Exhibit 10.21
PURCHASE AND NON-COMPETITION AGREEMENT
THIS PURCHASE AND NON-COMPETITION AGREEMENT (this "AGREEMENT") is made on
the 22nd day of October, 1998, by and among XXXX, INC., a Texas corporation
("SELLER"), XXXX X. XXXXXX, the sole shareholder of Seller ("SHAREHOLDER")
XXXXX X. XXXXXX, individually ("XXX. XXXXXX") and MSI/EAGLE SUPPLY, INC., a
Delaware corporation ("BUYER").
RECITALS
A. Seller, among its other activities, is in the business of purchasing
certain steel products and other products and supplies and reselling them to
Masonry Supply, Inc., a Texas corporation ("MSI") (the "BUSINESS").
B. Buyer, MSI, Shareholder, Xxx. Xxxxxx, spouse of Shareholder, and
Seller have entered into an Asset Purchase Agreement dated the 22nd day of
October, 1998 (the "ASSET PURCHASE AGREEMENT") pursuant to which MSI has agreed
to sell to Buyer, and Buyer has agreed to purchase from MSI, MSI's business as a
wholesale and retail seller of masonry materials and supplies and related
products and supplies for commercial and residential applications (the "MSI
BUSINESS"), including the Purchased Assets, as defined in the Asset Purchase
Agreement, with respect to the MSI Business.
C. Seller and Shareholder acknowledge that the Asset Purchase Agreement
and this Agreement represent an integrated transaction and that Buyer would not
have entered into the Asset Purchase Agreement but for the agreement of Seller
to enter into this Agreement.
D. Shareholder owns all of the issued and outstanding shares of stock of
Seller and MSI and will benefit substantially from the transactions under the
Asset Purchase Agreement and this Agreement. In return for such benefits,
Shareholder is willing to enter into this Agreement for the purposes set forth
below.
E. Xxx. Xxxxxx acknowledges that she will receive a substantial financial
benefit from the transactions under the Asset Purchase Agreement and this
Agreement. Accordingly, she is willing to, and does hereby, enter into this
Agreement for the purposes set forth below.
OPERATIVE TERMS
In consideration of the mutual promises, Buyer, Seller, Shareholder and
Xxx. Xxxxxx agree as follows:
1. PURCHASED ASSETS.
1.1. Seller hereby sells and assigns to Buyer, and Buyer hereby
purchases from Seller, the following assets which constitute all of the
operating assets of the Business:
(a) goodwill, customer lists, supplier lists and vendor lists;
and
(b) choses in action, claims, demands, and rights in favor of
Seller
(other than Seller's rights under this Agreement) with
respect to the Business; and
(c) books and records of the Business.
Such assets are collectively called the "SELLER BUSINESS ASSETS". The
Seller Business Assets are being sold free and clear of all security interests,
liens, claims, encumbrances, restrictions, reservations, charges or matters of
any kind (the "ENCUMBRANCES"). Seller is not selling to Buyer, and Buyer is not
purchasing from Seller, any assets of Seller other than the Seller Business
Assets.
1.2. Buyer does not assume any contracts, leases, debts, obligations
or liabilities of Seller, or arising out of the ownership or operation of Seller
or the Business, whether express or implied, contingent or otherwise, or
resulting from any violation of law, rule or regulation, or arising out of any
act, omission or transaction of Seller, MSI, Shareholder or Xxx. Xxxxxx.
Seller, Shareholder and Xxx. Xxxxxx, jointly and severally, shall indemnify and
hold Buyer and its directors, officers, employees, affiliates, successors and
assigns harmless with respect to all of such contracts, leases, debts,
obligations and liabilities.
2. PURCHASE PRICE AND PAYMENT; SALES AND TRANSFER TAXES.
2.1. PURCHASE PRICE AND PAYMENT. The purchase price for the Seller
Business Assets is One Hundred Dollars ($100.00) (the "PURCHASE PRICE") Buyer
has paid the Purchase Price to Seller upon execution of this Agreement, and
Seller hereby acknowledges the receipt and sufficiency of the Purchase Price.
2.2 SALES AND TRANSFER TAXES. Seller shall pay all sales and other
transfer taxes and fees, if any, arising out of the sale and assignment of the
Seller Business Assets to Buyer.
3. REPRESENTATIONS AND WARRANTIES OF SELLER, SHAREHOLDER AND XXX. XXXXXX.
Seller, Shareholder and Xxx. Xxxxxx, jointly and severally, represent and
warrant to Buyer as follows:
3.1. REPRESENTATIONS AND WARRANTIES IN ASSET PURCHASE AGREEMENT.
Seller, Shareholder and Xxx. Xxxxxx re-affirm all of the representations
and warranties of and with respect to Seller set forth in the Asset
Purchase Agreement.
3.2. TITLE. The Seller Business Assets are owned solely by Seller,
and Seller has good, assignable and marketable title to the Seller Business
Assets. Buyer is hereby receiving from Seller, and Seller is hereby
transferring to Buyer, good, assignable and marketable title to the Seller
Business Assets, free and clear of any and all Encumbrances.
3.3. SELLER BUSINESS ASSETS. The Seller Business Assets constitute
all of the assets and properties owned by Seller that are used or useful in
connection with the Business.
3.4. NO UNDISCLOSED LIABILITIES. Seller has no liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent or otherwise)
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for which Buyer will or could be liable.
3.5. NO MISREPRESENTATIONS. The representations, warranties and
statements made by Seller, Shareholder and Xxx. Xxxxxx in or pursuant to
this Agreement, and the Exhibits and Schedules hereto, are true, complete
and correct in all respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make any such
representation, warranty or statement, under the circumstances in which it
was made, not misleading. Seller and Shareholder have disclosed to Buyer
all material events, conditions or facts known to either or both of them
that affect or could affect the Business or the Seller Business Assets.
4. COVENANT NOT TO COMPETE. Seller and Shareholder hereby, jointly and
severally, agree as follows:
4.1 NONCOMPETITION. For a period of five (5) years after June 30,
1998, neither Seller nor Shareholder, nor any person or entity directly or
indirectly owning, owned by, controlling, controlled by or under common
ownership or control with ("AFFILIATES"). Seller or Shareholder, shall,
directly or indirectly, on its, his or their own behalf or on behalf of any
competitor of Buyer: (a) engage (whether as owner, partner, stockholder,
joint venturer, manager, employee, investor or otherwise) in the purchase
and sale of any steel products or other materials or supplies of the same
or similar types to those that Seller has been purchasing and reselling to
MSI (the "RESTRICTED BUSINESS") in all counties of the State of Texas, in
all other areas in which MSI is transacting business at June 30, 1998 (the
"REFERENCE DATE") or in which MSI has transacted business at any time
during the two years preceding the Reference Date, and in all areas in the
United States in which Buyer transacts business during such five (5) year
period described above (collectively, the "Market"); (b) affiliate with, or
own or have a proprietary interest of any kind in, any business or firm
that owns, manages or operates a business that purchases and sells any
steel products or related materials or supplies anywhere within the Market;
or (c) alone or acting with others, employ or attempt to employ or solicit
for any employment competitive with Buyer, any of Buyer's employees,
whether or not such employees worked for MSI on or prior to the Closing, as
defined in the Asset Purchase Agreement, or alone or acting with others,
influence or seek to influence any employee to leave Buyer's employment.
Seller and Shareholder also covenant, jointly and severally, that at no
time shall either of them disparage Buyer, any of its affiliated entities,
or any of the employees, directors or officers of Buyer or any of its
affiliated entities.
4.2 PAYMENT FOR COVENANTS. As additional consideration to
Shareholder for his covenants under SECTION 4.1, Buyer has paid to
Shareholder the sum of One Hundred Dollars ($100.00), the receipt and
adequacy of which are acknowledged by Shareholder.
4.3 REMEDIES; CURTAILMENT. Each of Seller and Shareholder agrees
that a breach or violation of the covenants in SECTION 4.1 by Seller or
Shareholder shall entitle Buyer, as a matter of right, to an injunction,
issued by any court of competent jurisdiction, restraining any further or
continued breach or violation of such covenants. Such right to an
injunction shall be cumulative and in addition to, and not in lieu of, any
other remedies to
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which Buyer may be entitled. Further, during any period in which Seller or
Shareholder is in breach of any of such covenants, the time period of such
covenant shall be extended for an amount of time that Seller or Shareholder
is in breach hereof.
The covenants contained in SECTION 4.1 will be construed as ancillary
to and independent of any other provision of this Agreement, and the
existence of any claim or cause of action of Seller or Shareholder against
Buyer or any officer, director, or shareholder of Buyer, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Buyer of the covenants contained in SECTION 4.1.
The parties to this Agreement agree that the limitations contained in
SECTION 4.1 with respect to geographic area, duration and scope of activity
are reasonable. However, if any court shall determine that the geographic
area, duration or scope of activity of any restriction contained in SECTION
4.1 is unenforceable, it is the intention of the parties that such
restrictive covenant set forth herein shall not thereby be terminated but
shall be deemed amended to the extent required to render it valid and
enforceable.
4.4 ASSIGNABILITY. The benefit of the covenants in this SECTION 4
are freely assignable by Buyer.
5. MISCELLANEOUS.
5.1 NOTICES. All notices that are required or may be given pursuant
to the terms of this Agreement shall be in writing and shall be sufficient
in all respects if given in writing and delivered personally or by a
recognized courier service or by registered or certified mail, postage
prepaid, to the parties at the following addresses (or to the attention of
such other person or to such other address as any party shall provide to
the other parties by notice in accordance with this Section):
IF TO BUYER: MSI/Eagle Supply, Inc.
c/o TDA Industries, Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx,
Chief Executive Officer
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WITH COPY TO: Carlton, Fields, Xxxx,
Xxxxxxxx, Xxxxx & Xxxxxx, P.A.
X.X. Xxx 0000
Xxxxx, Xxxxxxx 00000
(if by mail)
or
Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
(if by hand delivery)
Attention: Xxxxxxxxx X. Xxxxxxx,
Attorney at Law
IF TO SELLER: XXXX, Inc.
0000 Xxxxxxx 000 Xxxxx
Xxxxxxxxx, Xxxxx 00000
(prior to the Closing Date)
or
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
(on or after the Closing Date)
Attention: Xx. Xxxx X. Xxxxxx, President
WITH COPY TO: Xxxxxxx Xxxxx, Attorney at Law
0000 X. Xxxxxx Xxxxx Xxxxx, Xxxxx X
Xxxxxxxxx, Xxxxx 00000
IF TO SHAREHOLDER OR 00 Xxxxxxxx Xxxxx
XXX. XXXXXX: Xxxxxxxxx, Xxxxx 00000
WITH COPY TO: Xxxxxxx Xxxxx, Attorney at Law
0000 X. Xxxxxx Xxxxx Xxxxx, Xxxxx X
Xxxxxxxxx, Xxxxx 00000
Any such notice under this Section shall be deemed to have been given
and received on the day it is personally delivered or delivered by a
recognized courier service or, if mailed, on the fifth day after it is
mailed.
5.2 FURTHER ASSURANCES. Each party hereto agrees to execute, without
unreasonable delay, any and all documents and to perform such other acts as
may be reasonably necessary or expedient to further the purposes of this
Agreement and the transactions contemplated hereby. Without limiting the
generality of the foregoing, Seller, Shareholder and Xxx. Xxxxxx, jointly
and severally, shall use their best efforts to help facilitate the direct
purchase by Buyer of all steel and other products and supplies heretofore
purchased and sold by Seller to MSI in connection with the Business and the
MSI Business.
5.3 ATTORNEYS' FEES. In the event of a dispute between or among the
parties with respect to this Agreement, the prevailing party or parties
shall be entitled to recover the
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prevailing party's (or parties') reasonable attorneys' fees and costs,
whether incurred during trial, on appeal or in bankruptcy proceedings.
5.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, all of which
together shall constitute one and the same instrument.
5.5 ASSIGNMENT; AND NO THIRD PARTY BENEFICIARIES. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned or delegated by any of Seller,
Shareholder or Buyer without the prior written consent of the other party
or parties; provided, however, that notwithstanding the foregoing, Buyer
may assign this Agreement to any related or affiliated entity of Buyer or
any lender to Buyer. Any assignment or delegation made in violation of
this Agreement shall be null and void. This Agreement is not intended to
confer upon any person (including, without limitation, suppliers of
Seller) other than the parties hereto and any permitted assignee, any
rights or remedies hereunder. Nothing in this Agreement shall be construed
to imply any admission of liability or obligation to any person except the
parties to this Agreement.
5.6 ENTIRE AGREEMENT. This Agreement and the documents attached as
Exhibits and Schedules hereto contain the entire understanding of the
parties relating to the subject matter contained herein and supersede all
prior written or oral and all contemporaneous oral agreements and
understandings relating to the subject matter hereof. This Agreement
cannot be modified or amended except in writing signed by the party against
whom enforcement is sought.
5.7 EXHIBITS AND SCHEDULES. All Exhibits and Schedules to this
Agreement are incorporated herein by reference and made a part hereof.
5.8 GOVERNING LAW. This Agreement shall be governed by, and
construed and interpreted in accordance with, the substantive laws of the
State of New York without giving effect to any conflict-of-laws rule or
principle that might result in the application of the laws of another
jurisdiction.
5.9 JURISDICTION, VENUE AND WAIVER OF JULY TRIAL. Any action or
proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties in
the courts of the State of New York, or, if it has or can acquire
jurisdiction, in the United States District Court for the Southern District
of New York, or the Middle District of Florida, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection
to venue therein. If neither the United States District Court for the
Southern District of New York nor the United States District Court for the
Middle District of Florida has or can acquire jurisdiction, then any action
or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement, shall be resolved by binding arbitration
before a panel of three neutral arbitrators in Atlanta,
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Georgia, or such other mutually agreed venue under the rules of the
American Arbitration Association. THE PARTIES HERETO ACKNOWLEDGE THAT THE
TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND EXPENSE FOR
A BENCH TRIAL AND HEREBY WAIVE, TO THE EXTENT PERMITTED BY LAW, TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
5.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS. All representations, warranties, covenants and agreements made
by the parties hereto in this Agreement or in any certificate or other
document delivered pursuant hereto shall survive the execution of this
Agreement.
5.11 HEADINGS. The descriptive headings of the Sections and
Subsections hereof are inserted for convenience only and do not constitute
a substantive portion of this Agreement.
5.12 INVALIDITY. In the event that any provision of this Agreement is
determined to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of any
other provision of this Agreement.
5.13 WAIVER. The waiver by any party hereto of any breach, default,
misrepresentation or breach of warranty or covenant hereunder must be in
writing and shall not be deemed to extend to any prior or subsequent
breach, default, misrepresentation or breach of warranty or covenant
hereunder and shall not affect in any way any rights arising by virtue of
any such prior or subsequent occurrence.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day first above written.
MSI/EAGLE SUPPLY, INC.
a Delaware corporation ("BUYER")
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
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XXXX, INC.
a Texas corporation ("SELLER")
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: President
/s/ Xxxx X. Xxxxxx
-------------------------------------
XXXX X. XXXXXX, individually
("SHAREHOLDER")
/s/ Xxxxx X. Xxxxxx
-------------------------------------
XXXXX X. XXXXXX, individually
("XXX. XXXXXX")
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