Exhibit 2(i)
Note Purchase Agreement
THIS NOTE PURCHASE AGREEMENT (the "Agreement"), dated as of the 8th day
of September, 1995, among TEXFI INDUSTRIES, INC. , a Delaware corporation
("Texfi"), DECOTECH, L.C., a South Carolina limited liability company
("Decotech") and DECO GENERAL PARTNERSHIP, a South Carolina general partnership
("Deco").
W I T N E S S E T H:
WHEREAS, Texfi and Decotech are parties to an Asset Purchase Agreement,
dated as of March 31, 1995 (the "Purchase Agreement"), whereby Decotech
purchased from Texfi certain real and personal property of Texfi located in
Marion, North Carolina;
WHEREAS, as part of the consideration paid by Decotech to Texfi for the
aforesaid assets, Decotech delivered to Texfi that Subordinated Promissory Note
dated March 31, 1995, in the principal amount of $2,000,000 executed by Decotech
in favor of Texfi (the "Promissory Note");
WHEREAS, Texfi, BNY Financial Corporation ("BNY") and Decotech are
parties to that Subordination Agreement, dated as of March 31, 1995 (the
"Subordination Agreement"), whereby the obligations of Decotech to Texfi under
the Promissory Note are subordinated in certain respects to the payment of
certain obligations of Decotech to BNY;
WHEREAS, pursuant to the terms of the Promissory Note, a payment of
principal and interest in the amount of $682,777.78 was due and payable to Texfi
from Decotech on July 31, 1995, and interest on principal has continued to
accrue under the Promissory Note from August 1, 1995, at the rate of $555.56 per
day (the "Overdue Payment");
WHEREAS, Texfi and Decotech agree that the amount of $330,388.23 was
owed by Texfi to Decotech pursuant to the terms of the Purchase Agreement (the
"Purchase Agreement Payment");
WHEREAS, Texfi and Decotech are parties to an Agreement of even date
herewith (the "Setoff Agreement"), whereby the Purchase Agreement Payment was
offset against the Overdue Payment;
WHEREAS, pursuant to the Setoff Agreement, the difference between the
Overdue Payment and the Purchase Agreement Payment (the "Remaining Overdue
Payment") and all other amounts owed by Decotech to Texfi under the Promissory
remain outstanding;
WHEREAS, Decotech has made certain financial information available to
Texfi, including, without limitation, balance sheets and income statements of
Decotech for each of the four months ended July 1, 1995, and in reliance thereon
Texfi has agreed to transfer the Promissory Note to Deco pursuant to the terms
and conditions of this Agreement;
WHEREAS, Deco desires to purchase the Promissory Note from Texfi, and
Texfi desires to sell the Promissory Note to Deco, on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties hereto hereby agree as follows:
1. In exchange for the sum of Four Hundred Thousand Dollars
($400,000.00) in cash paid to Texfi by Deco upon the execution of this Agreement
by the parties hereto:
(i) Deco hereby purchases from Texfi and Texfi hereby sells,
conveys, assigns, transfers and delivers to Deco, its successors and
assigns forever, all of Texfi's right, title and interest in, to and
under the Promissory Note without recourse against Texfi; and
(ii) Deco hereby assumes and agrees to perform, fulfill and
discharge all of Texfi's liabilities and obligations under the
Subordination Agreement and Texfi hereby assigns all of its rights
thereunder to Deco.
2. Deco hereby acknowledges that: (i) the amount outstanding under the
Promissory Note has been reduced by an amount equal to the Purchase Agreement
Payment pursuant to the terms and conditions of the Setoff Agreement and it is
purchasing the Promissory Note subject to such reduction in outstanding amount;
(ii) except as specifically provided in Section 4 hereof, Texfi has made no
representations, warranties or guaranties with respect to the Promissory Note or
the collectability thereof; and (iii) it has relied upon its own investigation
in determining to purchase the Promissory Note and it assumes the risk of
nonpayment with respect thereto.
3. Decotech hereby acknowledges and consents to the sale and assignment
of the Promissory Note to Deco by Texfi and to the assignment to and assumption
by Deco of all of Texfi's rights, liabilities and obligations under the
Subordination Agreement as provided in this Agreement.
4. Texfi hereby warrants and represents to Deco that, except as
provided in the Setoff Agreement, it has not sold or otherwise transferred any
interest in the Promissory Note to any entity.
5. Deco hereby warrants and represents to Texfi that: (i) it is a
general partnership duly organized and validly existing under the laws of the
State of South Carolina with full partnership power and authority to undertake
the obligations contemplated by this Agreement, to execute and to deliver this
Agreement and to perform its obligations hereunder; (ii) the execution and
delivery of this Agreement have been duly authorized by all necessary
partnership action; and (iii) this Agreement has been duly executed and
delivered by Deco and is a valid and binding obligation of Deco, enforceable
against it in accordance with its terms.
- 2 -
6. Deco hereby agrees to defend, indemnify, protect and save Texfi
harmless from and against, and to reimburse Texfi for, any and all claims,
damages, losses, liability, expenses or costs, of every kind and nature
(including, but not limited to, attorneys' fees and court costs) arising, in
whole or in part, out of or in connection with the Promissory Note, the
Subordination Agreement or a breach of any of its representations, warranties or
agreements hereunder.
7. This Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of the parties hereto.
8. This Agreement and the other writings referred to herein or
delivered pursuant hereto shall constitute the entire understanding of the
parties with respect to the subject matter hereof. There are no representations,
promises, guaranties, covenants or undertakings other than as expressly set
forth herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended only by a written instrument duly executed by the
parties, and any condition to a party's obligations hereunder may only be waived
in writing by such a party.
9. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of North Carolina.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
TEXFI INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
DECOTECH, L.C.
By: Management Advisory Services,
Inc., Manager
By: /s/ L. Xxxxxxx Xxxxx, Xx.
Title: President
DECO GENERAL PARTNERSHIP
By: Management Advisory Services,
Inc., Partner
By: /s/ L. Xxxxxxx Xxxxx, Xx.
Title: President
- 3 -
