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Exhibit 2.2
BTR plc
BTR AUSTRALIA LIMITED
c/o 000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
May 4, 1998
NCI Building Systems, Inc.
0000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Gentlemen:
Reference is made to the Stock Purchase Agreement, dated as of March
25, 1998, by and between NCI Building Systems, Inc. and BTR Australia Limited,
and joined in for certain limited purposes by BTR plc (the "Agreement").
Capitalized terms used without definition herein shall have the meanings set
forth in the Agreement.
This will confirm the joint and several covenant and agreement of
Seller and BTR plc, on the one hand, and Purchaser, on the other hand, to the
following additional terms and provisions between the parties, which the parties
acknowledge are supported by good and adequate consideration actually received:
1. The definition of "Closing Date" in the Agreement is hereby
amended to be 12:01 a.m. Central Time on May 4, 1998, and, commencing on the
Closing Date, all production and shipment of products by MBCI and its
Subsidiaries will be for the benefit and account of Purchaser and/or its
subsidiaries.
2. The parties understand and agree that Seller is responsible
for and will pay all federal, state or local Taxes measured by income ("Income
Taxes") of any of the Companies for tax periods ending on or before the Closing
Date, as well as the portion of Income Taxes attributable to any income from any
such pre-Closing period for any returns filed on or after the Closing Date where
the tax period includes the Closing Date and the related return is required to
report income from both the pre-Closing and post-Closing periods.
In accordance with and in furtherance of the foregoing, the first
sentence of Section 8.1(a) of the Agreement is hereby amended in its entirety to
read as follows:
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"The Seller shall be liable for, and shall indemnify and hold the
Purchaser harmless against, all Taxes due or payable by the Companies
for any taxable year or taxable period ending on or before the Closing
Date but, with respect to any Taxes other than federal, state or local
Taxes measured by income ("Income Taxes"), only to the extent that the
amount of such Taxes other than Income Taxes exceeds the amount
reserved therefor on the applicable books and records of the
Companies."
Also in furtherance of the foregoing, the Agreement is hereby amended
to delete Section 4.12(e) thereof (except for the provision therein which
excludes the current income taxes balance from the definition of Inter-Company
Payables), and any obligation of the Purchaser, MBCI or any of the other
Companies pursuant to Section 4.12(e) or any other provision of the Agreement to
pay to Seller or any of its Affiliates any amounts in respect of Income Taxes
for operations conducted on or prior to the Closing Date is cancelled and
terminated and superceded by the agreements set forth in this paragraph 2 and
paragraph 3 of this letter. Purchaser and Seller acknowledge that Amatek has
already made an estimated payment in the amount of $827,000 toward federal
income taxes payable for such period, which amount will be applied against the
Seller's liability and obligations, pursuant to the Agreement and the provisions
of this paragraph 2 and paragraph 3 of this letter, to pay the Income Taxes for
such period. The provisions of Section 8.1(c) of the Agreement, insofar as they
relate to Income Taxes for the first quarter of 1998, are superceded by the
provisions of this paragraph 2 of this letter.
3. The parties agree that, for purposes of paragraph 2 above,
Income Taxes include, without limitation, the Texas franchise tax liabilities of
the Companies (the "Texas Tax"). Purchaser acknowledges that, on or about May 1,
1998, Seller paid, or caused to be paid, $961,483 (the "Texas Advance") against
the Texas Tax due and payable in respect of the operations of the Companies for
the year ended December 31, 1997 and the first quarter of 1998. Notwithstanding
anything to the contrary in paragraph 2 above, Purchaser agrees to reimburse
Seller for the Texas Advance on or before the close of business on May 11, 1998.
4. Immediately prior to the Closing, Amatek intends to pay
certain incentive payments to certain members of MBCI's management team. Such
payments will be funded via an intercompany transaction that will have no effect
on the net assets of Amatek at Closing (the cash and associated liability being
excluded from the Closing Date Balance Sheet) and that will not result in any
liability for Amatek after the Closing. The Seller and BTR plc covenant and
agree to indemnify and hold the Purchaser and the Companies harmless from and
against any liabilities or obligations resulting from such payments, other than
obligations in the nature of required withholding for employment taxes, employee
contributions and FICA.
5. Pursuant to Sections 1.2(a) and 4.12 of the Agreement, the
Purchase Price of $550 million shall be paid via two wire payments to the
account of BTR Australia Limited as follows:
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(a) a payment of $91,211,000 in satisfaction of the
Net Inter-Company Payables Amount; and
(b) a payment of $458,789,000 in satisfaction of the
balance of the Purchase Price.
6. As of the open of business on May 5, 1998, Purchaser will
pay the Purchase Price by wire transfer of immediately available funds to the
account of Seller previously designated in writing by Seller. The first sentence
of Section 1.3 of the Agreement is superseded in its entirety by this paragraph
6.
7. The Closing Date Balance Sheet will be prepared as of the
Closing Date, but adjusting entries will be made thereto to reflect the cash
transactions described in paragraph 8 below occurring after the Closing Date and
through 11:59 p.m. Central Time on May 4, 1998 (such date and time being
referred to as the "Cash Closing Time").
8. After the Closing Date and prior to the Cash Closing Time:
(a) All checks and drafts of MBCI or its Subsidiaries which
are duly presented for payment through the Cash Closing Time will be
for the account of Seller and paid by Seller or its Affiliates on
behalf of MBCI and its Subsidiaries. All checks and drafts of MBCI or
its Subsidiaries that are duly presented for payment after the Cash
Closing Time shall be the sole liability of MBCI and its Subsidiaries
and neither Seller nor any of Seller's Affiliates (other than the
Companies) shall have any liability therefor.
(b) All wire transfers, cash, checks and drafts received by or
deposited to an account of MBCI or its Subsidiaries and collected
through the Cash Closing Time will be for the account of Seller and
will be transferred on May 5, 1998 to an account designated by Seller
in accordance with past practice.
9. In connection with the Purchaser's preparation after the
Closing of historical consolidated financial statements and related notes for
Amatek for each of the three years ended December 31, 1995, 1996 and 1997 and
for any period from January 1, 1998 to Closing (and any comparative stub period
in the years ended December 31, 1995, 1996 and 1997), and in pursuance of its
obligations under Section 4.8(a) of the Agreement, Seller agrees to make
available all records relevant thereto and, with respect to the financial
statements of Amatek and Amatek, Inc. only, to provide reasonable access to and
customary audit representations from the management or other appropriate
personnel of such entities, provided that the other duties of such personnel are
not materially affected. In addition, Seller will authorize its independent
auditors to make available such auditors' records that would reasonably assist
Purchaser in such preparation (subject to appropriate terms of engagement and
satisfactory undertakings from Purchaser), provided, however, that any and all
fees and expenses associated with the services of such auditors shall be solely
for the account of the Purchaser. Except to the extent expressly provided in the
Agreement, neither Seller nor any
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affiliate of Seller shall have any liability for information or records made
available to Purchaser pursuant to this paragraph 9.
10. Notwithstanding anything to the contrary in the Agreement,
and subject to the limits described below, Purchaser will cause the Companies to
promptly reimburse Seller or any Affiliate of Seller for payments made by Seller
or any of such Affiliates on behalf of MBCI or its Subsidiaries for (i) workers'
compensation claims relating to occurrences prior to the Closing and (ii)
general liability, product liability and auto liability claims relating to
occurrences prior to the Closing. Such reimbursements shall be limited to
payments made after the Closing by Seller and its Affiliates in satisfaction of
individual and aggregate deductibles provided in the applicable insurance policy
coverages on occurrences or claims for which coverage is otherwise accepted by
the carrier, and shall not exceed the amounts reserved or accrued therefor on
the Closing Date Balance Sheet. Seller and its Affiliates will keep MBCI fully
informed of such claims so that the parties can cooperate to manage such claims
effectively.
11. BTR plc is joining in this letter agreement for the
express purpose of jointly and severally covenanting and agreeing with the
Purchaser to the same effect and on the same terms and conditions as the Seller
as set forth in this letter agreement, with the understanding that any
references to rights and obligations of Seller herein shall be deemed to include
also a reference to and a right and obligation of BTR plc to the same extent.
12. Each of Seller and BTR plc acknowledges and agrees that
the following original stock certificates are missing from the stock record
books of MBCI: (i) stock certificate No. 15 representing 899 shares of common
stock, $0.10 par value ("MBCI Common Stock"), issued in the name of Xxxxxxx X.
Xxxxxxxxx, Xx. and (ii) stock certificates No. 20, 21, 22, 24, 25, 26 and 27
representing an aggregate of 14,574 shares of MBCI Common Stock issued in the
name of Xxxxxx Holdings, Inc. (now Amatek). Seller and BTR plc further agree
that in furtherance of their indemnification obligations pursuant to Article VI
and Section 4.10 of the Agreement and notwithstanding any purported or existing
indemnification obligations of Amatek to MBCI with respect to the above
described lost stock certificates, each of Seller and BTR plc will indemnify
Purchaser from and against any claims made by Xx. Xxxxxxxxx, Xxxxxx Holdings,
Inc., Amatek or any of their heirs, assigns, successors or representatives or
anyone claiming through either Xx. Xxxxxxxxx, Xxxxxx Holdings, Inc., or Amatek
with respect to the above described lost stock certificates.
13. Seller has caused the Companies to collect insurance
proceeds in respect of a fire at MBCI's facility in Lubbock, Texas. The
Purchaser agrees that it will not make any claims with respect thereto, unless
it shall have prior thereto or concurrently therewith asserted other claims
pursuant to Section 4.3 of the Agreement arising out of other circumstances.
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14. Purchaser, Seller and BTR plc agree that the provisions
contained in Article VI in the Agreement will govern the indemnification
obligations of Seller and BTR plc in this letter agreement, except that the
proviso set forth in Section 6.2(a) of the Agreement and the limitations set
forth in such proviso shall not be applicable to such indemnification
obligations.
Very truly yours,
BTR AUSTRALIA LIMITED
By:/s/ XXXXX X. XXXX
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Xxxxx X. Xxxx
Attorney-in-Fact
BTR plc
By:/s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
Director
AGREED:
NCI BUILDING SYSTEMS, INC.
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, Vice President
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