CONTRIBUTION AGREEMENT
BY AND AMONG
PARKDALE XXXXX, INCORPORATED
UNIFI, INC.
UNIFI MANUFACTURING, INC.
A N D
PARKDALE AMERICA, LLC
DATED: June 30, 1997
TABLE OF CONTENTS
CONTRIBUTION AGREEMENT
Statement of Purpose 1
ARTICLE 1 ASSETS TO BE CONTRIBUTED 1
1.1 Parkdale Assets 1
(a) Owned Real Property 1
(b) Improvements 1
(c) Tangible Personal Property 1
(d) Inventories 2
(e) Contracts 2
(f) Permits 2
(g) Cash 2
(h) Deposits 2
1.2 Unifi and UMI Assets 2
(a) Owned Real Property 2
(b) Leased Real Property 2
(c) Improvements. 2
(d) Tangible Personal Property 2
(e) Inventories 3
(f) Contracts 3
(g) Permits 3
(h) Cash 3
(i) Deposits 3
1.3 Date of Contributions 3
1.4 Operating Agreement 3
1.5 Operating Expenses, Proration 3
(a) Taxes 4
(b) Utilities 4
(c) Leases 4
1.6 Additional Cash Contributions. 4
(a) By Unifi 4
(b) By Parkdale 4
1.7 Liabilities 5
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF PARKDALE 5
2.1 Organization and Good Standing; Governing Documents 5
2.2 Authority 5
2.3 No Conflict or Breach 5
2.4 Consents and Approvals 6
2.5 Title to and Sufficiency of Assets 6
2.6 Real Property 6
(a) Real Property 6
(b) Improvements 7
2.7 Tangible Personal Property 7
2.8 Inventories 7
2.9 Contracts 7
2.10Litigation 7
2.11Compliance with Decrees and Laws 8
2.12Permits 8
2.13Environmental Protection 8
2.14Insurance 10
2.15Labor and Employment Matters 10
2.16Product Warranties 10
2.17Related Party Transactions 10
2.18Brokers 10
2.19Disclosure 11
2.20Taxes 11
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF UNIFI AND UMI 11
3.1 Organization and Good Standing; Governing Documents 11
3.2 Authority 12
3.3 No Conflict or Breach 12
3.4 Consents and Approvals 12
3.5 Title to and Sufficiency of Assets 12
3.6 Real Property 13
(a) Owned 13
(b) Leased 13
(c) Improvements 13
3.7 Tangible Personal Property 13
3.8 Inventories 14
3.9 Contracts 14
3.10Litigation 14
3.11Compliance with Decrees and Laws 14
3.12Permits 15
3.13Environmental Protection 15
3.14Insurance 16
3.15Labor and Employment Matters 16
3.16Product Warranties 17
3.17Related Party Transactions 17
3.18Brokers 17
3.19Disclosure 17
3.20Taxes 17
ARTICLE 4 COVENANTS 18
4.1 Covenants of Parkdale 18
(a) Real Property and Improvements 18
(b) Access and Information 18
(c) Termination of Parkdale's Employees;
Settlement of Obligations of Parkdale 18
4.2 Covenants of Unifi and UMI 19
(a) Real Property 19
(b) Access and Information 19
(c) Termination of Unifi's and UMI's Employees;
Settlement of Obligations of Unifi and UMI 19
4.3 Mutual Covenants 19
(a) Best Efforts 19
(b) Confidentiality 20
(c) Employee Benefits 20
(d) Transfer Taxes 20
(e) Cooperation on Tax Matters 21
4.4 Noncompetition 21
4.5 Magnolia Assets 21
ARTICLE 5 CONDITIONS PRECEDENT TO PARKDALE'S OBLIGATIONS 22
5.1 Initial Closing 22
(a) Representations and Warranties 22
(b) Compliance with Covenants 22
(c) Absence of Litigation 22
(d) Consents and Approvals 22
(e) Legal Opinion 22
5.2 Subsequent Closing 22
(a) Compliance with Covenants 22
(b) Absence of Litigation 23
(c) Consents and Approvals 23
(d) Subdivision 23
(e) Title Insurance; Survey 23
(f) Environmental Audit 23
ARTICLE 6 CONDITIONS PRECEDENT TO UNIFI'S AND UMI'S OBLIGATIONS24
6.1 Initial Closing 24
(a) Representations and Warranties 24
(b) Compliance with Covenants 24
(c) Absence of Litigation 24
(d) Consents and Approvals 24
(e) Legal Opinion 24
6.2 Subsequent Closing 24
(a) Compliance with Covenants 24
(b) Absence of Litigation 25
(c) Consents and Approvals 25
(d) Title Insurance; Survey 25
(e) Environmental Audit 25
ARTICLE 7 CLOSING 25
7.1 Initial Closing 25
(a) Deliveries by Parkdale 26
(b) Deliveries by Unifi and UMI 26
7.2 Subsequent Closing 27
(a) Deliveries by Parkdale 27
(b) Deliveries by Unifi and UMI 27
7.3 Further Assurances 27
ARTICLE 8 INDEMNIFICATION 28
8.1 Indemnification by Parkdale 28
8.2 Indemnification by Unifi and UMI 28
8.3 Notice of Claim 29
8.4 Defense 29
8.5 Loss to the Company 29
8.6 Other Remedies 30
ARTICLE 9 TERMINATION 30
9.1 Termination 30
9.2 Effect on Obligations 30
ARTICLE XMISCELLANEOUS 30
10.1Survival of Representations 30
10.2Bulk Sales 31
10.3Expenses 31
10.4Publicity 31
10.5Best Efforts 31
10.6Notices 31
10.7Governing Law 32
10.8Counterparts 32
10.9Assignment 32
10.10 Third Party Beneficiaries 32
10.11 Headings 32
10.12 Amendments 33
10.13 Specific Performance 33
10.14 Severability 33
10.15 Entire Agreement 33
EXHIBIT A - Opinion of Counsel to Unifi and UMI
EXHIBIT B - Opinion of Counsel to Parkdale
EXHIBIT C - Noncompetition Covenant
CONTRIBUTION AGREEMENT
This Contribution Agreement (the "Agreement") is entered into on June
30, 1997, by and among PARKDALE XXXXX, INCORPORATED, a North Carolina
corporation ("Parkdale"), UNIFI, INC., a New York corporation ("Unifi"),
UNIFI MANUFACTURING, INC., a North Carolina corporation ("UMI"), and PARKDALE
AMERICA, LLC, a North Carolina limited liability company (the "Company").
Statement of Purpose.
Each of Parkdale, Unifi and UMI is in the business of manufacturing spun
cotton yarn utilizing open-end and air jet manufacturing technologies (the
``Business''). UMI is a wholly-owned subsidiary of Unifi. On June 27, 1997,
Parkdale and Unifi filed Articles of Organization to create a North Carolina
limited liability corporation entitled Parkdale America, LLC (the "Company").
Parkdale, Unifi, the Company and the Managers of the Company have entered
into an Operating Agreement dated June 30, 1997 (the ``Company Operating
Agreement''), which provides, among other things, that Parkdale owns
sixty-six percent (66%) interest in the Company and Unifi owns a thirty-four
percent (34%) interest in the Company. Parkdale, Unifi, UMI and the Company
are entering into this Agreement in order to set forth the terms and
conditions by which Parkdale, Unifi and UMI will each contribute to the
Company all of its assets used in the Business as conducted by each.
ARTICLE 1
ASSETS TO BE CONTRIBUTED
1.1 Parkdale Assets. Parkdale agrees to contribute and transfer to the
Company the following assets and properties of Parkdale (referred to
collectively as the "Parkdale Assets"):
(a) Owned Real Property. The manufacturing plants and associated
real property owned by Parkdale and listed on attached Schedule 1.1(a)
(the "Parkdale Real Property");
(b) Improvements. All buildings and other improvements, fixtures
and appurtenances owned by Parkdale and located on the Parkdale Real
Property (the "Parkdale Improvements");
(c) Tangible Personal Property. All machinery, equipment, office
equipment, supplies, materials and other items of tangible personal
property owned or leased by Parkdale and located on the Parkdale Real
Property, including (without limitation) the items listed on attached
Schedule 1.1(c) (the "Parkdale Personal Property") together with any
express or implied warranty by the manufacturers or sellers of any item
or component part thereof, and all maintenance records and other
documents relating thereto;
(d) Inventories. All inventories of Parkdale, including (without
limitation) all finished goods, work in process and raw materials,
located on the Parkdale Real Property (the "Parkdale Inventory");
(e) Contracts. All of Parkdale's interests in the contracts and
commitments described on attached Scheduled 1.1(e) (the "Parkdale
Contracts");
(f) Permits. All permits, authorizations, certificates, approvals
and licenses relating to the ownership and operation of the foregoing
assets and properties ("Parkdale Permits");
(g) Cash. Cash in the amount determined pursuant to Section 1.6
below; and
(h) Deposits. Parkdale's right to and interest in all utility,
lease and other deposits paid by Parkdale with respect to the foregoing
assets and properties (the "Parkdale Deposits").
1.2 Unifi and UMI Assets. Unifi and UMI agree to contribute and
transfer to the Company the following assets and properties of Unifi and UMI
(referred to collectively as the "Unifi Assets");
(a) Owned Real Property. The manufacturing plants and associated
real property owned by Unifi and UMI and described on attached Schedule
1.2(a) (the "Unifi Owned Real Property");
(b) Leased Real Property. All of Unifi's and UMI's interests in
the real property leased by Unifi and/or UMI (the ``Unifi Leased Real
Property''), together with the leases relating thereto (the ``Unifi Real
Property Leases''), described on attached Schedule 1.2(b).
(c) Improvements. All buildings and other improvements, fixtures
and appurtenances owned by Unifi or UMI and located on the Unifi Owned
Real Property or the Unifi Leased Real Property (the "Unifi
Improvements");
(d) Tangible Personal Property. All machinery, equipment, office
equipment, supplies, materials and other items of tangible personal
property owned or leased by Unifi or UMI and located on the Unifi Owned
Real Property or the Unifi Leased Real Property, including (without
limitation) the items listed on attached Schedule 1.2(d) (the "Unifi
Personal Property"), together with any express or implied warranty by
the manufacturers or sellers of any item or component part thereof, and
all maintenance records and other documents relating thereto;
(e) Inventories. All inventories of Unifi, including (without
limitation), all finished goods, work in process and raw materials,
located on the Unifi Owned Real Property and the Unifi Leased Real
Property (the "Unifi Inventory");
(f) Contracts. All of Unifi's interests in the contracts and
commitments described on attached Schedule 1.2(f) (the "Unifi
Contracts");
(g) Permits. All permits, authorizations, certificates, approvals
and licenses relating to the ownership and operation of the foregoing
assets and properties ("Unifi Permits");
(h) Cash. Cash in the amount determined pursuant to Sections 1.6
below; and
(i) Deposits. Unifi's right to and interest in all utility, lease
and other deposits paid by Unifi with respect to the foregoing assets
and properties (the "Unifi Deposits").
1.3 Date of Contributions. Subject to the terms, covenants and
conditions contained in this Agreement, on the Initial Closing Date (as
defined in Section 7.1 below), (a) Parkdale will contribute to the Company
the Parkdale Personal Property, the Parkdale Inventory, the Parkdale
Contracts, the Parkdale Permits, and the Parkdale Deposits, and (b) Unifi and
UMI will contribute to the Company the Unifi Personal Property, the Unifi
Inventory, the Unifi Contracts, the Unifi Permits, the cash referenced in
Section 1.7(a) and the Unifi Deposits. Subject to the terms, covenants and
conditions contained in this Agreement, on the Subsequent Closing Date (as
defined in Section 7.2 below), (a) Parkdale will contribute to the Company
the Parkdale Real Property and the Parkdale Improvements, and (b) Unifi and
UMI will contribute the Unifi Owned Real Property, the Unifi Leased Real
Property and the Unifi Improvements.
1.4 Operating Agreement. From and after the Initial Closing Date, the
Company will operate all of the Parkdale Assets and the Unifi Assets,
including (without limitation) the Parkdale Real Property, the Parkdale
Improvements, the Unifi Owned Real Property, the Unifi Leased Real Property
and the Unifi Improvements, and will conduct the Business currently conducted
by Parkdale and Unifi. Promptly after the Initial Closing, Parkdale, Unifi,
UMI and the Company will negotiate, in good faith, and execute operating
agreements, leases and other agreements necessary or appropriate to set forth
in more detail the arrangement contemplated by this Section 1.4.
1.5 Operating Expenses, Proration. Subject to the specific provisions
of this Section 1.5, Parkdale and Unifi shall continue to be responsible for
all costs and expenses attributable to the operation and the ownership of the
Parkdale Assets and the Unifi Assets, respectively, up to the Effective Time,
and the Company shall become responsible for all costs and expenses
attributable to the operation and/or ownership of the Parkdale Assets and the
Unifi Assets from and after the Effective Time of the Initial Closing Date.
With respect to certain expenses incurred in the operation and ownership of
the contributed assets, the following prorations shall be made:
(a)Taxes. Ad valorem property taxes shall be apportioned
between Parkdale, Unifi or UMI, as applicable, and the Company as
of the date of transfer of the property subject to the tax, based
on current tax bills if available and, if not available, based on
the most recent tax bills available with appropriate subsequent
adjustment when bills for the current year are received.
(b)Utilities. Utilities, water and sewer charges shall be paid
directly to the obligee by Parkdale, Unifi or UMI as applicable,
based on meter readings as of the Effective Time and at the
prevailing rates, if possible; otherwise such charges shall be
apportioned based on the number of operating days occurring before
and after the Effective Time during the billing period for each
such charge.
(c)Leases. The next payment due to lessors after the Effective
Time with respect to any leased property, vehicles or equipment
that are assigned to and assumed by the Company shall be
apportioned between Parkdale, Unifi or UMI, as applicable, and the
Company based on the time in such period before and after the
Effective Time.
Appropriate cash payments by Parkdale, Unifi, UMI, and the Company, as the
case may require, shall be made from time to time, as soon as practicable
after the facts giving rise to the obligation for such payments are known, to
give effect to the prorations provided in this Section 1.5.
1.6 Additional Cash Contributions.
(a)By Unifi. In addition to the assets to be contributed by
Unifi listed above, Unifi will contribute cash to the Company as
follows:
(i) $32,902,000 will be contributed on the Initial Closing
Date;
(ii) $10,000,000 will be contributed on the first
anniversary of the Initial Closing Date; and
(iii) $10,000,000 will be contributed on the second
anniversary of the Initial Closing Date.
(b)By Parkdale. In addition to the assets to be contributed by
Parkdale listed above, Parkdale will contribute $51,555,000 to the
Company on the Initial Closing Date.
1.7 Liabilities.
(a)The Parkdale Assets and the Unifi Assets shall be transferred
to the Company free and clear of all liabilities, obligations,
liens, security interests and encumbrances whatsoever; provided,
however, that the Company will assume the obligations described in
Section 1.7(b) below. The Company shall in no event assume or be
liable for any liability or obligation not specifically assumed
pursuant to this Section 1.7 and in instruments of assumption
delivered by it at the Initial Closing, and each of Parkdale, Unifi
and UMI shall retain responsibility for their respective
liabilities accrued as of the Effective Time and all liabilities
arising from their respective operations prior to the Effective
Time, whether or not accrued and whether or not disclosed.
(b)As of the sole exception to the provisions of paragraph (a)
above, the Company will assume (i) the obligations of Parkdale
under the Parkdale Contracts, to the extent that such obligations
are not performed prior to the Effective Time; (ii) the obligations
of Parkdale under the Promissory Note in the principal amount of
$46,000,000; and (iii) the obligations of Unifi and UMI under the
Unifi Contracts and the Unifi Real Property Leases.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF PARKDALE
Parkdale represents and warrants to Unifi and UMI and the Company as
follows:
2.1 Organization and Good Standing; Governing Documents. Parkdale is a
corporation duly organized, validly existing and in good standing under the
laws of the State of North Carolina. Parkdale has all requisite power and
authority to own, operate and lease the Parkdale Assets.
2.2 Authority. Parkdale has all requisite power and authority to
execute and deliver this Agreement and to perform the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary corporate
action on the part of Parkdale. This Agreement has been duly executed and
delivered by Parkdale and constitutes a valid and binding obligation of
Parkdale, enforceable against Parkdale in accordance with its terms.
2.3 No Conflict or Breach. The execution, delivery and performance of
this Agreement do not and will not:
(1) conflict with or constitute a violation of the Articles
of Incorporation or Bylaws of Parkdale;
(1) conflict with or constitute a violation of any law,
statute, judgment, order, decree or regulation of any legislative
body, court, administrative agency, governmental authority or
arbitrator applicable to or relating to Parkdale or the Parkdale
Assets;
(1) conflict with, constitute a default under, result in a
breach or acceleration of or, except as set forth on Schedule 2.4,
require notice to or the consent of any third party under any
contract, agreement, commitment, mortgage, note, license or other
instrument or obligation to which Parkdale is party or by which it
is bound or by which the Parkdale Assets are affected; or
(1) result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever on any of the Parkdale
Assets.
2.4 Consents and Approvals. Schedule 2.4 describes (a) each consent,
approval, authorization, registration or filing with any federal, state or
local judicial or governmental authority or administrative agency, and (b)
each consent, approval, authorization of or notice to any other third party,
which is required in connection with the valid execution and delivery by
Parkdale of this Agreement or the consummation by Parkdale of the
transactions contemplated herein (the items described in clauses (a) and (b),
collectively, the "Parkdale Required Consents").
2.5 Title to and Sufficiency of Assets. Parkdale has good and
marketable title to all of the Parkdale Assets, free and clear of any liens,
encumbrances, claims, security interests, mortgages or pledges of any nature
(collectively, "Liens"), other than:
(a) easements of record that do not affect the full use and
enjoyment of the Parkdale Real Property for the purposes for which
it is currently used or detract from its value; and
(b) Liens for taxes not yet due and payable.
The Parkdale Assets constitute all of the assets, tangible and intangible,
used by Parkdale in the Business.
2.6 Real Property.
(a)Real Property. Schedule 1.1(a) contains a true and correct
list of all real property owned by Parkdale and used in connection
with the Business. True and correct copies of (i) all deeds,
title insurance policies and surveys of the Parkdale Real Property
and (ii) all documents evidencing any mortgages, liens or
encumbrances upon the Parkdale Real Property have been made
available to Unifi. Parkdale does not lease any real property in
connection with the Business.
(b)Improvements. The Parkdale Real Property is zoned for the
various purposes for which the Parkdale Improvements are presently
being used. All Parkdale Improvements are in compliance with all
applicable zoning and land use laws, ordinances and regulations.
All Parkdale Improvements are in good repair and in good operating
condition, ordinary wear and tear excepted. No part of any
Parkdale Improvement encroaches on any real property not included
in the Parkdale Real Property.
2.7 Tangible Personal Property. All of the tangible personal property
owned or leased by Parkdale and used in connection with the Business is
listed on Schedule 1.1(c). Each item of Parkdale Personal Property is in
good operating order, condition and repair, ordinary wear and tear excepted,
is suitable for immediate use in the ordinary course of business of the
Business and is free from defects.
2.8 Inventories. All items included in the Parkdale Inventory (i) are
in materially good condition, not obsolete or defective, (ii) are useable or
saleable in the ordinary course of business of the Business and at the
current operating profit margins of Parkdale, (iii) are located on the
Parkdale Real Property, and (iv) have been acquired by Parkdale only in bona
fide transactions entered into in the ordinary course of business.
2.9 Contracts. Parkdale has provided to Unifi a true and correct list
of all contracts, commitments, agreements (including agreements for the
borrowing of money or the extension of credit), licenses, understandings and
obligations, whether written or oral, to which Parkdale is party or by which
Parkdale or the Parkdale Assets are bound or affected, that are material to
the operation of the Business as conducted by Parkdale. Parkdale has made
available to Unifi true and complete copies of all written Parkdale Contracts
and true and complete memoranda of all oral Parkdale Contracts, including any
and all amendments and other modifications thereto. Each of the Parkdale
Contracts is valid, binding and enforceable in accordance with its terms and
is in full force and effect. No Parkdale Contract will result in a material
loss upon completion of performance, and no purchase commitments are in
excess of the normal requirements of the Business as conducted by Parkdale.
There are no existing defaults, and no events or circumstances have occurred
which, with or without notice or lapse of time or both, would constitute
defaults, under any of the Parkdale Contracts. The assignment of the
Parkdale Contracts by Parkdale to the Company will not, with respect to any
Contract, (i) constitute a default thereunder, (ii) require the consent of
any person or party, except for the Parkdale Required Consents, or (iii)
affect the continuation, validity and effectiveness thereof or the terms
thereof.
2.10 Litigation. There are no claims, actions, suits, arbitration
proceedings, inquiries, hearings, injunctions or investigations ("Claims")
pending, or to the best knowledge of Parkdale, threatened, against Parkdale
and relating to Parkdale's ownership, use or operation of the Parkdale
Assets. There are no facts or circumstances which could serve as the basis
for any Claim against Parkdale involving the Parkdale Assets, or, by virtue
of the execution, delivery and performance of this Agreement, against Unifi.
2.11 Compliance with Decrees and Laws. There is not outstanding or, to
the best knowledge of Parkdale, threatened, any order, writ, injunction or
decree of any court, governmental agency or arbitration tribunal against or
involving Parkdale with respect to the Business or the Parkdale Assets.
Parkdale is currently, and has been continuously throughout the past two
years, in full compliance with all laws, statutes, rules, regulations, orders
and licensing requirements ("Rules") of federal, state, local and foreign
agencies and authorities applicable to the properties and operations of the
Business as conducted by Parkdale. To the best knowledge of Parkdale, there
has been no allegation of any violation of any such Rules, and no
investigation or review by any federal, state or local body or agency is
pending, threatened or planned and involving the Business as conducted by
Parkdale or the Parkdale Assets.
2.12 Permits. Parkdale has obtained all permits, authorizations,
certificates, approvals, licenses, exemptions and classifications required
for the conduct of the Business by Parkdale and the ownership and operation
of the Parkdale Assets. Parkdale is not in violation of any of the Parkdale
Permits, and no proceedings are pending or, to the best knowledge of
Parkdale, threatened, to revoke or limit any Parkdale Permit. All of the
Parkdale Permits will be effectively assigned and transferred to the Company
at the Closing to the extent permitted by law.
2.13 Environmental Protection. To the best knowledge of Parkdale, the
existing and prior uses of the Parkdale Assets comply with, and at all times
have complied with, and Parkdale is not in violation of, and has not
violated, in connection with the ownership, use, maintenance or operation of
the Parkdale Assets, any applicable federal, state, county or local statutes,
laws, regulations, rules, ordinances, codes, licenses or permits of any
governmental authorities relating to environmental matters, including by way
of illustration and not by way of limitation the Comprehensive Environmental
Response, Compensation and Liability Act as amended, the Resource
Conservation Recovery Act as amended, the Clean Air Act, the Clean Water Act,
the Occupational Safety and Health Act, the Toxic Substances Control Act, any
"Superfund" or "Superlien" law, the North Carolina Oil Pollution and
Hazardous Substances Control Act of 1978, or any other federal, state or
local statute, law, ordinance, code, rule, regulation, order, decree or
guideline (whether published or unpublished) regulating, relating to or
imposing liability or standards of conduct concerning any petroleum,
petroleum by-product (including but not limited to crude oil, diesel oil,
fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste,
oil sludge, and all other liquid hydrocarbons, regardless of specific
gravity), natural or synthetic gas, hazardous substance or materials, toxic
or dangerous waste, substance or material, pollutant or contaminant
(collectively "Environmental Laws"). Specifically, but not in limitation of
the foregoing, to the best knowledge of Parkdale:
(a)Parkdale has obtained and is in full compliance with the
terms and provisions of all licenses and permits necessary for
compliance with the Environmental Laws with respect to the
ownership and operation of the Parkdale Assets;
(b)The Parkdale Assets are free of asbestos containing materials
("ACM's"), and are free of Hazardous Materials. As used in this
Agreement, "Hazardous Material" means and includes asbestos, ACM's,
polychlorinated biphenyls, lead-based paints, any petroleum
product, petroleum by-products (including but not limited to crude
oil or any fraction of it, diesel oil, fuel oil, gasoline,
lubrication oil, oil refuse, oil mixed with other wastes, oil
sludge and all other liquid hydrocarbons, regardless of specific
gravity), natural or synthetic gas products and/or hazardous
substance or materials, waste, pollutant or contaminant, defined as
such in (or for the purposes of) the Environmental Laws.
(c)Parkdale and its predecessors in interest have operated the
Parkdale Assets, and have at all times received, handled, used,
stored, treated and disposed of all Hazardous Materials, in strict
compliance with all Environmental Laws. Parkdale has not
transported or arranged for the transport of any Hazardous
Materials to or from any property included in the Parkdale Assets.
(d)No Hazardous Material has been released, deposited,
discharged, placed, disposed of or originated on or under the
Parkdale Assets, nor has any real estate included in the Parkdale
Assets been used at any time by any person as a landfill or a waste
disposal site.
(e)There is no electrical equipment, including transformers,
containing polychlorinated biphenyls (PCBs) included in the
Parkdale Assets
(f)There are no monitoring xxxxx on any real property included
in the Parkdale Assets for monitoring any Hazardous Materials.
(g)There are no liens on any of the Parkdale Assets resulting
from any cleanup or proposed cleanup under the Environmental Laws.
(h)No part of the real estate included in the Parkdale Assets
constitutes "wetlands" as defined under any Environmental Law or
other law or regulation.
(i) No Environmental Law imposes standards or requirements, or
will impose standards or requirements, which will require the owner
or operator of the Parkdale Assets to engage in any work, repairs,
construction or capital expenditures in order to comply with such
Environmental Law or such proposed Environmental Law.
(j)No notices of any violation, inquiries or requests for
information relating to any of the matters referred to in
Subsections (a) through (i) above relating to the Parkdale Assets
or their use have been received by Parkdale.
2.14 Insurance. All insurance policies maintained by Parkdale with
respect to and the Parkdale Assets are valid, binding and enforceable in
accordance with their terms, are in full force and effect, and all premiums
due thereon have been paid and will be paid through the Effective Time. Such
policies provide adequate coverage for all risks normally insured against.
Parkdale has not been refused any insurance by any insurance carrier during
the past two years.
2.15 Labor and Employment Matters. With respect to employment matters:
(a)No employees of Parkdale who work in the Business are or have
been represented by a union or other labor organization or covered
by any collective bargaining agreement, and to the best knowledge
of Parkdale, no union is attempting to organize any such employees.
(b)There is no labor strike, dispute, slowdown, stoppage or
similar labor difficulty pending or, to the best knowledge of
Parkdale, threatened against or affecting Parkdale with respect to
the Business.
(c)Parkdale is in compliance with all federal, state and local
laws and regulations respecting employment and employment
practices, terms and conditions of employment and wages and hours,
and there is no unfair labor practice complaint against Parkdale
pending or, to the best knowledge of Parkdale, threatened.
(d)Parkdale has made available to Unifi a complete and correct
list of the name, age, position, rate of compensation and any
incentive compensation arrangements, bonuses or commissions or
fringe or other benefits, whether payable in cash or in kind, of
each current employee, independent contractor, consultant and agent
of Parkdale who is associated with the Business.
2.16 Product Warranties. There are no continuing or outstanding
warranties applicable to goods manufactured or sold by Parkdale.
2.17 Related Party Transactions. The Parkdale Assets do not include any
agreement with, or any other commitment to (a) any officer or director of
Parkdale; (b) any person related by blood or marriage to any such officer or
director; or (c) any corporation, partnership, trust or other entity in which
Parkdale or any such officer, director or related person has an equity or
participating interest.
2.18 Brokers. No finder, broker, agent or other intermediary has acted
for or on behalf of Parkdale in connection with the negotiation or
consummation of this Agreement, and there are no claims for any brokerage
commission, finder's fee or similar payment due from Parkdale.
2.19 Disclosure. No representation, warranty or statement made by
Parkdale in this Agreement, or any document furnished or to be furnished to
Unifi and UMI pursuant to this Agreement, contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material
fact necessary to make the statements contained herein or therein not
misleading.
2.20 Taxes. As of the date of this Agreement, the Initial Closing Date
and the Subsequent Closing Date, Parkdale represents and warrants to Unifi,
UMI and the Company as follows. Parkdale has completed and duly filed in
correct form with the appropriate governmental authorities all tax returns
and reports required to be filed. Such returns were accurate and complete as
filed. Parkdale has timely paid in full all taxes and other amounts,
including without limitation interest, penalties, assessments, deficiencies,
and additional amounts (``Taxes'') shown to be due on such tax returns and
reports or claimed to be due by any taxing authority or otherwise due and
owing. No liens or other encumbrances exist on the Parkdale Assets because
of unpaid Taxes. No officer, director, shareholder or employee responsible
for tax matters of Parkdale expects any governmental authority to assess
additional Taxes for any period for which tax returns and reports have
already been filed except as listed on Schedule 2.20. There is no dispute or
claim concerning any liabilities for Taxes of Parkdale either (i) claimed or
raised by any governmental authority in writing; or (ii) as to which any of
Parkdale's shareholders, officers, directors, or employees responsible for
tax matters has knowledge based upon personal contact with any agent of a
governmental authority except as listed on Schedule 2.20. Parkdale has never
been party to any income tax allocation or sharing agreement or a member of
an affiliated group of corporations filing a consolidated federal income tax
return. Parkdale has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF UNIFI AND UMI
Unifi and UMI jointly and severally represent and warrant to Parkdale
and the Company as follows:
3.1 Organization and Good Standing; Governing Documents.
(a)Unifi is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York. Unifi
has all requisite power and authority to own, operate and lease the
Unifi Assets.
(b)UMI is a corporation duly organized, validly existing and in
good standing under the laws of the State of North Carolina. UMI
has all requisite power and authority to own, operate and lease the
UMI assets. Unifi owns all of the issued and outstanding capital
stock of UMI.
3.2 Authority. Each of UMI and Unifi has all requisite power and
authority to execute and deliver this Agreement and to perform the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement have been duly and validly authorized by all necessary
corporate action on the part of Unifi and UMI. This Agreement has been duly
executed and delivered by Unifi and UMI and constitutes a valid and binding
obligation of Unifi and UMI, enforceable against Unifi and UMI in accordance
with its terms.
3.3 No Conflict or Breach. The execution, delivery and performance of
this Agreement do not and will not:
(a) conflict with or constitute a violation of the respective
Articles of Incorporation or Bylaws of Unifi or UMI;
(b) conflict with or constitute a violation of any law,
statute, judgment, order, decree or regulation of any legislative
body, court, administrative agency, governmental authority or
arbitrator applicable to or relating to Unifi, UMI or the Parkdale
Assets;
(c) conflict with, constitute a default under, result in a
breach or acceleration of or, except as set forth on Schedule 3.4,
require notice to or the consent of any third party under any
contract, agreement, commitment, mortgage, note, license or other
instrument or obligation to which Unifi or UMI is party or by which
it is bound or by which the Unifi Assets are affected; or
(d) result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever on any of the Unifi Assets.
3.4 Consents and Approvals. Schedule 3.4 describes (a) each consent,
approval, authorization, registration or filing with any federal, state or
local judicial or governmental authority or administrative agency and (b)
each consent, approval, authorization of or notice to any other third party,
which is required in connection with the valid execution and delivery by
Unifi or UMI of this Agreement or the consummation by Unifi of the
transactions contemplated herein (the items described in clauses (a) and (b),
collectively, the "Unifi Required Consents").
3.5 Title to and Sufficiency of Assets. Unifi has good and marketable
title to all of the Unifi Assets, free and clear of any Liens, other than:
(a)easements of record that do not affect the full use and
enjoyment of the Unifi Real Property for the purposes for which it
is currently used or detract from its value; and
(b)Liens for taxes not yet due and payable.
The Unifi Assets constitute all of the assets, tangible and intangible, used
by Unifi and UMI in the Business.
3.6 Real Property.
(a)Owned. Schedule 1.2(a) contains a true and correct list of
all real property owned by Unifi or UMI and used in connection with
the Business. True and correct copies of (i) all deeds, title
insurance policies and surveys of the Unifi Owned Real Property and
(ii) all documents evidencing any mortgages, liens or encumbrances
upon the Unifi Owned Real Property have been delivered to Parkdale.
(b)Leased. Schedule 1.2(b) contains a true and correct list of
all real property leased by Unifi or UMI and used in connection
with the Business. True and correct copies of each of the Unifi
Real Property Leases have been delivered to Parkdale. Each of the
Unifi Real Property Leases is valid, binding and enforceable in
accordance with its terms and is in full force and effect, and
there are no offsets or defenses by either landlord or tenant
thereunder. There are no existing defaults, and no events or
circumstances have occurred which, with or without notice or lapse
of time or both, would constitute defaults, under any of the Unifi
Real Property Leases. The assignment of the Unifi Real Property
Leases by Unifi or UMI to the Company will not, with respect to any
such lease, (i) permit the landlord to accelerate the rent or cause
the lease terms to be renegotiated, (ii) constitute a default
thereunder or (iii) require the consent of the landlord or any
third party, other than the Unifi Required Consents.
(c)Improvements. The Unifi Owned Real Property and the Unifi
Leased Real Property are zoned for the various purposes for which
the Unifi Improvements thereon are presently being used. All Unifi
Improvements are in compliance with all applicable zoning and land
use laws, ordinances and regulations. All Unifi Improvements are
in good repair and in good operating condition "ordinary wear and
tear excepted. No part of any Unifi Improvement encroaches on any
real property not included in the Unifi Owned Real Property or the
Unifi Leased Real Property.
3.7 Tangible Personal Property. All of the tangible personal property
owned or leased by Unifi or UMI and used in connection with the Business is
listed on Schedule 1.2(d). Each item of Unifi Personal Property is in good
operating order, condition and repair ordinary wear and tear excepted, is
suitable for immediate use in the ordinary course of business of the
Business, is free from defects.
3.8 Inventories. All items included in the Unifi Inventory (i) are in
materially good condition, not obsolete or defective, (ii) are useable or
saleable in the ordinary course of business of the Business and at the
current operating profit margins of Unifi or UMI, (iii) are located on Unifi
Real Property and (iv) have been acquired by Unifi or UMI only in bona fide
transactions entered into in the ordinary course of business.
3.9 Contracts. Unifi and UMI have delivered to Parkdale a true and
correct list of all contracts, commitments, agreements (including agreements
for the borrowing of money or the extension of credit), licenses,
understandings and obligations, whether written or oral, to which Unifi or
UMI is party or by which Unifi or UMI or the Unifi Assets are bound or
affected, that are material to the operation of the Business as conducted by
Unifi or UMI. Unifi and UMI have made available to Parkdale true and
complete copies of all written Unifi Contracts and true and complete
memoranda of all oral Unifi Contracts, including any and all amendments and
other modifications thereto. Each of the Unifi Contracts is valid, binding
and enforceable in accordance with its terms and is in full force and effect.
No Unifi Contract will result in a material loss upon completion of
performance, and no purchase commitments are in excess of the normal
requirements of the Business as conducted by Unifi or UMI. There are no
existing defaults, and no events or circumstances have occurred which, with
or without notice or lapse of time or both, would constitute defaults, under
any of the Unifi Contracts. The assignment of the Unifi Contracts by Unifi
and UMI to the Company will not, with respect to any Unifi Contract, (i)
constitute a default thereunder, (ii) require the consent of any person or
party, except for the Unifi Required Consents, or (iii) affect the
continuation, validity and effectiveness thereof or the terms thereof.
3.10 Litigation. There are no claims, actions, suits, arbitration
proceedings, inquiries, hearings, injunctions or investigations ("Claims")
pending, or to the best knowledge of Unifi and UMI, threatened, against Unifi
or UMI and relating to Unifi's or UMI's ownership, use or operation of the
Unifi Assets. There are no facts or circumstances which could serve as the
basis for any Claim against Unifi or UMI involving the Unifi Assets, or, by
virtue of the execution, delivery and performance of this Agreement, against
Parkdale.
3.11 Compliance with Decrees and Laws. There is no outstanding or, to
the best knowledge of Unifi and UMI, threatened, any order, writ, injunction
or decree of any court, governmental agency or arbitration tribunal against
or involving Unifi or UMI with respect to the Business or the Unifi Assets.
Unifi and UMI are currently, and have been continuously throughout the past
two years, in full compliance with all laws, statutes, rules, regulations,
orders and licensing requirements ("Rules") of federal, state, local and
foreign agencies and authorities applicable to the business, properties and
operations of the Business as conducted by Unifi or UMI. To the best
knowledge of Unifi and UMI, there has been no allegation of any violation of
any such Rules, and no investigation or review by any federal, state or local
body or agency is pending, threatened or planned and involving the Business
as conducted by Unifi or UMI or the Unifi Assets.
3.12 Permits. Unifi and UMI have obtained all permits, authorizations,
certificates, approvals, licenses, exemptions and classifications required
for the conduct of the Business by Unifi or UMI and the ownership and
operation of the Unifi Assets. Neither Unifi nor UMI is in violation of any
of the Unifi Permits, and no proceedings are pending or, to the best
knowledge of Unifi, threatened, to revoke or limit any Unifi Permit. All of
the Unifi Permits will be effectively assigned and transferred to the Company
at the Closing to the extent permitted by law.
3.13 Environmental Protection. To the best knowledge of Unifi and UMI,
the existing and prior uses of the Unifi Assets comply with, and at all times
have complied with, and Unifi and UMI are not in violation of, and have not
violated, in connection with the ownership, use, maintenance or operation of
the Unifi Assets, any applicable federal, state, county or local statutes,
laws, regulations, rules, ordinances, codes, licenses or permits of any
governmental authorities relating to environmental matters, including by way
of illustration and not by way of limitation the Comprehensive Environmental
Response, Compensation and Liability Act as amended, the Resource
Conservation Recovery Act as amended, the Clean Air Act, the Clean Water Act,
the Occupational Safety and Health Act, the Toxic Substances Control Act, any
"Superfund" or "Superlien" law, the North Carolina Oil Pollution and
Hazardous Substances Control Act of 1978, or any other federal, state or
local statute, law, ordinance, code, rule, regulation, order, decree or
guideline (whether published or unpublished) regulating, relating to or
imposing liability or standards of conduct concerning any petroleum,
petroleum by-product (including but not limited to crude oil, diesel oil,
fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste,
oil sludge, and all other liquid hydrocarbons, regardless of specific
gravity), natural or synthetic gas, hazardous substance or materials, toxic
or dangerous waste, substance or material, pollutant or contaminant
(collectively "Environmental Laws"). Specifically, but not in limitation of
the foregoing, to the best knowledge of Unifi and UMI:
(a)Each of Unifi and UMI has obtained and is in full compliance
with the terms and provisions of all licenses and permits necessary
for compliance with the Environmental Laws with respect to the
ownership and operation of the Unifi Assets;
(b)The Unifi Assets are free of asbestos containing materials
("ACM's"), and are free of Hazardous Materials. As used in this
Agreement, "Hazardous Material" means and includes asbestos, ACM's,
polychlorinated biphenyls, lead-based paints, any petroleum
product, petroleum by-products (including but not limited to crude
oil or any fraction of it, diesel oil, fuel oil, gasoline,
lubrication oil, oil refuse, oil mixed with other wastes, oil
sludge and all other liquid hydrocarbons, regardless of specific
gravity), natural or synthetic gas products and/or hazardous
substance or materials, waste, pollutant or contaminant, defined as
such in (or for the purposes of) the Environmental Laws.
(c)Unifi and UMI have operated the Unifi Assets, and have at all
times received, handled, used, stored, treated and disposed of all
Hazardous Materials, in strict compliance with all Environmental
Laws. Neither Unifi nor UMI has transported or arranged for the
transport of any Hazardous Materials to or from any property
included in the Unifi Assets.
(d)No Hazardous Material has been released, deposited,
discharged, placed, disposed of or originated on or under the Unifi
Assets, nor has any real estate included in the Unifi Assets been
used at any time by any person as a landfill or a waste disposal
site.
(e)There is no electrical equipment, including transformers,
containing polychlorinated biphenyls (PCBs) included in the Unifi
Assets
(f)There are no monitoring xxxxx on any real property included
in the Unifi Assets for monitoring any Hazardous Materials.
(g)There are no liens on any of the Unifi Assets resulting from
any cleanup or proposed cleanup under the Environmental Laws.
(h)No part of the real estate included in the Unifi Assets
constitutes "wetlands" as defined under any Environmental Law or
other law or regulation.
(i) No Environmental Law, imposes standards or requirements, or
will impose standards or requirements, which will require the owner
or operator of the Unifi Assets to engage in any work, repairs,
construction or capital expenditures in order to comply with such
Environmental Law or such proposed Environmental Law.
(j)No notices of any violation, inquiries or requests for
information relating to any of the matters referred to in
Subsections (a) through (i) above relating to the Unifi Assets or
their use have been received by Unifi.
3.14 Insurance. All insurance policies maintained by Unifi and UMI with
respect to and the Unifi Assets are valid, binding and enforceable in
accordance with their terms, are in full force and effect, and all premiums
due thereon have been paid and will be paid through the Effective Time. Such
policies provide adequate coverage for all risks normally insured against.
Neither Unifi nor UMI has been refused any insurance by any insurance carrier
during the past two years.
3.15 Labor and Employment Matters. With respect to employment matters:
(a)No employees of Unifi or UMI who work in the Business are or
have been represented by a union or other labor organization or
covered by any collective bargaining agreement, and to the best
knowledge of Unifi and UMI, no union is attempting to organize any
such employees.
(b)There is no labor strike, dispute, slowdown, stoppage or
similar labor difficulty pending or, to the best knowledge of Unifi
and UMI, threatened against or affecting Unifi or UMI with respect
to the Business.
(c)Each of Unifi and UMI is in compliance with all federal,
state and local laws and regulations respecting employment and
employment practices, terms and conditions of employment and wages
and hours, and there is no unfair labor practice complaint against
Unifi or UMI pending or, to the best knowledge of Unifi and UMI,
threatened.
(d)Unifi and UMI have made available to Parkdale a complete and
correct list of the name, age, position, rate of compensation and
any incentive compensation arrangements, bonuses or commissions or
fringe or other benefits, whether payable in cash or in kind, of
each current employee, independent contractor, consultant and agent
of Unifi and UMI who is associated with the Business.
3.16 Product Warranties. There are no continuing or outstanding
warranties applicable to goods manufactured or sold by Unifi or UMI
3.17 Related Party Transactions. The Unifi Assets do not include any
agreement with, or any other commitment to (a) any officer or director of
Unifi or UMI; (b) any person related by blood or marriage to any such officer
or director; or (c) any corporation, partnership, trust or other entity in
which Unifi or UMI or any such officer, director or related person has an
equity or participating interest.
3.18 Brokers. No finder, broker, agent or other intermediary has acted
for or on behalf of Unifi or UMI in connection with the negotiation or
consummation of this Agreement, and there are no claims for any brokerage
commission, finder's fee or similar payment due from Unifi or UMI.
3.19 Disclosure. No representation, warranty or statement made by Unifi
in this Agreement, or any document furnished or to be furnished to Parkdale
pursuant to this Agreement, contains or will contain any untrue statement of
a material fact, or omits or will omit to state any material fact necessary
to make the statements contained herein or therein not misleading.
3.20 Taxes. The term ``Affiliated Corporations'' is defined to include
Unifi, UMI and all corporations that (i) are or have been a party with Unifi
or UMI to a tax sharing agreement, or (ii) are or have been a member of an
affiliated group of corporations that have filed or will file a consolidated
federal income tax return with Unifi or UMI. As of the date of this
Agreement, the Initial Closing Date and the Subsequent Closing Date, Unifi
and UMI represent and warrant to Parkdale and the Company as follows. The
Affiliated Corporations have completed and duly filed in correct form with
the appropriate governmental authorities all tax returns and reports required
to be filed. Such returns were accurate and complete as filed. The
Affiliated Corporations have timely paid in full all Taxes shown to be due on
such tax returns and reports or claimed to be due by any taxing authority or
otherwise due and owing. No liens or other encumbrances exist on the Unifi
Assets because of unpaid Taxes. No officer, director or employee responsible
for tax matters of the Affiliated Corporations expects any governmental
authority to assess additional Taxes for any period for which tax returns and
reports have already been filed except as listed on Schedule 3.20. There is
no dispute or claim concerning any liabilities for Taxes of the Affiliated
Corporations either (i) claimed or raised by any governmental authority in
writing; or (ii) as to which any of the Affiliated Corporations' officers,
directors, or employees responsible for tax matters has knowledge based upon
personal contact with any agent of a governmental authority except as listed
on Schedule 3.20. Each Affiliated Corporation has withheld and paid all
taxes required to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, stockholder, or
other third party.
ARTICLE 4
COVENANTS
4.1 Covenants of Parkdale. Parkdale covenants and agrees with Unifi
and the Company as follows:
(a)Real Property and Improvements. Between the date of this
Agreement and the Subsequent Closing, Parkdale shall not create or
permit to exist any security interest, mortgage, pledge, lien,
charge, encumbrance or adverse claim of any kind or nature with
respect to any of the Parkdale Real Property or the Parkdale
Improvements except for Liens described in Section 2.5.
(b)Access and Information. Parkdale shall permit Unifi and UMI
and their counsel, accountants and other representatives full
access during normal business hours to the Parkdale Assets.
Parkdale shall furnish to Unifi and UMI and their representatives
all information concerning the Parkdale Assets as Unifi and UMI may
reasonably request.
(c)Termination of Parkdale's Employees; Settlement of
Obligations of Parkdale. Immediately prior to the Effective Time,
Parkdale shall terminate all of its employees utilized in or
necessary to the operation of the Business (the "Transferred
Employees") and the Company shall employ such Transferred Employees
as of the Effective Time. Such transfer of employment shall not
be treated as a separation from service with respect to such
Transferred Employees for purposes of any employee benefit plan or
policy of Parkdale (including, without limitation, any severance
pay entitlements). Parkdale shall make adequate provisions for a
settlement of all obligations of Parkdale to such Transferred
Employees, including accrued salaries, wages, payroll taxes,
health, medical, retirement, vacation and any other obligations and
expenses of any kind or description of Parkdale arising out of or
relating to the employment by Parkdale of the Transferred Employees
prior to the Effective Time.
4.2 Covenants of Unifi and UMI. Each of Unifi and UMI covenants and
agrees with Parkdale and the Company as follows:
(a)Real Property. Between the date of this Agreement and the
Subsequent Closing, Unifi and UMI shall not create or permit to
exist any security interest, mortgage, pledge, lien, charge,
encumbrance or adverse claim of any kind or nature with respect to
any of the Unifi Owned Real Property, the Unifi Leased Real
Property or the Unifi Improvements, except for the Liens described
in Section 3.5.
(b)Access and Information. Unifi and UMI shall permit Parkdale
and its counsel, accountants and other representatives full access
during normal business hours to all the Unifi Assets. Unifi shall
furnish to Parkdale and its representatives all information
concerning the Unifi Assets as Parkdale may reasonably request.
(c)Termination of Unifi's and UMI's Employees; Settlement of
Obligations of Unifi and UMI. Effective at the Effective Time,
Unifi and UMI shall terminate their direct plant specific spun yarn
employees ("Spun Yarn Employees"), and the Company shall
simultaneously employee such Spun Yarn Employees as of the
Effective Time. Unifi and UMI shall make adequate provisions for a
settlement of all obligations of Unifi and UMI to such employees,
including accrued salaries, wages, payroll taxes, any severance pay
entitlements, health, medical, retirement, vacation or deferred
compensation benefits and any other obligations and expenses of any
kind or description of Unifi or UMI arising out of or relating to
the employment by Unifi or UMI or Unifi's or UMI's termination of
such employees.
4.3 Mutual Covenants. Each of Parkdale, Unifi and UMI covenants and
agrees with the other as follows:
(a)Best Efforts. Each of Parkdale, Unifi and UMI shall use its
best efforts to make or obtain all consents, approvals,
authorizations, registrations and filings with all federal, state
or local judicial or governmental authorities or administrative
agencies as are required in connection with the consummation of the
transactions contemplated by this Agreement.
(b)Confidentiality. In recognition of the confidential nature
of certain of the information which will be provided to each party
by the other, each of Parkdale, Unifi and UMI agrees to retain in
confidence, and to require its directors, officers, employees,
consultants, professional representatives and agents (collectively,
"Representatives") to retain in confidence all confidential
information transmitted or disclosed to it by the other, and
further agrees that it will not use for its own benefit and will
not use or disclose to any third party, or permit the use or
disclosure to any third party of, any confidential information
obtained from or revealed by the other, except that each of
Parkdale, Unifi and UMI may disclose the information to those of
its Representatives who need the information for the proper
performance of their assigned duties with respect to the
consummation of the transactions contemplated hereby. In making
such information available to its Representatives, each of
Parkdale, Unifi and UMI shall take any and all precautions
necessary to ensure that its Representatives use the information
only as permitted hereby. Notwithstanding anything to the contrary
in the foregoing provisions, such information may be disclosed (a)
where it is necessary to any regulatory authorities or governmental
agencies, (b) if it is required by court order or decree or
applicable law, (c) if it is ascertainable or obtained from public
or published information, (d) if it is received from a third party
not known to the recipient to be under an obligation to keep such
information confidential, or (e) if the recipient can demonstrate
that such information was in its possession prior to disclosure
thereof in connection with this Agreement. If any party shall be
required to make disclosure of any such information by operation of
law, such disclosing party shall give the other party prior notice
of the making of such disclosure and shall use all reasonable
efforts to afford such other party an opportunity to contest the
making of such disclosure. In the event that the Closing shall not
occur, each of Parkdale, Unifi and UMI shall immediately deliver,
or cause to be delivered, to the other (without retaining any
copies thereof) any and all documents, statements or other written
information obtained from the other that contain confidential
information.
(c)Employee Benefits. Parkdale, Unifi and UMI shall cause the
Company to adopt employee health and welfare benefit plans
effective as of the Effective Time which provide benefits that are
substantially equivalent to the benefits provided by Parkdale prior
to the Effective Time, and shall make such plans available to each
former employee of Parkdale, Unifi and UMI that is hired by the
Company.
(d)Transfer Taxes. Parkdale, Unifi and UMI shall pay or cause
to be paid all Taxes or recording fees imposed on any transfers by
each respective party of real property and tangible and intangible
personal property, including without limitation intellectual
property, applicable to the transfers of property contemplated by
this Agreement and all sales and use Taxes applicable to transfers
contemplated by this Agreement.
(e)Cooperation on Tax Matters. Parkdale, Unifi, UMI and the
Company shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with any return
preparation, audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon the
other party's request) the provision of records and information
which are reasonably relevant to any such return preparation,
audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
The Company and Parkdale, Unifi and UMI agree (i) to retain all
books and records which are relevant to the determination of the
tax liabilities pertinent to the parties until the expiration of
the applicable statute of limitations and to abide by all record
retention agreements entered into with any taxing authority, and
(ii) to give the other party reasonable written notice prior to
destroying or discarding any such books and records and, if the
other party so requests, allow the other party to take possession
of such books and records.
4.4 Noncompetition. In order to ensure to the Company the full
benefits of the Parkdale Assets, the Unifi Assets and the Business (which,
for purposes of this covenant, includes the manufacture and sale of spun
cotton and cotton/non-cotton blend yarn using open-end and air jet
technologies and any future improvements developed for exclusive application
to such manufacturing technologies) as conducted by Parkdale, Unifi and UMI,
Parkdale, Unifi and UMI and their respective affiliates hereby covenant and
agree that they will not in any manner, directly or indirectly, engage in the
Business anywhere within North America. This covenant shall be effective on
and from the date of this Agreement and (a) shall expire with respect to
Parkdale on the earliest to occur of the following: (i) the date the Company
ceases to be engaged in the Business, (ii) the date Unifi and UMI cease to
hold any ownership interest in the Company, or (iii) the date that is five
years following the date that Parkdale ceases to hold any ownership interest
in the Company, and (b) shall expire with respect to Unifi and UMI on the
earliest to occur of the following: (i) the date the Company ceases to be
engaged in the Business, (ii) the date Parkdale ceases to hold any ownership
interest in the Company, or (iii) the date that is five years following the
date that Unifi and UMI cease to hold any ownership interest in the Company.
Each of Parkdale, Unifi and UMI acknowledge that any breach of the covenants
of this Section 4.4 will result in irreparable damage and continuing injury
to the Company, and that, in the event of any such breach or threatened
breach by Parkdale, Unifi, or UMI, the Company shall be entitled, without
limiting any other remedies, to an injunction restraining the breaching party
from committing any such violation, and each of Parkdale, Unifi and UMI
hereby consent to the issuance of such injunction. In the event that any
provision of this Section 4.4 shall be determined by any court to be
unenforceable, this Section 4.4 shall be interpreted to extend over the
maximum time periods for which it may be enforceable and to the maximum
extent in any and all other respects as to which it may be enforceable, all
as shall be determined by such court.
4.5 Magnolia Assets. Following the Initial Closing and subject to all
consents, approvals, notices or filings required with respect to any third
party or any governmental or administrative authority, Parkdale and Unifi
shall cause the Company to purchase from Magnolia Manufacturing Company
("Magnolia") all the assets of Magnolia's air jet spinning business for a
price equal to 7.5 multiplied by the operating cash flow (defined as
operating income plus depreciation and amortization, determined in accordance
with generally accepted accounting principles) of Magnolia.
ARTICLE 5
CONDITIONS PRECEDENT TO PARKDALE'S OBLIGATIONS
5.1 Initial Closing. The obligations of Parkdale to consummate the
transactions contemplated by this Agreement to occur at the Initial Closing
are subject to the satisfaction of the following conditions on or before the
Initial Closing Date, unless specifically waived in writing by Parkdale prior
to the Initial Closing Date:
(a)Representations and Warranties. The representations and
warranties of Unifi and UMI contained in this Agreement shall have
been true and correct on the date of this Agreement and shall be
true and correct on the Initial Closing Date as though made on and
as of the Initial Closing Date.
(b)Compliance with Covenants. Each of Unifi and UMI shall have
duly performed and complied with all covenants, agreements and
obligations required by this Agreement to be performed or complied
with by it on or prior to the Initial Closing.
(c)Absence of Litigation. No action or proceeding shall be
pending by or before any court or other governmental body or agency
seeking to restrain, prohibit or invalidate the transactions
contemplated by this Agreement or which would materially adversely
affect the right of the Company to own, operate or control the
Parkdale Assets or Unifi Assets to be transferred on the Initial
Closing Date.
(d)Consents and Approvals. All Parkdale Required Consents and
Unifi Required Consents necessary for the transactions scheduled to
occur on the Initial Closing Date shall have been obtained.
(e)Legal Opinion. Parkdale shall have received from Xxxxxxx,
Xxxxxxx & Xxxxxx, L.L.P., counsel to Unifi and UMI, an opinion,
dated the Initial Closing Date, in the form of Exhibit A.
5.2 Subsequent Closing. The obligations of Parkdale to consummate the
transactions contemplated by this Agreement to occur at the Subsequent
Closing subject to the satisfaction of the following conditions on or before
the Subsequent Closing Date, unless specifically waived in writing by
Parkdale prior to the Subsequent Closing Date:
(a)Compliance with Covenants. Each of Unifi and UMI shall have
duly performed and complied with all covenants, agreements and
obligations required by this Agreement to be performed or complied
with by it on or prior to the Subsequent Closing.
(b)Absence of Litigation. No action or proceeding shall be
pending by or before any court or other governmental body seeking
to restrain, prohibit or invalidate the transactions contemplated
by this Agreement to occur on the Subsequent Closing Date or which
would materially adversely affect the right of the Company to own,
operate or control the Parkdale Assets or the Unifi Assets to be
transferred on the Subsequent Closing Date.
(c)Consents and Approvals. All Parkdale Required Consents and
Unifi Required Consents necessary for the transactions scheduled to
occur on the Subsequent Closing Date shall have been obtained.
(d)Subdivision. Parkdale shall have completed all steps
necessary to subdivide the Parkdale Real Property from any other
real property owned by Parkdale that is adjacent to the Parkdale
Real Property and not used in the operation of the manufacturing
plants located on the Parkdale Real Property.
(e)Title Insurance; Survey. The Company shall have obtained, at
its own expense, title insurance policies insuring good and
marketable title and fee simple absolute or leasehold title, as
applicable, to all of the Parkdale Real Property, the Unifi Owned
Real Property and the Unifi Leased Real Property, free and clear of
all title defects or objections, liens, claims, charges, security
interest or other encumbrances of any nature whatsoever, except
those that have been disclosed pursuant to this Agreement. Correct
surveys shall have been certified to the Company showing boundaries
of and the location of the Parkdale Real Property, the Unifi Owned
Real Property and the Unifi Leased Real Property, and the locations
of all Parkdale Improvements and the Unifi Improvements, and
showing no encroachment by such Improvements on property of others.
(f)Environmental Audit. Parkdale shall have caused, at its
sole option and at its expense, an independent environmental
consultant, chosen by Parkdale at its sole discretion, to inspect,
audit, and test the Unifi Assets for the existence of any and all
environmental conditions and any and all violations of
Environmental Laws, and to deliver a report describing the findings
and conclusions of the inspection (hereafter referred to as the
"Parkdale Environmental Assessment"). The scope, sequence and
timing of the Parkdale Environmental Assessment shall be at the
sole discretion and expense of Parkdale. The results of the
Parkdale Environmental Assessment shall be satisfactory in all
respects to Parkdale.
ARTICLE 6
CONDITIONS PRECEDENT TO UNIFI'S AND UMI'S OBLIGATIONS
6.1 Initial Closing. The obligations of Unifi and UMI to consummate
the transactions contemplated by this Agreement to occur at the Initial
Closing are subject to the satisfaction of the following conditions on or
before the Initial Closing Date, unless specifically waived in writing by
Unifi and UMI prior to the Initial Closing Date:
(a)Representations and Warranties. The representations and
warranties of Parkdale contained in this Agreement shall have been
true and correct on the date of this Agreement and shall be true
and correct on the Initial Closing Date as though made on and as of
the Initial Closing Date.
(b)Compliance with Covenants. Parkdale shall have duly
performed and complied with all covenants, agreements and
obligations required by this Agreement to be performed or complied
with by it on or prior to the Initial Closing.
(c)Absence of Litigation. No action or proceeding shall be
pending by or before any court or other governmental body or agency
seeking to restrain, prohibit or invalidate the transactions
contemplated by this Agreement or which would materially adversely
affect the right of the Company to own, operate or control the
Unifi Assets or the Parkdale Assets to be transferred on the
Initial Closing Date.
(d)Consents and Approvals. All Parkdale Required Consents and
Unifi Required Consents necessary for the transactions to occur on
the Initial Closing Date shall have been obtained.
(e)Legal Opinion. Unifi and UMI shall have received from
Womble, Carlyle, Xxxxxxxxx & Rice, PLLC, counsel to Parkdale, an
opinion, dated the Initial Closing Date, in the form of Exhibit B.
6.2 Subsequent Closing. The obligations of Unifi and UMI to
consummate the transactions contemplated by this Agreement to occur at the
Subsequent Closing subject to the satisfaction of the following conditions on
or before the Subsequent Closing Date, unless specifically waived in writing
by Unifi and UMI prior to the Subsequent Closing Date:
(a)Compliance with Covenants. Parkdale shall have duly
performed and complied with all covenants, agreements and
obligations required by this Agreement to be performed or complied
with by it on or prior to the Subsequent Closing.
(b)Absence of Litigation. No action or proceeding shall be
pending by or before any court or other governmental body seeking
to restrain, prohibit or invalidate the transactions contemplated
by this Agreement to occur on the Subsequent Closing Date or which
would materially adversely affect the right of the Company to own,
operate or control the Parkdale Assets or the Unifi Assets to be
transferred on the Subsequent Closing Date.
(c)Consents and Approvals. All Parkdale Required Consents and
Unifi Required Consents necessary for the transactions scheduled to
occur on the Subsequent Closing Date shall have been obtained.
(d)Title Insurance; Survey. The Company shall have obtained, at
its own expense, title insurance policies insuring good and
marketable title and fee simple absolute or leasehold title, as
applicable, to all of the Parkdale Real Property, the Unifi Owned
Real Property and the Unifi Leased Real Property, free and clear of
all title defects or objections, liens, claims, charges, security
interest or other encumbrances of any nature whatsoever, except
those that have been disclosed pursuant to this Agreement. Correct
surveys shall have been certified to the Company showing boundaries
of and the location of the Parkdale Real Property, the Unifi Owned
Real Property and the Unifi Leased Real Property, and the locations
of all Parkdale Improvements and the Unifi Improvements, and
showing no encroachment by such Improvements on property of others.
(e)Environmental Audit. Unifi and UMI shall have caused, at
their sole option and at their expense, an independent
environmental consultant, chosen by Unifi and UMI at their sole
discretion, to inspect, audit, and test the Parkdale Assets for the
existence of any and all environmental conditions and any and all
violations of Environmental Laws, and to deliver a report
describing the findings and conclusions of the inspection
(hereafter referred to as the "Unifi Environmental Assessment").
The scope, sequence and timing of the Unifi Environmental
Assessment shall be at the sole discretion and expense of Unifi.
The results of the Unifi Environmental Assessment shall be
satisfactory in all respects to Unifi.
ARTICLE 7
CLOSING
7.1 Initial Closing. The initial closing of the transactions
contemplated by this Agreement (the "Initial Closing") shall take place at
the offices of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, in Charlotte, North
Carolina, at 10:00 a.m., on June 30, 1997, or such other date as may be
mutually agreed upon by the parties hereto. The date of the Initial Closing
is referred to as the "Initial Closing Date". For the purposes of passage of
title and risk of loss, allocation of expenses, adjustments and other
economic or financial effects of the transactions contemplated hereby, the
Initial Closing when completed shall be deemed to have occurred at 12:01
a.m., local time, on the Initial Closing Date (the "Effective Time").
(a)Deliveries by Parkdale. At the Initial Closing, Parkdale
shall deliver or cause to be delivered to Unifi, UMI, and the
Company the following:
(i) A copy of all corporate resolutions authorizing the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated herein
accompanied by the certification of the Secretary of Parkdale
to the effect that such resolutions are in full force and
effect and have not been amended, modified or rescinded;
(ii) The legal opinion referred to in Section 6.1(e);
(iii) Evidence of that all Parkdale Required Consents
related to the transfer of the Parkdale Personal Property, the
Parkdale Inventory, the Parkdale Contracts and the Parkdale
Permits have been obtained or satisfied;
(iv) Bills of Sale, Assignments and such other
instruments of transfer as are necessary to convey to the
Company the Parkdale Personal Property, the Parkdale
Inventory, the Parkdale Contracts and the Parkdale Permits,
free and clear of all Liens;
(v) Noncompetition Covenants in the form of Exhibit C
executed and delivered by W. Xxxx Xxxxxxxx and Xxxxxxxx X.
Xxxxxxx; and
(vi) A lease agreement, in form and substance
satisfactory to Unifi, UMI and the Company, leasing the
Parkdale Owned Real Property to the Company.
(b)Deliveries by Unifi and UMI. At the Initial Closing, Unifi
and UMI shall deliver or cause to be delivered to Parkdale and the
Company the following:
(i) A copy of all corporate resolutions authorizing the
execution, delivery and performance of this Agreement by Unifi
and UMI, and the consummation of the transactions contemplated
herein, accompanied by the certification of the Secretaries of
Unifi and UMI to the effect that such resolutions are in full
force and effect and have not been amended, modified or
rescinded;
(ii) The legal opinion referred to in Section 5.1(e);
(iii) Evidence of that all Unifi Required Consents related
to the transfer of the Unifi Personal Property, the Unifi
Inventory, the Unifi Contracts and the Unifi Permits have been
obtained or satisfied;
(iv) Bills of Sale, Assignments and such other
instruments of transfer as are necessary to convey to the
Company the Unifi Personal Property, the Unifi Inventory, the
Unifi Contracts and the Unifi Permits, free and clear of all
Liens;
(v) A wire transfer to the Company of cash in the amount
determined pursuant to Section 1.7 above;
(vi) Noncompetition Covenants in the form of Exhibit C
executed and delivered by G. Xxxxx Xxxxxx, XX and Xxxxxxx X.
Xxxxxxx;
(vii) A sublease, in form and substance satisfactory to
Parkdale and the Company, subleasing the Unifi Leased Real
Property to the Company; and
(viii) A lease agreement, in form and substance
satisfactory to Parkdale and the Company, leasing the Unifi
Owned Real Property to the Company.
7.2 Subsequent Closing. The Subsequent Closing of the transaction
contemplated by this Contribution Agreement (the ``Subsequent Closing'')
shall take place at the offices of Womble, Carlyle, Xxxxxxxxx & Rice, PLLC,
in Charlotte, North Carolina, at 10:00 a.m. on or before the tenth business
day following the satisfaction of all conditions set forth in Sections 5.2
and 6.2 above, or such other date as may be mutually agreed upon by the
parties. The date of the Subsequent Closing is referred to as the
``Subsequent Closing Date.''
(a)Deliveries by Parkdale. At the Subsequent Closing, Parkdale
shall deliver or cause to be delivered to Unifi, UMI and the
Company the following:
(i) A warranty deed or deeds transferring fee simple title to
the Parkdale Real Property to the Company;
(ii) Evidence that all Parkdale Required Consents related
to the transfer of the Parkdale Real Property and the Parkdale
Improvements have been obtained or satisfied.
(b)Deliveries by Unifi and UMI. At the Subsequent Closing,
Unifi and UMI shall deliver or cause to be delivered to Parkdale
and the Company the following:
(i) A warranty deed or deeds transferring fee simple title to
the Unifi Owned Real Property to the Company;
(ii) Assignments transferring Unifi's and UMI's leasehold
interests in the Unifi Real Property Leases to the Company;
and
(iii) Evidence that Unifi Required Consents related to the
transfer of the Unifi Owned Real Property, the Unifi Leased
Real Property and the Unifi Improvements have been obtained or
satisfied.
7.3 Further Assurances. Parkdale, Unifi and UMI shall, at any time on
or after the Initial Closing Date and the subsequent Closing Dates, take any
and all steps requested by the other to place the Company in possession and
operating control of the Parkdale Assets and the Unifi Assets, and will do,
execute, acknowledge and deliver all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be required
for the more effective transfer to and reduction to possession of the
Company, or its successors or assigns, of any of the Assets.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by Parkdale. Parkdale shall indemnify, defend and
hold harmless Unifi, UMI, and the Company from, against, and with respect to
any and all action or cause of action, loss, damage (including without
limitation all foreseeable and unforeseeable consequential damages), claim,
obligation, liability, penalty, fine, cost and expense (including without
limitation reasonable attorneys' and consultants' fees and costs and expenses
incurred in investigating, preparing, defending against or prosecuting any
litigation, claim, proceeding, demand or request for action by any
governmental or administrative entity), of any kind or character (a "Loss")
arising out of or in connection with any of the following:
(a)any breach of any of the representations or warranties of
Parkdale contained in or made pursuant to this Agreement;
(b)any failure by Parkdale to perform or observe, or to have
performed or observed, in full, any covenant, agreement or
condition to be performed or observed by it pursuant to this
Agreement;
(c)any and all liabilities and obligations of Parkdale, of any
kind or nature whatsoever, whether accrued, absolute, contingent or
otherwise, known or unknown, except for obligations under the
Parkdale Contracts arising on or after the Closing;
(d)Parkdale's ownership and operation of Parkdale Assets prior
to the Effective Time, including any and all liabilities under the
Parkdale Contracts which relate to events occurring prior to the
Effective Time; or
(e)noncompliance by Parkdale with the provisions of the North
Carolina bulk sales laws (if applicable).
8.2 Indemnification by Unifi and UMI. Unifi and UMI shall jointly and
severally indemnify, defend and hold harmless Parkdale and the Company from,
against and with respect to any Loss arising out of or in connection with any
of the following:
(a)any breach of any of the representations and warranties of
Unifi and UMI contained in or made pursuant to this Agreement;
(b)any failure by Unifi or UMI to perform or observe, or to have
performed or observed, in full, any covenant, agreement or
condition to be performed or observed by it pursuant to this
Agreement;
(c)any and all liabilities and obligations of Unifi and UMI, of
any kind or nature whatsoever, whether accrued, absolute,
contingent or otherwise, known or unknown, except for obligations
under the Unifi Contracts arising on or after the Closing;
(d)Unifi's and UMI's ownership and operation of the Unifi Assets
prior to the, including any and all liabilities under the Unifi
Contracts which relate to events occurring prior to the Effective
Time; or
(e)noncompliance by Unifi or UMI with the provisions of the
North Carolina bulk sales laws (if applicable).
8.3 Notice of Claim. Any party seeking to be indemnified hereunder
(the "Indemnified Party") shall, within 15 days following discovery of the
matters giving rise to a Loss, notify the party from whom indemnity is
sought (the "Indemnity Obligor") in writing of any claim for recovery,
specifying in reasonable detail the nature of the Loss and the amount of the
liability estimated to arise therefrom. The Indemnified Party shall provide
to the Indemnity Obligor as promptly as practicable thereafter all
information and documentation reasonably requested by the Indemnity Obligor
to verify the claim asserted.
8.4 Defense. If the facts pertaining to a Loss arise out of the claim
of any third party, or if there is any claim against a third party available
by virtue of the circumstances of the Loss, the Indemnity Obligor may, by
giving written notice to the Indemnified Party within 15 days following its
receipt of the notice of such claim, elect to assume the defense or the
prosecution thereof, including the employment of counsel or accountants at
its cost and expense; provided, however, that during the interim the
Indemnified Party shall use its best efforts to take all action (not
including settlement) reasonably necessary to protect against further damage
or loss with respect to the Loss. The Indemnified Party shall have the right
to employ counsel separate from counsel employed by the Indemnity Obligor in
any such action and to participate therein, but the fees and expenses of such
counsel shall be at the Indemnified Party's own expense. Whether or not the
Indemnity Obligor chooses so to defend or prosecute such claim, all the
parties hereto shall cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony and shall attend such
conferences, discovery proceedings and trials as may be reasonably requested
in connection therewith. The Indemnity Obligor shall not be liable for any
settlement of any such claim effected without its prior written consent,
which shall not be unreasonably withheld.
8.5 Loss to the Company. In the event of a Loss to the Company
resulting in the expenditure of funds by the Company or a write-down in the
fair market value of any Parkdale Asset or Unifi Asset contributed to the
Company hereunder, the following shall apply: first, the Capital Account (as
defined in the Company Operating Agreement) of the defaulting party shall be
decreased by the amount of the Loss, and second, the Company may require, at
its option, that the defaulting party either (i) contribute cash to the
Company in an amount equal to the Loss, or (ii) take such action as necessary
to restore the value of the Parkdale Asset or the Unifi Asset, as applicable.
8.6 Other Remedies. The foregoing indemnification provisions are in
addition to, and not in derogation of, any statutory, equitable or common law
remedy any party may have as a result of a Loss.
ARTICLE 9
TERMINATION
9.1 Termination. This Agreement may be terminated at any time prior to
the Subsequent Closing:
(a)By the mutual written consent of Parkdale and Unifi; or
(b)By either Parkdale or Unifi, if there shall be any order,
writ, injunction or decree of any court or governmental or
regulatory agency binding on Parkdale, Unifi or UMI which prohibits
or restrains Parkdale, Unifi, UMI or the Company from consummating
the transactions contemplated hereby; or
9.2 Effect on Obligations. Termination of this Agreement pursuant to
this Article 9 shall terminate all obligation of the parties under this
Agreement, except for the obligations under Section 10.3 (with respect to
expenses), Section 10.4 (with respect to publicity) and Section 4.3(b) (with
respect to confidentiality). Any such termination pursuant to this Article 9
shall be a dissolution event under Article XV of the Company Operating
Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations. All representations and warranties of
the parties hereto contained in this Agreement or otherwise made in writing
in connection with the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the Closing hereunder.
10.2 Bulk Sales. The parties agree to waive the requirements, if any,
of all applicable bulk sales laws.
10.3 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expense, whether or not the transactions contemplated hereby
are consummated.
10.4 Publicity. Each of Parkdale, Unifi and UMI agrees it will not make
any press releases or other announcements prior to the Closing with respect
to the transactions contemplated hereby, except as required by applicable
law, without the prior approval of the other party.
10.5 Best Efforts. Each party hereto agrees to use its best efforts to
satisfy the conditions to the Initial Closing and the Subsequent Closing set
forth in this Agreement and otherwise to consummate the transactions
contemplated by this Agreement.
10.6 Notices. All notices, demands and other communications made
hereunder shall be in writing and shall be given either by personal delivery,
by nationally recognized overnight courier (with charges prepaid) or by
telecopy (with telephone confirmation), and shall be deemed to have been
given or made when personally delivered, the day following the date deposited
with such overnight courier service or when transmitted to telecopy machine
and confirmed by telephone, addressed to the respective parties at the
following addresses (or such other address for a party as shall be specified
by like notice):
If to Parkdale:
Parkdale Xxxxx, Incorporated
0000 X. Xxxxxxxx Xxxxxxxxx
P. O. Drawer 1787
Gastonia, NC 28053-1787
Attention: Xxxxxxxx X. Xxxxxxx, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy (which shall not constitute notice) to:
Womble, Carlyle, Xxxxxxxxx & Rice, PLLC
3300 One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: J. Xxxxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Unifi or UMI:
Unifi, Inc.
0000 X. Xxxxxxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Vice President
and Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
Xxxxxxxxxxxx Xxxxxxxx, Xxxxx 000
P. O. Drawer 1559
Xxxxxxxxxx, XX 00000
Attention: C. Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxx XxXxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
10.7 Governing Law. This Agreement shall be governed by the laws of the
State of North Carolina applicable to agreements made and to be performed
entirely within such state.
10.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interest or
obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of all other parties hereto, and any purported
assignment without such consent shall be void.
10.10 Third Party Beneficiaries. None of the provisions of this
Agreement or any document contemplated hereby is intended to grant any right
or benefit to any person or entity which is not a party to this Agreement.
10.11 Headings. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of this
Agreement and shall not in any way affect the meaning or interpretation of
this Agreement.
10.12 Amendments. Any waiver, amendment, modification or supplement
of or to any term or condition of this Agreement shall be effective only if
in writing and signed by all parties hereto, and the parties hereto waive the
right to amend the provisions of this Section orally.
10.13 Specific Performance.
(a)Parkdale acknowledges that the Parkdale Assets are unique and
that if Parkdale fails to consummate the transactions contemplated
by this Agreement such failure will cause irreparable harm to Unifi
and UMI for which there will be no adequate remedy at law. Unifi
and UMI shall be entitled, in addition to its other remedies at law
or at equity, to specific performance of this Agreement if Parkdale
shall, without cause, refuse to consummate the transactions
contemplated by this Agreement; and
(b)Each of Unifi and UMI acknowledges that the Unifi Assets are
unique and that if Unifi or UMI fails to consummate the
transactions contemplated by this Agreement such failure will cause
irreparable harm to Parkdale for which there will be no adequate
remedy at law. Parkdale shall be entitled, in addition to its
other remedies at law or at equity, to specific performance of this
Agreement if Unifi or UMI shall, without cause, refuse to
consummate the transactions contemplated by this Agreement.
10.14 Severability. In the event that any provision in this
Agreement shall be determined to be invalid, illegal or unenforceable in any
respect, the remaining provisions of this Agreement shall not be in any way
impaired, and the illegal, invalid or unenforceable provision shall be fully
severed from this Agreement and there shall be automatically added in lieu
thereof a provision as similar in terms and intent to such severed provision
as may be legal, valid and enforceable.
10.15 Entire Agreement. This Agreement and the Schedules and
Exhibits hereto constitute the entire contract between the parties hereto
pertaining to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings between the parties with
respect to such subject matter, including (without limitation) the letter of
intent dated June 16, 1997, which are hereby expressly terminated.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed by its duly authorized officer as of the date first above
written.
PARKDALE XXXXX, INCORPORATED
By: XXXXXXXX X. XXXXXXX
Xxxxxxxx X. Xxxxxxx, President
UNIFI, INC.
By: XXXXXX X. XXXXX, III
Xxxxxx X. Xxxxx, III
Vice President and
Chief Financial Officer
UNIFI MANUFACTURING, INC.
By: XXXXXX X. XXXXX, III
Xxxxxx X. Xxxxx, III
Vice President and
Chief Financial Officer
PARKDALE AMERICA, LLC
By: XXXXXXXX X. XXXXXXX
Xxxxxxxx X. Xxxxxxx, President
