Exhibit 2(h)
Agreement
THIS AGREEMENT, dated as of the 8th day of September, 1995, between
TEXFI INDUSTRIES, INC., a Delaware corporation ("Texfi") and DECOTECH, L.C., a
South Carolina limited liability company ("Decotech").
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, 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, as of the date hereof, Decotech has not paid the Overdue
Payment to Texfi;
WHEREAS, the parties agree that the amount of $330,388.23 is owed by
Texfi to Decotech pursuant to the provisions of the Purchase Agreement
($242,687.00 for the post-closing adjustment to the purchase price based upon
the inventory valuation and $87,701.23 for vacation pay and other
adjustments)(the "Purchase Agreement Payment");
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 enter into this Agreement and to transfer the Promissory
Note to Deco General Partnership, a South Carolina general partnership
consisting of certain of the members of Decotech ("Deco"), pursuant to the terms
and conditions of that Note Purchase Agreement of even date herewith among
Texfi, Decotech and Deco (the "Note Purchase Agreement");
WHEREAS, Decotech and Texfi desire for Texfi to offset the Purchase
Agreement Payment against the Overdue Payment;
WHEREAS, it is the desire of Texfi and Decotech fully and finally to
settle and resolve all disputes and differences which exist or may exist between
them, known or unknown,
including, without limitation, claims arising out of the Purchase Agreement and
the transactions contemplated thereby and related thereto;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained and the transfer of the Promissory Note to Deco pursuant to the
terms and conditions of that Note Purchase Agreement, the parties hereto hereby
agree as follows:
1. Texfi hereby offsets the Purchase Agreement Payment against the
Overdue Amount as full and final payment of the Purchase Agreement Payment and
acknowledges the amount of the setoff as partial payment of the Overdue Amount.
Decotech hereby acknowledges and consents to the setoff of the Purchase
Agreement Payment against the Overdue Amount. Decotech agrees that (i) the
portion of the Overdue Payment equal to the difference between the Overdue
Payment and the Purchase Agreement Amount (the "Outstanding Overdue Payment")
remains outstanding under the Promissory Note and (ii) except for a reduction of
the Overdue Payment by an amount equal to the Purchase Agreement Payment,
nothing in this Agreement constitutes or shall be deemed to constitute a waiver
of any of Texfi's rights under the Promissory Note and the Promissory Note
remains in full force and effect unchanged.
2. Except for the Continuing Texfi Claims (as hereafter defined), Texfi
hereby fully releases and forever discharges Decotech from any and all rights,
claims, demands, damages, actions, causes of action, costs, expenses, and suits
at law or in equity, known or unknown, fixed or contingent, that Texfi has or
may have against Decotech, at this time, at any time heretofore or at any time
hereafter, based upon, relating to or arising from any event, act or omission
whatsoever which occurred prior to the date hereof, including, without
limitation, claims based upon or arising out of the Purchase Agreement or the
consummation of the transactions contemplated thereby. Except with respect to
the Continuing Texfi Claims, Texfi covenants and agrees that it has not nor will
it hereafter commence, maintain, or assert any right or claim of any nature, or
prosecute any action or proceeding at law or otherwise, against Decotech for
damages or loss of any kind or amount or for any other legal or equitable relief
based upon, relating to or arising from any event, act or omission that occurred
prior to the date hereof based upon or arising out of the Purchase Agreement or
the consummation of the transactions contemplated thereby. As used in this
Agreement, the term "Continuing Texfi Claims" shall be defined as all rights,
claims, demands, damages, actions, causes of action, costs, expenses, and suits
at law or in equity, known or unknown, fixed or contingent, that Texfi has or
may have against Decotech, at this time, at any time heretofore or at any time
hereafter, based upon, relating to or arising from the Promissory Note (except
for the reduction of the Overdue Payment as provided in Section 1 hereof), that
Assignment of Lease among Texfi, Decotech and Etowah Warehouse, Inc. dated March
31, 1995, that Assignment of Sublease among Texfi, Decotech and Xxx River, Inc.
dated March 31, 1995, those Equipment Subleases between Texfi and Decotech dated
March 31, 1995 with respect to certain equipment leased by Texfi from Pitney
Xxxxx Credit Corporation, Xxxx Xxxxxxx Leasing Corporation and First American
National Bank, respectively, and Section 8.5 of the Purchase Agreement [Xxxx and
Hold Inventory].
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3. Decotech hereby fully releases and forever discharges Texfi from any
and all rights, claims, demands, damages, actions, causes of action, costs,
expenses, and suits at law or in equity, known or unknown, fixed or contingent,
that Decotech has or may have against Texfi, at this time, at any time
heretofore or at any time hereafter, based upon, relating to or arising from any
event, act or omission whatsoever that occurred prior to the date hereof,
including, without limitation, claims based upon or arising out of the Purchase
Agreement or the consummation of the transactions contemplated thereby. Decotech
covenants and agrees that it has not nor will it hereafter commence, maintain,
or assert any right or claim of any nature, or prosecute any action or
proceeding at law or otherwise, against Texfi for damages or loss of any kind or
amount or for any other legal or equitable relief based upon, relating to or
arising from any event, act or omission which occurred prior to the date hereof
based upon or arising out of the Purchase Agreement or the consummation of the
transactions contemplated thereby.
4. Except with respect to the Continuing Texfi Claims, it is the
intention of the parties that this Agreement and the releases contained herein
shall constitute a full and final accord and satisfaction of all claims that the
parties may have or hereafter be deemed to have against the other arising from
events, acts or omissions that occurred prior to the date hereof. In furtherance
of this intention, each party expressly waives any statutory or common law
provision that would otherwise prevent this release from extending to claims
other than the Texfi Continuing Claims that are not currently known or suspected
to exist in any party's favor at the time of executing the release and which if
known by that party, might have materially affected his or its settlement as
provided for hereunder.
5. Decotech hereby warrants and represents to Texfi that (i) it is duly
organized and has full power and authority to enter into this Agreement and the
Note Purchase Agreement, (ii) all action required to be taken to authorize the
execution, delivery and performance by Decotech has been taken, (iii) Management
Advisory Services, Inc. is the duly appointed Manager of Decotech with full
authority to execute this Agreement and the Note Purchase Agreement on its
behalf, (iv) entering into this Agreement and the performance thereof by
Decotech will not violate Decotech's organization documents, any agreement,
judgment or other instrument to which it is a party or by which it is bound, and
(v) BNY Financial Corporation, Decotech's principal lender, has consented to the
transactions contemplated by this Agreement.
6. This Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of the parties hereto.
7. 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
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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.
8. 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
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