Exhibit 99.4
Memorandum of Agreement
Xxxxxx and Xxxxx Xxxx (Xxxx) and Palm Desert Art, Inc. (Palm) have
previously entered into an agreement for the merger of RM&M Framemakers,
Inc. (RMM) into R.M.M. Acquisition, Inc. (RAI) dated August 5. 1998. As
part of the transaction certain assets of RAI know as the Heart of America
Assets were pledged to Xxxx as security for the transaction and a UCC-1 was
filed to perfect that security interest. In settlement of various disputes
that have arisen as a result of such transaction, the parties hereby agree
to the following:
1. Xxxx will receive back the Heart of America assets and all
inventories in all locations pursuant to a Xxxx of Sale "in lieu of"
in satisfaction of their perfected UCC-1 security interest.
2. Xxxx will receive from Palm or RAI, as appropriate a reassignment of
such leases as are necessary form Xxxx to continue the operation of
the Heart of America business.
3. Xxxx will xxxxx a general Release to RAI and Palm, and RAI and Palm
will similarly give a General Release to Xxxx, including but not
limited to the restrictive covenants.
4. At the time of the delivery of the above described documents, Xxxx
will return to Palm all but 75,000 shares of the Palm Desert Art,
Inc. stock currently owned by them. The remaining 75,000 shares of
that stock will be returned upon either upon receipt by Xxxx of proof
that all Key Bank loans to RMM, RAI or Palm, for which Xxxx (or
either of them) are personally liable, have been paid and the Mohrs
have received enforceable releases from Key Bank or ninety (90) days
after the reconveyance of the Heart of America Assets, whichever is
later.
5. Xxxx agrees to permit Palm to represent the Heart of America line in
the states of Arizona, Oregon, Washington, and Colorado and others as
mutually agreed upon. As sales representative, Palm will receive a
sales commission of 15% on all sales of framed prints generated by
Palm for which Xxxx has received payment. Xxxx also agrees to pay
Palm an additional. fee of 10% (up to a total of $188,000) of these
sales for territorial development considerations.
6. Xxxx will continue to collect any remaining RAI accounts receivable
(approximately $30,000) on behalf of RAI and will use such collected
funds exclusively for the payment of RAI vendors. Invoices to be
paid will be selected by Xxxx from the list of outstanding payables
supplied by Palm and/or RAI.
7. This agreement shall be effective as of January 17, 1999. While it
is understood that the legal documents needed to complete the
retransfer of assets will not be completed until after that date, the
parties agree that Xxxx may operate the stores and wholesale business
as of that date ant that all business transacted after that date
shall belong to and shall be the obligation of Xxxx or such entity as
Xxxx creates to operate the business.
Palm Desert Art, Inc. /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, Pres.
R.M.M. Acquisition, Inc.
By: /s/ Xxxx X. Xxxx /s/ Xxxxx Xxxx
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Xxxx X. Xxxx, Pres. Xxxxx Xxxx
