Purchase And Non-competition Agreement

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 TUSA, INC., a Texas corporation ("SELLER"), GARY L. HOWARD, the sole shareholder of Seller ("SHAREHOLDER") PATTI L. HOWARD, individually ("MRS. HOWARD") 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, Mrs. Howard, 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. Mrs. Howard 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 Mrs. Howard 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 Mrs. Howard. Seller, Shareholder and Mrs. Howard, 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 MRS. HOWARD. Seller, Shareholder and Mrs. Howard, jointly and severally, represent and warrant to Buyer as follows:


3.1. REPRESENTATIONS AND WARRANTIES IN ASSET PURCHASE AGREEMENT.
Seller, Shareholder and Mrs. Howard 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)


2


for which Buyer will or could be liable.


3.5. NO MISREPRESENTATIONS. The representations, warranties and
statements made by Seller, Shareholder and Mrs. Howard 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, par ...