PURCHASE AND SALE AGREEMENT
among
BMCW SOUTHCENTRAL, L.P.
(Buyer)
and
FRONTIER WHOLESALE COMPANY
(Seller)
and
SHAREHOLDERS
dated as of April 15, 2000
PURCHASE AND SALE AGREEMENT
This Agreement, dated as of April 15, 2000, is among Frontier Wholesale
Company, Inc., a Texas corporation ("Seller"), the shareholders of Seller listed
on Exhibit 1 attached hereto ("Shareholders"), and BMCW SouthCentral, L.P.
("Buyer").
IT IS AGREED among the parties as follows:
1 - DEFINITIONS
For purposes of this Agreement, the capitalized terms identified in this Article
shall have the meanings assigned to them as follows:
"BUSINESS" means the Seller's business operations of Seller's Xxxxxx Windows
Planning Centers distribution and sale of windows to retail customers, dealers,
and building contractors conducted from the Leased Locations to customers in
Oklahoma, Texas, Arizona, Nevada, and northwest Louisiana;
"CLOSING" means the exchange of closing documents and the payment of the
Purchase Price to the Seller by Buyer which will occur on the CLOSING DATE;
"CONTRACTS" means all contracts and agreements of any form or nature Seller
entered into prior to Closing in the ordinary course of the Business, including,
but not limited to, agreements for the sale or purchase of Inventory;
"DUE DILIGENCE PERIOD" means the period of time commencing on the date of this
Agreement, and expiring on April 28, 2000;
"ENVIRONMENTAL LAWS" means federal or state laws or regulations relating to
pollution, or the protection of human health or the environment, including, but
not limited to, the Clean Air Act, the Federal Water Pollution Control Act (as
amended by the Clean Water Act of 1977 and the Water Quality Act of 1987), the
Resource Conservation and Recovery Act of 1976 (as amended by the Hazardous and
Solid Waste Amendments of 1984), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (as amended by the Superfund Amendments
and Reauthorization Act of 1986), the Hazardous Materials Transportation Act,
the Toxic Substances Control Act, and the Federal Insecticide Fungicide &
Rodenticide Act, all as in effect on the Closing Date or, with respect to the
representations and warranties, in effect on the date hereof.
"EQUIPMENT" means all tools, equipment, office furniture, computers, and
equipment and other pieces of tangible personal property, including forms,
supplies, office equipment, and products owned by the Seller and used by it in
the Business, including those items described on Exhibit 2 attached hereto;
PURCHASE AND SALE AGREEMENT - 1
"EXCLUDED ASSETS" means all personal items of Seller which are listed on Exhibit
3 attached hereto;
"FINANCIAL STATEMENTS" means the financial statements of the Business, together
with all schedules and notes delivered to Buyer, which are dated as of December
31, 1999;
"INVENTORY" means windows and accessories located at each of the Leased
Locations for which a valid and enforceable customer order exists, but not
including inventory which has been sold but not delivered. Inventory will also
include spare parts, which shall be valued consistent with the past practices of
Seller as shown on Seller's Financial Statements;
"LEASED LOCATIONS" means all leases of real property incurred by the Business
which are listed on Exhibit 4 attached hereto;
"NONCOMPETE/NONSOLICITATION AGREEMENT" means the agreement by Seller,
Shareholders, and Xxxxx Xxxxxxxx to not compete with the Buyer in the Business
or solicit employees of the Business for employment by another entity in the
form attached hereto as Exhibit 5;
"PURCHASE PRICE" means the total amount of funds to be paid by Buyer to Seller
for the Purchased Assets to be calculated pursuant to Section 4.1 of this
Agreement;
"PURCHASED ASSETS" means the Equipment, Contracts, Inventory, Trade Accounts
Receivable, Trademarks and Tradenames, and Leased Locations;
"TERMINATION DATE" means the last business day immediately preceding the Closing
Date;
"TRADE ACCOUNTS RECEIVABLE" means the Seller's right to receive payment for
goods sold, including those owed but not yet due as of Closing, to all customers
and other third-party purchasers of goods and services from the Business in the
ordinary course of the Business prior to Closing, including any inventory that
is sold but not delivered and any and all past due accounts and notes receivable
taken in collection of routine receivables, together with all mechanics' liens,
materialmen's liens and other security interests securing such obligations and
which are assignable as permitted by law;
"TRADEMARKS AND TRADENAMES" means the name "Xxxxxx Windows Planning Centers" and
any derivations thereof;
2 - DUE DILIGENCE
2.1 DUE DILIGENCE. Buyer shall have the Due Diligence Period to perform such
inspections, environmental assessments, and other tests and surveys of the
Business or the Purchased Assets as Buyer, in Buyer's discretion, shall require
for the purpose of determining the suitability of the Business or the Purchased
Assets for Buyer's acquisition.
2.2 DUE DILIGENCE ACTIVITIES. Due Diligence shall include, but not be
limited to:
PURCHASE AND SALE AGREEMENT - 2
2.2.1 Review of the books and records of the Business including the
financial records and customer records.
2.2.2 Review of the Business's employee compensation, benefits, and
bonus plans. Review of the employment records of the Business, including I9
forms.
2.2.3 Review of records including health, workers' compensation, and
other benefit records of employees of the Business and conduct interviews of key
personnel of the Business.
2.2.4 Review and inspection of Contracts, Equipment, Inventory, and
Trade Accounts Receivable of the Business.
2.2.5 Review and inspection of each of the Leased Locations and
contacting each of the landlords of the Leased Locations to obtain an estoppel
certificate.
2.2.6 During the Due Diligence Period, and in order to assist Buyer
with Buyer's inspections and investigations of the Purchased Assets, the Seller
shall provide Buyer and Buyer's representatives with reasonable access to and
copies of all existing studies, reports, and records, including financial,
customer and employee records, relating to the Business and the Purchased
Assets. Seller shall fully cooperate with Buyer and shall promptly provide Buyer
with all relevant information currently available to Seller and requested by
Buyer during the Due Diligence Period.
2.2.7 After execution of this Agreement and after Xxxxxx Xxxxxxxx
advises Xxxxxx Windows and Doors of this Agreement, Buyer may discuss and review
the Business with Xxxxxx Windows & Doors including any performance requirements
by Xxxxxx Windows & Doors.
2.3 CONFIDENTIALITY DURING DUE DILIGENCE. Buyer, Seller, and Shareholders
acknowledge and agree that the parties desire to keep this transaction
confidential until jointly announced or when required by law to be announced.
2.4 TERMINATION OF AGREEMENT. Upon execution of this Agreement, Buyer shall,
as soon as practical, complete the above due diligence items. Upon completion of
the due diligence items, Buyer shall notify Seller of any problems or objections
in writing. Seller shall, within five (5) days after receipt of such notice,
advise Buyer of the cure of such objections or Seller's intention not to cure
the objection. Buyer may, at Buyer's sole discretion, either terminate this
Agreement or accept Seller's proposed cure or waive such objection and proceed
to Closing.
2.5 EXCLUSIVE DEALING. Seller and Shareholders agree that upon execution of
this Agreement and until the Closing Date or termination of this Agreement,
Seller and Shareholders will not seek to sell the Business to any other party
nor will Seller or Shareholders accept any offers to acquire the Business from
any other party.
PURCHASE AND SALE AGREEMENT - 3
3 - PURCHASE AND SALE
At Closing, the Seller and Shareholders agree to sell and convey to Buyer, and
Buyer agrees to purchase and accept from Seller and Shareholders, the Purchased
Assets for the Purchase Price on the covenants, terms and conditions contained
herein.
4 - DETERMINATION OF PURCHASE PRICE
The calculation of the Purchased Assets is summarized on Exhibit 6 attached
hereto. The calculations will be updated on the Closing Date with the adjusted
values of the Purchased Assets and attached to an amendment to this Agreement to
be executed and delivered at Closing. The Purchase Price for the Purchased
Assets shall be calculated as follows:
4.1 INVENTORY. The Inventory shall be valued as follows:
4.1.1 PHYSICAL INVENTORY. A physical inventory count and valuation
shall be conducted by Buyer and Seller immediately preceding Closing. The value
of the Inventory (except as otherwise provided herein) shall be the Seller's
actual cost (the sum paid for the items net of any discounts [including cash
discounts] or rebates taken or to be taken plus freight costs incurred to
deliver the items to Seller's Business). The inventory that is sold but not
delivered shall be marked by Seller and excluded from the physical inventory
account. Spare parts and service inventory shall be valued consistent with
Seller's prior practices as reflected on the Financial Statements.
4.1.2 DISPLAYS. The displays at the Leased Locations shall be valued
on the following basis: the invoiced price of each display that is less than 3
years old less depreciation calculated on a straight-line basis over 3 years.
4.1.3 RESOLUTION OF INVENTORY VALUATION ISSUES. Any and all disputes
regarding any aspect of the inventory count and valuation process shall be
negotiated between the parties. In the event the parties cannot agree on the
value of any item or items, then each shall submit such evidence of values it
deems appropriate to a mutually agreed upon certified public accountant ("CPA").
The decision of the CPA shall be final and binding.
4.1.4 INVENTORY COSTS. The actual costs incurred for the services of
the CPA pursuant to Section 4.1.3 shall be paid by the party whose original
estimate of cost was furthest away from the final determined cost. Each party
shall pay its own accounting and attorney fees. In conducting the inventory
count, Buyer shall bear its own costs, including wages and overtime of its
employees, lodging, meals, and transportation of its employees and any other
expenses incurred by Buyer. In conducting the inventory count, Seller shall bear
its own costs, including wages and overtime of its employees, lodging, meals,
and transportation of its employees and any other expenses incurred by Seller.
4.2 EQUIPMENT. The Equipment will be valued at the net book value of the
Equipment as of December 31, 1999 of $373,552 plus any increase in the book
value as of the Closing Date of any items of Equipment acquired after December
31, 1999 and added to the Equipment list attached as Exhibit 2 and decreased by
the value of any items removed from Exhibit 2 and
PURCHASE AND SALE AGREEMENT - 4
depreciation incurred between December 31, 1999 and the Closing Date in
accordance with Seller's normal accounting policies.
4.3 TRADE ACCOUNTS RECEIVABLE. All Trade Accounts Receivable that are no
older than 90 days from date of invoice shall be valued at face value. All Trade
Accounts Receivable that are older than ninety 90 days from date of invoice may,
at the option of Buyer, be acquired by Buyer at face value or, if not acquired,
shall be retained by Seller.
4.4 GOODWILL, NONCOMPETE/NONSOLICITATION AGREEMENT, AND INTANGIBLES. Buyer
shall pay $3,000,000 as goodwill and for the noncompete/nonsolicitation
agreements and the intangibles. Seller, Xxxxx Xxxxxxxx and the Shareholders
shall each execute and deliver a Noncompete/Nonsolicitation Agreement to Buyer
at Closing. An amount of $25,000 shall be assigned to the
Noncompete/Nonsolicitation Agreements of Seller, Xxxxxx Xxxxxxxx, Xxxx Xxxxxxxx
Xxxxxxxx and Xxx Xxxxxxxx Xxxxxx and an amount of $5,000 shall be assigned to
the Noncompete/Nonsolicitation Agreement of Xxxx Xxxxxxxxx Xxxxxxxx.
4.5 ALLOCATION OF VALUE. Buyer shall value the business for tax purposes as
follows: Equipment at fair market value; Inventory at acquired value; Trade
Accounts Receivable at acquired value; and the balance of Purchase Price to
goodwill, the intangibles, and the assigned values of the
noncompete/nonsolicitation agreements.
4.6 NONASSUMPTION OF THE SELLER'S OTHER LIABILITIES. All liabilities of
Seller shall be retained by Seller and not assumed by Buyer, except as provided
herein for customer claims. Seller shall retain liability for any orders for
windows that have been invoiced by Seller and that are delivered following the
Closing Date. In the event Buyer becomes liable for or has to pay any of the
liabilities not assumed by Buyer, then such liabilities including any costs or
expenses associated with such liabilities shall be deducted from the Reserve
during the Post Closing Adjustment Period provided for in Article 5 or shall be
paid to Buyer under Article 8.
5 - TERMS OF PAYMENT
5.1 PAYMENT DUE AT CLOSING. At Closing, Buyer shall pay to Seller an amount
estimated equal to the Purchase Price for the Purchased Assets as determined in
Article 4 ("Estimated Purchase Price"). Such payment shall consist of
immediately available funds.
5.2 RESERVE. Seller agrees that Buyer shall withhold $100,000, (the
"Reserve") from the Purchase Price for the Purchased Assets for a period of one
hundred twenty (120) days following Closing ("Post Closing Adjustment Period")
as a reserve to be applied to the post closing adjustments, including, but not
limited to, satisfaction of: (i) any unpaid taxes payable by Seller which
constitute a lien upon the Purchased Assets or which are imposed upon Buyer as a
transferee of the Purchased Assets; (ii) uncollected Trade Accounts Receivable
or discounts taken (including prompt payment discounts or any other discounts
the customer is entitled to take) on Trade Accounts Receivable, (iii) any
undisputed and unpaid creditors of Seller on contractual claims that are
asserted against Buyer;(iv) customer claims for windows that do not conform to
orders as evidenced by contract specifications or approved shop drawings for
goods delivered to Seller or customer within 90 days prior to the Closing Date
in which the Seller erred
PURCHASE AND SALE AGREEMENT - 5
in placing the order; and (v) payment of any amounts owing by Seller to Buyer at
the end of the Post Closing Adjustment Period. After deducting all amounts owed
to Buyer by Seller from the Reserve, Buyer shall pay to Seller the net amount of
the Reserve at the end of the Post Closing Adjustment Period. If Seller owes
Buyer more than the amount of the Reserve, such additional amount shall be paid
to Buyer in immediately available funds simultaneously with payment of the
Reserve to Buyer.
5.3 POST CLOSING ADJUSTMENTS. During the Post Closing Adjustment Period,
Buyer and Seller shall jointly prepare an analysis of adjustments to be made to
the payment made at Closing, to reflect the actual Purchase Price. If Buyer and
Seller do not agree on the amount of the adjusting payment required, then the
dispute shall be resolved by the CPA.
5.4 CUSTOMER CLAIMS FOLLOWING CLOSING. If customers who purchased inventory
from Seller prior to the Closing Date seek from Buyer customer service
adjustments for the windows purchased from Seller that are not covered by the
warranty from Xxxxxx Windows & Doors, Buyer agrees to notify Seller of such
claim and to resolve such claim, if requested by Seller, at a cost agreed to by
Seller. All such resolved claims shall be charged against the Xxxxxx Windows &
Doors sales service reimbursement credit issued by Xxxxxx Windows & Doors for
the service rendered, and any claims in excess of such credit shall be paid by
Seller to Buyer.
5.5 STORAGE AND DELIVERY COSTS. Buyer shall assume and perform Seller's
contracts for windows sold to customers but not yet delivered as may be
requested by Seller, provided that to the extent the price of windows so
delivered exceeds $250,000, Seller shall pay to Buyer 5% of the amount by which
the price of such windows exceed $250,000 for storage and handling expenses
incurred by Buyer.
6 - INTENTIONALLY OMITTED
7 - REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS
Seller and Shareholders hereby represent to Buyer as follows, and the
representations contained in this Article or elsewhere in this Agreement shall
be deemed remade as of Closing and shall survive Closing:
7.1 AUTHORIZATION. Seller and Shareholders have all requisite power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Seller and Shareholders, assuming the due authorization and execution of this
Agreement by Buyer, is the valid, binding obligation of Seller and Shareholders
enforceable against Seller and Shareholders in accordance with its terms, except
that in the case of (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now or hereafter
in effect relating to creditors' rights, and (ii) the remedies of specific
performance and injunctive and other equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings thereafter may be brought.
PURCHASE AND SALE AGREEMENT - 6
7.2 TAX MATTERS. Seller has timely filed all tax returns required to be
filed by the date of this Agreement with respect to taxes imposed on the
Business, and Seller has paid all taxes shown to be due on such returns. There
are no liens for taxes upon the Purchased Assets, except liens for current taxes
not yet due. Seller has withheld for its employees applicable taxes for all
pertinent periods in compliance with the tax withholding provisions of all
applicable laws.
7.3 COMPLIANCE WITH LAWS, LICENSES, AND PERMITS. Seller and Shareholders are
not in violation of (i) any applicable order, judgment, injunction, award, or
decree, or (ii) any ordinance, regulation, or other requirement of any
governmental entity, in either case that is material to the Business. Seller and
Shareholders have received all currently required permits.
7.4 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. Seller has previously
delivered to Buyer copies of the following financial statements of Seller of the
period ending December 31, 1999. The Financial Statements present fairly the
financial condition and results of operations of the Business as of the
respective date and periods thereof and have been prepared in accordance with
generally accepted accounting principles consistently applied and are prepared
in accordance with the methods used by Seller to prepare income taxes which are
consistently applied.
7.5 LEGAL PROCEEDINGS. There are no outstanding lawsuits or assertion of
claims against or involving the Business or the Purchased Assets.
7.6 CONTRACTS AND LEASES. The Contracts and leases for the Leased Locations
are valid and in full force and effect.
7.7 TRADE ACCOUNTS RECEIVABLE. All Trade Accounts Receivables transferred to
Buyer are recorded on the books of the Seller as of the Closing Date, represent
bona fide transactions made in the ordinary course of the Business and, in the
aggregate, are collectible in the ordinary course of the Business.
7.8 EQUIPMENT. The Equipment listed in Exhibit 1 is a complete and accurate
list of the material Equipment utilized by the Business.
7.9 LABOR MATTERS. There are no material disputes, employee grievances, or
other disciplinary actions pending or threatened involving any of the present or
former employees of the Business. There is no labor strike, dispute, slowdown,
or stoppage pending or threatened against or affecting the Business, and the
Business has not experienced any work stoppage or labor difficulty within the
past twelve (12) months. Seller has no agreement, arrangement, or commitment to
create any additional plan or arrangement or to modify or amend any existing
employee benefit plan of the Business.
Seller has made available to Buyer true, correct, and complete copies of all
written employee benefit plans, all contracts related thereto, and the most
recently available annual report, summary plan descriptions, IRS Form 5500s (or
5500-Cs or 5500-Rs) and favorable determination letters for such employee
benefit plans of the Business. Seller is in compliance in all material respects
with the terms of its employee benefit plans and with all applicable laws and
regulations relating thereto, including but not limited to ERISA and the Code.
Seller has no
PURCHASE AND SALE AGREEMENT - 7
unfunded or underfunded liabilities under any employee benefit plans. No
employee benefit plan provides for post-retirement welfare benefits, except as
required under Sections 601-609 of ERISA, or Section 4980B of the Code.
Seller has complete employment records, as required by law, for each Employee,
including fully executed I9 forms.
7.10 BROKERS AND FINDERS. Except for Seller and Shareholders obligations to
Matrix Capital, neither Seller nor Shareholders have agreed to pay, or has taken
any action that will result in any third party becoming obligated to pay or
entitled to receive any investment banking, brokerage, finder's or similar fee
or commission in connection with this Agreement or the transactions contemplated
hereby. Seller and Shareholders agree to indemnify and hold Buyer harmless from
any claim for a fee or other compensation asserted against Buyer by Matrix
Capital.
7.11 ENVIRONMENTAL LAWS. To the knowledge of Seller and Shareholders the
Business is in compliance with all Environmental Laws. Seller and Shareholders
have received no notice from any governmental entity alleging that Seller or the
Business is not in compliance with Environmental Laws, and there are no
circumstances that may prevent or interfere with material compliance in the
future. Seller and Shareholders have made available to Buyer all material
information that is in the possession of or reasonably available to Seller and
Shareholders regarding environmental matters pertaining to the environmental
conditions of the Business.
7.12 WINDOW WARRANTIES. There have been no special warranties of any kind
beyond the warranties provided by Xxxxxx Windows & Doors to customers of the
Business, and there is no continuing obligation of any kind by Seller to its
customers that extends beyond the Closing Date.
8 - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller and Shareholders as follows and
the warranties and representations contained in this Article or elsewhere in
this Agreement shall be deemed remade as of Closing:
8.1 LEGAL STATUS. Buyer is a limited partnership duly organized, validly
existing and in good standing under the laws of the state of Texas and prior to
Closing, is qualified or licensed to do business in the states of Nevada,
Oklahoma, and Arizona.
8.2 AUTHORITY. Buyer has full power and authority to execute and perform
this Agreement. Upon execution hereof, this shall be a valid and legally binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
9 - COLLECTION OF RECEIVABLES
9.1 GUARANTY OF COLLECTIBILITY. Seller guarantees to Buyer the
collectibility of all of the Trade Accounts Receivable that Buyer acquires at
Closing. During the Post Closing Adjustment Period, Buyer shall collect such
Trade Accounts Receivable. Payments shall be applied first to
PURCHASE AND SALE AGREEMENT - 8
the oldest Trade Account Receivables unless the customer specifically specifies
otherwise. Buyer shall notify Seller of any requests by customers to pay
invoices other than the oldest first. Buyer shall provide monthly aging reports
of the Trade Accounts Receivable to Seller. If any of such Trade Accounts
Receivable have not been collected by Buyer during the Post Closing Adjustment
Period, Buyer shall assign those uncollected Trade Accounts Receivable to Seller
and deduct the amount of such uncollected Trade Accounts Receivable from the
Reserve under Article 5 hereof. In addition, any discounts taken by customers
(including prompt payment discounts) shall be taken into account and the
Purchase Price adjusted to reflect the actual collected value of the Trade
Accounts Receivable. Any payments received on invoices not acquired by Buyer
shall be transferred to Seller.
10 - INTENTIONALLY OMITTED
11 - EMPLOYEES
11.1 DEFINITION. Seller agrees on execution of this Agreement to furnish to
Buyer a list of all persons regularly employed on either a part-time or
full-time basis by Seller in connection with the Business including their
current wage and salary rates. The term "Employees" shall mean all persons
included on such list, including employees on leave of absence, as well as those
persons who become regularly employed by Seller between the date of the list and
the Termination Date.
11.2 TERMINATION. On the Termination Date, Seller shall terminate all
Employees employed by the Business. With respect to terminated Employees and any
persons who terminated employment including notice of termination prior to
Closing, Seller shall be solely responsible for payment, when and if due, of all
salaries, wages, bonuses, vacation, COBRA benefits, and other obligations, if
any, owed to Employees as of the Termination Date.
11.3 BUYER'S OFFER OF EMPLOYMENT. Buyer shall offer employment to the
terminated Employees (except for Xxxxx Xxxxxxxx whose continuing relationship
with the Business shall be governed by a consulting and
noncompetition/nonsolicitation agreement and Xxxxx Xxxxx whose employment shall
be governed by an employment agreement) at their current wage and salary rates
of compensation including incentive pay programs for sales persons (exclusive of
any management or discretionary bonus pay programs) as offered by Seller. All
offers of employment shall be "at will." Buyer shall include the Employees who
accept Buyer's offer in Buyer's employment benefit plans in accordance with the
terms of such plans following the Termination Date, giving each such Employee
credit for time of employment with Seller and excluding any waiting periods.
11.4 LABOR CONTRACTS. Seller is not a party to any organized labor contracts
with respect to the Business nor does Seller have any liability to any organized
labor pension plan involving the Business.
11.5 WORKERS' COMPENSATION. Seller assumes all responsibility for liability
arising from workers' compensation claims by Employees, both medical and
disability, which have been filed at or prior to the time of Closing or which
arose out of incidents that occurred prior to Closing.
PURCHASE AND SALE AGREEMENT - 9
Buyer shall be responsible for all claims for Employees which arise out of, or
are based upon, incidents which occur subsequent to Closing.
11.6 NONASSUMPTION OF OBLIGATIONS OWED EMPLOYEES. Except as specified in this
Article 11, Buyer assumes no responsibility whatsoever for obligations and/or
benefits owed by Seller to its Employees, nor in any way adopts existing
employment or benefit programs currently offered by Seller.
12 - NONCOMPETE/NONSOLICITATION AGREEMENT
12.1 NONCOMPETE/NONSOLICITATION. For a period of 5 years after Closing,
Seller and Shareholders agree not to engage in the sale of windows to retail
customers, dealers, and building contractors (except as employees or consultants
to Buyer) in competition with Buyer within a two hundred fifty (250) mile radius
of each of the Leased Locations. A separate Noncompete/Nonsolicitation Agreement
shall be executed at Closing by Seller and Shareholders substantially in the
form attached hereto as Exhibit 7.
13 - INDEMNITIES
13.1 SELLER AND SHAREHOLDERS. Seller and Shareholders shall jointly and
severally, indemnify, and hold Buyer harmless against losses, damages, taxes,
penalties, costs and expenses (including accounting and legal fees) incurred by
Buyer arising out of or involving (i) any liability, cost or expense that arises
out of or involves the actions or operations of the Business or actions or
nonactions by Seller's officers, directors, shareholders or employees with
respect to the Business prior to the Closing Date; (ii) a breach of any of the
representations made by Seller or Shareholders in this Agreement, (iii) the
nonperformance of any covenant or agreement made in this Agreement by Seller or
Shareholders, or (iv) any claims or actions arising out of the Business filed or
made following the Closing Date but based on facts or occurrences prior to the
Closing Date.
13.2 BUYER. Buyer agrees to hold harmless, indemnify and defend Seller and
Shareholders (by counsel reasonably satisfactory to Seller and Shareholders)
from and against any and all loss, claim, damage, liability or expense arising
out of or occurring in connection with any breach by Buyer of any of its
covenants, representations or warranties hereunder. Such indemnification shall
include any claims pertaining to any services or products invoiced or sold
(excluding any sold but not delivered items) after the Closing, including,
without limitation, any products liability, personal injury or property damage
claims pertaining to products shipped or sold after the Closing.
PURCHASE AND SALE AGREEMENT - 10
14 - TAXES AND UTILITIES
14.1 TRANSFER TAXES. All sales taxes, fees, excise taxes, use taxes and other
taxes or fees of any form or nature levied upon either party by any governmental
entity by reason of the transfer of the Purchased Assets or recording of such
transfers, but excluding any tax based on the income of either party real estate
taxes owed by Seller or Shareholders, shall be shared equally between Buyer and
the Seller.
14.2 UTILITIES, PERSONAL PROPERTY OR REAL ESTATE TAXES. All personal property
taxes shall be prorated as of the Closing Date. All utilities owed by the
Business and all real estate taxes owed by the Business shall be paid by Seller
or Shareholders.
15 - CONDUCT OF OPERATIONS PRIOR TO CLOSING
15.1 CONDUCT OF OPERATIONS. From the date hereof until Closing, Seller shall
conduct its operation of the Business in the ordinary course and consistent with
its prior practices including the booking of inventory sold but not delivered.
Seller agrees not to buy or sell any assets connected with the Business, with a
sales price in excess of $5,000, other than Inventory, without the written
consent of Buyer during the period from execution of this Agreement until
Closing.
16 - CLOSING
16.1 CLOSING. Closing shall occur on May 1, 2000 in Dallas, Texas or at such
other time or place as the parties may agree upon.
16.2 TIME IS OF THE ESSENCE. Time is of the essence for the Closing of this
transaction.
17 - CONDITIONS PRECEDENT TO BUYER'S DUTY TO CLOSE
Buyer shall have no duty to close unless and until each and every one of the
following conditions precedent have been fully and completely satisfied:
17.1 CONTINUED TRUTH OF WARRANTIES. All of the representations and warranties
of Seller and Shareholders contained herein shall continue to be true and
correct at Closing in all material respects;
17.2 PERFORMANCE OF OBLIGATIONS. Seller and Shareholders shall have
substantially performed or tendered performance of each and every one of its
obligations hereunder which by its terms is capable of performance before
Closing;
17.3 DELIVERY OF CLOSING DOCUMENTS. Seller and Shareholders shall have
tendered delivery to Buyer of all the documents required to be delivered to
Buyer by Seller and Shareholders at Closing;
PURCHASE AND SALE AGREEMENT - 11
17.4 LITIGATION. No lawsuit, administrative proceedings or other legal action
shall have been filed which seeks to restrain or enjoin the acquisition of the
Purchased Assets or the operation of such Purchased Assets in any material
respect;
17.5 BOARD OR EXECUTIVE COMMITTEE APPROVAL. This Agreement shall be submitted
to Buyer's Board of Directors or the Executive Committee of the Board, and the
Board or Committee shall have approved this transaction;
17.6 MATERIAL ADVERSE CHANGE. There has been no material adverse change in
the Purchased Assets, sales volume, sales staffing, or margins;
17.7 ESTOPPEL CERTIFICATES. Buyer shall have received from each lessor of the
Leased Locations an estoppel certificate confirming that there are no defaults
under the lease and agreeing to Buyer's assumption of the lease.
17.8 Consulting NONCOMPETE/NONSOLICITATION AGREEMENT. Buyer shall have
negotiated and received a mutually agreeable consulting
noncompetition/nonsolicitation agreement with Xxxxx Xxxxxxxx.
17.9 DISTRIBUTION AGREEMENT. Buyer shall have entered into a mutually
agreeable exclusive distribution agreement with Xxxxxx Windows subject to
completion of the transactions provided for in this Agreement.
17.10 TRADEMARKS AND TRADENAMES. Buyer shall have entered into with Seller and
Xxxxxx Windows a mutually agreeable license agreement for the Trademarks and
Tradenames.
18 - CONDITIONS PRECEDENT TO SELLER'S AND SHAREHOLDERS' DUTY TO CLOSE
Seller and Shareholders shall have no duty to close this transaction unless and
until each and every one of the following conditions precedent have been fully
and completely satisfied:
18.1 CONTINUED TRUTH OF WARRANTIES. All of the representations and warranties
of Buyer contained herein shall continue to be true and correct at Closing in
all material respects, and Buyer shall deliver a certificate to that effect;
18.2 PERFORMANCE OF OBLIGATIONS. Buyer shall have substantially performed or
tendered substantial performance of each and every one of its obligations
hereunder which by its terms is capable of performance before Closing;
18.3 DELIVERY OF CLOSING DOCUMENTS. Buyer shall have tendered delivery to
Seller and Shareholders all the documents required to be delivered to Seller and
Shareholders by Buyer at Closing pursuant to this Agreement; and
PURCHASE AND SALE AGREEMENT - 12
18.4 LITIGATION. No lawsuit, administrative proceedings or other legal action
shall be pending or threatened against Seller which seeks to restrain or enjoin
Seller or Shareholders' sale or Buyer's acquisition of the Purchased Assets.
19 - ITEMS TO BE DELIVERED AT CLOSING BY SELLER AND SHAREHOLDERS
At Closing, Seller and Shareholders shall, unless waived by Buyer, deliver the
following items to Buyer:
19.1 XXXX OF SALE. A duly executed warranty xxxx of sale conveying the
Purchased Assets to Buyer;
19.2 ASSIGNMENT AND ASSUMPTION AGREEMENTS. Agreements duly executed by Seller
under which Seller assigns and Buyer assumes and agrees to fully and faithfully
perform the Contracts and leases for the Leased Vehicles, Leased Personal
Property, and Leased Locations;
19.3 TITLE CERTIFICATES. A certificate of title for each registered motor
vehicle to be purchased hereunder which has been duly executed;
19.4 CERTIFIED RESOLUTION. A copy of the resolution of the Board of Directors
of Seller authorizing the execution and performance of this Agreement
respectively certified by the secretary of Seller;
19.5 REPRESENTATIONS AND WARRANTIES. A certificate signed by Seller and
Shareholders to the effect that all of the representations and warranties of
Seller and Shareholders contained herein are true and correct in all material
respects as of Closing;
19.6 UCC TERMINATION STATEMENTS. All Uniform Commercial Code termination or
release statements necessary to transfer the Purchased Assets free and clear of
all security interests, liens or encumbrances; and
19.7 NONCOMPETE/NONSOLICITATION AGREEMENTs. Fully executed
Noncompete/Nonsolicitation Agreements from Seller, each Shareholder, and Xxxxx
Xxxxxxxx as required by this Agreement, and
19.8 LICENSE AGREEMENT. A fully executed License Agreement for the Trademarks
and Tradenames with such terms and conditions as are acceptable to Buyer.
20 - ITEMS TO BE DELIVERED AT CLOSING BY BUYER
At Closing, Buyer shall, unless waived by Seller, deliver the following items to
Seller:
20.1 REPRESENTATIONS AND WARRANTIES. A certificate signed by an officer of
Buyer to the effect that all the representations and warranties of Buyer
contained herein are true and correct in all material respects as of Closing;
PURCHASE AND SALE AGREEMENT - 13
20.2 PURCHASE PRICE. That portion of the Purchase Price to be paid at Closing
shall be paid in immediately available funds by wire transfer to such of
Seller's and Shareholders' bank accounts as it may designate, and
21 - MISCELLANEOUS
21.1 FURTHER ASSURANCES. Each party shall, at any time after Closing, execute
and deliver to the other party all such additional instruments of conveyance and
assignments, certificates or similar documents as such other party may
reasonably request.
21.2 NONSOLICITATION AGREEMENT. Buyer agrees that if the transactions
provided for in this Agreement do not occur for some reason other than Seller's
failure to perform the duties and requirements of this Agreement, then Buyer
agrees that for a period of one year Buyer will not directly solicit for
employment any person employed by Seller that was introduced to Buyer during the
Due Diligence Period. This restriction on offers of employment shall not include
an unsolicited contact with Buyer by an employee of Seller or a response by an
employee of Seller to a general advertisement by Buyer.
21.3 NO OTHER AGREEMENTS. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter except for the agreements
executed in connection with this agreement and the closing of the transaction
provided for in this agreement. All prior and contemporaneous negotiations,
proposals and agreements between the parties are included in this Agreement. Any
changes to this Agreement must be agreed to in writing by both parties.
21.4 WAIVER. Either party may waive the performance of any obligation owed to
it by the other party hereunder for the satisfaction of any condition precedent
to the waiving party's duty to perform any of its covenants, including its
obligations to close. Any such waiver shall be valid only if contained in
writing signed by the party to be charged.
21.5 PUBLIC ANNOUNCEMENTS. No public announcements of this Agreement shall be
made unless Buyer and Seller have mutually agreed on the timing, distribution,
and contents of such announcements, except as may be required by applicable
security laws.
21.5 NOTICES. Any notices required or allowed in this Agreement shall be
effectively given if placed in a sealed envelope, postage prepaid, and deposited
in the United States mail, registered or certified, addressed as follows:
To Seller and --------------------------------------------
Shareholders:
--------------------------------------------
--------------------------------------------
Attn:
---------------------------------------
To Buyer: BMCW SouthCentral, L.P.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 000000000
Attn: Xxxxxxx X. Xxxxx, President
PURCHASE AND SALE AGREEMENT - 14
Building Materials Holding Corporation
Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx,
Senior V.P., Finance and Treasurer
Copy To: Building Materials Holding Corporation
000 Xxxx Xxxx., Xxxxx 000
Xxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Street, Senior Vice President,
General Counsel and Secretary
21.6 THIRD-PARTY BENEFICIARY. Nothing contained herein shall create or give
rise to any third-party beneficiary rights for any individual as a result of the
terms and provisions of this Agreement.
21.7 CONFIDENTIAL INFORMATION. The parties agree that all information
acquired from the other in connection with the negotiation, execution and
consummation of this Agreement is confidential and shall not be disclosed to any
other party (other than attorneys, accountants and agents of the party) without
the written consent of the other.
21.8 ASSIGNMENT. The parties shall not assign this Agreement without the
prior written consent of the other parties. Any attempt to assign this Agreement
without prior written consent shall be void.
21.9 CHOICE OF LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the state of Texas.
21.10 PARAGRAPH HEADINGS. The Section and Article paragraph headings contained
herein are for convenience only and shall have no substantive bearing on the
interpretation of this Agreement.
21.11 RULES OF INTERPRETATION. The following rules of interpretation shall
apply to this Agreement, the exhibits hereto and any certificates, reports or
other documents or instruments made or delivered pursuant to or in connection
with this Agreement, unless otherwise expressly provided herein or therein and
unless the context hereof or thereof clearly requires otherwise:
A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms, and if a term is said to have the meaning assigned to such term
in another document or agreement and the meaning of such terms therein is
amended, modified or supplemented, then the meaning of such term herein shall be
deemed automatically amended, modified or supplemented in a like manner.
PURCHASE AND SALE AGREEMENT - 15
References to the plural include the singular, the plural, and the part the
whole.
The words "include," "includes," and "including" are not limiting.
A reference to any law includes any amendment or modification to such law which
is in effect on the relevant date.
A reference to any person or entity includes its successors, heirs and permitted
assigns.
Where the character or amount of any asset or liability or item of income or
expense is required to be determined or any consolidation or other accounting
computation is required to be made for purposes of this Agreement or any exhibit
hereto or certificate, report or other document or instrument made or delivered
pursuant to or in connection with this Agreement, such determination or
computation shall be done in accordance with generally accepted accounting
principles at the time in effect, to the extent applicable, except where such
principles are inconsistent with the express requirements hereof or of such
exhibit, certificate, report, document or instrument.
The words "hereof," "herein," "hereunder," and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement.
All exhibits to this Agreement constitute material terms of this Agreement and
are incorporated fully into the terms of this Agreement.
21.12 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be an original, but which shall together constitute but one
agreement.
The parties have executed this Agreement on the day and year first written
above.
SELLER:
FRONTIER WHOLESALE COMPANY, INC.
By: /s/ X.X. XXXXXXXX
--------------------------------------------
Its PRESIDENT
SHAREHOLDERS:
/s/ XXXXX XXXXXXXX
--------------------------------------------
Xxxxxx Xxxxxxxx
/s/ XXXX XXXXXXXX XXXXXXXX
--------------------------
Xxxx Xxxxxxxx Xxxxxxxx
PURCHASE AND SALE AGREEMENT - 16
/s/ XXX XXXXXXXX DEALEY
--------------------------------------------
Xxx Xxxxxxxx Xxxxxx
/s/ XXXX X. XXXXXXXX
--------------------------------------------
Xxxx Xxxxxxxxx Xxxxxxxx
BUYER:
BMCW SOUTHCENTRAL, L.P.
By: BMCW Corporation South Central
Its: General Partner
By: /s/ XXXXX X. XXXXXX
--------------------------------------------
Xxxxx X. Xxxxxx, Senior Vice President -
Finance and Treasurer
PURCHASE AND SALE AGREEMENT - 17
