SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
This Second Amendment to Asset Purchase Agreement ("Second Amendment"),
dated November 14, 1997, is between BMC West Corporation, a Delaware Corporation
(the "Purchaser"), and Lone Star Plywood & Door Corp., a Delaware corporation
(the "Seller").
RECITALS
1. The Purchaser and the Seller have entered into that certain Asset
Purchase Agreement, dated as of October 6, 1997 (the "Agreement"), pursuant to
which the Purchaser has agreed to purchase from the Seller, and the Seller has
agreed to sell to the Purchaser, certain assets of the Seller, on the terms and
subject to the conditions set forth therein. Capitalized terms used herein and
not otherwise defined shall have the meanings set forth in the Agreement.
2. The Purchaser and the Seller amended the Agreement on November 10,
1997 to provide that Purchaser assumed the obligations of the Seller to pay
certain Change of Control Bonuses and similar bonuses the Seller previously
agreed to pay to certain of its employees.
AGREEMENT
Now, therefore, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the Purchaser and the Seller
hereby further amend the Agreement as follows:
Section 1. CUSTOMER CLAIMS. The Purchaser and the Seller hereby agree to
delete the provisions of Section 2.03(b)(iii) in their entirety in return for
the Seller providing to the Purchaser a credit of $185,000 to the Closing
Balance Sheet.
Section 2. WARRANTY OF TRADE ACCOUNTS RECEIVABLE. Section 2.03(b)(i) is
deleted in its entirety and replaced with the following:
"(i) Within 120 calendar days following the Closing Date, the Seller
shall deliver to the Purchaser an unaudited balance sheet of the Seller (the
"Closing Balance Sheet") as of the close of business on the date immediately
preceding the Closing Date. The Closing Balance Sheet shall be prepared (x) in
accordance with GAAP, except that it shall not contain the footnotes required
thereby, and (y) except as otherwise expressly indicated herein, using
procedures substantially similar to those used to prepare the Reference Balance
Sheet.
During the preparation of the Closing Balance Sheet and the period of any
dispute referred to in Section 2.03(b)(iv), the Purchaser shall provide the
Seller and Coopers & Lybrand, independent accountants ("Seller's Accountants"),
full access to
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the books, records and facilities of the Seller and shall cooperate fully with
the Seller and Seller's Accountants, in each case to the extent reasonably
required by the Seller and Seller's Accountants in order to prepare the Closing
Balance Sheet and to investigate the basis for any such dispute; PROVIDED,
HOWEVER, that any such investigation shall be conducted in such a manner as not
to interfere unreasonably with the operation of the Purchaser's business.
Except as otherwise set forth in this Section 2.03(b)(i), the value of the
Trade Accounts Receivable on the Closing Balance Sheet shall be the actual
collected value of the Trade Accounts Receivable during the 120 calendar days
following the Closing Date, plus the actual amounts of any credits or allowances
given to customers with respect to such Trade Accounts Receivable. "Trade
Accounts Receivable" means the right to receive payment on obligations,
including those owed but not yet due, as of Closing, of all customers and other
third-party purchasers of goods and services from the Business in the ordinary
course of business prior to Closing, including any and all past due accounts and
notes receivable taken in collection of routine receivables, but excluding any
such obligations which have been written off the books prior to Closing. During
a period of 120 calendar days following the Closing Date, the Purchaser shall
(1) use its reasonable best efforts to collect Trade Accounts Receivable
consistent with past practice of the Business, including the processing of
returns of goods that are returned and resalable, and (2) take all reasonable
and usual steps requested by the Seller to create, protect and preserve any
applicable deeds of trust, mortgages, mechanic's liens, materialmen's liens and
other security interests that may secure the Trade Accounts Receivable acquired
by the Purchaser hereunder. The Seller shall reimburse the Purchaser for all
reasonable out-of-pocket expenses incurred by the Purchaser in taking the action
requested by the Seller pursuant to clause (2) above, upon receipt of reasonable
documentation therefore. The Purchaser agrees that it shall not, for a period
of 180 days following the Closing Date, make any changes to (a) the personnel
used by the Seller immediately prior to the Closing in the collection of the
Trade Accounts Receivable, (b) the salespersons to whose customers the Trade
Accounts Receivable relate or (c) any incentive compensation or commission
structure in place on the date hereof relating to the collection of the Trade
Accounts Receivable. If, as of the date 120 days after the Closing Date, the
uncollected balance of any one of such Trade Accounts Receivable is greater than
20% of the total sales activity of the corresponding customer account during
such 120-day period, the Purchaser may, at its option, subject to
Section 2.03(b)(iv), (x) assign those uncollected Trade Accounts Receivable
(including all related deeds of trust, mortgages, mechanic's liens,
materialmen's liens and other security interests securing such Trade Accounts
Receivable) to the Seller or (y) at the Seller's request, continue to use its
reasonable best efforts to collect such Trade Accounts Receivable consistent
with past practice of the Business and pay to the Seller, promptly upon receipt,
all proceeds therefrom less reasonable collection expenses; PROVIDED, HOWEVER,
that, notwithstanding anything in this Agreement to the contrary, if the
Purchaser shall be in default of its obligations under this paragraph with
respect to a
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given Trade Account Receivable, the Purchaser shall not be (1) entitled to any
adjustment to the Purchase Price or any indemnification under this Agreement to
the extent such Trade Account Receivable is or proves to be uncollectible or
(2) obligated to assign such Trade Account Receivable (or any related deeds of
trust, mortgages, mechanic's liens, materialmen's liens or other security
interests securing such Trade Account Receivable) to the Seller hereunder."
Section 3. MISCELLANEOUS.
(A) The Agreement, except to the extent amended hereby, shall remain
in full force and effect.
(B) The descriptive headings contained in this Second Amendment are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Second Amendment.
(C) This Second Amendment shall be governed by, and construed in
accordance with , the laws of the State of Oregon applicable to contracts
executed and to be performed in that State.
(D) This Second Amendment may be executed in one or more
counterparts, and by the different parties hereto and separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreements.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
Asset Purchase Agreement to be duly executed as of the date first written above.
BMC WEST CORPORATION
/s/ Ellis C. Goebel
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Ellis C. Goebel
Senior Vice President - Finance and
Treasurer
LONE STAR PLYWOOD & DOOR CORP.
By /s/ John W. Dixon
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Its John W. Dixon, Chairman
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