SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
TO
SCHEDULE 13D
----------
Under the Securities Exchange Act of 1934
TEXFI INDUSTRIES, INC.
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
882895 10 5
(CUSIP Number)
William L. Remley, President
Chadbourne Corporation
1430 Broadway
Suite 1300
New York, New York 10018
(212) 391-1392
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 2, 1996
(Date of Event which Requires Filing
of this Statement)
Check the following box if a fee is being paid with this Statement: [ ]
Exhibit Index is on page 10.
<PAGE>
CUSIP No. 882895 10 5 13D Page 2 of 28 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chadbourne Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,977,700
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,977,700
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,977,700
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 882895 10 5 13D Page 3 of 28 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Halton House Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,977,700
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,977,700
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,977,700
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 882895 10 5 13D Page 4 of 28 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Halton Declaration of Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,977,700
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,977,700
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,977,700
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 882895 10 5 13D Page 5 of 28 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bahamas Protectors, Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,977,700
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,977,700
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,977,700
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
<PAGE>
Item 1. Security and Issuer.
This Amendment No. 4, filed jointly by Chadbourne Corporation
("Chadbourne"), Halton House Ltd. ("Halton Ltd."), The Halton Declaration of
Trust ("Halton Trust"), and Bahamas Protectors, Ltd. ("Bahamas Protectors"),
amends and supplements the statement on Schedule 13D, as previously amended
(this "Schedule"), filed jointly by Chadbourne, Halton Ltd., Halton Trust and
Bahamas Protectors relating to shares of Common Stock, par value $1.00 per share
(the "Common Stock"), of Texfi Industries, Inc. (the "Issuer"). Any capitalized
term used without definition shall have the same meaning previously ascribed to
it in this Schedule.
Item 2. Identity and Background.
The principal office of Chadbourne is 1430 Broadway, Suite 1300, New York,
New York 10018.
Item 3. Source and Amount of Funds or Other Consideration.
The purchases of Common Stock by Chadbourne reported in Item 5(c) of this
Amendment No. 4 have required the expenditure of approximately $125,000 from
cash on hand and $599,000 from borrowed funds. Chadbourne has borrowed the funds
expended in such purchases from Trinity Investment Corp. ("Trinity") pursuant to
an arrangement, described in Item 6 of this Amendment No. 4, under which Trinity
agreed to loan, in its discretion, up to $1 million to Chadbourne, the repayment
of which is secured by securities held in a designated brokerage account of
Chadbourne, including the shares of Common Stock purchased by Chadbourne with
such funds.
Item 5. Interest in Securities of the Issuer.
(a)-(b) As of the close of business on October 2, 1996, Chadbourne may be
deemed to be the beneficial owner of 1,977,700 shares of Common Stock, including
600,000 shares underlying the Option. Such 1,977,700 shares constitute 22.6% of
the shares of Common Stock outstanding (based on 8,740,000 shares of Common
Stock reported to be outstanding as of October 2, 1996, in Bloomberg Business
News), as well as shares underlying the Option. Halton Ltd., by virtue of its
ownership of Chadbourne, Halton Trust, by virtue of its ownership of Halton
Ltd., and Bahamas Protectors, by virtue of its powers as protector of Halton
Trust, each may be deemed to have the power to vote and dispose of the shares of
Common Stock beneficially owned by Chadbourne.
- 6 -
<PAGE>
(c) Since August 23, 1996, Chadbourne effected purchases of Common Stock in
open-market transactions, as follows:
Date of trade Shares acquired Price per share*
------------- --------------- ----------------
8/23/96 -
8/28/96 70,600 $2.375
9/3/96 -
9/12/96 111,200 $2.50 - $2.875
9/16/96 -
9/24/96 45,000 $2.75 - $2.875
9/26/96 -
10/2/96 40,600 $2.75 - $3.00
* Such prices are net of brokerage commissions.
Except as provided in the foregoing table with respect to Chadbourne, none
of the Reporting Persons have effected any transaction in the Common Stock
within the 60 days preceding the date of this Amendment No. 4.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Trinity has agreed to loan up to $1 million, in its discretion to
Chadbourne, pursuant to the terms of a Loan and Security Agreement dated as of
August 1, 1996 by and between Trinity and Chadbourne, a copy of which is
attached as Exhibit 4.1 hereto and incorporated by reference. Under such Loan
and Security Agreement, an aggregate of approximately $599,000 has been advanced
to Chadbourne to fund the purchases of Common Stock described in Item 5(c) of
this Amendment No. 4. Under the terms of such Loan and Security Agreement,
interest only is due on July 31 of each year and the balance of indebtedness is
due July 31, 2002. Repayment by Chadbourne of such funds and interest thereon is
secured by all securities held in a brokerage account of Chadbourne at Smith
Barney, Inc., including all shares of Common Stock purchased by Chadbourne with
such borrowed funds.
- 7 -
<PAGE>
Item 7. Materials to be Filed as Exhibits.
Exhibit Description
- ------- -----------
4.0 Joint filing agreement.
4.1 Loan and Security Agreement dated as of August 1, 1996 by and
between Trinity Investment Corp. and Chadbourne Corporation.
- 8 -
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned hereby certifies that the information set forth in
this amendment is true, complete and correct.
Dated: October 3, 1996
CHADBOURNE CORPORATION
By: William L. Remley, President
HALTON HOUSE LTD.
By: William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: Bahamas Protectors, Ltd., as
Protector of The Halton
Declaration of Trust
- 9 -
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
4.0 Joint filing agreement. 11
4.1 Loan and Security Agreement dated as of
August 1, 1996 by and between Trinity
Investment Corp. and Chadbourne
Corporation. 12
- 10 -
EXHIBIT 4.0
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934,
as amended, the undersigned hereby agree to the joint filing on behalf of each
of them of this Amendment No. 4 to Schedule 13D with respect to the Common
Stock, par value $1.00 per share, of Texfi Industries, Inc. and that this
agreement shall be included as an exhibit to such joint filing.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing
Agreement as of October 3, 1996.
CHADBOURNE INVESTMENT CORP.
By: William L. Remley, President
HALTON HOUSE LTD.
By: William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: Bahamas Protectors, Ltd., as
Protector of The Halton
Declaration of Trust
- 11 -
EXHIBIT 4.1
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made and entered
into effective for all purposes and all respects as of the 1st day of August,
1996 by CHADBOURNE CORPORATION, a Delaware corporation, whose address is 1430
Broadway, 13th Floor, New York, New York 10018 ("Pledgor"), and TRINITY
INVESTMENT CORP., a Delaware corporation, whose address is 1430 Broadway, 13th
Floor, New York, New York 10018 ("Secured Party").
WHEREAS, Secured Party has indicated to Pledgor that it may consider
loaning in the future, in its sole and absolute discretion, funds to Pledgor, up
to a maximum aggregate amount of One Million Dollars ($1,000,000.00), pursuant
to the form of Promissory Note (Line of Credit) attached hereto as Exhibit A and
made a part hereof (such form, as executed, and/or any renewal, replacement,
substitution thereto, as any of the foregoing may be amended from time to time,
shall hereinafter be referred to as the "Credit Note"), subject to the terms and
conditions hereinafter set forth, for the purpose of acquiring in the future
from time to time shares of Common Stock of Texfi Industries, Inc. (such shares
and/or the stock certificate(s) representing such shares shall hereinafter be
referred to as the"Stock"), a Delaware corporation ("Texfi"), or for such other
investment activities as Secured Party shall approve from time to time;
WHEREAS, as a material inducement to Secured Party to make (or otherwise
consider making) such loans to Pledgor hereunder and as collateral for the
payment of principal, interest and other sums due under such loans, Pledgor has
agreed to grant Secured Party a security interest in and to the Stock.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Indebtedness.
(a) At any time or from time to time prior to July 31, 2002, Secured Party
agrees to consider loaning, in its sole and absolute discretion, funds to
Pledgor, up to a maximum aggregate amount of One Million Dollars
($1,000,000.00), subject to the provisions provided herein (any such funds
advanced or readvanced hereunder being hereinafter referred to collectively as
the "Indebtedness").
(b) Nothing herein shall grant to Pledgor (or any other party) any right to
demand Secured Party to make any loans hereunder, and it is expressly understood
and agreed that Secured Party has the sole and absolute discretion to decide
whether or not to advance any funds pursuant to this Agreement and can
unilaterally impose any condition or requirement not stated in this Agreement as
an additional condition for making any such loans.
<PAGE>
(c) It is understood and agreed that, as funds are advanced from time to
time to Pledgor by Secured Party, such Indebtedness shall be evidenced by the
Credit Note payable to Secured Party and secured by the "Collateral" (as defined
below).
2. Grant of Security Interests.
(a) Pledgor hereby grants, pledges, assigns and transfers unto Secured
Party a security interest in and to all of Pledgor's right, title and interest
in and to the Stock (including, but not limited to, Pledgor's account numbered
376-181-40 at Smith Barney ("Smith Barney"), whose business address is 1776 Eye
Street, N.W., Suite 900, Washington, D.C. 20006, or any subsequent account
wherein the Stock is held for the account of Pledgor), together with all right,
title and interest of Pledgor in and to any proceeds, increases, substitutions,
replacements, additions and accessions thereof and thereto (hereinafter
collectively referred to as the "Collateral").
(b) As additional security for the payment of principal, interest and other
sums due under the Credit Note, the Collateral is hereby absolutely,
unconditionally and irrevocably granted, pledged and assigned to Secured Party.
(c) In furtherance of and not in limitation of the foregoing, any and all
income, proceeds and/or distributions with respect to the Stock and/or the
Collateral shall be immediately paid over to Secured Party upon receipt by
Pledgor and, in connection therewith, Secured Party shall have the right to
instruct the respective payor thereunder to make any and all such payments
directly to Secured Party until the Indebtedness (including, any and all
interest, fees and expenses) is repaid in full.
(d) Pledgor hereby covenants and agrees that, upon the acquisition of any
Stock, Pledgor shall immediately (i) provide the Secured Party with written
notice of such acquisition and (ii) deliver or cause to be delivered to Secured
Party (A) (1) possessions of the Stock and (2) a duly executed Collateral
Assignment Separate From Certificate (Stock Power) in the form attached hereto
as Exhibit B and made a part hereof, and/or (B) any pledge, escrow or other
security agreement which is satisfactory to Secured Party and, if necessary,
entered into by Smith Barney [or any other subsequent holder of the Stock for
Pledgor's account (such holder being hereinafter referred to as "Broker")], if
it appears necessary or advisable in the opinion of Secured Party to establish,
maintain and/or continuously perfect a valid and enforceable first priority
security interest in the Stock (it being understood, however, that any such
delivery shall be deemed to have been made and be effective immediately upon
Pledgor's acquisition of the Stock, directly or by and through Broker, which
Stock shall be deemed to be held in constructive trust by Pledgor (or such
Broker, as the case may be) for the benefit of Secured Party until such
possession and/or delivery actually occurs); provided, however, that, no such
pledge of the Stock hereunder shall be deemed to have accrued or be deemed
effective until such Stock has been acquired by Pledgor.
2
<PAGE>
3. Pledgor's Representations, Warranties and Covenants. Pledgor represents,
warrants and covenants, which representations, warranties, and covenants shall
survive execution and delivery of this Agreement, as follows:
(a) Use of Proceeds. Pledgor shall use the Indebtedness solely for the
purpose of, and to the fullest extent necessary to, acquire the Stock.
(b) Enforceability; Priority. Pledgor is the legal and beneficial
owner of the Collateral and has the full, absolute and entire right, power
and authority to execute and deliver this Agreement and to grant the
security interest in the Collateral hereunder. The security interest
granted to Secured Party hereunder in and to the Collateral constitutes a
valid and enforceable first priority security interest therein and is
subject to no mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority
or other security agreement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC
of any jurisdiction, or any other similar recording or notice statute, and
any lease having substantially the same effect as any of the foregoing)
(the "Liens") that have been created by or are arising through Pledgor,
except for the Liens expressly set forth in this Agreement. Secured Party
is entitled to all the rights, priorities, benefits and remedies of a
secured party afforded by the Uniform Commercial Code of the State of New
York or any other applicable jurisdiction (the "UCC").
(c) No Liens. Except for the Liens expressly set forth in this
Agreement, Pledgor shall not grant to any individual, partnership, joint
venture, firm, corporation, association, trust, or other enterprise or any
government or political subdivision or any agency, department, or
instrumentality thereof (a "Person") any lien or otherwise pledge or
encumber the Collateral, nor shall Pledgor sell, assign, transfer or
otherwise dispose of the Collateral, without the express written consent of
Secured Party exercised in its sole discretion.
(d) Further Actions. Pledgor agrees, at its sole cost and expense, to
acknowledge, execute and deliver to Secured Party and, if appropriate,
record such financing statements and such other instruments, documents
and/or notices as Secured Party may from time to time reasonably request or
as are necessary in the opinion of Secured Party to establish, maintain
and/or continuously perfect a valid and enforceable security interest in
the Collateral as provided herein and the other rights and security
contemplated herein [including, but not limited to, any pledge, escrow or
other security agreement which is satisfactory to Secured Party and entered
into by Broker (or any other subsequent holder of the Stock for Pledgor's
account)] all in accordance with the UCC and all other applicable laws as
enacted in any and all relevant jurisdictions or any other relevant law.
Pledgor will pay any applicable filing fees and related expenses.
3
<PAGE>
(e) Attorney-in-Fact. So long as this Agreement remains in existence,
Secured Party is absolutely, irrevocably and unconditionally constituted
and appointed the true and lawful attorney-in-fact, in Pledgor's name or
otherwise, to pursue and enforce all and any rights of Pledgor in and to
the Collateral, such power of attorney being coupled with an interest so
long as this Agreement shall remain in effect.
(f) Absolute Rights. This Agreement shall be construed as absolute,
continuing and unlimited with respect to the covenants, conditions and
obligations contained herein, without regard to regularity, validity,
enforceability or any change, modification or amendment of any liability or
obligation of Secured Party. Further, Secured Party may exercise its rights
with respect to the Collateral without any necessity on its part or on the
part of the holder of any obligation secured hereby first to realize upon
or enforce any of the security now or hereafter held for any such
obligation, and Pledgor hereby waives (i) any right to require Secured
Party to proceed against any person or to pursue any other remedy and (ii)
all suretyship defenses or other defenses in the nature thereof.
4. Events of Default. The following shall constitute Events of Default
under this Agreement:
(a) Pledgor shall fail to pay to Secured Party any amount due Secured
Party under any term or provision of the Credit Note which has not been
cured within ten (10) days after written notice to Pledgor of such default;
(b) any representation, warranty or statement made by Pledgor herein
or in any certificate delivered pursuant hereto shall prove to be untrue in
any material respect on the date as of which made or being made which has
not been (or cannot be) cured within ten (10) days after written notice to
Pledgor of such breach;
(c) Pledgor shall default in the performance or observance by it of
any other term, covenant or agreement contained in this Agreement, the
Credit Note or any other document executed in connection herewith or
otherwise securing the Indebtedness, and the same is not cured within ten
(10) days after written notice of such default is given to Pledgor or, with
respect to any default which cannot be reasonably cured within ten (10)
days, if Pledgor fails to proceed within ten (10) days to commence curing
such default and thereafter to proceed with all due diligence to
substantially cure such default within forty-five (45) days thereafter; or
(d) Pledgor shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or
an involuntary case is commenced against Pledgor and the petition is not
controverted within ten (10) days, or is not dismissed within sixty (60)
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially
4
<PAGE>
all of the property of Pledgor, or Pledgor commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency, or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Pledgor, or
there is commenced against Pledgor any such proceeding which remains
undismissed for a period of sixty (60) days, or Pledgor is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or Pledgor suffers any appointment of a
custodian or the like for it or any substantial part of its properties to
continue undischarged or unstayed for a period of sixty (60) days; or
Pledgor makes a general assignment for the benefit of creditors; or any
corporate action is taken by Pledgor for the purposes of effecting any of
the foregoing.
5. Remedies. Pledgor agrees that, if any Event of Default shall have
occurred and be continuing, then and in every such case, subject to (i) any
continuing rights of the holders of pre-existing Liens identified in this
Agreement and (ii) any mandatory requirements of applicable law then in effect,
Secured Party may avail itself of any legal or equitable rights or remedies of a
secured creditor under the UCC and/or any other applicable law now or hereafter
existing.
6. Waiver of Claims. Except as otherwise provided in this Agreement,
PLEDGOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH SECURED PARTY'S TAKING POSSESSION OR
SECURED PARTY'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT
LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and Pledgor
hereby further waives, to the fullest extent permitted by law:
(a) all damage occasioned by such taking of possession except any
damages which are the direct result of Secured Party's gross negligence or
misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of Secured Party's
rights hereunder; and
(c) all rights of redemption, stay, extension or moratorium now or
hereafter in force under any applicable law in order to prevent or delay
the enforcement of this Agreement or absolute sale of the Collateral or any
portion thereof, and Pledgor, for itself and all who may claim under him,
insofar as he now or hereafter lawfully may, hereby waives the benefit of
all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of Pledgor therein and thereto, and shall be
a perpetual bar both at law and
5
<PAGE>
in equity against Pledgor and against any and all Persons claiming or attempting
to claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under Pledgor.
7. Application of Proceeds. The proceeds of any Collateral shall be applied
as follows:
(a) to the payment of any and all reasonable expenses and fees
(including reasonable attorneys' fees) incurred by Secured Party in
obtaining and disposing of Collateral;
(b) next, any surplus then remaining to the payment of the
Indebtedness; and
(c) if no part of the Indebtedness is outstanding and in default, any
surplus then remaining shall be paid to Pledgor, subject however, to the
rights of the holder of any then existing Lien of which Secured Party has
actual notice (without investigation);
it being understood that Pledgor shall remain liable to the extent of any
deficiency between the amount of the proceeds of the Collateral and the
aggregate amount of the sums referred to in clauses (a) and (b) of this
Paragraph 7 with respect to Secured Party.
8. Remedies Cumulative. No failure or delay on the part of Secured Party in
exercising any right, power or privilege hereunder and no course of dealing
between Pledgor and Secured Party shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power, or privilege hereunder
preclude any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which Secured Party would otherwise
have.
9. Discontinuance of Proceedings. In case Secured Party shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Secured Party, then and in every such case Pledgor and Secured Party shall be
restored to their former positions and the rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of Secured Party, shall continue as if no such
proceeding had been instituted.
10. Additional Rights. The rights of Secured Party under this Agreement
shall be in addition to all rights and benefits at law or in equity inuring to
Secured Party with respect to the Credit Note, the Indebtedness and any
documents relating thereto.
6
<PAGE>
11. Notices. All notices to be given under this Agreement shall be deemed
given when delivered by hand, by facsimile or other similar transition, by a
nationally recognized overnight courier, or when sent by certified or registered
mail, return receipt requested, and addressed to the party's laks known address.
Notice shall be deemed effective upon receipt. Either party may change its
address for notices by delivery to and receipt of a notice thereof to the other
party.
12. Waiver; Amendment. This Agreement may be changed, waived, discharged,
or terminated only by an instrument in writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought.
13. Obligations Absolute. The obligations of Pledgor under this Agreement
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstances or occurrence whatsoever, including,
without limitation: (a) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from, any agreement or invoice relating to
the Collateral or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof; (b) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such
instrument or agreement or this Agreement or any exercise or non-exercise of any
right, remedy, power or privilege under or in respect of this Agreement; (c) any
furnishing of any additional security to Secured Party or any acceptance thereof
or any sale, exchange, release, surrender or realization of or upon any security
by Secured Party; or (d) any invalidity, irregularity or unenforceability of all
or part of the Collateral.
14. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided, however, that Pledgor may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of
Secured Party. All agreements, statements, representations and warranties made
by Pledgor herein or in any certificate or other instrument delivered by Pledgor
or on its behalf under this Agreement shall be considered to have been relied
upon by Secured Party and shall survive the execution and delivery of this
Agreement regardless of any investigation made by Secured Party.
15. Headings Descriptive, Etc. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
16. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall at all times and in all respects be construed in
accordance with and be governed by the laws of the State of New York.
7
<PAGE>
17. Pledgor's Duties. It is expressly agreed, anything herein contained to
the contrary notwithstanding, that Pledgor shall remain liable to perform all of
the obligations, if any, assumed by it with respect to the Collateral, and
Secured Party shall not be required or obligated in any manner to perform or
fulfill any of the obligations of Pledgor under or with respect to any
Collateral.
18. Preamble; Exhibits. The preamble hereto is hereby incorporated herein
and, by this reference, made a part hereof. Similarly, Exhibits A and B are
hereby incorporated herein and, by this reference, made a part hereof.
[Signatures appear on following page]
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date first set forth above.
PLEDGOR:
WITNESS/ATTEST: CHADBOURNE CORPORATION,
a Delaware corporation
By: William L. Remley,
President
[Corporate Seal]
SECURED PARTY:
WITNESS/ATTEST: TRINITY INVESTMENT CORP.,
a Delaware corporation
By: William L. Remley,
President
[Corporate Seal]
9
<PAGE>
EXHIBIT A
TO
LOAN AND SECURITY AGREEMENT
PROMISSORY NOTE (LINE OF CREDIT)
$1,000,000.00 District of Columbia
Date: August 1, 1996
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation ("Maker"), hereby promises to pay to the order of TRINITY INVESTMENT
CORP. ("Payee") at 1430 Broadway, 13th Floor, New York, New York 10018, the
principal sum of ONE MILLION DOLLARS ($1,000,000.00), or so much thereof as may
be advanced and/or readvanced hereunder and remain unpaid, together with accrued
interest at the rate hereinafter set forth, on the unpaid principal balance
hereof from time to time outstanding (the "Principal Balance"), at the rates
applicable from time to time before maturity, as set forth in this Promissory
Note (this "Note").
1. Revolving Loan. This Note evidences a revolving loan. Advances and
readvances shall be made hereunder as provided in that certain Loan and Security
Agreement dated as of August 1, 1996 between Maker and Payee (the "Loan and
Security Agreement"). The entire unpaid principal balance, together with accrued
and unpaid interest thereon, and all other obligations of Maker hereunder, if
not sooner paid, shall be due and payable in full on July 31, 2002 (the
"Maturity Date").
2. Rate of Interest. This Note shall bear interest (computed on the basis
of the actual number of days elapsed over a 365-day year) until the Maturity
Date on the Principal Balance at a rate equal to nine percent (9%) per annum
(the "Interest Rate").
3. Payments. Interest only, commencing as of the date hereof and calculated
at the Interest Rate on the Principal Balance, shall be due and payable annually
on the thirty-first (31st) day of each July during the term of this Note
commencing on the thirty-first (31st) day of July, 1997, except that the last
such payment of interest only shall be due and payable on the Maturity Date, and
on each such interest payment date there shall be due and payable all interest
accrued to that date; provided, however, that Payee shall have the absolute
right (but not the obligation), in its sole discretion, to add to the Principal
Balance at any time or from time to time any accrued interest then due and
payable hereunder and treat the same as an advance under this Note, without
notice to or demand upon Maker. The entire Principal Balance hereof, and all
accrued but unpaid interest, if any, shall be due and payable in full on the
Maturity Date. Payments made on account hereof shall, at Payee's option, be
applied first (1st) to the payment of any late charges accrued and due and other
costs and expenses, if any, then to accrued and unpaid interest, and the
remainder of each payment shall be applied to unpaid principal.
<PAGE>
Maker may prepay the Principal Balance or any part thereof, with accrued
interest to the date of such prepayment, at any time, without penalty or
premium. Prepayments shall not postpone or reduce any regular payments of
interest, but shall be credited to installments of principal, if any, in their
order of maturity.
4. Guaranty. Maker hereby unconditionally guarantees the due performance
and prompt payment, whether on the Maturity Date or by acceleration or
otherwise, of the full principal balance of this Note, together with interest
calculated as aforesaid, and all reasonable legal or other costs incurred by
Payee in the enforcement thereof against Maker.
5. Event of Default. It is expressly agreed that time is of the essence for
all purposes of this Note. Either (i) the failure of Maker to make any payment
of the interest or the Principal Balance on this Note as and when due and
payable which failure is not fully cured within ten (10) days after written
notice thereof from Payee; (ii) the making by Maker of a general assignment for
the benefit of creditors; (iii) the appointment of a custodian for Maker; (iv)
the commencement of any proceeding by Maker for relief under any Federal
bankruptcy law or any state insolvency or similar law; (v) the commence- ment of
any proceeding against Maker under any Federal bankruptcy law or any state
insolvency or similar law, which proceeding is not dismissed within sixty (60)
days; or (vi) any Event of Default under the Loan and Security Agreement, shall
constitute an event of default hereunder (each, an "Event of Default"). Upon the
occurrence of an Event of Default, or at any time thereafter during the
continuance of any such Event of Default, Payee may, with or without notice to
Maker, declare this Note to be immediately due and payable, as to the unpaid
Principal Balance, any accrued interest, late charges and any expenses, costs
and/or damages provided for herein, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived.
6. Security Agreements. This Note is made pursuant to the Loan and Security
Agreement and is or may be secured by (i) financing statements by Maker, as
debtor, and Payee, as secured party, and (ii) any other instruments now or
hereafter executed by Maker in favor of Payee which in any manner constitute
additional security for this Note (the foregoing documents, including the Loan
and Security Agreement, are hereinafter collectively referred to as the "Loan
Documents"). All of the terms, covenants, conditions and provisions of the Loan
Documents are hereby incorporated in and made a part of this Note to the same
extent as if herein set forth in full.
7. Outstanding Principal Amount. The face amount of this Note is the
principal sum of One Million Dollars ($1,000,000.00). Each advance and readvance
by Payee hereunder shall be evidenced by this Note, and any repayments of
principal by Maker shall be credited against the Principal Balance due on this
Note, but shall not extinguish this Note in whole or in part. The Principal
Balance due on this Note may increase and decrease as advances, readvances and
payments are made hereunder, pursuant to the Loan and Security Agreement
(including amendments and supplements thereto) between Maker
-2-
<PAGE>
and Payee hereof, and this Note shall evidence all of the indebtedness of Maker
hereunder from time to time existing pursuant to said Loan and Security
Agreement, including readvances of sums already paid. The aggregate principal
advances and readvances under this Note may exceed the face amount hereof, but
the Principal Balance hereunder at any given time shall not exceed the face
amount hereof, it being understood and agreed that Payee hereof does not intend
to make any loans to Maker that are not secured by the Loan and Security
Agreement and that each and every advance and readvance made at present or
hereafter to Maker shall be deemed to be a fully secured advance evidenced by
this Note.
8. Waivers. Maker hereby waives demand, presentment for payment, notice of
dishonor, protest and notice of protest and diligence in collection or bringing
suit and agrees that Payee may accept partial payment without discharging the
obligations evidenced hereby.
9. Attorneys' Fees and Costs; Waiver of Jury Trial. Maker agrees to pay all
reasonable attorneys' fees and costs incurred by Payee in collecting or
attempting to collect this Note, whether by suit or otherwise. MAKER HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL ACTION
BROUGHT BY PAYEE TO COLLECT THIS NOTE.
10. Applicable Law; Assigns. This Note shall be governed by, and construed
in accordance with, the laws of the State of New York. As used herein, Maker and
Payee shall be deemed to include their respective successors, legal
representatives and assigns, whether by voluntary action of the parties or by
operation of law.
11. Default Rate of Interest. Any late payment of interest or the Principal
Balance (whether on the Maturity Date or by acceleration of this Note as
provided in Section 5) shall bear interest from the due date of such payment
until paid at the Interest Rate plus five percent (5%) (the "Default Rate of
Interest").
12. Highest Lawful Rate. Anything herein to the contrary notwithstanding,
the obligations of Maker hereunder shall be subject to the limitation that to
the extent that contracting for or receipt of interest at the Default Rate of
Interest hereunder would be contrary to provisions of any law applicable to
Payee limiting the highest rate of interest which may be lawfully contracted
for, charged or received by Payee, such amount which would exceed the highest
lawful rate shall be applied to the reduction of the Principal Balance due
hereunder and not to the payment of interest at the Default Rate of Interest.
13. Notices. Any notice to the parties provided for in this Note shall be
given hand delivered, with receipt thereof, or sent by certified or registered
mail, return receipt requested, and first-class postage prepaid, or by overnight
courier, at the last known address of the addressee party. Notice shall be
deemed effective upon receipt.
-3-
<PAGE>
[Signatures appear on following page]
-4-
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed, sealed and delivered this
Note, intending to be bound legally, as of the date first above written.
MAKER:
WITNESS/ATTEST: CHADBOURNE CORPORATION,
a Delaware corporation
By: William L. Remley,
President
[Corporate Seal]
-5-
<PAGE>
EXHIBIT B
TO
LOAN AND SECURITY AGREEMENT
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto TRINITY
INVESTMENT CORP., a Delaware corporation, pursuant to that certain Loan and
Security Agreement dated as of August 1, 1996 (as the same may be amended from
time to time), the Stock Certificate(s) representing
_______________________________ (_____) shares of Common Stock of Texfi
Industries, Inc., a Delaware corporation (the "Corporation"), more fully
described below, standing in the undersigned's name on the books of the
Corporation, and does hereby irrevocably constitute and appoint any officer of
the Corporation the undersigned's attorney-in-fact and agent to transfer such
Stock Certificate(s) on the books of the Corporation with full power of
substitution in accordance with the foregoing.
This Collateral Assignment is made pursuant to the Loan and Security
Agreement.
Dated: _______________
Stock Certificate No.(s): [Smith Barney Account # 376-181-40]
Number of Shares: __________________
In the Presence of: CHADBOURNE CORPORATION,
a Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
<PAGE>
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto TRINITY
INVESTMENT CORP., a Delaware corporation, pursuant to that certain Loan and
Security Agreement dated as of August 1, 1996 (as the same may be amended from
time to time), the Stock Certificate(s) representing ____________________
(______) shares of Common Stock of Texfi Industries, Inc., a Delaware
corporation (the "Corporation"), more fully described below, standing in the
undersigned's name on the books of the Corporation, and does hereby irrevocably
constitute and appoint any officer of the Corporation the undersigned's
attorney-in-fact and agent to transfer such Stock Certificate(s) on the books of
the Corporation with full power of substitution in accordance with the
foregoing.
This Collateral Assignment is made pursuant to the Loan and Security Agreement.
Dated:
Stock Certificate No.(s): [Smith Barney Account # 376-181-40]
Number of Shares:
In the Presence of: CHADBOURNE CORPORATION,
a Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
<PAGE>
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto TRINITY
INVESTMENT CORP., a Delaware corporation, pursuant to that certain Loan and
Security Agreement dated as of August 1, 1996 (as the same may be amended from
time to time), the Stock Certificate(s) representing
_________________________________ (______) shares of Common Stock of Texfi
Industries, Inc., a Delaware corporation (the "Corporation"), more fully
described below, standing in the undersigned's name on the books of the
Corporation, and does hereby irrevocably constitute and appoint any officer of
the Corporation the undersigned's attorney-in-fact and agent to transfer such
Stock Certificate(s) on the books of the Corporation with full power of
substitution in accordance with the foregoing.
This Collateral Assignment is made pursuant to the Loan and Security Agreement.
Dated:
Stock Certificate No.(s): [Smith Barney Account # 376-181-40]
Number of Shares:
In the Presence of: CHADBOURNE CORPORATION,
a Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
<PAGE>
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto TRINITY
INVESTMENT CORP., a Delaware corporation, pursuant to that certain Loan and
Security Agreement dated as of August 1, 1996 (as the same may be amended from
time to time), the Stock Certificate(s) representing
_________________________________ (______) shares of Common Stock of Texfi
Industries, Inc., a Delaware corporation (the "Corporation"), more fully
described below, standing in the undersigned's name on the books of the
Corporation, and does hereby irrevocably constitute and appoint any officer of
the Corporation the undersigned's attorney-in-fact and agent to transfer such
Stock Certificate(s) on the books of the Corporation with full power of
substitution in accordance with the foregoing.
This Collateral Assignment is made pursuant to the Loan and Security Agreement.
Dated:
Stock Certificate No.(s): [Smith Barney Account # 376-181-40]
Number of Shares:
In the Presence of: CHADBOURNE CORPORATION,
a Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.____________)
TEXFI INDUSTRIES, INC.
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
882895 10 5
(CUSIP Number)
William L. Remley, President, Chadbourne Corporation 1140 Connecticut Avenue,
N.W., Suite 1201, Washington, D.C. 20336 Telephone (202) 466-7555
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 24, 1994
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement of Schedule 13G to report
the acquisition which is the subject of the Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [X].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d).
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
<PAGE>
The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
* with a copy to
George Lancer, Esq.
Dreyer and Traub
101 Park Avenue
New York, New York 10178
-2-
<PAGE>
CUSIP No. 882895 10 5 13D Page 3 of 32 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chadbourne Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.16%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-3-
<PAGE>
CUSIP No. 882895 10 5 13D Page 4 of 32 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Halton House Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-4-
<PAGE>
CUSIP No. 882895 10 5 13D Page 5 of 32 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Halton Declaration of Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-5-
<PAGE>
CUSIP No. 882895 10 5 13D Page 6 of 32 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stefan F. Tucker
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
-6-
<PAGE>
UNITED STATES
Item 1. Security and Issuer.
The statement relates to shares of Common Stock, par value $1.00 per shares
(the "Common Stock"), of Texfi Industries, Inc., a Delaware corporation (the
"Issuer"), which has its principal executive offices at 5400 Glenwood Avenue,
Suite 318, Raleigh, North Carolina 27622.
Item 2. Identity and Background
This statement is filed jointly by Chadbourne Corporation, a Delaware
corporation ("Chadbourne"), Halton House Ltd., a Bahamian corporation ("Halton
Ltd."), The Halton Declaration of Trust ("Halton Trust") and Stefan F. Tucker.
Chadbourne, Halton Ltd., Halton Trust and Stefan F. Tucker are sometimes
collectively referred to as the "Reporting Persons."
Chadbourne has its principal business and executive offices at 1140
Connecticut Avenue, N.W. Suite 1201, Washington, D.C. 20036. Chadbourne is
engaged in the investment business. Halton Ltd. owns all of the outstanding
capital stock of Chadbourne. William L. Remley is the sole director and
executive officer of Chadbourne. Mr. Remley is the President of Chadbourne,
Lyford Corporation ("Lyford"), Sunderland Industrial Holdings Corporation
("SIHC"), Ascott Wing, Inc. ("Ascott"), CPT Holdings, Inc. and Mentmore Holdings
Corporation ("Mentmore"). Lyford, SIHC and CPT Holdings, Inc. are holding
companies with interests in various industrial manufacturing businesses. Ascott
is engaged in the investment business and is a shareholder of CPT Holdings, Inc.
Mentmore is engaged in the business of providing management services to
companies affiliated with Mr. Remley. The business address of Mr. Remley,
Chadbourne, Lyford, SIHC, Ascott, CPT Holdings, Inc. and Mentmore is 1140
Connecticut Avenue, N.W. Suite 1201, Washington, D.C. 20036.
Halton Ltd. has its principal business and executive offices at c/o Coutts
& Co.(Bahamas) Ltd., P.O. Box N7788, West Bay Street, Nassau, Bahamas. Halton
Ltd. is a holding company with interests in investment and
industrial/manufacturing/technology companies. William L. Remley is the sole
director and executive officer of Halton Ltd. Halton Trust owns beneficially
ninety percent (90%) of the outstanding capital stock of Halton Ltd.
Halton Trust is a trust created under the laws of the Bahamas that has as
its principal address c/o Coutts & Co. (Bahamas) Ltd., P. O. Box N7788, West Bay
Street, Nassau, Bahamas. The trustee of Halton Trust is Coutts & Co. (Bahamas)
Ltd. All powers with respect to investment or voting of securities beneficially
owned by Halton Trust are exercisable by Stefan F. Tucker, protector under the
constituent instruments of Halton Trust. Mr. Tucker's business address is 1615 L
Street, N.W., Washington, D.C. 20036. He is an attorney with Tucker, Flyer &
Lewis a professional corporation at that address.
-7-
<PAGE>
During the last five years, none of the Reporting Persons, nor any other
person identified in this Item 2, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and, as a result of such proceeding, was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or finding any violation
with respect to such laws. Messrs. Remley and Tucker are citizens of the United
States of America.
Item 3. Source and Amount of Funds or Other Consideration
The funds used to pay the purchase price in cash at the closing were
derived directly from capital contributed to Chadbourne by its sole shareholder,
Halton Ltd., which received such funds from the corpus of the Halton Trust.
Item 4. Purpose of Transaction
On May 24, 1994, Chadbourne acquired directly from the Issuer, 924,000
shares (the "Shares") of Common Stock, par value $1.00 per share ("Common
Stock") and an option (the "Option") to acquire 600,000 shares of Common Stock
at an initial exercise price of $4.25 per share, which Option is exercisable for
a period of five (5) years after the closing date. Concurrently with the closing
of the acquisition of the Shares and the Option, three members of the Issuer's
board of directors resigned and three designees of Chadbourne, Mr. Remley and
Messrs. Richard Kramer and John Mazzuto, business associates of Mr. Remley, were
elected to fill the vacancies and to serve as directors; Mr. Remley for a term
expiring at the Issuer's 1997 Annual Meeting and Messrs. Kramer and Mazzuto for
terms expiring at the Issuer's 1996 Annual Meeting. Chadbourne, acting through
its designated directors, intends to assist in the management of and in
establishing policies for the Issuer.
Chadbourne intends to continue to evaluate the Issuer's financial position,
management and business, future developments, market conditions, the price of
the Issuer's securities in trading markets and other factors. Chadbourne may,
from time to time, purchase additional shares of Common Stock or other
securities of the Issuer or dispose of all or a portion of the securities of the
Issuer over which Chadbourne then exercises dispositive power. Purchase
transactions, if any, may occur directly from the Issuer, in private
transactions with other shareholders, and/or in the open market. Dispositive
transactions, if any, may occur in the open market or otherwise.
Except as set forth in this Item 4, none of the Reporting Persons has any
present plans or proposals which relate to or could result in any of actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a)-(b) The following table sets forth information with respect
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<PAGE>
to shares of Common Stock beneficially owned by each Reporting Person named in
Item 2 of this Schedule, as of the close of business on May 24, 1994.
<TABLE>
<CAPTION>
Name Aggregate Percentage Sole Power Shared Power Sole Power Shared
Number of of Class(2) to Vote or to Vote or to Dispose Power to
Shares Direct Vote Direct Vote or Direct to Dispose
Beneficially Disposition or Direct
Owned(1) Disposition
<S> <C> <C> <C> <C> <C> <C>
Chadbourne 1,524,000 16.16% 1,524,000 -0- 1,524,000 -0-
Halton Ltd. 1,524,000 16.16% 1,524,000 -0- 1,524,000 -0-
Halton Trust 1,524,000 16.16% 1,524,000 -0- 1,524,000 -0-
S.F. Tucker 1,524,000 16.16% 1,524,000 -0- 1,524,000 -0-
</TABLE>
(1) Includes 600,000 shares which may be acquired in connection with the
Option referred to in Item 4.
(2) Computed on the basis of 8,630,996 shares of Common Stock outstanding
after the issuance of the 924,000 shares of Common Stock to Chadbourne as
represented to Chadbourne by the Issuer plus the 600,000 shares of Common
Stock which may be acquired upon exercise of the Option.
(c) On May 24, 1994 Chadbourne acquired from the Issuer 924,000 shares of
Common Stock of the Issuer and an Option to acquire an additional 600,000 shares
of Common Stock of the Issuer in exchange for payment by Chadbourne to the
Issuer of $5,000,000 in cash, all pursuant to the terms of a Stock and Option
Purchase Agreement, a copy of which is annexed hereto as Exhibit 1.1. Other than
the acquisition of shares of Common Stock and the Option in that transaction,
none of the Reporting Persons has effected any transactions in the Common Stock
of the Issuer during the past sixty (60) days.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
None.
Item 7. Materials to be Filled as Exhibits.
Exhibit Description
------- -----------
1.0 Joint Filing Agreement
1.1 Stock and Option Purchase Agreement dated as of May
24, 1994 between Texfi Industries, Inc. and Chadbourne
Corporation.
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<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned hereby certifies that the information set forth in
this statement is true, complete and correct.
Dated: June 1, 1994
CHADBOURNE CORPORATION
By:
William L. Remley, President
HALTON HOUSE LTD.
By:
William L. Remley, President
THE HALTON DECLARATION OF TRUST
By:
Stefan F. Tucker, as Protector of The
Halton Declaration of Trust
STEFAN F. TUCKER
-10-
Exhibit 1.0
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934,
as amended, the undersigned hereby agree to the joint filing on behalf of each
of them of a statement on Schedule 13-D, including any and all amendments, with
respect to the Common Stock, par value $1.00 per share, of TEXFI INDUSTRIES,
INC. and that this Agreement shall be included as an exhibit to such joint
filing.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing
Agreement, this 1st day of June, 1994.
CHADBOURNE CORPORATION
By:
William L. Remley, President
HALTON HOUSE LTD.
By:
William L. Remley, President
THE HALTON DECLARATION OF TRUST
By:
Stefan F. Tucker, as Protector of The
Halton Declaration of Trust
STEFAN F. TUCKER
-11-
Exhibit 1.1
STOCK AND OPTION PURCHASE AGREEMENT
THIS STOCK AND OPTION PURCHASE AGREEMENT ("Agreement") is made as of May
24, 1994, between TEXFI INDUSTRIES, INC., a Delaware corporation (the
"Company"), and CHADBOURNE CORPORATION, a Delaware corporation (the "Purchaser"
or the "Optionee").
On the terms and subject to the conditions set forth in this Agreement, the
Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, shares of the Company's Common Stock, par value $1.00
per share ("Common Stock"), and the option to purchase additional shares of
Common Stock (the "Option"). Accordingly, the parties hereto agree as follows:
I. AUTHORIZATION AND CLOSING
1.1. Authorization of the Common Stock. The Company has authorized the sale
to the Purchaser of 924,000 shares of Common Stock (the "Purchased Shares") and
the issuance and sale to the Optionee pursuant to the Option of up to 600,000
shares of Common Stock.
1.2. Purchase and Sale of the Common Stock and the Option. At the Closing
(as defined below), the Company shall sell to the Purchaser and, subject to the
terms and conditions set forth herein, the Purchaser shall purchase from the
Company the Purchased Shares, and the Company shall grant to the Optionee (and
deliver to the Optionee a certificate in the form attached as Exhibit A hereto)
and, subject to the terms and conditions set forth herein, the Optionee shall
purchase from the Company the Option, all at the aggregate price of
$5,000,000.00 (the "Purchase Price").
1.3. The Closing. The closing of the purchase and sale of the Purchased
Shares and the Option (the "Closing") shall take place at the offices of
Robinson, Bradshaw & Hinson, P.A. at 2:00 p.m. on May 24, 1994, or at such other
place or on such other date as may be mutually agreeable to the Company and the
Purchaser, but in no event later than May 30, 1994. At the Closing, the Company
shall deliver to the Purchaser one or more stock certificates evidencing the
Common Stock to be purchased by the Purchaser, registered in the Purchaser's or
its nominee's name, upon payment of the Purchase Price therefor.
II. CONDITIONS TO THE PURCHASER'S OBLIGATION AT CLOSING
The obligation of the Purchaser to purchase and pay for the Purchased
Shares and the Option at the Closing is subject to the satisfaction as of the
Closing of the following conditions:
2.1. Representations and Warranties; Covenants. The representations and
warranties contained in Article IV hereof shall be true and correct at and as of
the Closing as though then made, except to the extent of changes caused by the
transactions expressly contemplated herein, and the Company
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<PAGE>
shall have performed in all material respects all of the covenants required to
be performed by it hereunder prior to the Closing.
2.2. Closing Certificate. The Company shall have delivered to the Purchaser
a certified copy of the resolutions duly adopted by the Company's board of
directors authorizing the execution, delivery and performance of this Agreement
and each of the other agreements contemplated hereby, the sale of the Purchased
Shares, the grant of the Option, the issuance and sale of the shares that may be
purchased pursuant to the Option to the Purchaser, and the consummation of all
other transactions contemplated by this Agreement.
2.3. Legal Opinion. The Purchaser shall have received from Schell Bray
Aycock Abel & Livingston, counsel for the Company, an opinion which shall be
addressed to the Purchaser, dated the date of Closing, and in form and substance
satisfactory to the Purchaser.
2.4. Proceedings. All corporate and other proceedings taken or required to
be taken by the Company in connection with the transactions contemplated hereby
to be consummated at or prior to the Closing and all documents incident thereto
shall be satisfactory in form and substance to the Purchaser.
2.5. Waiver. Any condition specified in this Article II may be waived if
consented to by the Purchaser; provided that no such waiver shall be effective
against the Purchaser unless it is set forth in a writing executed by the
Purchaser.
III. CONDITIONS TO COMPANY'S OBLIGATION AT CLOSING
The obligation of the Company to sell to the Purchaser the Purchased Shares
and the Option at the Closing is subject to the satisfaction as of the Closing
of the following conditions:
3.1. The Purchaser shall have performed in all material respects all of the
covenants required to be performed by it hereunder prior to the Closing.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchaser to enter into this Agreement and
purchase the Purchased Shares and the Option, the Company hereby represents and
warrants that:
4.1. Organization and Corporate Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is qualified or licensed to do business and is in good standing in
every jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified or licensed and where the failure to
be so qualified or licensed would have a material adverse effect on the business
prospects, financial condition, operating results, assets or operations of the
Company and its subsidiaries taken as
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<PAGE>
a whole. The Company has all requisite corporate power and authority and all
material licenses, permits and authorizations necessary to own and operate its
properties, to carry on its businesses and to carry out the transactions
contemplated by this Agreement.
4.2. Capital Stock. As of the Closing and immediately after the Closing,
the authorized capital stock of the Company shall consist of 20,000,000 shares
of Common Stock and 5,000,000 shares of Preferred Stock, par value $1.00 per
share, of which only 8,630,996 shares of Common Stock shall be issued and
outstanding, which includes the Purchased Shares.
4.3. Authorization; No Breach. The execution, delivery and performance of
this Agreement and all other agreements contemplated hereby to which the Company
is a party have been duly authorized by the Company and do not require the
approval of the Company's shareholders. This Agreement and all other agreements
contemplated hereby have been validly executed and delivered by the Company and
each such agreement constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally or by general equitable principles.
As of the Closing, after giving effect to the consummation of the transactions
contemplated hereby the Company will not be in default under any contract,
agreement, instrument or indenture related to the borrowing of money to which it
is a party or by which it or any of its property is bound. The execution and
delivery by the Company of this Agreement and all other agreements contemplated
hereby to which the Company is a party and the fulfillment of and compliance
with the respective terms hereof and thereof by the Company, the offering, sale
and issuance of the Purchased Shares and the Option hereunder (assuming the
accuracy of the Purchaser's investment representations set forth in Section
7.1), do not and shall not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii) result in
the creation of any lien, security interest, charge or encumbrance upon the
Company's or any subsidiary's capital stock or assets pursuant to, (iv) give any
third party the right to modify, terminate or accelerate any obligation under,
(v) result in a violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice to any court or administrative
or governmental body pursuant to, the Certificate of Incorporation or bylaws of
the Company or any subsidiary, or any law, statute, rule or regulation to which
the Company or any subsidiary is subject, or any material agreement, instrument,
order, judgment or decree to which the Company or any subsidiary is a party or
by which it, or any of its property, is bound.
4.4. Authorization and Consent. Assuming the accuracy of the Purchaser's
investment representations set forth in Section 7.1, no authorization,
exemption, consent or approval of, notice to, or declaration to or filing with,
any governmental authority is required for the valid execution, delivery and
performance by the Company of this Agreement or the other agreements
contemplated hereby, or the consummation by the Company of any other
transactions contemplated hereby or thereby. The Company has
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<PAGE>
obtained all material third party consents, waivers, approvals and exemptions
necessary to consummate the transactions contemplated hereby, except for any
such third party consents, waivers, approvals and exemptions required for any of
the shares that may be purchased pursuant to the Option to be listed on the New
York Stock Exchange.
4.5. Listing of Shares. The Purchased Shares are listed on the New York
Stock Exchange. The Company will use its best efforts to insure that, within
ninety (90) days from the date of Closing, the shares that may be purchased
pursuant to the Option are approved for listing on the New York Stock Exchange
subject to the issuance thereof.
4.6. Reports with Securities and Exchange Commission. The Company has made
all filings with the Securities and Exchange Commission which it is required to
make under the Securities and Exchange Act of 1934, and the Company has not
received any request from the Securities and Exchange Commission to file any
amendment or supplement to any of the reports filed therewith.
4.7. Other Shareholder Rights. Except as disclosed in Notes 7 and 8 to the
financial statements contained in the Company's Annual Report for the fiscal
year ended October 29, 1993 or as otherwise contemplated hereby, no registration
rights are outstanding with respect to the Company's securities and no rights
exist to acquire securities of the Company.
4.8. Rights Agreement. The effectuation of this Agreement and the
transactions contemplated hereby will not result in any person having the right
to exercise any rights pursuant to that certain Rights Agreement dated as of
July 22, 1988, between the Company and First Union National Bank of North
Carolina.
V. PROVISIONS WITH RESPECT TO OPTION TO PURCHASE SHARES
5.1. Exercise Price. The initial exercise price for the Option shall be
$4.25 per share. The initial exercise price shall be increased by $0.25 per
share (the "EP Increase"), or such other amount as shall be determined in the
manner set forth in the last sentence of this Section 5.1, on each anniversary
of the date of the Closing. The initial exercise price as so increased (the
"Exercise Price") is subject to adjustment as provided in Section 5.4 hereof. If
there has been an adjustment to the Exercise Price as provided in Section 5.4
hereof, then, in such event, the EP Increase will be proportionately adjusted to
reflect the percentage increase or decrease to the Exercise Price in effect on
the anniversary date for which the EP Increase is taking effect from the
Exercise Price in effect on the immediately preceding anniversary date or the
date hereof as the case may be.
5.2. Term and exercise. The Option may be exercised in whole or in part as
to any whole number of shares at any time and from time to time prior to five
years from the date of the Closing by (i) delivery to the Company of a written
notice of exercise stating the number of shares that the Optionee then elects to
purchase and (ii) payment of the Exercise Price
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<PAGE>
in certified funds or by wire transfer of immediately available funds to an
account designated by the Company.
5.3. Covenants of Issuer. The Company covenants and agrees that all shares
that may be issued upon the exercise of the Option will, upon issuance, be fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof (other than transfer taxes in respect of any transfer
occurring contemporaneously with such issue) and shall be approved for listing
on the New York Stock Exchange subject to the issuance thereof if the Company's
securities are then listed on the New York Stock Exchange. The Company further
covenants and agrees that during the period within which the rights represented
by the Option may be exercised, the Company will at all times have authorized
and reserved a sufficient number of shares of Common Stock to provide for the
exercise in full of the rights represented by the Option. The Company will
provide to, or make available to, as the case may be, the optionee the same
information, reports and notices as it shall provide to, or make available to,
the holders of its Common Stock, and at the same time as such information,
reports and notices are provided to, or made available to, the holders of its
Common Stock.
5.4. Anti-Dilution Provisions.
A. Exercise Price Adjustments. The Exercise Price shall be subject to
adjustment from time to time as follows:
(i) In the event the Company should at any time or from time to time
after the date hereof fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination
of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock
(hereinafter referred to as "Common Stock Equivalents") without payment of
any consideration by such holder for the additional shares of Common Stock
or the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon conversion or exercise thereof), then, as of such
record date (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Exercise Price shall be
approximately decreased and the number of shares of Common Stock issuable
pursuant to the Option shall be appropriately increased in proportion to
such increase of the aggregate of shares of Common Stock and those issuable
with respect to Common Stock Equivalents to be outstanding immediately
following such transaction compared with the aggregate of the shares of
Common Stock and those shares issuable with respect to Common Stock
Equivalents then outstanding immediately prior to such transaction.
(ii) If the number of shares of Common Stock outstanding at any time
after the date hereof is decreased by a reverse split or other combination
of the outstanding shares of Common Stock, then, following the record date
of such combination, the Exercise Price shall be appropriately increased
and the number of shares of Common Stock issuable upon exercise
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<PAGE>
shall be appropriately decreased in proportion to such decrease in the
outstanding shares of Common Stock.
(iii) Issuance of Common Stock Below Exercise Price. If the Company
shall, at any time or from time to time, directly or indirectly, sell or
issue shares of Common Stock for cash or property or in payment of an
obligation which could be made in cash at the election of the Company, or
rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock in
either case at a price per share of Common Stock (determined, in the case
of rights, options, warrants or convertible or exchangeable securities, by
dividing (x) the total amount received or receivable by the Company
(including the amount of payment of an obligation which could be made in
cash at the election of the Company) in consideration of the sale or
issuance of such rights, options, warrants or convertible or exchangeable
securities, plus the total consideration payable to the Company upon
exercise or conversion or exchange thereof, by (y) the total number of
shares of Common Stock covered by such rights, options, warrants or
convertible or exchangeable securities) lower than the Exercise Price of
the Option immediately prior to such sale or issuance, then the applicable
Exercise Price shall be reduced to a price determined by multiplying the
applicable Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to such sale or issuance plus
the number of shares of Common Stock which the aggregate consideration
received (determined as provided below) for such sale or issuance would
purchase at the applicable Exercise Price immediately prior to such sale or
issuance and the denominator of which shall be the total number of shares
of Common Stock outstanding immediately after such sale or issuance. Such
adjustment shall be made successively whenever such sale or issuance is
made. For the purposes of such adjustments, the shares of Common Stock
which the holder of any such rights, options, warrants, or convertible or
exchangeable securities shall be entitled to subscribe for or purchase
shall be deemed to be issued and outstanding as of the date of such sale or
issuance and the consideration received by the Company therefor shall be
deemed to be the consideration received by the Company (plus any
underwriting discounts or commissions in connection therewith) for such
rights, options, warrants or convertible or exchangeable securities, plus
the consideration stated in such rights, options, warrants or convertible
or exchangeable securities to be paid for the shares of Common Stock
covered thereby. If the Company shall sell or issue shares of Common Stock
for a consideration consisting, in whole or in part, of property other than
cash or its equivalent, then in determining the "price per share of Common
Stock" and the "consideration received by the Company" for purposes of the
first sentence and the immediately preceding sentence of this Section
5.4(A)(iii), the fair value of such property shall be determined in good
faith by the Board of Directors of the Company. The determination of
whether any adjustment is required under this Section 5.4(A)(iii), by
reason of the sale and issuance of rights, options, warrants or convertible
or exchangeable securities and the amount of such adjustment, if any, shall
be made only at the time of such issuance or sale and not at the subsequent
time of issuance or sale of Common Stock upon the exercise of such rights
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<PAGE>
to subscribe or purchase.
B. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, recapitalization, transfer or
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 5.4 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Optionee against dilution.
C. Exclusions. This Section 5.4 shall not be applicable to any sale or
issuance of any securities by the Company in respect of rights to convert or
acquire securities described in Notes 7 or 8 to the financial statements
contained in the Company's Annual Report for the fiscal year ended October 29,
1993.
5.5. Rights as a shareholder. The Optionee will have no rights as a
shareholder with respect to any shares covered by the Option until the date that
the Optionee has fully complied with the terms of Section 5.2 above. Except as
provided in Section 5.4 above, no adjustment will be made for dividends, other
distributions, or other rights for which the record data is prior to the date of
such issuance.
5.6. Cash in Lieu of Fractional Shares. The Company shall not be required
to issue fractional shares upon the exercise of the Option. If, by reason of any
change made pursuant to Section 5.4, the Optionee would be entitled, upon the
exercise of any rights evidenced hereby, to receive a fractional interest in a
share, the Company shall, upon such exercise, purchase such fractional interest
for an amount in cash equal to the fair market value of such fractional interest
(as determined in good faith by the Board of Directors of the Company),
determined as of the date of the exercise of the Option.
VI. REGISTRATION RIGHTS
6.1. Piggyback Registrations.
A. Right to Piggyback. Whenever the Company proposes to register any of its
securities under the Securities Act of 1933, as amended, or any similar federal
law then in force (the "Securities Act") in any primary, secondary or combined
offering (other than pursuant to a Demand Registration), and the registration
form to be used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), the Company will give prompt written notice to the
Purchaser of its intention to effect such a registration and will (subject to
the priorities established below) include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 30 days after the receipt of the Company's notice.
B. Piggyback Expenses. The Company's Registration Expenses
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<PAGE>
will be paid by the Company in all Piggyback Registrations.
C. Priority on Piggyback Registrations. If a Piggyback Registration is an
underwritten registration, and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities requested to
be included in such registration exceeds the number of Registrable Securities
that can be sold in an orderly manner in such offering after the Company has
been able to sell the number of securities it proposes to sell within a price
range acceptable to the Company, the Company will include in such registration
the number of securities the Company proposes to sell and then the number of the
Purchaser's Registerable Securities that, in the opinion of the managing
underwriter, can be sold in an orderly manner in such offering after the Company
has been able to sell the number of securities it proposes to sell within a
price range acceptable to the Company. If, pursuant to this Section 6.1(C), the
number of the Purchaser's Registrable Securities included in such registration
is more than twenty percent (20%) less than the number of Registrable Securities
the Purchaser has requested to be included in such registration, then such
registration will not be deemed to be an "opportunity" as that word is used in
Section 6.2(A) hereof.
D. Selection of Underwriters. If any Piggyback Registration is in
connection with an underwritten offering, the Company will have the right to
select the investment banker(s) and manager(s) to administer the offering.
E. Other Registrations. If the Company has previously filed a registration
statement with respect to Registrable Securities pursuant to this Section 6.1
and if such previous registration has not been withdrawn or abandoned, the
Company will not file or cause to be effected any other registration of any of
its Registrable Securities or securities convertible or exchangeable into or
exercisable for its Registrable Securities under the Securities Act (except on
Form S-8 or Form S-4 or any successor forms), whether on its own behalf or at
the request of any holder or holders of such Registrable Securities, until a
period of at least ninety (90) days has elapsed from the effective date of such
previous registration.
6.2. Demand Registrations.
A. Right to Demand Registrations. At any time after three years from the
date of Closing, if the Company has failed to provide the Purchaser with at
least two (2) opportunities to register securities pursuant to the PiggyBack
Registration Rights granted herein, the Purchaser may request registration under
the Securities Act of all or any part of the Purchaser's Registrable Securities
(a "Demand Registration"); provided, however, that the Purchaser may not request
any Demand Registration after the Company has given the notice of a Piggyback
Registration referred to in Section 6.1(A) until the first to occur of (i) 150
days (or, in the event the Company is permitted to use any applicable short
form, 90 days) after the date of such notice, (ii) 90 days (or, in the event the
Company is permitted to use any applicable short form, 45 days) after the date
of such notice if the Company has not yet filed a registration statement with
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<PAGE>
respect to such Piggyback Registration, (iii) the withdrawal of any registration
statement the Company has filed with respect to such Piggyback Registration (or
any public announcement by the Company that it no longer intends to pursue such
public offering), or (iv) five Business Days after the effectiveness of such
Piggyback Registration. The Purchaser will be entitled to request up to two (2)
Demand Registrations. Each request for a Demand Registration shall specify the
approximate number of such Registrable Securities requested to be registered and
the anticipated per share price range for such offering and proposed manner of
distribution including whether or not the offering will be underwritten. Demand
Registrations will be on Forms S-2 or S-3 or any similar short-form registration
statement whenever the Company is permitted to use any applicable short form.
B. Priority on Demand Registrations. If in a Demand Registration the
managing underwriters (if any) advise the Company in writing that in their
opinion the number of Registrable Securities requested to be included in such
registration together with the number of securities the Company proposes to be
included in such registration for its own account exceeds the number of
securities that can be sold in an orderly manner in such offering within a price
range acceptable to the Purchaser, the Company will include in such registration
first, the number of Registrable Securities requested to be included in such
registration by the Purchaser, and next, the number of securities requested to
be included in such registration by the Company for its own account.
C. Restrictions on Demand Registrations. The Company may postpone for up to
ninety (90) days the filing or the effectiveness of a registration statement for
a Demand Registration if the Company reasonably determines that such Demand
Registration would have an adverse effect other than of an immaterial nature on
any proposal or plan by the Company or any of its subsidiaries to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction; provided that in
such event, the Purchaser will be entitled to withdraw such request and, if such
request is withdrawn, such Demand Registration shall not count as one of the
permitted Demand Registrations hereunder and the Company will pay all expenses
incurred by the Purchasers in such withdrawn Demand Registration. The Company
will not be obligated to effect any Demand Registration within six (6) months
after the effective date of a previous Demand Registration, or such lesser
period after such effective date as agreed to in writing by the managing
underwriter(s) for such previous Demand Registration.
D. Selection of Underwriters. In any underwritten Demand Registration, the
Company will have the right to select the investment banker(s) and manager(s) to
administer the offering, subject to the approval of the Purchaser, which
approval will not be unreasonably withheld.
E. Other Registration Rights. Except as provided in this Agreement and for
so long as the Purchaser maintains ownership of 5% or more of the outstanding
Common Stock of the Company, the Company will not
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grant to any persons the right to request the Company to register any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, without the written consent of the Purchaser.
F. Expenses of Demand Registration. The Purchaser shall bear all expenses
of any Demand Registration hereunder unless the Company includes in such
registration securities to be registered for its own account, in which case the
Purchaser will pay the expenses allocable to the registration of the Purchaser's
securities included in the registration, and any expenses not so allocable will
be borne by the Purchaser in proportion to the aggregate selling price of the
securities to be so registered.
6.3. Holdback Agreement.
A. The Purchaser agrees not to effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the 180-day period beginning on the effective date of any
underwritten Piggyback Registration in which Registrable Securities are included
(except as part of such underwritten registration or as bona fide gifts), unless
the underwriters managing the registered public offering otherwise agree.
B. The Company agrees not to effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the 180-day period beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except (i) as part of such underwritten registration
(ii) as offerings pursuant to registrations on Form S-8 or any successor form or
(iii) upon the exercise or conversion of any Common Stock Equivalents then
outstanding), unless the underwriters managing the registered public offering
otherwise agree.
6.4. Registration Procedures. Whenever the Purchaser has requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
will use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:
A. prepare and file with the United States Securities and Exchange
Commission or any governmental body or agency succeeding to the functions
thereof (the "Securities and Exchange Commission") a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to counsel selected and retained by the Purchaser at
the Purchaser's expense copies of all such documents proposed to be filed, which
documents will be subject to the timely review of such counsel);
-21-
<PAGE>
B. prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 270 days or until such earlier
time as all of the securities covered by such registration statement have been
sold and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
C. furnish to the Purchaser such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as the Purchaser may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the Purchaser;
D. use its best efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdictions as the
Purchaser reasonably requests and do any and all other acts and things which may
be reasonably necessary or advisable to enable the Purchaser to consummate the
disposition in such jurisdictions of the Registrable Securities owned by the
Purchaser (provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6.4(D), (ii) subject itself to taxation
in any such jurisdiction, (iii) consent to general service of process in any
such jurisdiction or (iv) register the Registrable Securities or seek an
exemption from registration under the securities laws of any state that
requires, as a condition to registration or such exemption, that the Company
indefinitely file in such jurisdiction substantially all reports required to be
filed by the Company with the Securities and Exchange Commission);
E. notify the Purchaser, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of the
Purchaser, the Company will promptly prepare (and, when completed, give notice
to the Purchaser) a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
provided, however, that upon such notification by the Company, the Purchaser
will not sell Registrable Securities until the Company has notified the
Purchaser that it has prepared a supplement or amendment to such prospectus;
F. cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by the Company are
-22-
<PAGE>
then listed and, if not so listed, to be included on the NASD automated
quotation system;
G. provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
H. enter into such customary agreements (including underwriting agreements
in customary form) and take all such other actions as the Purchaser or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares);
I. make available for inspection on a confidential basis by the Purchaser,
any underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by the Purchaser
or any such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees, attorneys and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
J. otherwise use its best efforts to comply with all applicable rules and
regulations of the Securities and Exchange Commission, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full fiscal quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
K. permit the Purchaser (if, in the Purchaser's sole and exclusive
judgment, the Purchaser might be deemed to be an underwriter or a controlling
person of the Company within the meaning of Section 15 of the Securities Act) to
participate in the preparation of such registration or comparable statement and
to require the insertion therein of material, furnished to the Company in
writing, which in the reasonable judgment of the Purchaser and its counsel
should be included, provided that such material shall be furnished under such
circumstances as shall cause it to be subject to the indemnification provisions
provided pursuant to Section 6.6(B) hereof;
L. in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order; and
M. furnish to the Purchaser at the time of the disposition of
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<PAGE>
Registrable Securities to be registered an opinion of counsel for the Company,
in form and substance satisfactory to the Purchaser, to the effect that (i) the
Company is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation with full corporate power and
authority to own and hold its properties, including such properties as it holds
under lease, and to conduct its business as described in the registration
statement, and is qualified to conduct business and is in good standing in each
jurisdiction where the conduct of its business requires such qualification and
in which the failure to be so qualified could have a material adverse effect on
the Company; (ii) such Registrable Securities have been validly issued and are
fully paid in nonassessable; (iii) a registration statement covering such
Registrable Securities has been filed with the Securities and Exchange
Commission under the Securities Act and has been made effective by order of such
Commission; (iv) such registration statement and the prospectus contained
therein appear on their face to be appropriately responsive in all material
respects to the requirements of the Securities Act, and nothing has come to such
counsel's attention that would cause it to believe that either such registration
statement or such prospectus contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; (v) such Registrable Securities conform in all material
respects to the description thereof contained in such registration statement;
(vii) to the best of such counsel's knowledge, no stop order has been issued by
the Securities and Exchange Commission suspending the effectiveness of such
registration statement.
6.5. Registration Expenses.
A. All expenses incident to the Company's performance of or compliance with
this Agreement, including without limitation all fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Company and the
Company's independent certified public accountants, underwriters (excluding
discounts and commissions) and other persons retained by the Company (all such
expenses being herein called "Registration Expenses"), will be borne by the
Company, except as otherwise provided in this Agreement (including with respect
to Demand Registrations), except that the Company will, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any liability insurance for the Company and its board of directors and the
expenses for listing the securities to be registered on each securities exchange
on which similar securities issued by the Company are then listed or on the NASD
automated quotation system.
B. To the extent Registration Expenses are not required to be paid by the
Company, the Purchaser will pay the Registration Expenses allocable to the
registration of the Purchaser's securities included in the registration, and any
Registration Expenses not so allocable will be borne by the Purchaser in
proportion to the aggregate selling price of the
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<PAGE>
securities to be so registered. Such expenses would include, without limitation,
underwriters' discounts and commissions and fees of Purchaser's counsel.
6.6. Indemnification.
A. The Company agrees to indemnify, to the extent permitted by law, the
Purchaser, its officers, directors, employees and agents and each person who
controls the Purchaser (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses (including legal fees and
expenses) caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are (i) caused by
or contained in any information furnished in writing to the Company by the
Purchaser expressly for use therein, (ii) caused by the Purchaser's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Purchaser with a
sufficient number of copies of the same, or (iii) caused by the Purchaser's sale
of Registrable Securities in violation of the proviso to Section 6.4(E) hereof.
B. In connection with any registration statement in which the Purchaser is
participating, the Purchaser will furnish to the Company in writing such
information, affidavits and other material as the Company reasonably requests
for use in connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact contained
in the registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is contained in any information, affidavit or other material so
furnished in writing by the Purchaser.
C. In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may properly be
sought pursuant to this Article VI, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel to which the indemnified party has no
reasonable objection to represent the indemnified party and any others the
indemnifying party may designate in such proceedings and shall pay the fees and
disbursements of such counsel related to such proceeding. Except as otherwise
provided in this paragraph, after the indemnifying party retains counsel in
accordance with the preceding sentence, the indemnifying party shall not be
liable to
-25-
<PAGE>
the indemnified party under this Article VI for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In any such proceeding,
any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed in writing to the retention of such counsel and to the payment
by the indemnifying party of such counsel's fees and expenses or (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
conflicting interests between them. The indemnified party agrees to consult with
the indemnifying party prior to the retention of its own counsel in situations
covered by clause (ii) of the preceding sentence. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Purchaser and such
control persons of the Purchaser, such firm shall be designated in writing by
the Purchaser. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, such consent not to be unreasonably withheld, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
D. The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities. The Company also
agrees to make such provisions, as are reasonably requested by any indemnified
party, for contribution to such party in the event the Company's indemnification
is unavailable for any reason.
6.7. Participation in Underwritten Registrations. No person may participate
in any registration hereunder that is underwritten unless such person (a) agrees
to sell such person's securities on the basis provided in any underwriting
arrangements approved by the person or persons entitled hereunder to approve
such arrangements and (b) completes and executes all
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<PAGE>
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
which are customary in such transactions; provided, however, that the Purchaser
shall not be required to make any representations or warranties to the Company
or the underwriters other than representations and warranties regarding the
Purchaser and the Purchaser's intended method of distribution.
6.8. No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Purchaser in this Agreement.
6.9. Definition of "Registrable Securities." As used in this Article VI,
the term "Registrable Securities" means the Purchased Shares and shares of
Common Stock purchased upon exercise of the Option, and shares of Common Stock
issued in respect of either the Purchased Shares or the shares of Common Stock
purchased upon exercise of the Option by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, such securities will cease to be Registrable Securities when they
have been distributed to the public through a broker, dealer or market purchaser
in compliance with Rule 144 under the Securities Act (or any similar rule then
in force) or pursuant to an effective registration statement under the
Securities Act.
VII. MISCELLANEOUS
7.1. Purchaser's Investment Representations. The Purchaser hereby
represents that:
A. The Purchaser is acquiring the Purchased Shares, the Option, and the
shares which may be purchased pursuant to the exercise of the Option (together,
for purposes of this Section 7.1, the "Investment Securities") for its own
account with the present intention of holding such Investment Securities for
purposes of investment, and that the Purchaser has no intention of selling such
Investment Securities in a public distribution in violation of the federal
securities laws or any applicable state securities laws.
B. The Purchaser is sophisticated in financial matters and is able to
evaluate the risks and benefits of his or its investment in the Investment
Securities.
C. The Purchaser is able to bear the economic risk of its investment in the
Investment Securities for an indefinite period of time because the Investment
Securities have not been registered under the Securities Act and, therefore,
cannot be sold unless subsequently registered under the Securities Act or an
exemption from such registration is available.
D. The Purchaser has had full opportunity to interview directors and
officers and to ask questions and receive answers concerning
-27-
<PAGE>
the Company and has had full access to such other information concerning the
Company as it has requested.
7.2. Restrictive Legend. Each certificate for the Purchased Shares or the
shares purchased pursuant to the exercise of the Option shall be imprinted with
a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT UPON REGISTRATION UNDER ALL APPLICABLE FEDERAL AND
STATE SECURITIES LAWS OR UPON DELIVERY TO THE CORPORATION OF EITHER (A) A
NO-ACTION LETTER FROM THE STATE AND FEDERAL AGENCIES HAVING JURISDICTION
THEREOF OR (B) AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
NEITHER THE SALE NOR THE PROPOSED TRANSFER CONSTITUTES A VIOLATION OF ANY
FEDERAL OR STATE SECURITIES LAW.
7.3. Purchaser's Ownership Representations. The Purchaser hereby represents
and warrants that both the Purchaser and Mentmore Holdings Corporation are
corporations controlled, directly or indirectly, by William Remley and Richard
Kramer or members of their immediate families.
7.4. Consent to Amendments. Except as otherwise expressly provided herein,
the provisions of this Agreement may be amended and the Company or the Purchaser
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, with the written consent of the Company and the
Purchaser. No other course of dealing between the Company and the Purchaser or
any delay in exercising any rights hereunder or under the Company's Certificate
of Incorporation shall operate as a waiver of any rights of the Purchaser.
7.5. Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by the Purchaser or on its behalf.
7.6. Successors and Assigns. Except as otherwise expressly provided herein,
all covenants and agreements contained in this Agreement by or on behalf of any
of the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not. In
addition, and whether or not any express assignment has been made, the
provisions of this Agreement that are for the Purchaser's benefit as a purchaser
or holder of Purchased Shares are also for the benefit of, and enforceable by,
any subsequent holder of such Purchased Shares; provided that Purchased Shares
shall cease to be Purchased Shares under this Agreement when they have been (i)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them or (ii) distributed to the public
pursuant to Rule 144. This Agreement shall terminate at such time as all of the
Purchased Shares have been (i) effectively registered under the Securities Act
and disposed of in accordance with the registration
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<PAGE>
statement covering them or (ii) distributed to the public pursuant to Rule 144.
7.7. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
7.8. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the
same Agreement.
7.9. Descriptive Headings; Interpretation. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement. The use of the word "including" in this Agreement shall be by way of
example rather than by limitation.
7.10. Governing Law. The corporate law of the State of Delaware shall
govern all issues concerning the relative rights of the Company and its
shareholders. All other questions concerning the construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by the internal law, and not the law of conflicts, of the State of
North Carolina.
7.11. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, one business day after sent to the recipient by reputable express
courier service (charges prepaid) or five business days after mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
Purchaser and to the Company at the addresses indicated below:
If to the Company: Texfi Industries, Inc.
Post Office Box 31728
Raleigh, North Carolina 27622
Attn: Chief Financial Officer
with a copy to: Schell Bray Aycock Abel & Livingston
1500 Renaissance Plaza
230 North Elm Street
Post Office Box 21847
Greensboro, NC 27420
Attn: Braxton Schell, Esq.
If to the Purchaser: Chadbourne Corporation
1140 Connecticut Avenue, N.W.
Washington, D.C. 20036
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<PAGE>
Attn: President
with a copy to: Dreyer & Traub
101 Park Avenue
New York, New York
Attn: Gerald N. Schrager, Esq.
or to such other address or to the attention to such other person as the
recipient party has specified by prior written notice to the sending party.
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the date first written above.
TEXFI INDUSTRIES, INC.
By: L. Terrell Sobey, Jr.
Its President
CHADBOURNE CORPORATION
By: William L. Remley
Its President
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<PAGE>
EXHIBIT A
CERTIFICATE OF OPTION
For value received, Texfi Industries, Inc., does hereby grant to Chadbourne
Corporation an option to purchase up to 600,000 shares of Common Stock, par
value $1.00 per share, of Texfi Industries, Inc., on the terms and conditions
set forth in that certain Stock and Option Purchase Agreement dated as of May
24, 1994, between Texfi Industries, Inc., and Chadbourne Corporation.
TEXFI INDUSTRIES, INC.
By ________________________________
Its ________________________________
Date: ________________________________
-31-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
SCHEDULE 13D
----------
Under the Securities Exchange Act of 1934
TEXFI INDUSTRIES, INC.
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
882895 10 5
(CUSIP Number)
William L. Remley, President
Chadbourne Corporation
1430 Broadway
Suite 1300
New York, New York 10018
Telephone (212) 391-1392
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 31, 1994
(Date of Event which Requires Filing
of this Statement)
Check the following box if a fee is being paid with this Statement: [X]
Exhibit Index is on page 10.
<PAGE>
CUSIP No. 882895 10 5 13D Page 2 of 12 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chadbourne Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 882895 10 5 13D Page 3 of 12 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Halton House Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 882895 10 5 13D Page 4 of 12 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Halton Declaration of Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 882895 10 5 13D Page 5 of 12 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stefan F. Tucker
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 882895 10 5 13D Page 5 of 12 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gary R. Siegel
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,524,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,524,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
<PAGE>
Item 1. Security and Issuer.
This Amendment No. 1, filed jointly by Chadbourne Corporation
("Chadbourne"), Halton House Ltd. ("Halton Ltd."), The Halton Declaration of
Trust ("Halton Trust"), Stefan F. Tucker, and Gary R. Siegel, amends and
supplements the statement on Schedule 13D, (this "Schedule"), filed jointly by
Chadbourne, Halton Ltd., Halton Trust and Mr. Tucker relating to shares of
Common Stock, par value $1.00 per share (the "Common Stock"), of Texfi
Industries, Inc. (the "Issuer"). Any capitalized term used without definition
shall have the same meaning previously ascribed to it in this Schedule.
Item 2. Identity and Background.
As previously reported in this Schedule, all powers with respect to
investment or voting of securities beneficially by Halton Trust were exercisable
by Stefan F. Tucker, protector under the constituent instruments of Halton
Trust. Pursuant to an instrument effective as of August 31, 1994, Mr. Tucker
resigned as protector under the constituent instruments of Halton Trust,
whereupon Gary R. Siegel became the successor protector. Mr. Siegel's business
address is 1615 L Street, N.W., Washington, D.C. 20036. He is an attorney with
Tucker, Flyer & Lewis a professional corporation at that address. Mr. Siegel is
hereinafter included within the definition of "Reporting Persons."
During the last five years, Mr. Siegel has not been convicted in a criminal
proceeding (excluding traffic or similar misdemeanors) and has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction whereby, as a result of such proceeding, he was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws. Mr. Siegel is a citizen of the United
States of America.
Item 5. Interest in Securities of the Issuer.
(a)-(b) Chadbourne, as holder of the Option, may be deemed to be the
beneficial owner of 1,524,000 of Common Stock, or 16.5% of the shares of Common
Stock outstanding (based on 8,630,996 shares of Common Stock reported to be
outstanding in the Issuer's Form 10-Q for the quarter ended April 29, 1994, as
well as shares underlying the Option). Halton Ltd., by virtue of its ownership
of Chadbourne, and Halton Trust, by virtue of its ownership of Halton Ltd., each
may be deemed to have the power to vote and dispose of the shares of Common
Stock covered by the Option. From and after August 31, 1994, Gary R. Siegel, by
virtue of his powers as protector of Halton Trust, may be deemed to have the
power to vote and dispose of the shares of Common Stock covered by the Option,
and Mr. Tucker has no power to vote or dispose of shares of Common Stock.
(c) Mr. Tucker resigned as protector of the Halton Trust, whereupon Mr.
Siegel became the successor protector thereof, effective as of August 31, 1994.
Other than such resignation and succession, none of the Reporting Persons has
effected any transactions in the Common Stock of the Issuer during the past
sixty (60) days.
(e) As a result of resignations as protector of Halton Trust, Mr. Tucker
ceased to be the beneficial owner of more than five percent of the Common Stock
as of August 31, 1994.
Item 7. Materials to be Filed as Exhibits.
Exhibit Description
- ------- -----------
1.0 Joint filing agreement.
1.1 Resignation of Stefan F. Tucker as protector under the
constituent documents of The Halton Declaration of Trust
and appointment of Gary R. Siegel as successor.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned hereby certifies that the information set forth in
this amendment is true, complete and correct.
Dated: August 22, 1994
CHADBOURNE CORPORATION
By:
William L. Remley, President
HALTON HOUSE LTD.
By:
William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: Gary R. Siegel, as
Protector of The Halton Declaration
of Trust
Stefan F. Tucker
Gary R. Siegel
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
1.0 Joint filing agreement 10
1.1 Resignation of Stefan F. Tucker as protector 11
under the constituent documents of the
Halton Declaration of Trust and appointment
of Gary R. Siegel as successor.
EXHIBIT 1.0
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the undersigned hereby agree to the joint filing on behalf of
each of them of this Amendment No. 1 to Schedule 13D with respect to the Common
Stock, par value $1.00 per share, of Texfi Industries, Inc. and that this
agreement shall be included as an exhibit to such joint filing.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing
Agreement this 22nd day of August, 1994.
CHADBOURNE INVESTMENT CORP.
By: William L. Remley, President
HALTON HOUSE LTD.
By: William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: Gary R. Siegel, as
Protector of The Halton Declaration
of Trust
Stefan F. Tucker
Gary R. Siegel
EXHIBIT 1.1
RESIGNATION OF PROTECTOR AND SELECTION OF SUCCESSOR PROTECTOR
WHEREAS, the undersigned, STEFAN F. TUCKER ("TUCKER"), is the duly
appointed initial Protector of The Halton Declaration of Trust, dated December
31, 1992 (the "Trust");
WHEREAS, pursuant to the provisions of the FOURTH SCHEDULE of the Trust,
TUCKER desires to resign his office as Protector thereof and, in connection
therewith, has been granted the authority, by written instrument delivered to
the Trustees of the Trust, (i) to nominate a new successor to act as Protector
of the Trust, (ii) to nominate an alternative successor Protector to take office
as Protector only if the successor named herein fails to qualify as a Protector
in accordance with the provisions of the FOURTH SCHEDULE of the Trust, and (iii)
to revoke the nomination of any and all successor Protectors heretofore made by
TUCKER to the Trustees of the Trust; and
WHEREAS, TUCKER wishes to nominate (i) GARY R. SIEGEL ("SIEGEL"), of
Potomac, Maryland, as a successor Protector of the Trust immediately upon the
later of his acceptance of such nomination or August 31, 1994 (the "Effective
Date"), and (ii) RICHARD HOFFMAN, of Dallas, Texas, as the alternative successor
Protector of the Trust to take office as Protector only if SIEGEL fails to
qualify as a Protector.
NOW, THEREFORE, TUCKER, pursuant to the authority granted to him under the
FOURTH SCHEDULE of the Trust, does hereby (i) resign his office as Protector of
the Trust effective for all purposes and in all respects as of the Effective
Date, (ii) nominate and appoint GARY R. SIEGEL as the successor Protector of the
Trust, effective for all purposes and in all respects as of the Effective Date,
(iii) nominate and appoint RICHARD HOFFMAN as the alternative successor
Protector of the Trust effective upon the Effective Date, and (iv) revoke the
nomination of any and all successor Protectors (and/or alternative successor
Protectors) heretofore made by TUCKER to the Trustees of the Trust.
By joining in the execution of this Resignation of Protector and Selection
of Successor Protector, SIEGEL hereby acknowledges this notice of nomination and
appointment as successor Protector of the Trust and hereby signifies his
acceptance of the Trust and covenants that he shall faithfully discharge his
duties as successor Protector of the Trust. In furtherance thereof, pursuant to
the provisions of the FOURTH SCHEDULE of the Trust (including his right
hereafter to revoke such nominationS for any reason at any time during his
lifetime), SIEGEL hereby (i) nominates (and ratifies and confirms the nomination
of) RICHARD HOFFMAN as his successor Protector upon SIEGEL's ceasing for any
reason to hold office as Protector of the Trust and (ii) nominates GERALD
SCHRAGER as alternative successor Protector to take office as Protector in
accordance with the provisions of the FOURTH SCHEDULE of the Trust.
WITNESS:
STEFAN F. TUCKER, Protector of The
Halton Declaration of Trust
I hereby acknowledge and accept my nomination and appointment as successor
Protector of the Trust in accordance with the terms hereof as of Effective Date.
GARY R. SIEGEL
<PAGE>
)
: SS.:
)
BE IT REMEMBERED that, on the 21st day of July, 1994, before me, a Notary
Public in and for the jurisdiction aforesaid, do hereby certify that each of the
abovesigned, STEFAN F. TUCKER and GARY R. SIEGEL, personally came and appeared
before me in said jurisdiction, and, being personally well known to me, and
being by me first duly sworn, did depose and say that he did duly sign and seal
and as and for his act and deed execute, acknowledge and deliver the within
instrument for the purposes therein mentioned.
Subscribed and sworn to me on this 21st day of July, 1994.
Notary Public
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TEXFI INDUSTRIES, INC.
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
882895 10 5
(CUSIP Number)
William L. Remley, President
Chadbourne Corporation
1430 Broadway
Suite 1300
New York, New York 10018
(212) 391-1392
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 6, 1995
(Date of Event which Requires Filing
of this Statement)
Check the following box if a fee is being paid with this statement: [ ]
Exhibit Index is on page 10.
<PAGE>
CUSIP No. 882895 10 5 13D Page 2 of 24 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chadbourne Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,705,800
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,705,800
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,705,800
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-2-
<PAGE>
CUSIP No. 882895 10 5 13D Page 3 of 24 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Halton House Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,705,800
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,705,800
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,705,800
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-3-
<PAGE>
CUSIP No. 882895 10 5 13D Page 4 of 24 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Halton Declaration of Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,705,800
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,705,800
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,705,800
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- --------------------------------------------------------------------------------
-4-
<PAGE>
CUSIP No. 882895 10 5 13D Page 5 of 24 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gary R. Siegal
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,705,800
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,705,800
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,705,800
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
-5-
<PAGE>
Item 1. Security and Issuer.
This Amendment No. 2, filed jointly by Chadbourne Corporation
("Chadbourne"), Halton House Ltd. ("Halton Ltd."), The Halton Declaration of
Trust ("Halton Trust"), and Gary R. Siegel, amends and supplements the statement
on Schedule 13D, as previously amended (this "Schedule"), filed jointly by
Chadbourne, Halton Ltd., Halton Trust and Mr. Siegel relating to shares of
Common Stock, par value $1.00 per share (the "Common Stock"), of Texfi
Industries, Inc. (the "Issuer"). Any capitalized term used without definition
shall have the same meaning previously ascribed to it in this Schedule.
Item 2. Identity and Background.
The principal office of Chadbourne has been relocated to 1430 Broadway,
Suite 1300, New York, New York 10018.
Item 3. Source and Amount of Funds or Other Consideration.
The purchases of Common Stock by Chadbourne reported in Item 5(c) of this
Amendment No. 2 have required the expenditure of approximately $528,719.
Chadbourne has borrowed the funds expended in such purchases from The A.J. 1989
Trust pursuant to an arrangement, described in Item 6 of this Amendment No. 2,
whereunder The A.J. 1989 Trust agreed to loan Chadbourne up to $1 million, in
the discretion of The A.J. 1989 Trust, the repayment of which is secured by the
securities in Chadbourne's designated brokerage account, including the shares of
Common Stock purchased by Chadbourne with such funds.
Item 5. Interest in Securities of the Issuer.
(a)-(b) As of the close of business on March 31, 1995, Chadbourne may be
deemed to be the beneficial owner of 1,705,800 shares of Common Stock, including
600,000 shares underlying the Option. Such 1,705,800 shares constitute 18.4% of
the shares of Common Stock outstanding (based on 8,652,621 shares of Common
Stock reported to be outstanding as of January 13, 1995 in the Issuer's proxy
statement for its 1995 Annual Meeting of Stockholders), as well as shares
underlying the Option. Halton Ltd., by virtue of its ownership of Chadbourne,
Halton Trust, by virtue of its ownership of Halton Ltd., and Mr. Siegel, by
virtue of his powers as protector of Halton Trust, each may be deemed to have
the power to vote and dispose of the shares of Common Stock beneficially owned
by Chadbourne.
-6-
<PAGE>
(c) Since January 1, 1995, Chadbourne effected purchases of Common Stock in
open-market transactions, as follows:
Date of trade Shares acquired Price per share*
------------- --------------- ----------------
January 3, 1995 2,000 $2.75
January 4, 1995 1,000 $2.625
January 9, 1995 4,000 $2.50
January 11, 1995 20,000 $2.50
January 13, 1995 4,000 $2.375
January 17, 1995 4,500 $2.50
January 18, 1995 25,000 $2.375
January 30, 1995 2,500 $2.625
February 1, 1995 500 $2.75
February 3, 1995 17,000 $3.00
February 13, 1995 2,600 $3.125
February 14, 1995 2,600 $3.125
February 15, 1995 2,600 $3.00
February 16, 1995 2,200 $2.875
February 17, 1995 2,600 $2.875
February 21, 1995 2,600 $3.00
February 22, 1995 19,600 $3.00
February 23, 1995 400 $3.00
February 24, 1995 2,600 $3.125
March 3, 1995 43,500 $3.00
March 6, 1995 20,000 $3.00
* Such prices are net of brokerage commissions.
Except as provided in the foregoing table with respect to Chadbourne, none
of the Reporting Persons have effected any transaction in the Common Stock
within the 60 days preceding the date of this Amendment No. 2.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
The A.J. 1989 Trust has agreed to loan Chadbourne up to $1 million, in the
discretion of the trustees of The A.J. 1989 Trust, pursuant to the terms of a
Loan and Security Agreement dated as of January 1, 1995 by and between The A.J.
1989 Trust and Chadbourne, a copy of which is attached as Exhibit 2.1 hereto and
incorporated by reference. Under such Loan and Security Agreement, an aggregate
of approximately $528,719 has been advanced to Chadbourne to fund the purchases
of Common Stock described in Item 5(c) of this Amendment No. 2. Under the terms
of such Loan and Security Agreement, interest only is due on December 31 of
-7-
<PAGE>
each year and the balance of indebtedness is due December 31, 2001. Repayment by
Chadbourne of such funds and interest thereon is secured by all securities held
in Chadbourne's brokerage account with Smith Barney, including all shares of
Common Stock purchased by Chadbourne with such borrowed funds.
Item 7. Materials to be Filed as Exhibits.
Exhibit Description
- ------- -----------
2.0 Joint filing agreement.
2.1 Loan and Security Agreement dated as of January 1, 1995 by
and between The A.J. 1989 Trust and Chadbourne Corporation.
-8-
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned hereby certifies that the information set forth in
this amendment is true, complete and correct.
Dated: April 7, 1995
CHADBOURNE CORPORATION
By: William L. Remley, President
HALTON HOUSE LTD.
By: William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: Gary R. Siegel, as Protector of
The Halton Declaration of Trust
Gary R. Siegel
-9-
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
2.0 Joint filing agreement. 11
2.1 Loan and Security Agreement dated as of 12
January 1, 1995 by and between The A.J.
1989 Trust and Chadbourne Corporation.
-10-
EXHIBIT 2.0
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the undersigned hereby agree to the joint filing on behalf of
each of them of this Amendment No. 2 to Schedule 13D with respect to the Common
Stock, par value $1.00 per share, of Texfi Industries, Inc. and that this
agreement shall be included as an exhibit to such joint filing.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing
Agreement this 7th day of April 1995.
CHADBOURNE INVESTMENT CORP.
By: William L. Remley, President
HALTON HOUSE LTD.
By: William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: Gary R. Siegel, as Protector of
The Halton Declaration of Trust
Gary R. Siegel
-11-
EXHIBIT 2.1
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made and entered
into effective for all purposes and all respects as of the 1st day of January,
1995 by CHADBOURNE CORPORATION, a Delaware corporation, whose address is 1430
Broadway, 13th Floor, New York, New York 10018 ("Pledgor"), and THE A.J. 1989
TRUST, whose address is c/o Mentmore Holdings, Corp., 1430 Broadway, 13th Floor,
New York, New York 10018 ("Secured Party").
WHEREAS, Secured Party has indicated to Pledgor that it may consider
loaning in the future, in its sole and absolute discretion, funds to Pledgor, up
to a maximum aggregate amount of One Million Dollars ($1,000,000.00), pursuant
to the form of Promissory Note (Line of Credit) attached hereto as Exhibit A and
made a part hereof (such form, as executed, and/or any renewal, replacement,
substitution thereto, as any of the foregoing may be amended from time to time,
shall hereinafter be referred to as the "Credit Note"), subject to the terms and
conditions hereinafter set forth, for the purpose of acquiring in the future
from time to time shares of Common Stock of Texfi Industries, Inc. (such shares
and/or the stock certificate(s) representing such shares shall hereinafter be
referred to as the"Stock"), a Delaware corporation ("Texfi");
WHEREAS, as a material inducement to Secured Party to make (or otherwise
consider making) such loans to Pledgor hereunder and as collateral for the
payment of principal, interest and other sums due under such loans, Pledgor has
agreed to grant Secured Party a security interest in and to the Stock.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Indebtedness.
(a) At any time or from time to time prior to December 31, 2001, Secured
Party agrees to consider loaning, in its sole and absolute discretion, funds to
Pledgor, up to a maximum aggregate amount of One Million Dollars
($1,000,000.00), subject to the provisions provided herein (any such funds
advanced or readvanced hereunder being hereinafter referred to collectively as
the "Indebtedness").
(b) Nothing herein shall grant to Pledgor (or any other party) any right to
demand Secured Party to make any loans hereunder, and it is expressly understood
and agreed that Secured Party has the sole and absolute discretion to decide
whether or
<PAGE>
not to advance any funds pursuant to this Agreement and can unilaterally impose
any condition or requirement not stated in this Agreement as an additional
condition for making any such loans.
(c) It is understood and agreed that, as funds are advanced from time to
time to Pledgor by Secured Party, such Indebtedness shall be evidenced by the
Credit Note payable to Secured Party and secured by the "Collateral" (as defined
below).
2. Grant of Security Interests.
(a) Pledgor hereby grants, pledges, assigns and transfers unto Secured
Party a security interest in and to all of Pledgor's right, title and interest
in and to the Stock (including, but not limited to, Pledgor's account numbered
376- 181-40-15 at Smith Barney ("Smith Barney"), whose business address is 1776
Eye Street, N.W., Suite 900, Washington, D.C. 20006, or any subsequent account
wherein the Stock is held for the account of Pledgor), together with all right,
title and interest of Pledgor in and to any proceeds, increases, substitutions,
replacements, additions and accessions thereof and thereto (hereinafter
collectively referred to as the "Collateral").
(b) As additional security for the payment of principal, interest and other
sums due under the Credit Note, the Collateral is hereby absolutely,
unconditionally and irrevocably granted, pledged and assigned to Secured Party.
(c) In furtherance of and not in limitation of the foregoing, any and all
income, proceeds and/or distributions with respect to the Stock and/or the
Collateral shall be immediately paid over to Secured Party upon receipt by
Pledgor and, in connection therewith, Secured Party shall have the right to
instruct the respective payor thereunder to make any and all such payments
directly to Secured Party until the Indebtedness (including, any and all
interest, fees and expenses) is repaid in full.
(d) Pledgor hereby covenants and agrees that, upon the acquisition of any
Stock, Pledgor shall immediately (i) provide the Secured Party with written
notice of such acquisition and (ii) deliver or cause to be delivered to Secured
Party (A) (1) possessions of the Stock and (2) a duly executed Collateral
Assignment Separate From Certificate (Stock Power) in the form attached hereto
as Exhibit B and made a part hereof, and/or (B) any pledge, escrow or other
security agreement which is satisfactory to Secured Party and, if necessary,
entered into by Smith Barney [or any other subsequent holder of the Stock for
Pledgor's account (such holder being hereinafter referred to as "Broker")], if
it appears necessary or advisable in the opinion of Secured Party to establish,
maintain and/or continuously
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<PAGE>
perfect a valid and enforceable first priority security interest in the Stock
(it being understood, however, that any such delivery shall be deemed to have
been made and be effective immediately upon Pledgor's acquisition of the Stock,
directly or by and through Broker, which Stock shall be deemed to be held in
constructive trust by Pledgor (or such Broker, as the case may be) for the
benefit of Secured Party until such possession and/or delivery actually occurs);
provided, however, that, no such pledge of the Stock hereunder shall be deemed
to have accrued or be deemed effective until such Stock has been acquired by
Pledgor.
3. Pledgor's Representations, Warranties and Covenants. Pledgor represents,
warrants and covenants, which representations, warranties, and covenants shall
survive execution and delivery of this Agreement, as follows:
(a) Use of Proceeds. Pledgor shall use the Indebtedness solely for the
purpose of, and to the fullest extent necessary to, acquire the Stock.
(b) Enforceability; Priority. Pledgor is the legal and beneficial
owner of the Collateral and has the full, absolute and entire right, power
and authority to execute and deliver this Agreement and to grant the
security interest in the Collateral hereunder. The security interest
granted to Secured Party hereunder in and to the Collateral constitutes a
valid and enforceable first priority security interest therein and is
subject to no mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority
or other security agreement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC
of any jurisdiction, or any other similar recording or notice statute, and
any lease having substantially the same effect as any of the foregoing)
(the "Liens") that have been created by or are arising through Pledgor,
except for the Liens expressly set forth in this Agreement. Secured Party
is entitled to all the rights, priorities, benefits and remedies of a
secured party afforded by the Uniform Commercial Code of the State of
Florida or any other applicable jurisdiction (the "UCC").
(c) No Liens. Except for the Liens expressly set forth in this
Agreement, Pledgor shall not grant to any individual, partnership, joint
venture, firm, corporation, association, trust, or other enterprise or any
government or political subdivision or any agency, department, or
instrumentality thereof (a "Person") any lien or otherwise pledge or
encumber the Collateral, nor shall Pledgor sell, assign, transfer or
otherwise dispose of the Collateral, without the
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<PAGE>
express written consent of Secured Party exercised in its sole discretion.
(d) Further Actions. Pledgor agrees, at its sole cost and expense, to
acknowledge, execute and deliver to Secured Party and, if appropriate,
record such financing statements and such other instruments, documents
and/or notices as Secured Party may from time to time reasonably request or
as are necessary in the opinion of Secured Party to establish, maintain
and/or continuously perfect a valid and enforceable security interest in
the Collateral as provided herein and the other rights and security
contemplated herein [including, but not limited to, any pledge, escrow or
other security agreement which is satisfactory to Secured Party and entered
into by Broker (or any other subsequent holder of the Stock for Pledgor's
account)] all in accordance with the UCC and all other applicable laws as
enacted in any and all relevant jurisdictions or any other relevant law.
Pledgor will pay any applicable filing fees and related expenses.
(e) Attorney-in-Fact. So long as this Agreement remains in existence,
Secured Party is absolutely, irrevocably and unconditionally constituted
and appointed the true and lawful attorney-in-fact, in Pledgor's name or
otherwise, to pursue and enforce all and any rights of Pledgor in and to
the Collateral, such power of attorney being coupled with an interest so
long as this Agreement shall remain in effect.
(f) Absolute Rights. This Agreement shall be construed as absolute,
continuing and unlimited with respect to the covenants, conditions and
obligations contained herein, without regard to regularity, validity,
enforceability or any change, modification or amendment of any liability or
obligation of Secured Party. Further, Secured Party may exercise its rights
with respect to the Collateral without any necessity on its part or on the
part of the holder of any obligation secured hereby first to realize upon
or enforce any of the security now or hereafter held for any such
obligation, and Pledgor hereby waives (i) any right to require Secured
Party to proceed against any person or to pursue any other remedy and (ii)
all suretyship defenses or other defenses in the nature thereof.
4. Events of Default. The following shall constitute Events of Default
under this Agreement:
(a) Pledgor shall fail to pay to Secured Party any amount due Secured
Party under any term or provision of the Credit Note which has not been
cured within ten (10) days after written notice to Pledgor of such default;
(b) any representation, warranty or statement made by Pledgor herein
or in any certificate delivered pursuant hereto shall prove to be untrue in
any material respect on the date as
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<PAGE>
of which made or being made which has not been (or cannot be) cured within
ten (10) days after written notice to Pledgor of such breach;
(c) Pledgor shall default in the performance or observance by it of
any other term, covenant or agreement contained in this Agreement, the
Credit Note or any other document executed in connection herewith or
otherwise securing the Indebtedness, and the same is not cured within ten
(10) days after written notice of such default is given to Pledgor or, with
respect to any default which cannot be reasonably cured within ten (10)
days, if Pledgor fails to proceed within ten (10) days to commence curing
such default and thereafter to proceed with all due diligence to
substantially cure such default within forty-five (45) days thereafter; or
(d) Pledgor shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or
an involuntary case is commenced against Pledgor and the petition is not
controverted within ten (10) days, or is not dismissed within sixty (60)
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of Pledgor, or Pledgor commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency, or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Pledgor, or
there is commenced against Pledgor any such proceeding which remains
undismissed for a period of sixty (60) days, or Pledgor is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or Pledgor suffers any appointment of a
custodian or the like for it or any substantial part of its properties to
continue undischarged or unstayed for a period of sixty (60) days; or
Pledgor makes a general assignment for the benefit of creditors; or any
corporate action is taken by Pledgor for the purposes of effecting any of
the foregoing.
5. Remedies. Pledgor agrees that, if any Event of Default shall have
occurred and be continuing, then and in every such case, subject to (i) any
continuing rights of the holders of pre-existing Liens identified in this
Agreement and (ii) any mandatory requirements of applicable law then in effect,
Secured Party may avail itself of any legal or equitable rights or remedies of a
secured creditor under the UCC and/or any other applicable law now or hereafter
existing.
6. Waiver of Claims. Except as otherwise provided in this Agreement,
PLEDGOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH
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<PAGE>
SECURED PARTY'S TAKING POSSESSION OR SECURED PARTY'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF
ANY STATE, and Pledgor hereby further waives, to the fullest extent permitted by
law:
(a) all damage occasioned by such taking of possession except any
damages which are the direct result of Secured Party's gross negligence or
misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of Secured Party's
rights hereunder; and
(c) all rights of redemption, stay, extension or moratorium now or
hereafter in force under any applicable law in order to prevent or delay
the enforcement of this Agreement or absolute sale of the Collateral or any
portion thereof, and Pledgor, for itself and all who may claim under him,
insofar as he now or hereafter lawfully may, hereby waives the benefit of
all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of Pledgor therein and thereto, and shall be
a perpetual bar both at law and in equity against Pledgor and against any and
all Persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through and under Pledgor.
7. Application of Proceeds. The proceeds of any Collateral shall be applied
as follows:
(a) to the payment of any and all reasonable expenses and fees
(including reasonable attorneys' fees) incurred by Secured Party in
obtaining and disposing of Collateral;
(b) next, any surplus then remaining to the payment of the
Indebtedness; and
(c) if no part of the Indebtedness is outstanding and in default, any
surplus then remaining shall be paid to Pledgor, subject however, to the
rights of the holder of any then existing Lien of which Secured Party has
actual notice (without investigation);
it being understood that Pledgor shall remain liable to the extent of any
deficiency between the amount of the proceeds of the Collateral and the
aggregate amount of the sums referred to
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<PAGE>
in clauses (a) and (b) of this Paragraph 7 with respect to Secured Party.
8. Remedies Cumulative. No failure or delay on the part of Secured Party in
exercising any right, power or privilege hereunder and no course of dealing
between Pledgor and Secured Party shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power, or privilege hereunder
preclude any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which Secured Party would otherwise
have.
9. Discontinuance of Proceedings. In case Secured Party shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Secured Party, then and in every such case Pledgor and Secured Party shall be
restored to their former positions and the rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of Secured Party, shall continue as if no such
proceeding had been instituted.
10. Additional Rights. The rights of Secured Party under this Agreement
shall be in addition to all rights and benefits at law or in equity inuring to
Secured Party with respect to the Credit Note, the Indebtedness and any
documents relating thereto.
11. Notices. All notices to be given under this Agreement shall be deemed
given when delivered by hand, by facsimile or other similar transition, by a
nationally recognized overnight courier, or when sent by certified or registered
mail, return receipt requested, and addressed to the party's address set forth
opposite such party's signature below, or if sent otherwise be deemed given when
actually received. Either party may change its address for notices by delivery
and receipt of a notice thereof to the other party.
12. Waiver; Amendment. This Agreement may be changed, waived, discharged,
or terminated only by an instrument in writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought.
13. Obligations Absolute. The obligations of Pledgor under this Agreement
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstances or occurrence whatsoever, including,
without limitation: (a) any renewal, extension, amendment or modification of, or
addition or supplement to or
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<PAGE>
deletion from, any agreement or invoice relating to the Collateral or any other
instrument or agreement referred to therein, or any assignment or transfer of
any thereof; (b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such instrument or agreement or this
Agreement or any exercise or non-exercise of any right, remedy, power or
privilege under or in respect of this Agreement; (c) any furnishing of any
additional security to Secured Party or any acceptance thereof or any sale,
exchange, release, surrender or realization of or upon any security by Secured
Party; or (d) any invalidity, irregularity or unenforceability of all or part of
the Collateral.
14. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided, however, that Pledgor may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of
Secured Party. All agreements, statements, representations and warranties made
by Pledgor herein or in any certificate or other instrument delivered by Pledgor
or on its behalf under this Agreement shall be considered to have been relied
upon by Secured Party and shall survive the execution and delivery of this
Agreement regardless of any investigation made by Secured Party.
15. Headings Descriptive, Etc. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
16. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall at all times and in all respects be construed in
accordance with and be governed by the laws of the State of Florida.
17. Pledgor's Duties. It is expressly agreed, anything herein contained to
the contrary notwithstanding, that Pledgor shall remain liable to perform all of
the obligations, if any, assumed by it with respect to the Collateral, and
Secured Party shall not be required or obligated in any manner to perform or
fulfill any of the obligations of Pledgor under or with respect to any
Collateral.
18. Preamble; Exhibits. The preamble hereto is hereby incorporated herein
and, by this reference, made a part hereof. Similarly, Exhibits A and B are
hereby incorporated herein and, by this reference, made a part hereof.
[Signatures appear on following page]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date set first set forth above.
PLEDGOR:
WITNESS/ATTEST: CHADBOURNE CORPORATION, a Delaware
corporation
By: William L. Remley,
President
[Corporate Seal]
SECURED PARTY:
WITNESS: THE A.J. 1989 TRUST
By: William L. Remley, Trustee
2
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<PAGE>
EXHIBIT A
TO
LOAN AND SECURITY AGREEMENT
PROMISSORY NOTE (LINE OF CREDIT)
$1,000,000.00 District of Columbia
Date: January 1, 1995
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORA- TION, a Delaware
corporation ("Maker"), hereby promises to pay to the order of THE A.J. 1989
TRUST ("Payee") the principal sum of ONE MILLION DOLLARS ($1,000,000.00), or so
much thereof as may be advanced and/or readvanced hereunder and remain unpaid,
together with accrued interest at the rate hereinafter set forth, on the unpaid
principal balance hereof from time to time outstanding (the "Principal
Balance"), at the rates applicable from time to time before maturity, as set
forth in this Promissory Note (this "Note").
1. Revolving Loan. This Note evidences a revolving loan. Advances and
readvances shall be made hereunder as provided in that certain Loan and Security
Agreement dated as of January 1, 1995 between Maker and Payee (the "Loan and
Security Agreement"). The entire unpaid principal balance, together with accrued
and unpaid interest thereon, and all other obligations of Maker hereunder, if
not sooner paid, shall be due and payable in full on December 31, 2001 (the
"Maturity Date").
2. Rate of Interest. This Note shall bear interest (computed on the basis
of the actual number of days elapsed over a 365-day year) until the Maturity
Date on the Principal Balance at a rate equal to nine percent (9%) per annum
(the "Interest Rate").
3. Payments. Interest only, commencing as of the date hereof and calculated
at the Interest Rate on the Principal Balance, shall be due and payable annually
on the thirty-first (31st) day of each December during the term of this Note
commencing on the thirty-first (31st) day of December, 1995, except that the
last such payment of interest only shall be due and payable on the Maturity
Date, and on each such interest payment date there shall be due and payable all
interest accrued to that date; provided, however, that Payee shall have the
absolute right (but not the obligation), in its sole discretion, to add to the
Principal Balance at any time or from time to time any accrued interest then due
and payable hereunder and treat the same as an advance under this Note, without
notice to or demand upon Maker. The entire Principal Balance hereof, and all
accrued but unpaid interest, if any, shall be due and payable in full on the
Maturity Date.
<PAGE>
Payments made on account hereof shall, at Payee's option, be applied first (1st)
to the payment of any late charges accrued and due and other costs and expenses,
if any, then to accrued and unpaid interest, and the remainder of each payment
shall be applied to unpaid principal.
Maker may prepay the Principal Balance or any part thereof, with accrued
interest to the date of such prepayment, at any time, without penalty or
premium. Prepayments shall not postpone or reduce any regular payments of
interest, but shall be credited to installments of principal, if any, in their
order of maturity.
4. Guaranty. Maker hereby unconditionally guarantees the due performance
and prompt payment, whether on the Maturity Date or by acceleration or
otherwise, of the full principal balance of this Note, together with interest
calculated as aforesaid, and all reasonable legal or other costs incurred by
Payee in the enforcement thereof against Maker.
5. Event of Default. It is expressly agreed that time is of the essence for
all purposes of this Note. Either (i) the failure of Maker to make any payment
of the interest or the Principal Balance on this Note as and when due and
payable which failure is not fully cured within ten (10) days after written
notice thereof from Payee; (ii) the making by Maker of a general assignment for
the benefit of creditors; (iii) the appointment of a custodian for Maker; (iv)
the commencement of any proceeding by Maker for relief under any Federal
bankruptcy law or any state insolvency or similar law; (v) the commencement of
any proceeding against Maker under any Federal bankruptcy law or any state
insolvency or similar law, which proceeding is not dismissed within sixty (60)
days; or (vi) any Event of Default under the Loan and Security Agreement, shall
constitute an event of default hereunder (each, an "Event of Default"). Upon the
occurrence of an Event of Default, or at any time thereafter during the
continuance of any such Event of Default, Payee may, with or without notice to
Maker, declare this Note to be immediately due and payable, as to the unpaid
Principal Balance, any accrued interest, late charges and any expenses, costs
and/or damages provided for herein, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived.
6. Security Agreements. This Note is made pursuant to the Loan and Security
Agreement and is or may be secured by (i) financing statements by Maker, as
debtor, and Payee, as secured party, and (ii) any other instruments now or
hereafter executed by Maker in favor of Payee which in any manner constitute
additional security for this Note (the foregoing documents, including the Loan
and Security Agreement, are hereinafter collectively referred to as the "Loan
Documents"). All of the terms, covenants, conditions and provisions of the Loan
Documents are hereby incorporated in and
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<PAGE>
made a part of this Note to the same extent as if herein set forth in full.
7. Outstanding Principal Amount. The face amount of this Note is the
principal sum of One Million Dollars ($1,000,000.00). Each advance and readvance
by Payee hereunder shall be evidenced by this Note, and any repayments of
principal by Maker shall be credited against the Principal Balance due on this
Note, but shall not extinguish this Note in whole or in part. The Principal
Balance due on this Note may increase and decrease as advances, readvances and
payments are made hereunder, pursuant to the Loan and Security Agreement
(including amendments and supple- ments thereto) between Maker and Payee hereof,
and this Note shall evidence all of the indebtedness of Maker hereunder from
time to time existing pursuant to said Loan and Security Agreement, including
readvances of sums already paid. The aggregate principal advances and readvances
under this Note may exceed the face amount hereof, but the Principal Balance
hereunder at any given time shall not exceed the face amount hereof, it being
understood and agreed that Payee hereof does not intend to make any loans to
Maker that are not secured by the Loan and Security Agreement and that each and
every advance and readvance made at present or hereafter to Maker shall be
deemed to be a fully secured advance evidenced by this Note.
8. Waivers. Maker hereby waives demand, presentment for payment, notice of
dishonor, protest and notice of protest and diligence in collection or bringing
suit and agrees that Payee may accept partial payment without discharging the
obligations evidenced hereby.
9. Attorneys' Fees and Costs; Waiver of Jury Trial. Maker agrees to pay all
reasonable attorneys' fees and costs incurred by Payee in collecting or
attempting to collect this Note, whether by suit or otherwise. MAKER HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL ACTION
BROUGHT BY PAYEE TO COLLECT THIS NOTE.
10. Applicable Law; Assigns. This Note shall be governed by, and construed
in accordance with, the laws of the State of Florida. As used herein, Maker and
Payee shall be deemed to include their respective successors, legal
representatives and assigns, whether by voluntary action of the parties or by
operation of law.
11. Default Rate of Interest. Any late payment of interest or the Principal
Balance (whether on the Maturity Date or by acceleration of this Note as
provided in Section 5) shall bear interest from the due date of such payment
until paid at the Interest Rate plus five percent (5%) (the "Default Rate of
Interest").
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<PAGE>
12. Highest Lawful Rate. Anything herein to the contrary notwithstanding,
the obligations of Maker hereunder shall be subject to the limitation that to
the extent that contracting for or receipt of interest at the Default Rate of
Interest hereunder would be contrary to provisions of any law applicable to
Payee limiting the highest rate of interest which may be lawfully contracted
for, charged or received by Payee, such amount which would exceed the highest
lawful rate shall be applied to the reduction of the Principal Balance due
hereunder and not to the payment of interest at the Default Rate of Interest.
13. Notices. Any notice to the parties provided for in this Note shall be
given hand delivered, with receipt thereof, or sent be certified or registered
mail, return receipt requested, and first-class postage prepaid, or by overnight
courier, to the address of the addressee party set forth in this paragraph 13,
unless notice of a change of address is given to all parties hereto pursuant to
the provisions of this paragraph 13. Notice shall be deemed effective upon
receipt. Notice shall be given to Maker at the following address:
Chadbourne Corporation
1430 Broadway
13th Floor
New York, New York 10018
and to Payee at the following address:
The A.J. 1989 Trust
c/o William L. Remley, Trustee
c/o Mentmore Holdings Corp.
1430 Broadway
13th Floor
New York, New York 10018
IN WITNESS WHEREOF, the undersigned has executed, sealed and delivered this
Note, intending to be bound legally, as of the date first above written.
MAKER:
WITNESS/ATTEST: CHADBOURNE CORPORATION, a
Delaware corporation
By: William L. Remley,
President
[Corporate Seal]
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<PAGE>
EXHIBIT B
TO
LOAN AND SECURITY AGREEMENT
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto THE A.J. 1989
TRUST pursuant to that certain Loan and Security Agreement dated as of January
1, 1995 (as the same may be amended from time to time), the Stock Certificate(s)
representing _______________________________ (_____) shares of Common Stock of
Texfi Industries, Inc., a Delaware corporation (the "Corporation"), more fully
described below, standing in the undersigned's name on the books of the
Corporation, and does hereby irrevocably constitute and appoint any officer of
the Corporation the undersigned's attorney-in-fact and agent to transfer such
Stock Certificate(s) on the books of the Corporation with full power of
substitution in accordance with the foregoing.
This Collateral Assignment is made pursuant to the Loan and Security
Agreement.
Dated: _______________
Stock Certificate No.(s): [Smith Barney Account #376-181-40-15]
Number of Shares: __________________
In the Presence of: CHADBOURNE CORPORATION, a
Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
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<PAGE>
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto THE A.J. 1989
TRUST pursuant to that certain Loan and Security Agreement dated as of January
1, 1995 (as the same may be amended from time to time), the Stock Certificate(s)
representing Sixty-Three Thousand (63,000) shares of Common Stock of Texfi
Industries, Inc., a Delaware corporation (the "Corporation"), more fully
described below, standing in the undersigned's name on the books of the
Corporation, and does hereby irrevocably constitute and appoint any officer of
the Corporation the undersigned's attorney-in-fact and agent to transfer such
Stock Certificate(s) on the books of the Corporation with full power of
substitution in accordance with the foregoing.
This Collateral Assignment is made pursuant to the Loan and Security Agreement.
Dated: January 31, 1995
Stock Certificate No.(s): [Smith Barney Account #376-181-40-15]
Number of Shares: 63,000
In the Presence of: CHADBOURNE CORPORATION, a
Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
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<PAGE>
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto THE A.J. 1989
TRUST pursuant to that certain Loan and Security Agreement dated as of January
1, 1995 (as the same may be amended from time to time), the Stock Certificate(s)
representing Fifty-Five Thousand Three Hundred (55,300) shares of Common Stock
of Texfi Industries, Inc., a Delaware corporation (the "Corporation"), more
fully described below, standing in the undersigned's name on the books of the
Corporation, and does hereby irrevocably constitute and appoint any officer of
the Corporation the undersigned's attorney-in-fact and agent to transfer such
Stock Certificate(s) on the books of the Corporation with full power of
substitution in accordance with the foregoing.
This Collateral Assignment is made pursuant to the Loan and Security Agreement.
Dated: February 28, 1995
Stock Certificate No.(s): [Smith Barney Account # 376-181-40-15]
Number of Shares: 55,300
In the Presence of: CHADBOURNE CORPORATION, a
Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
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<PAGE>
STOCK POWER
COLLATERAL ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, CHADBOURNE CORPORATION, a Delaware
corporation, does hereby grant, pledge, assign and transfer unto THE A.J. 1989
TRUST pursuant to that certain Loan and Security Agreement dated as of January
1, 1995 (as the same may be amended from time to time), the Stock Certificate(s)
representing Sixty-Three Thousand Five Hundred (63,500) shares of Common Stock
of Texfi Industries, Inc., a Delaware corporation (the "Corporation"), more
fully described below, standing in the undersigned's name on the books of the
Corporation, and does hereby irrevocably constitute and appoint any officer of
the Corporation the undersigned's attorney-in-fact and agent to transfer such
Stock Certificate(s) on the books of the Corporation with full power of
substitution in accordance with the foregoing.
This Collateral Assignment is made pursuant to the Loan and Security Agreement.
Dated: March 31, 1995
Stock Certificate No.(s): [Smith Barney Account #376-181-40-15]
Number of Shares: 63,500
In the Presence of: CHADBOURNE CORPORATION, a
Delaware corporation
_________________________ By____________________________
William L. Remley,
President
[Corporate Seal]
SIGNATURE GUARANTY:
-13-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3
TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TEXFI INDUSTRIES, INC.
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
882895 10 5
(CUSIP Number)
William L. Remley, President
Chadbourne Corporation
1430 Broadway,
Suite 1300
New York, New York 10018
(212) 391-1392
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 20, 1995
(Date of Event which Requires Filing
of this Statement)
Check the following box if a fee is being paid with this statement [ ].
Exhibit Index is on page 10.
<PAGE>
CUSIP No. 882895 10 5 13D Page 2 of 15 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chadbourne Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,710,300
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,710,300
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,710,300
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.48%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-2-
<PAGE>
CUSIP No. 882895 10 5 13D Page 3 of 12 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Halton House Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,710,300
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,710,300
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,710,300
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.48%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-3-
<PAGE>
CUSIP No. 882895 10 5 13D Page 4 of 15 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Halton Declaration of Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,710,300
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,710,300
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,710,300
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.48%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- --------------------------------------------------------------------------------
-4-
<PAGE>
CUSIP No. 882895 10 5 13D Page 5 of 15 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bahamas Protectors, Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,710,300
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,710,300
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,710,300
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.48%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
-5-
<PAGE>
CUSIP No. 882895 10 5 13D Page 6 of 15 pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gary R. Siegel
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
-6-
<PAGE>
Item 1. Security and Issuer.
This Amendment No. 3, filed jointly by Chadbourne Corporation
("Chadbourne"), Halton House Ltd. ("Halton Ltd."), The Halton Declaration of
Trust ("Halton Trust"), Gary R. Siegel and Bahamas Protectors, Ltd. ("Bahamas
Protectors"), amends and supplements the statement on Schedule 13D, as
previously amended (this "Schedule"), filed jointly by Chadbourne, Halton Ltd.,
Halton Trust and Mr. Siegel relating to shares of Common Stock, par value $1.00
per share (the "Common Stock"), of Texfi Industries, Inc. (the "Issuer"). Any
capitalized term used without definition shall have the same meaning previously
ascribed to it in this Schedule.
Item 2. Identity and Background.
As previously reported in this Schedule, all powers with respect to
investment or voting of securities beneficially owned by Halton Trust were
exercisable by Gary R. Siegel, protector under the constituent instruments of
Halton Trust. Pursuant to an instrument effective as of September 22, 1995, Mr.
Siegel resigned as protector under the constituent instruments of Halton Trust.
Pursuant to an instrument effective as of October 20, 1995, Bahamas Protectors
became the successor protector. Bahamas Protectors' business address is
Charlotte House, Charlotte Street, P.O. Box N-341, Nassau, Bahamas. Bahamas
Protectors is hereinafter included within the definition of "Reporting Persons."
During the last five years, Bahamas Protectors has not been a party to a
criminal proceeding (excluding traffic violations or similar misdemeanors) and
has not been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction whereby, as a result of such proceeding, it was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or state securities laws
or finding any violation with respect to such laws. Bahamas Protectors is a
Bahamian corporation.
Item 5. Interest in Securities of the Issuer.
(a)-(b) Chadbourne, as holder of the Option, may be deemed to be the
beneficial owner of 1,710,300 shares of Common Stock, including 600,000 shares
underlying the Option. Such 1,710,300 shares constitute 18.48% of the shares of
Common Stock outstanding (based on 8,652,621 shares of Common Stock reported to
be outstanding in the Issuer's Form 10-Q for the quarter ended July 31, 1995,
and assuming that all shares underlying the Option are deemed to be
outstanding). Halton Ltd., by virtue of its ownership of Chadbourne, Halton
Trust, by virtue of its ownership of Halton Ltd., and Bahamas Protectors, by
virtue of its powers as protector of Halton Trust, each may be deemed to have
the power to vote and dispose of the shares of Common Stock beneficially owned
by Chadbourne.
-7-
<PAGE>
(c) Mr. Siegel resigned as protector of the Halton Trust effective as of
September 22, 1995. Effective as of October 20, 1995, Bahamas Protectors became
the successor protector thereof with full power with respect to the investing or
voting of securities beneficially owned by Halton Trust. Other than as described
in this paragraph (c), none of the Reporting Persons has effected any
transactions in the Common Stock of the Issuer during the past sixty (60) days.
(e) As a result of his resignation as protector of the Halton Trust, Mr.
Siegel ceased to be the beneficial owner of more than five percent of the Common
Stock as of September 22, 1995.
Item 7. Materials to be Filed as Exhibits.
Exhibit Description
- ------- -----------
3.0 Joint filing agreement.
3.1 Resignation of Gary R. Siegel as protector under the
constituent documents of the Halton Declaration of Trust and
appointment of Bahamas Protectors as successor.
-8-
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned hereby certifies that the information set forth in
this amendment is true, complete and correct.
Dated: October 20, 1995
CHADBOURNE CORPORATION
By: William L. Remley, President
HALTON HOUSE LTD.
By: William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: BAHAMAS PROTECTORS, LTD., as
Protector of The Halton
Declaration of Trust
Gary R. Siegel
BAHAMAS PROTECTORS, LTD.
-9-
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
3.0 Joint filing agreement 11
3.1 Resignation of Gary R. Siegel as protector 12
under the constituent documents of the Halton
Declaration of Trust and appointment of Bahamas
Protectors as successor.
-10-
EXHIBIT 3.0
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934,
as amended, the undersigned hereby agree to the joint filing on behalf of each
of them of this Amendment No. 3 to Schedule 13D with respect to the Common
Stock, par value $1.00 per share, of Texfi Industries, Inc. and that this
agreement shall be included as an exhibit to such joint filing.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing
Agreement this 20th day of October, 1995.
CHADBOURNE INVESTMENT CORP.
By: William L. Remley, President
HALTON HOUSE LTD.
By: William L. Remley, President
THE HALTON DECLARATION OF TRUST
By: BAHAMAS PROTECTORS, LTD., as
Protector of The Halton Declaration
of Trust
Gary R. Siegel
BAHAMAS PROTECTORS, LTD.
-11-
EXHIBIT 3.1
REMOVAL OF SUCCESSOR PROTECTOR AND RESIGNATION OF PROTECTOR
WHEREAS, GARY R. SIEGEL ("SIEGEL") is the duly appointed successor and
current Protector of The Halton Declaration of Trust, dated December 31, 1992
(the "Trust"), pursuant to that certain FOURTH SCHEDULE of the Trust and that
certain Resignation of Protector and Selection of Successor Protector dated July
21, 1994 (but effective as of August 31, 1994);
WHEREAS, pursuant to that certain Selection of Alternate Successor
Protector dated June 1, 1995, SIEGEL (i) nominated and appointed JAY GORDON,
ESQUIRE ("GORDON") as the alternate successor Protector of the Trust to act as
Protector only if SIEGEL ceases for any reason to hold office as Protector of
the Trust and (ii) revoked the nomination of any and all other successor
Protectors and/or alternate successor Protectors heretofore made by any
Protector to the Trustees of the Trust, save and except SIEGEL;
WHEREAS, pursuant to the FOURTH SCHEDULE of the Trust, SIEGEL has the
absolute and unconditional right, by a written instrument delivered to the
Trustees of the Trust, to resign as Protector of the Trust at any time and for
any reason;
WHEREAS, effective immediately upon receipt of this instrument by the
Trustees of the Trust, or a copy thereof followed by the original instrument
(the "Effective Date"), SIEGEL wishes to resign as Protector of the Trust; and
WHEREAS, as of the Effective Date, GORDON wishes to reject his nomination
and appointment as alternate successor Protector of the Trust and otherwise to
resign from the office of Protector of the Trust to the extent such office may
have been conferred upon him.
NOW, THEREFORE, effective for all purposes and in all respects as of the
Effective Date, (i) SIEGEL does hereby resign as Protector of the Trust and (ii)
GORDON does hereby notify the Trustees that he does not accept or consent to his
nomination and appointment as successor Protector of the Trust and, by this
instrument, hereby resigns from the office of Protector of the Trust to the
extent such office may have heretofore been conferred upon him. In furtherance
of the foregoing, the Protector hereby confers upon the Trustees of the Trust,
pursuant to Clauses 6 and 7 of the FOURTH SCHEDULE, the sole and exclusive
right, power and authority to act as the Protector of the Trust
<PAGE>
until another is chosen and to appoint such successor Protector as they shall
see fit (and at such time as they shall determine) to carry out the role of
Protector under the Trust.
WITNESS:
GARY R. SIEGEL, Protector of the
Halton Declaration of Trust
JAY GORDON
-2-
<PAGE>
)
: ss:
)
BE IT REMEMBERED that, on the ____ day of September, 1995, before me, a
Notary Public in and for the jurisdiction aforesaid, do hereby certify that the
above signed, GARY R. SIEGEL, personally came and appeared before me in said
jurisdiction, and, being personally well known to me, and being by me first duly
sworn, did depose and say that he did duly sign and seal and as and for his act
and deed execute, acknowledge and deliver the within instrument for the purposes
therein mentioned.
Subscribed and sworn to me on this ____ day of September, 1995.
___________________________________
Notary Public
My Commission Expires:_____________
[Notarial Seal]
)
: ss:
)
BE IT REMEMBERED that, on the ____ day of September, 1995, before me, a
Notary Public in and for the jurisdiction aforesaid, do hereby certify that the
above signed, JAY GORDON, personally came and appeared before me in said
jurisdiction, and, being personally well known to me, and being by me first duly
sworn, did depose and say that he did duly sign and seal and as and for his act
and deed execute, acknowledge and deliver the within instrument for the purposes
therein mentioned.
Subscribed and sworn to me on this ____ day of September, 1995.
___________________________________
Notary Public
My Commission Expires:_____________
[Notarial Seal]
-3-
<PAGE>
DESIGNATION OF SUCCESSOR PROTECTOR
WHEREAS, the undersigned, COUTTS & CO. (BAHAMAS), LIMITED, a Bahamian
corporation ("TRUSTEE"), is the duly appointed Trustee of The Halton Declaration
of Trust, dated December 31, 1992 (the "Trust");
WHEREAS, pursuant to that certain Removal of Successor Protector and
Resignation of Protector dated September 19, 1995 (the "Resignation") delivered
to TRUSTEE, the successor Protector, Gary R. Siegel, resigned as Protector of
the Trust, and the alternate successor Protector, Jay Gordon, failed to consent
to his nomination as successor Protector of the Trust and otherwise resigned
from the office of Protector of the Trust, all effective upon delivery of the
Resignation to TRUSTEE as of September 22, 1995;
WHEREAS, pursuant to the Resignation and Clauses 6 and 7 of the FOURTH
SCHEDULE of the Trust, it was conferred upon the TRUSTEE the sole and exclusive
right, power and authority to act as the Protector until another is chosen and,
at such time as the TRUSTEE shall determine, to appoint such successor Protector
as the TRUSTEE shall see fit to carry out the role of Protector under the Trust;
WHEREAS, TRUSTEE wishes to nominate and appoint BAHAMAS PROTECTORS, LTD., a
Bahamian corporation ("PROTECTORS"), as the successor Protector of the Trust to
act as Protector immediately upon the later of (i) its acceptance of such
nomination or (ii) October 20, 1995 (the "Effective Date");
NOW, THEREFORE, TRUSTEE, pursuant to the authority granted to it under the
FOURTH SCHEDULE of the Trust, effective for all purposes and in all respects as
of the Effective Date, does hereby nominate and appoint PROTECTORS as the
successor Protector of the Trust.
By joining in the execution of this Designation of Successor Protector,
PROTECTORS hereby acknowledges, accepts and consents to its nomination and
appointment as successor Protector of the Trust, and hereby accepts the Trust
and covenants that it shall faithfully discharge its duties as successor
Protector of the Trust.
WITNESS/ATTEST: COUTTS & CO. (BAHAMAS) LIMITED,
Trustee
<PAGE>
I hereby acknowledge and accept my nomination and appointment as successor
Protector of the Trust in accordance with the terms hereof, the Trust and the
FOURTH SCHEDULE as of Effective Date.
WITNESS/ATTEST: BAHAMAS PROTECTORS, LTD.
-2-
<PAGE>
)
: ss:
)
BE IT REMEMBERED that, on the ____ day of October, 1995, before me,
a Notary Public or other Public Offical in and for the jurisdiction aforesaid,
do hereby certify that the above signed, _________________, an authorized
officer of COUTTS & CO. (BAHAMAS), LIMITED ("Trustee"), personally came and
appeared before me in said jurisdiction, and, being personally well known to me,
and being by me first duly sworn, did depose and say that he/she did duly sign
and seal and as and for his/her act and deed on behalf of Trustee execute,
acknowledge and deliver the within instrument for the purposes therein
mentioned.
Subscribed and sworn to me on this ____ day of October, 1995.
___________________________________
Notary Public
My Commission Expires:_____________
[Notarial Seal]
)
: ss:
)
BE IT REMEMBERED that, on the ____ day of October, 1995, before me, a
Notary Public or other Public Offical in and for the jurisdiction aforesaid, do
hereby certify that the above signed, _________________, an authorized officer
of BAHAMAS PROTECTORS, LTD. ("Protectors"), personally came and appeared before
me in said jurisdiction, and, being personally well known to me, and being by me
first duly sworn, did depose and say that he/she did duly sign and seal and as
and for his/her act and deed on behalf of Protectors execute, acknowledge and
deliver the within instrument for the purposes therein mentioned.
Subscribed and sworn to me on this ____ day of October, 1995.
-3-
