any pretrial proceeding such as a deposition) (collectively the “Losses”) arising out of, based upon, or in any way related or attributed to, (i) any breach of a representation, warranty or covenant by the Company contained in this Agreement; or (ii) any activities or services performed hereunder by Maxim, unless it is finally judicially determined (and not subject to appeal) in a court of competent jurisdiction that such Losses were the primary and direct result of the willful misconduct or gross negligence of Maxim in performing the services hereunder.

 

	  	
2.

	
The Company agrees to notify Maxim promptly of the assertion against it or any other person of any claim or the commencement of any legal action, suit or proceeding relating to a transaction contemplated by the Agreement.  If Maxim receives written notice of the commencement of any legal action, suit or proceeding with respect to which the Company is or may be obligated to provide indemnification pursuant to this Addendum A, Maxim shall, within twenty (20) days of the receipt of such written notice, give the Company written notice thereof (a “Claim Notice”). Failure to give such Claim Notice within such twenty (20) day period shall not constitute a waiver by Maxim of its right to indemnity hereunder with respect to such action, suit or proceeding; provided, however, the indemnification hereunder may be limited by any such failure to provide a Claim Notice to the Company that materially prejudices the Company. Upon receipt by the Company of a Claim Notice from Maxim with respect to any claim for indemnification which is based upon a claim made by a third party (“Third Party Claim”), the Company may assume the defense of the Third Party Claim with counsel of its own choosing, as described below. Maxim shall cooperate in the defense of the Third Party Claim and shall furnish such records, information and testimony and attend all such conferences, discovery proceedings, hearings, trial and appeals as may be reasonably required in connection therewith. Maxim shall have the right to employ its own counsel in any such action which shall be at the Company's expense if (i) the Company shall have failed in a timely manner to assume the defense and employ counsel or experts reasonably satisfactory to Maxim in such litigation or proceeding or (ii) the named parties to any such litigation or proceeding (including any impleaded parties) include the Company and Maxim and representation of the Company and Maxim by the same counsel or experts would, in the reasonable opinion of Maxim, be inappropriate due to actual or potential differing interests between the Company and Maxim. The Company shall not satisfy or settle any Third Party Claim for which indemnification has been sought and is available hereunder, without the prior written consent of Maxim, which consent shall not be conditioned or delayed and which shall not be required if Maxim is granted a release in connection therewith. The indemnification provisions hereunder shall survive the termination or expiration of this Agreement.

  

	  	
3.

	
The Company further agrees, upon demand by Maxim, to promptly reimburse Maxim for, or pay, any loss, claim, damage, liability or expense as to which Maxim has been indemnified herein with such reimbursement to be made currently as any loss, damage, liability or expense is incurred by Maxim. Notwithstanding the provisions of the aforementioned Indemnification, any such reimbursement or payment by the Company of fees, expenses, or disbursements incurred by Maxim shall be repaid by Maxim in the event of any proceeding in which a final judgment (after all appeals or the expiration of time to appeal) is entered in a court of competent jurisdiction against Maxim based solely upon its gross negligence or willful misconduct in the performance of its duties hereunder, and provided further, that the Company shall not be required to make reimbursement or payment for any settlement effected without the Company’s prior written consent (which consent shall not be unreasonably withheld or delayed).

 

  

  

  

 

	  	
4.

	
If for any reason the foregoing indemnification is unavailable or is insufficient to hold such indemnified party harmless, the Company agrees to contribute the amount paid or payable by such indemnified party in such proportion as to reflect not only the relative benefits received by the Company, as the case may be, on the one hand, and Maxim, on the other hand, but also the relative fault of the Company and Maxim as well as any relevant equitable considerations. In no event shall Maxim contribute in excess of the fees actually received by it pursuant to the terms of this Agreement.

 

	  	
5.

	
For purposes of this Agreement, each officer, director, stockholder, and employee or affiliate of Maxim and each person, if any, who controls Maxim (or any affiliate) within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, shall have the same rights as Maxim with respect to matters of indemnification by the Company hereunder.

 

 

	  	
MAXIM GROUP LLC

	  	  	  
	  	
By: 

	  
	  	  	
Name: Clifford A. Teller

	  	  	
Title: Executive Managing Director, IB

 

Accepted and Agreed to as of

the date first written above:

 

NOVA LIFESTYLE, INC.

 

	
By: 

	  	  
	  	
Name:

	  
	  	
Title:

 

	  

 

[Sig Page to Indemnification Provisions

Pursuant to Placement Agency Agreement

between Nova Lifestyle, Inc. and Maxim Group LLC]Exhibit101DyerEmploymentAgreement

Exhibit 10.1

11215 Metro Parkway
Fort Myers, Florida 33966
(239)277-6200

March 3, 2014

Mr. David F. Dyer 
################# 
#################

Dear Dave:

This letter sets forth our agreement on your compensation and benefits package for fiscal 2014 for your service as the Chief Executive Officer at Chico's FAS, Inc. (the "Company" or "Chico's"). Your signature where indicated signifies your acceptance of the following:

		
	Base Salary:
	$950,000.00 annually

		
	Incentive Bonus:
	The Target Bonus is 150% of base salary.  Actual bonus may range from 0-175% of target, contingent upon the achievement of certain performance goals consistent with the goals for other Chico's executives as established each year by the Board's Compensation and Benefits Committee (the "Plan"). Threshold is 25% of target. Company performance below levels established, however, will result in no bonus payout. Achievement of results beyond the Plan level may pay up to 175% of target. Payouts normally occur at or around the time of our earnings release in early March. The terms of the bonus, including eligibility, payouts and objectives, may be modified from time to time.

		
	Equity Award:
	For the 2014 annual equity grant, you will receive an equity award designed to deliver approximately $6.625 million in value on the grant date. The grant date will be March 3, 2014 and the grant price will be the closing price of the Company's stock on the grant date. Approximately 50% of the equity award will be in the form of restricted stock. The restricted stock will vest over a 3-year period with one-third of the restricted stock grant vesting on each anniversary of the grant date. The balance of the equity award will be in the form of performance share units ("PSUs"). You will have the opportunity to earn between 0-150% of the target PSUs awarded with the actual number of PSUs earned based on the RONA targets as set forth under the Company's annual bonus plan. If earned, the PSUs will vest over a 3-year period with one­ third of the earned PSUs vesting on each anniversary of the grant date.

The actual number of shares awarded will depend on the share price on the grant date; provided, however, that, similar to other executives, the share price used to calculate the number of shares awarded will not be less than $14.00, even if the stock price on the grant date is below $14.00.

Transition to Non-Employee
		
	Director:
	We have agreed that, at the appropriate time, you will transition from CEO to a non-employee Director. Under the Company's 2012 Omnibus Stock and Incentive Plan, all equity awarded to you during your tenure as CEO will continue to vest as set forth in the previous paragraph after that transition. You agree to work with the Board, or a Committee thereof, to accomplish a smooth transition from CEO to non-employee Director.

Severance and 
		
	Change of Control:
	If you are involuntarily terminated without "Cause," or in the event of a "Change of Control" resulting in your voluntary termination with "Good Reason," you may be entitled to the severance benefits set forth in Exhibit A to this letter. Eligibility and key terms are defined in Exhibit A. As a condition to receive the benefits listed in Exhibit A, you agree to execute the Company's Form of Waiver and Release substantially in the form of the agreement attached as Exhibit B to this letter. Both parties acknowledge the inclusion of Restrictive Covenants, including a non-competition covenant and a non-raiding covenant, in Exhibit B.

		
	Death/Disability:
	In the event of your death or permanent disability, you will be entitled to the benefits set forth in Exhibit A to this letter. "Permanent Disability" shall mean "disabled" as defined in Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the "Code").

Termination for "Cause"/
 Violation of Restrictive
		
	 Covenants:
	In the event you are terminated for "Cause" or violate any applicable restrictive covenant as set forth in Exhibit B to this letter, you agree to the immediate forfeiture of any unvested equity grants and the cancellation of all outstanding option grants. You also agree that any gains on option exercises within 6 months of the violation of the restrictive covenant are subject to claw-back. Forfeiture of equity grants and option gains may also apply in the event grounds for a "cause" termination are uncovered during any severance period.

Use of Personal
		
	Aircraft:
	If the Company requires the use of your personally owned aircraft for Company business, the Company will reimburse you for the actual cost of such business use at appropriate reimbursement rates.

Page 2

		
	409A Compliance:
	Notwithstanding any provisions of this letter to the contrary and, to the extent applicable, this letter shall be interpreted, construed, and administered    (including   with   respect   to   any   amendment, modification, or termination of the letter), in such a manner so as to comply with the provisions of Code Section 409A and any related Internal Revenue Service guidance promulgated thereunder. In addition, for purposes of this letter, each amount to be paid or benefit to be provided to you pursuant to the letter, which constitutes deferred compensation subject to Code Section 409A, shall be construed as a separate identified payment for purposes of Code Section 409A.

		
	Delayed Payment:
	Notwithstanding anything in this letter to the contrary, in the event the you are a "specified employee" (as such term is defined in Section 409A(a)(2)(B)(i) of the Code), to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, any payment due and payable to the you hereunder as a result of your severance from service with the Company shall not be made before the date which is six (6) months after such severance from service.

Group Insurance
		
	Plan:
	Medical/Dental/Vision

Notwithstanding anything in this letter to the contrary and regardless of the reason for your termination from the Company, you will eligible to receive continued health insurance benefits post-termination until you reach the age of 67 (or, in the case of your death, spousal coverage until you would have reached age 67); provided that you (or your spouse) pay the employee portion of premium post-termination, and provided further that (i) benefits will be discontinued if and when you receive similar benefits from another employer, and (ii) Chico's will not be obligated to provide health benefits to you if it no longer maintains a group health plan.

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Health care coverage continuation shall be concurrent with applicable COBRA requirements

		
	Life Insurance:
	Chico's provides term insurance equal to lx your base salary; in addition Chico's provides accidental death and dismemberment insurance equal to 1x your base salary. Supplemental insurance is available for purchase.

		
	401(k) Plan:
	Eligible deferral of 1-100% of your compensation (subject to an IRS  maximum),   with  a  match  of  50%  of  the  first  6%  of compensation you defer.

Deferred Compensation
		
	Plan:
	As a highly compensated associate of Chico's, you will have the opportunity to participate in the Chico's Deferred Compensation Plan   and   to   defer   pre-tax compensation   (less   applicable FICA/Medicare tax withholding). You may defer up to 80% of your base salary payable during 2014 and up to 100% of your bonus paid for 2014 payable in March 2015 in accordance with the terms of the plan.          

Stock Purchase
		
	Plan:
	To the extent made available to other officers of Chico’s, the opportunity to purchase Chico's stock directly from the Company for a discount, two times a year, in March and September.

As in the past, please understand that Chico's FAS, Inc. is an at-will employer, meaning that either you or Chico's (subject to severance benefits outlined in Exhibit A) are free to end the employment relationship at any time, with or without notice or cause.

Page 4

Please indicate your acceptance of the above by signing below and returning to my attention. By signing this letter you warrant your acknowledgment the at-will nature of our relationship, and that you are not a party to any agreement that would bar or limit the scope of your employment with Chico's.
If you have any questions, please feel free to call me at your convenience. 
Very truly yours,
/s/ Ross Roeder                             
Ross Roeder
Chairman of the Board 
Chico's FAS, Inc.

Accepted by:

	
			
	/s/ David F. Dyer                                
	 
	3/6/2014                      

	David F. Dyer
	 
	Date

Page 5

EXHIBIT A
In the event of your involuntary termination as CEO without Cause, as defined below, other than a termination within 24 months following a Change in Control (defined below), you will be entitled to all of the benefits set forth, below. We have agreed that for the purposes of this Exhibit A, a voluntary transition from your position as CEO to a non-employee member of our Board of Directors does not constitute a termination.
Once the transition from your position as CEO to a non-employee member of our Board of Directors is complete, if the Board does not nominate you to stand for election to the Board in the normal course, if you are not reelected to the Board by a majority of the Company's shareholders, or in the event of your death or permanent disability, then you will only be entitled to the benefits set forth in paragraphs 3 through 6, below.

		
	1)
	Payments equal to the sum of base salary and target bonus, payable in monthly installments over one year.  Payments will commence on the thirty-fifth (35th) day following your termination of employment, provided that (i) you have executed the waiver and release agreement, and (ii) the required revocation period has expired.

		
	2)
	A pro-rated bonus for the applicable bonus period based on actual company performance that would otherwise have been payable to you. Payments will be made after year-end results are measured, but in no event later than two and one­ half months after the end of the fiscal year.

		
	3)
	Accelerated vesting of time-based restricted stock grants without proration.

		
	4)
	Accelerated vesting of all PSUs based on actual performance at end of the performance period, without proration. These shares will be paid as soon as possible after the end of the performance period, but in no event later than two and one-half months after the end of such performance period.

		
	5)
	Continued health insurance coverage until age 67 provided that you pay the employee portion of premium post-termination, and provided further that (i) benefits will be discontinued if and when you receive similar benefits from another employer, and (ii) Chico's will not be obligated to provide health benefits to you if it no longer maintains a group health plan.

		
	6)
	All severance benefits are specifically conditioned on the Company receiving a signed waiver and release agreement from you as well as your continued compliance with the restrictive covenants.

"Cause" shall mean the occurrence of any of the following:
		
	1)
	Your conviction of, or entering a plea of no contest to, any felony; 

Page 6

		
	2)
	Your conviction of, or entering a plea of no contest to, any crime related to your employment by the Company, but specifically excluding traffic offenses;

		
	3)
	Your continued willful neglect of, refusal to perform, or gross negligence concerning, your duties, or engaging in willful misconduct in the performance of your duties, which has a material adverse effect on the Company;

		
	4)
	Your willful failure to take actions that are permitted by law and necessary to implement policies of the Company's Board of Directors which the Board of Directors has communicated to you in writing, provided that minutes of a Board of Directors meeting that are provided to or made available to you shall be deemed communicated to you;

		
	5)
	Your material breach of the terms of the attached letter agreement; or,

		
	6)
	Drug or alcohol abuse by you, but only to the extent that such abuse has an obvious and material adverse effect on the Company or on the performance of your duties and responsibilities under this Agreement,

provided; however, that Cause shall not be found in any of the circumstances set forth above (other than in subparagraph (1), or (2) above or where the basis for the Cause determination is incapable of being cured) unless the relevant act or failure to act is not cured by you within ten (10) business days after the Company gives you written notice setting out a clear description of the circumstances alleged by the Company to constitute Cause hereunder.

In the event of your involuntary termination without Cause, or your voluntary termination with "Good Reason," as defined below, in either case within 24 months following a Change in Control (CIC), you will be entitled to the following:

		
	1)
	An amount equal to two (2) times the sum of base salary and target bonus, payable in a lump sum. Payments will be made on the thirty-fifth (35th) day following your termination of employment, provided that (i) you have executed the waiver and release agreement, and (ii) the required revocation period has expired.

		
	2)
	You may exercise any vested options for three years after termination or the remaining term of the options, whichever is less.

		
	3)
	PSUs -Upon a CIC, any unvested PSUs will be converted, without pro-ration, to time vested restricted stock units, with the number of restricted stock units based upon performance to the date of the CIC. In the event of your involuntary termination without "Cause" or your termination with "Good Reason," as defined below,  in either case within  24 months  following the  CIC, vesting of these restricted stock units and any other unvested restricted shares will be accelerated and you will receive delivery of the shares within 60 days following such termination of employment.

- ----·---

Page 7

"Good Reason" shall mean, without your express written consent, the occurrence of the following events, unless such events are corrected in all material respects by the Company within 30 days of your written notification to us that you intend to terminate your employment for "Good Reason and provided that you gave the Company notice within 90 days of the initial existence of such conditions:"

		
	1)
	Any material reduction in your then current titles or positions, or a material reduction in your then current duties or responsibilities; or

		
	2)
	Your failure to be re-elected or re-appointed to the Company's Board of Directors.

In the event of your death or "Permanent Disability", as defined in Section 409A(a)(2)(C) of the Internal Revenue Code  of 1986, as amended (the "Code"), following a CIC, You or your beneficiaries will be entitled to the following:

		
	1)
	All accrued but unpaid compensation

		
	2)
	You or your beneficiaries may exercise any vested options for one year after your death or Permanent Disability or the remaining term of the options, whichever is less.

		
	3)
	Continued health insurance coverage until age 67 (or, in the case of death, until executive would have reached age 67) as set forth in the Letter; such benefits to be mitigated by similar benefits provided by new employer.

A "Change in Control" shall mean:

		
	1)
	any "person" or "group" as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 ("Act") becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing thirty-five percent (35%) or more of the combined voting power of the Company's then outstanding securities;

		
	2)
	during any one-year period, individuals who at the beginning of such period constitute the Board of Directors, and any new director who is elected or nominated by the Board by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the one-year period or whose election or nomination was previously so approved, cease to constitute at least a majority of the Board;

		
	3)
	a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more 

Page 8

than fifty percent (50%) of the combined voting power of the voting securities of the surviving entity or its ultimate parent outstanding immediately after such merger or consolidation; or

		
	4)
	the sale or disposition of all or substantially all of the Company's assets.

Provided that a "Change in Control" shall not be deemed to have occurred unless it is a "change in control" within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.
EXHIBIT B

CONFIDENTIAL EXECUTIVE SEPARATION AGREEMENT AND RELEASE

This Confidential Executive Separation Agreement and Release ("Agreement") is entered into between Chico's FAS, Inc., its subsidiaries and affiliates, including but not limited to Chico's Retail Services, Inc., White House/Black Market, Inc., Chico's Distribution Services, LLC, SOMA by Chico's, LLC and Boston Proper, Inc. (collectively referred to in this Agreement as the "Company") and   ___________ ("Executive").

Executive's employment by Company as its _____________________________ has been terminated effective _____________ ("Termination Date").   Company and Executive wish to provide for the payment of severance pay to Executive and the final settlement of all claims that Executive may have against Company and any of the other Released Parties named  in this Agreement, including but  not limited to claims arising out of his employment by Company and claims alleging an ownership interest in Company. Therefore, Company and Executive agree as follows:

1.    Termination of Employment

Executive acknowledges that his employment by Company has been terminated effective at the close of business on the Termination Date. He acknowledges that he has received all of his accrued salary and vacation pay up to and including that date. He shall not receive or accrue any salary or benefits after that date.

		
	2.
	Severance Payments

Company shall pay Executive severance payments and benefits in the amount and manner outlined in the Letter Agreement dated March 3, 2014.

		
	3.
	General Release

In exchange for the payments described in paragraph 2 above, Executive, on behalf of himself, his heirs, executors, administrators, successors and assigns, releases and waives any claims, charges, complaints, liabilities, obligation s, promises, agreements, causes of action, rights, costs, losses, debts and expenses of any nature whatsoever, known or unknown, of any kind that he or his heirs, executors, administrators, successors and assigns had, now have or hereafter can, will or may have (either directly, indirectly, derivatively or in any other representative capacity) by reason of any matter, fact or cause whatsoever (the "Claims") against, (a) Company and its subsidiaries and 

Page 9

affiliates, including but not limited to Chico's Retail Services, Inc., White House/Black Market, Inc., Chico's Distribution Services, LLC, SOMA by Chico's, LLC and Boston Proper, Inc.; (b) the owners, shareholders, employees, officers, managers, supervisors, directors, agents, attorneys, partners, joint ventures, predecessors, successors and assigns of Company and its subsidiaries and affiliates; and (c) the employee benefit plans and plan administrators and fiduciaries of Company and its subsidiaries and affiliates (collectively referred to in this Agreement as the "Released Parties") from the beginning of time through the date upon which he signs this Agreement. Notwithstanding the foregoing , nothing herein shall be considered  as releasing; (i) any rights that Executive may have to indemnification and directors and officers liability insurance coverage; (ii) Executives' right to enforce the terms of this Agreement; (iii) any rights that cannot be waived under applicable Jaw; or (iv) any rights to workers' compensation or unemployment insurance benefits.

This General Release waives all Claims of any kind that Executive may have against the Released Parties from the beginning of time through the date upon which Executive signs this Agreement, including any Claim arising out of (a) Executive's employment by  Company or the termination of that employment; (b) an alleged ownership interest in Company; (c) any express or implied contract; (d) any public policy violation or other tort; (e) any federal, state or local constitution, statute, regulation or ordinance (including statutory attorneys' fees); or (f) any other law of any kind.  It expressly waives all Claims under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act, the American s with Disabilities Act, the Fair Labor Standards Act, the Worker Retraining and Notification Act, the Employee Retirement Income Security Act, and the Florida Civil Rights Act of 1992 (often referred to as the Florida Civil Human Rights Act). Executive represents that he has not filed against the Company or any of the Released Parties any complaints, charges or lawsuits arising out of his employment by the Company, or any other matter arising on or prior to the date he signs this Agreement. Executive covenants and agrees that he will not seek any personal recovery against the Company or any of the Released Parties arising out of any of the matters set forth in this paragraph 3.

		
	4.
	Knowing and Voluntary Waiver

By signing this Agreement, Executive acknowledges the following:

(a)He has read and understands this Agreement.

(b)He understands that the General Release set forth above waives rights or claims arising under the Age Discrimination in Employment Act.

		
	(c)
	He understands that be  is not  waiving  any rights or claims under  the  Age  Discrimination in

Employment Act that may arise after the date on which he signs this Agreement.

		
	(d)
	He was not already entitled to the severance payments described above, and they are consideration

in exchange for his waiver of rights or claims in this Agreement.

		
	(e)
	He is advised that he should consult with an attorney prior to signing this Agreement.

Page 10

		
	(f)
	He understands that he has a period of 21 days to consider this Agreement before signing it.

(g)He understands that he has a right to revoke this Agreement for seven days after signing it, and that it will not become effective or enforceable until that period has expired. To be effective, any revocation must be, in writing, to the Chief Human Resources Officer for the Company, and state, "I hereby revoke my acceptance of our Confidential Executive Separation Agreement and Release." The revocation must be personally delivered to the Chief Human Resources Officer for the Company, or his designee, or mailed to the Chief Human Resources Officer for the Company and postmarked within seven calendar days of execution of this Agreement. This Agreement and General Release shall not become effective or enforceable until the revocation period has expired.

(h)    Revisions to this Agreement do not restart the 21 period set forth in this Section.

		
	5.
	No Assignment of Claims

Executive represents and warrants that he has not transferred or assigned to any other person or entity any of the claims that are waived or released by him in the General Release set forth above.            ·

		
	6.
	Non-Disclosure and Code of Ethics Agreements

Executive acknowledges that he has surviving obligations under the Code of Ethics and the Non-Disclosure Agreement that he previously signed, which are incorporated into this Agreement by reference, and he agrees to comply with all of such obligations. Executive acknowledges that the Non-Disclosure Agreement prohibits him from using or disclosing, in any way, information relating to the compensation or contact information of current or former employees of the Company.

		
	7.
	Employment with a Competitor

Executive understands if he begins to work for a Direct Competitor of the Company, as an employee, director, or contractor, within twelve months from the Effective Date of this Agreement, he must immediately notify the Chief Human Resources Officer for the Company. Executive also understands if he does begin such work, all remaining severance payments under Section 2, above, will end. For the purposes of this Agreement, Direct Competitors of the Company arc specifically defined as ______________. ____________ and ____________. [Company to insert named competitors].

		
	8.
	Confidentiality

Executive agrees that he will not disclose the terms of this Agreement to anyone except his accountant or attorney, unless he is required to do so by law or court order. He further agrees that any disclosure of such terms by his accountant or attorney will be deemed to be a breach of this covenant. Because a breach of this covenant would result in damages that would be extremely 

Page 11

difficult to ascertain or calculate, liquidated damages in the sum of $10,000 shall immediately be due from Executive to Company if this covenant is breached.

		
	9.
	No Disparagement

Executive  agrees  that  he  will  not  disparage  Company  or  any  of the  other Released  Parties  in  any communication, or make any statements that will reflect negatively on or harm the business interests of any of them.

		
	10.
	No Raiding

Executive agrees that, for one year following the Effective Date of this Agreement, he will not solicit or attempt to persuade any employee, consultant, representative or agent of Company or any of its subsidiaries or affiliates to terminate his or her employment or relationship with Company or its subsidiary or affiliate. Executive acknowledges that the purpose of this covenant is to enable Company and its subsidiaries and affiliates to maintain a stable workforce in order to remain in business, and that it would disrupt, damage, impair and interfere with their business if he were to engage in such solicitation.

		
	11.
	Return of Company Property

Executive acknowledges that he is required to return to Company all property belonging to Company or its subsidiaries or affiliates, and he agrees to do so promptly. This includes, but is not limited to, equipment, keys, credit cards, files, records, documents, notes, computer records, intellectual property and proprietary information of any kind. He further acknowledges that he is not permitted to remove such property from the premises of Company or its subsidiaries or affiliates or retain it in his possession, and he agrees not to do so.

		
	12.
	Restrictive Covenants

Executive agrees that should he violate any of the Restrictive Covenants outlined in Paragraphs 6, 7, 9 and 10, herein, any unvested equity grants will be immediately forfeited and all outstanding option grants will be cancelled. He further acknowledges that any gains on option exercises within six months of the violation of the Restrictive Covenant are subject to claw-back. These remedies are in addition to any and all other legal remedies.

		
	13.
	Future Employment

Executive agrees that he will not apply for employment with Company or any of its subsidiaries or affiliates at any time in the future.

		
	14.
	Non-Admission of Liability

Nothing in this Agreement shall be construed as an admission of liability by Company or any of the other Released Parties.

Page 12

		
	15.
	Cooperation

Executive agrees that, if any legal action is threatened or commenced against Company or any of the other Released Parties, relating to events about which he has knowledge, he will cooperate fully with them in the defense of such action.

		
	16.
	Entire Agreement

With the exception of the Non-Disclosure Agreement and Code of Ethics referred to above, this Agreement contains the complete and exclusive agreement between Executive and Company related to the matters addressed herein, and it supersedes any other agreements for understandings between them, whether oral or in writing. Executive acknowledge s that he has not relied on any oral representations concerning the effect of this Agreement.

		
	17.
	Amendments and Waivers

This Agreement may be amended or modified, and its provisions may be waived, only in a written instrument signed by Executive and Company.

		
	18.
	Severability

If any part of this Agreement is held to be unenforceable for any reason, the other parts of the Agreement will remain in effect.

		
	19.
	Governing Law

This Agreement shall be governed by and construed under the laws of the State of Florida, without regard to principles of conflict of laws.

		
	20.
	Interpretation

The rule of interpretation that ambiguities in an agreement arc to be construed against the party that drafted
it shall not apply to this Agreement.

		
	21.
	Successors

This Agreement shall be binding upon and inure to the benefit of the parties and their heirs, successors and 
assigns.

		
	22.
	Counterparts

Page 13

This Agreement may be executed in counterparts, and every signed counterpart shal1 have the legal effect of an original document.

		
	23.
	Attorneys' Fees

If any arbitration or other legal proceeding is commenced to enforce the terms of this Agreement, the prevailing party shall be entitled to the payment of its reasonable attorneys' fees and costs in the proceeding by the losing party.

24.    Effective Date

This Agreement shall become effective upon the expiration of the seven-day revocation period provided for above,  unless Executive revokes it during the revocation period.

	
				
	EXECUTIVE
	CHICO'S FAS, INC.

	By:
	                                                                                
	By: 
	                                                                        
Chief Human Resources Officer

	

Dated:
	

                                                                                
	

Dated:
	                                                                 

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