-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AWFp1q8G8DSdTSQSLurQXlx5sBQjX0451tweesgP/EaONGhhbT9JaPHCG/9Vfc5i pPc7P387oV0+sAfeZPAPdQ== 0001193125-04-017199.txt : 20040209 0001193125-04-017199.hdr.sgml : 20040209 20040209153832 ACCESSION NUMBER: 0001193125-04-017199 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040209 GROUP MEMBERS: JAMES M. FAIL GROUP MEMBERS: JAMES M. FAIL LIVING TRUST GROUP MEMBERS: KATHRYN FAIL LUTTRULL GROUP MEMBERS: P.S.F. HOLDINGS LIMITED PARTNERSHIP GROUP MEMBERS: STONE CAPITAL, INC. GROUP MEMBERS: STONE HOLDINGS, INC. GROUP MEMBERS: STONE INVESTMENTS, INC. GROUP MEMBERS: THE MARITAL TRUST GROUP MEMBERS: WINN HOLDINGS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WICKES INC CENTRAL INDEX KEY: 0000910620 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS [5211] IRS NUMBER: 363554758 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42945 FILM NUMBER: 04577715 BUSINESS ADDRESS: STREET 1: 706 N DEERPATH DR CITY: VERNON HILLS STATE: IL ZIP: 60061 BUSINESS PHONE: 8473673400 MAIL ADDRESS: STREET 1: 706 NORTH DEERPATH DR CITY: VERNON HILLS STATE: IL ZIP: 60061 FORMER COMPANY: FORMER CONFORMED NAME: WICKES LUMBER CO /DE/ DATE OF NAME CHANGE: 19930813 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: IMAGINE INVESTMENTS INC CENTRAL INDEX KEY: 0001051043 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 8150 N CENTRAL EXPRESSWAY STE 1901 CITY: DALLAS STATE: TX ZIP: 75206 BUSINESS PHONE: 2143651900 MAIL ADDRESS: STREET 1: 8150 N CENTRAL EXPRESSWAY STE 1901 CITY: DALLAS STATE: TX ZIP: 75206 SC 13D/A 1 dsc13da.htm AMENDMENT NO. 10 TO SCHEDULE 13D Amendment No. 10 to Schedule 13D

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

(Rule 13d-101)

 

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

(Amendment No. 10) (1)

 

 

Wickes, Inc.

(Name of Issuer)

 

 

Common Stock, par value $.01 per share

(Title of Class of Securities)

 

 

967 446 10 5

(CUSIP Number)

 

 

Gary M. Goltz

Imagine Investments, Inc.

8150 North Central Expressway, Suite 1901

Dallas, Texas 75206

(214) 365-1905

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

 

 

Copies to:

 

Sally A. Schreiber

Munsch Hardt Kopf & Harr, P.C.

4000 Fountain Place

1445 Ross Avenue

Dallas, Texas 75202

(214) 855-7500

 

January 12, 2004

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following box .  ¨

 

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

 

(1) The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see, the Notes).

CUSIP No. 967 446 10 5

          

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

Imagine Investments, Inc.

75-2709444

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

Delaware

    

Number of

Shares

Beneficially

Owned By

Each

Reporting

Person

With

  

(7)     Sole Voting Power

 

        —

(8)    Shared Voting Power

 

        3,879,743*

(9)     Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

        3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

CO

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

Stone Investments, Inc.

86-0740106

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

Delaware

    

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

  

(7)    Sole Voting Power

 

        —

(8)    Shared Voting Power

 

        3,879,743*

(9)    Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

        3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, CO

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

Stone Capital, Inc.

75-2262907

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

Delaware

    

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

  

(7)    Sole Voting Power

 

        —

(8)    Shared Voting Power

 

        3,879,743*

(9)    Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

        3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, CO

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

Stone Holdings, Inc.

75-2681508

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

  

¨

  6)  

Citizenship or Place of Organization

 

Delaware

    

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

  

(7)    Sole Voting Power

 

        —

(8)    Shared Voting Power

 

        3,879,743*

(9)    Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

        3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

 

  

x

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, CO

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

P.S.F. Holdings Limited Partnership

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

Texas

    

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

  

(7)    Sole Voting Power

 

        —

(8)    Shared Voting Power

 

        3,879,743*

(9)    Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

        3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, PN

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

The Marital Trust established pursuant to the provisions of Section 3 of Article 3 of the agreement establishing the James M. Fail Living Trust.

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

Alaska

    

Number of

Shares

Beneficially

Owned by

Each

Reporting Person

With

  

(7)    Sole Voting Power

 

        —

(8)     Shared Voting Power

 

        3,879,743*

(9)     Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

        3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, OO

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

James M. Fail Living Trust

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

Alaska

    

Number of

Shares

Beneficially

Owned by

Each

Reporting Person

With

  

(7)     Sole Voting Power

 

        —

(8)     Shared Voting Power

 

        3,879,743*

(9)     Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

         3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, OO

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

James M. Fail

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

United States

    

Number of

Shares

Beneficially

Owned By Each

Reporting Person

With

  

(7)     Sole Voting Power

 

        —

(8)     Shared Voting Power

 

        3,879,743*

(9)     Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

         3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, IN

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

 

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

Winn Holdings, LLC

75-2891040

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

Texas

    

Number of

Shares

Beneficially

Owned By Each

Reporting Person

With

  

(7)    Sole Voting Power

 

        —

(8)    Shared Voting Power

 

        3,879,743*

(9)     Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

        3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, OO

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

 

CUSIP No. 967 446 10 5

 

  1)  

Names of Reporting Persons

I.R.S. Identification Nos. of Above Persons (entities only)

 

Kathryn Fail Luttrull

    
  2)  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨

(b)  x

    
  3)  

SEC Use Only

 

    
  4)  

Source of Funds (See Instructions)

 

WC

    
  5)  

Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)

 

   ¨
  6)  

Citizenship or Place of Organization

 

United States

    

Number of

Shares

Beneficially

Owned By Each

Reporting Person

With

  

(7)     Sole Voting Power

 

        —

(8)     Shared Voting Power

 

        3,879,743*

(9)     Sole Dispositive Power

 

        —

(10)    Shared Dispositive Power

 

         3,879,743*

11)  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

3,879,743*

    
12)  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

 

  

x

 

13)  

Percent of Class Represented by Amount in Row (11)

 

46.7%

    
14)  

Type of Reporting Person (See Instructions)

 

HC, IN

    

 

* Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc.

 

SCHEDULE 13D/A

 

This Amendment No. 10 to Schedule 13D filed on October 15, 1998, with the Securities and Exchange Commission, as amended by that certain Amendment No. 1 to Schedule 13D filed on November 24, 1998, that certain Amendment No. 2 to Schedule 13D filed on January 19, 1999, that certain Amendment No. 3 to Schedule 13D filed on February 8, 1999, that certain Amendment No. 4 to Schedule 13D filed on September 18, 2001, that certain Amendment No. 5 to Schedule 13D filed on February 6, 2002, that certain Amendment No. 6 to Schedule 13D filed on August 27, 2002, that certain Amendment No. 7 to Schedule 13D filed on April 21, 2003, that certain Amendment No. 8 to Schedule 13D filed on October 30, 2003, and that certain Amendment No. 9 to Schedule 13D filed on December 12, 2003 (as so amended, the “Schedule 13D”), with respect to the common stock, par value $.01 per share, of Wickes, Inc., a Delaware corporation (the “Issuer”). The Schedule 13D is hereby incorporated by reference for all purposes. Capitalized terms used but not defined herein shall have the meanings subscribed to them on Schedule 13D.

 

Item 2. Identity and Background.

 

Item 2 is hereby amended and restated to read as follows:

 

(a) This statement is filed by (i) Imagine Investments, Inc., a Delaware corporation (“Imagine Investments”), (ii) Stone Investments, Inc., a Delaware corporation (“Stone Investments”), (iii) Stone Capital, Inc., a Delaware corporation (“Stone Capital”), (iv) Stone Holdings, Inc., a Delaware corporation (“Stone Holdings”), (v) P.S.F. Holdings Limited Partnership, a Texas limited partnership (“P.S.F.”), (vi) the Marital Trust established pursuant to the provisions of Section 3 of Article B of the agreement establishing the James M. Fail Living Trust (the “Marital Trust”), (vii) James M. Fail Living Trust (the “Living Trust”), (viii) James M. Fail, (ix) Winn Holdings, LLC, a Texas limited liability company (“Winn Holdings”), and (x) Kathryn Fail Luttrull (collectively, the “Reporting Persons”).

 

Imagine Investments is a wholly-owned subsidiary of Stone Investments. Stone Investments is a wholly-owned subsidiary of Stone Capital. Stone Capital is a wholly-owned subsidiary of Stone Holdings. Each of the Marital Trust, Living Trust, and P.S.F. owns approximately 25%, 45%, and 30%, respectively, of the common stock of Stone Holdings. Additionally, the Marital Trust and the Living Trust own, in the aggregate, approximately 22.6% of the preferred stock of Stone Holdings. Mr. Fail is a trustee of each of the Marital Trust and the Living Trust and has sole voting and dispositive power with respect to each of such trusts. Winn Holdings has a 1.3645% general partnership interest in and is the general partner in P.S.F. Kathryn Fail Luttrull is the sole member and manager of Winn Holdings.

 

(b) The business address of each of the Reporting Persons is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

 

(c) The principal business of Imagine Investments, Stone Investments, Stone Capital, Stone Holdings, P.S.F., and Winn Holdings is investments, including investing in securities of other entities. The principal business of each of the Marital Trust and Living Trust is to implement and effectuate the investment activities of Mr. Fail and his family, including investing in securities of other entities. The present principal occupation of James M. Fail is Chairman of the Board and Chief Executive Officer of Stone Holdings and serving in other principal positions in certain other of the Reporting Persons as more fully described on Schedule 1 attached hereto and incorporated herein by reference. The present principal occupation of Kathryn Fail Luttrull is manager and sole member of Winn Holdings and serving in other principal positions in certain other of the Reporting Persons as more fully described on Schedule 1 attached hereto and incorporated herein by reference.

 

(d) During the last five years, none of the Reporting Persons or the Covered Persons (as hereinafter defined) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

 

(e) During the last five years, none of the Reporting Persons or the Covered Persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a

 

result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

(f) The place of organization for each of Imagine Investments, Stone Investments, Stone Capital, and Stone Holdings is Delaware. The place of organization of each of P.S.F. and Winn Holdings is Texas. The place of organization of each of the Marital Trust and the Living Trust is Alaska. The place of citizenship of James M. Fail and Kathryn Fail Luttrull is the United States of America. Unless otherwise indicated on Schedule 1 attached hereto and incorporated herein by reference, the place of citizenship of each of the Covered Persons is the United States of America.

 

For additional information required by Instruction C to Schedule 13D with respect to the general partners, controlling persons, executive officers, and directors of the foregoing Reporting Persons, to the extent applicable (collectively, “Covered Persons”), please see Schedule 1 attached hereto and incorporated herein by reference.

 

Item 4. Purpose of Transaction.

 

Item 4 is hereby amended and restated to read as follows:

 

As of October 1, 2003, Imagine Investments and the Issuer entered into a letter agreement, as amended and restated on December 10, 2003 (as amended, the “October 2003 Letter Agreement”) pursuant to which Imagine Investments agreed to provide financing in the form of a loan (the “2003 Loan”) to the Issuer to enable it to make a cash tender offer for its 2003 Senior Subordinated Notes and pursuant to which Imagine Investments could have acquired up to 10,500,000 additional shares of common stock of the Issuer if such 2003 Loan was made. The tender offer was withdrawn by the Issuer on January 12, 2004 and the commitment contained in the October 2003 Letter Agreement expired on January 12, 2004. See Items 5 and 6 below for further discussion of the October 2003 Letter Agreement and the 2003 Loan.

 

As of November 5, 2003, the Issuer, Imagine Investments, and Robert T. Shaw entered into a voting agreement (“Voting Agreement”) pursuant to which the parties thereto agreed to vote their shares of common stock of the Issuer to consent to the amendment of the Issuer’s Certificate of Incorporation to increase the number of authorized shares of the Issuer’s common stock to permit issuance of the 2003 Loan Shares and, possibly, additional shares. The Voting Agreement terminated on December 31, 2003. The Reporting Persons and Robert T. Shaw previously acknowledged that they may constitute a “group” pursuant to Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, by virtue of the Voting Agreement. As a result of the termination of the Voting Agreement, the Reporting Persons disclaim membership in a “group” among themselves and with Robert T. Shaw.

 

The Reporting Persons intend to review on a continuing basis their investment in the Issuer. Each of the Reporting Persons is willing to consider a sale, either in the open market or in one or more privately negotiated transactions, of any or all of the shares that it acquired; a future acquisition of additional control of the business of the Issuer by other means, including a tender offer, merger, or other business combination, open market purchases, private transactions, or otherwise; and transactions pursuant to which employees of the Issuer would obtain equity ownership in the Issuer.

 

However, except as set forth above, none of the Reporting Persons has any current plans or proposals with respect to any of the following: (a) the acquisition or disposition of securities of the Issuer; (b) any extraordinary corporate transaction, such as a merger, reorganization, or liquidation, involving either the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) a change in the present board of directors or management of the Issuer, including plans or proposal to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer’s business or corporate structure; (g) any changes in the Issuer’s charter or bylaws that may impede the acquisition of control of the Issuer by any person; (h) causing a class of securities of the Issuer to be delisted from any national securities exchange or to cease

 

to be authorized to be quoted in an inter-dealer quotation system or a registered national securities association; (i) a class of securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to any of the foregoing. However, the Reporting Persons reserve the right to take any and all such actions in the future.

 

Item 5. Interest in Securities of the Issuer.

 

Item 5 is hereby amended and restated to read as follows:

 

  (a) As a result of the transactions described below in Item 6, as of the date of this Amendment No. 10, Imagine Investments is the record owner of 3,879,743 shares of common stock of the Issuer, which shares represent approximately 46.7% of the issued and outstanding shares of the common stock of the Issuer as of October 31, 2003. By virtue of the relationships described in Item 2 of this Schedule 13D, each of the Reporting Persons may be deemed to share the beneficial ownership of all of the shares of common stock of the Issuer beneficially owned by Imagine Investments.

 

  (b) Imagine Investments has the direct power to vote and direct the disposition of the shares of common stock of the Issuer actually owned by it. By virtue of the relationships described in Item 2 of this Schedule 13D, each of the Reporting Persons may be deemed to share the indirect power to vote and direct the disposition of all of the shares of common stock of the Issuer owned of record by Imagine Investments.

 

  (c) The commitment contained in the October 2003 Letter Agreement expired on January 12, 2004, and the Voting Agreement was terminated on December 31, 2003.

 

  (d) Not applicable.

 

  (e) Not applicable.

 

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

 

Item 6 is hereby amended and restated to read as follows:

 

In order to provide a better understanding of the beneficial ownership of common stock of the Issuer by the Reporting Persons, the following chronology is provided:

 

  (a) Imagine Investments has been, prior to the transactions set forth in Items 6(p) and 6(q) below (the “April 2003 Transactions”), the pledgee of shares of Riverside Group, Inc., a Florida corporation (“Riverside”). Prior to the consummation of the April 2003 Transactions, Riverside owned a significant percentage of the shares of the Issuer and Wilson Financial Corporation currently owns a significant portion of the shares of Riverside. See the Schedule 13D filed by Imagine Investments with respect to Riverside, as the same has been and may be amended from time to time, for more specific information.

 

  (b)

On October 5, 1998, Imagine Investments and Riverside entered into a Stock Purchase Agreement (as amended from time to time, the “Stock Purchase Agreement”), pursuant to which, among other things, (1) Imagine Investments purchased 250,000 shares of common stock of the Issuer from Riverside (3.0% of the outstanding) for $3.25 per share, (2) Riverside granted to Imagine Investments an option (the “Option”) to purchase 750,000 shares of common stock of the Issuer held by Riverside (9.2% of the outstanding) for $3.25 per share (subject to certain limitations that are described below), (3) Riverside had the right to require Imagine Investments to exercise the Option for up to 200,000 shares of common stock of the Issuer underlying the Option, and (4) Riverside granted to Imagine Investments a right of first refusal, for a period of 18 months following the date of the Stock Purchase Agreement, on all of the shares of common stock of the Issuer held by Riverside other than the 250,000 shares purchased by Imagine

 

 

Investments under the Stock Purchase Agreement (estimated to be approximately 3,599,113 shares (43.9%). As described below, the Option was eventually exercised in full by Imagine Investments, including through the use of the put option by Riverside. Imagine Investments’ right of first refusal under the Stock Purchase Agreement expired on April 5, 2000, without being exercised. In addition, under the Stock Purchase Agreement, (1) Riverside assigned its rights under that certain Registration Rights Agreement dated September 2, 1993, between Riverside and the Issuer, with respect to the shares of common stock of the Issuer acquired by Imagine Investments under the Stock Purchase Agreement, and (2) upon request by Imagine Investments, Riverside agreed to use its best efforts to cause the Issuer to effect the securities law registration of the common stock of the Issuer held by Imagine Investments. The Option could not be exercised by Imagine Investments to the extent it would cause Imagine Investments to become an “interested stockholder,” within the meaning of Section 203 of the Delaware General Corporation Law, of the Issuer unless the Board of Directors of the Issuer approved the acquisition by Imagine Investments of more than 15% of the outstanding common stock of the Issuer.

 

  (c) On or about November 5, 1998, Riverside exercised its put option under the Stock Purchase Agreement and required Imagine Investments to purchase 200,000 shares of common stock of the Issuer underlying the Option from Riverside.

 

  (d) On or about December 14, 1998, Imagine Investments acquired 185,000 shares of common stock of the Issuer pursuant to its exercise of a portion of the Option.

 

  (e) On December 29, 1998, Imagine Investments purchased from Riverside 82,000 shares of common stock of the Issuer, which shares were not subject to the Option, for $3.75 per share.

 

  (f) On or about January 26, 1999, Imagine Investments exercised the remainder of the Option and acquired 365,000 shares of common stock of the Issuer from Riverside.

 

  (g) On August 31, 1999, Riverside, borrowed $1,800,000 (as the same has been, and may be further, amended, modified and renewed from time to time, the “1999 Loan”) from Imagine Investments. On August 31, 2000, the 1999 Loan was modified and renewed and, in connection therewith, Riverside executed and delivered to Imagine Investments a promissory note in the principal amount of $2,021,628, which note amended and restated in its entirety the existing note in the principal amount of $1,800,000. The 1999 Loan was secured by, among other things, 758,155 shares of common stock of the Issuer owned by Riverside (921,845 shares were initially pledged, but 81,970 were released pursuant to a letter agreement dated August 30, 1999, between Riverside and Imagine Investments, and 81,720 shares were released on August 31, 2000, in connection with the modification and renewal of the 1999 Loan) (as such number of shares may be further modified from time to time, the “1999 Pledged Shares”). The 1999 Pledged Shares represented approximately 9.1% of the issued and outstanding shares of common stock of the Issuer as of October 31, 2002. As additional security for the 1999 Loan, Riverside assigned to Imagine Investments any and all registration rights of Riverside with respect to, among other things, the shares of common stock of the Issuer held by Riverside to the extent Imagine Investments has foreclosed upon or otherwise acquired the same. The 1999 Loan has reached its maturity date several times without being paid but has been extended several times, most recently pursuant to that certain Third Amendment to Loan Agreement and Note dated as of November 30, 2002. See Item 6(n) below.

 

  (h) On or about December 19, 2000, Imagine Investments transferred to Stone Investments 1,082,000 shares of common stock of the Issuer for and in consideration of $4.3125 per share or $4,666,125 in the aggregate.

 

  (i) On or about March 5, 2001, Stone Investments transferred to Imagine Investments 615,000 shares of common stock of the Issuer for and in consideration of $3.28 per share or $2,017,200 in the aggregate.

 

  (j) During the period of March through August 2001, Imagine Investments acquired from several persons 11% Secured Promissory Notes dated April 1, 1999 (collectively, the “11% Notes”) with an outstanding principal balance of $9,500,000 (the holders of the Notes being called, collectively, the “Holders”). The 11% Notes were originally sold by Riverside on or about April 1, 1999, pursuant to a Credit Agreement (the “11% Note Credit Agreement”) dated as of April 1, 1999, between Riverside and the Holders and. the 11% Notes. Imagine Investments acquired the 11% Notes pursuant to, among other things, several individual Purchase and Sale of Notes and Interest in Collateral Documents Agreements (collectively, the “Purchase Agreements”) entered into between Imagine Investments and various Holders. Pursuant to the Purchase Agreements, Imagine Investments acquired the 11% Notes in exchange for cash and delivery to the Holders of an aggregate of 601,790 shares of common stock of the Issuer held by Imagine Investments (the “11% Note Purchase Shares”). The Purchase Agreements provided that Imagine Investments had the absolute, irrevocable, and unconditional right and option to purchase the 11% Note Purchase Shares between the date of closing of the purchase of the 11% Notes and December 31, 2001, at a price of $5.025 per share, subject to adjustment as provided therein. The Purchase Agreements also provided that the Holders had the absolute, irrevocable, and unconditional right and the option to require Imagine Investments to purchase the 11% Note Purchase Shares between the date of closing of the purchase of the 11% Notes and December 31, 2001, at a price of $5.025 per share, subject to adjustment as provided therein. Additionally, between the date of closing of the purchase of the 11% Notes and December 31, 2001, Imagine Investments had the right to vote the 11% Note Purchase Shares. As a result of the put/call option and voting provisions of the Purchase Agreements, Imagine Investments was deemed to continue to be the beneficial owner of the 11% Note Purchase Shares. On or about November 1, 2001, Imagine Investments exercised its call option under the Purchase Agreements and purchased all right, title, and interest in and to the 11% Note Purchase Shares for a purchase price of $5.43 per share, or $3,265,733.80 in the aggregate. The 11% Note Purchase Shares represented approximately 7.2% of the issued and outstanding shares of common stock of the Issuer as of October 31, 2002. The 11% Notes were secured by, among other things, a second lien on 2,016,168 shares of common stock of the Issuer owned by Riverside (the “11% Note Pledged Shares”), which shares represented approximately 24.3% of the issued and outstanding common stock of the Issuer as of October 31, 2002. The 11% Note Pledged Shares were pledged pursuant to the Pledge and Security Agreement (the “11% Note Pledge Agreement”) dated as of April 1, 1999, executed by Riverside and Mitchell W. Legler, as agent for the Holders. Pursuant to the 11% Note Pledge Agreement, Riverside may not sell or encumber the 11% Note Pledged Shares except pursuant to the 11% Note Credit Agreement and the Intercreditor Agreement referred to therein. The 11% Notes have reached their maturity date several times without being paid but have been extended several times, most recently pursuant to that certain Third Amendment to Credit Agreement and Notes dated as of June 25, 2002. See Item 6(o) below.

 

  (k) On June 25, 2002, the maturity date of the 1999 Loan was extended from December 15, 2000, to September 30, 2002, pursuant to that certain Amendment to Loan Agreement and Note dated as of June 25, 2002.

 

  (l) On June 25, 2002, the maturity date of the 11% Notes was extended from September 30, 2000, to September 30, 2002, pursuant to that certain Amendment to Credit Agreement and Notes dated as of June 25, 2002.

 

  (m) Commencing on August 5, 2002 and continuing through February 7, 2003, Imagine Investments loaned Riverside an additional aggregate $858,799 pursuant to various Promissory Notes, which loans were secured by the 1999 Pledged Shares (the “2002/2003 Loans”).

 

  (n)

On September 30, 2002, the maturity date of the 1999 Loan was extended from September 30, 2002, to November 30, 2002, pursuant to that certain Second Amendment to Loan Agreement and Note dated September 30, 2002. On November 30,

 

 

2002, the maturity date of the 1999 Loan was extended from November 30, 2002, to January 31, 2003 pursuant to that certain Third Amendment to Loan Agreement and Note dated November 30, 2002.

 

  (o) On September 30, 2002, the maturity date of the 11% Notes was extended from September 30, 2002, to November 30, 2002, pursuant to that certain Second Amendment to Credit Agreement and Notes dated September 30, 2002. On November 30, 2002, the maturity date of the 11% Notes was extended from November 30, 2002, to January 31, 2003 pursuant to that certain Third Amendment to Credit Agreement and Notes dated November 30, 2002.

 

  (p) On April 4, 2003, Imagine Investments entered into that certain Agreement for Conveyance of Shares of Wickes, Inc. in Lieu of Foreclosure and Bill of Sale dated as of April 2003 pursuant to which Imagine Investments acquired the 1999 Pledged Shares, the 11% Note Pledged Shares, and an additional 23,420 shares (the “Additional Issuer Shares” and, together with the 1999 Pledged Shares and the 11% Note Pledged Shares, the “Wickes Shares”) of the Issuer that were not otherwise pledged to it. Pursuant to the terms of the April 2003 Agreement, 717,923 shares of the 1999 Pledged Shares were acquired by Imagine Investments in exchange for the deemed payment of $3,589,615.17 of the principal amount outstanding, plus accrued interest through March 31, 2003, on the 1999 Loan and the 2002/2003 Loans. Additionally, 40,232 shares of the 1999 Pledged Shares, the 11% Note Pledged Shares, and the Additional Issuer Shares were acquired by Imagine Investments in exchange for the deemed payment of $10,399,099.83 of the $12,590,022.73 principal amount outstanding, plus accrued interest through March 31, 2003, on the 11% Notes. The parties to the April 2003 Agreement agreed that the amount of the foregoing indebtedness exchanged for the common stock of the Issuer acquired pursuant thereto was calculated to be $5.00 of indebtedness per each share of common stock of the Issuer even though the parties believed that the fair market value of a share of common stock of the Issuer as of that date was substantially less. In addition, Imagine Investments has agreed to pay Riverside certain amounts that Imagine Investments receives with respect to the Wickes Shares upon the sale, liquidation, or redemption thereof if certain conditions are met.

 

  (q) On April 4, 2003, Imagine Investments entered into that certain Letter Agreement dated April 4, 2003, between Imagine Investments and Riverside (the “Liberty Option Agreement”) pursuant to which Riverside granted to Imagine Investments an option to purchase the 53,700 shares of common stock of the Issuer that are pledged to Liberty Savings Bank to secure indebtedness owed to Liberty Savings Bank by Riverside (the “Liberty Loan”) for an exercise price of $5.00 per share. Pursuant to the provisions of the Liberty Option Agreement, the term of the option commenced on April 4, 2003 and expired without being exercised by Imagine Investments.

 

  (r) On or about June 4, 2003, Stone Investments transferred to Imagine Investments 467,000 shares of common stock of the Issuer for and in consideration of $3.298 per share or $1,540,300 in the aggregate.

 

  (s) As of October 1, 2003, Imagine Investments and the Issuer entered into the October 2003 Letter Agreement pursuant to which Imagine agreed to provide up to $10,500,000 of financing in the form of a loan (the 2003 Loan) to the Issuer on or before December 12, 2003, to enable it to make a cash tender offer for its 2003 Senior Subordinated Notes and pursuant to which Imagine Investments could have acquired up to 10,500,000 additional shares of the common stock of the Issuer if such 2003 Loan was made. On January 12, 2004, the Issuer announced that it has terminated its tender offer for such 2003 Senior Subordinated Notes. The commitment contained in the October 2003 Letter Agreement expired on January 12, 2004.

 

  (t) As of November 5, 2003, the Issuer, Imagine Investments, and Robert T. Shaw entered into the Voting Agreement. The Voting Agreement terminated on December 31, 2003.

 

Item 7. Material to be Filed as Exhibits.

 

7.1. Stock Purchase Agreement dated as of October 5, 1998, between Riverside and Imagine Investments, pursuant to which, among other things, (1) Imagine Investments purchased 250,000 shares of common stock of the Issuer from Riverside, (2) Riverside granted to Imagine Investments an option to purchase 750,000 shares of common stock of the Issuer held by Riverside, (3) Riverside had the right to put up to 200,000 shares of common stock of the Issuer underlying such option to Imagine Investments, and (4) Riverside granted to Imagine Investments a right of first refusal with respect to up to all of the shares of common stock of the Issuer held by Riverside other than the 250,000 shares purchased by Imagine Investments (incorporated by reference to Exhibit A of the Schedule 13D, filed with the Securities and Exchange Commission on October 15, 1998 (File No. 005-42945)).

 

7.2. Amendment No. 1 to Stock Purchase Agreement dated as of November 4, 1998, between Riverside and Imagine Investments (incorporated by reference to Exhibit B of Amendment No. 1 to the Schedule 13D, filed with the Securities and Exchange Commission on November 24, 1998 (File No. 005-42945)).

 

7.3. Amendment No. 2 to Stock Purchase Agreement dated as of November 18, 1998, between Riverside and Imagine Investments (incorporated by reference to Exhibit C of Amendment No. 1 to the Schedule 13D, filed with the Securities and Exchange Commission on November 24, 1998 (File No. 005-42945)).

 

7.4. Amendment No. 3 to Stock Purchase Agreement dated as of November 30, 1998, between Riverside and Imagine Investments.*

 

7.5. Amendment No. 4 to Stock Purchase Agreement dated as of December 9, 1998, between Riverside and Imagine Investments.*

 

7.6. Amendment No. 5 to Stock Purchase Agreement dated as of December 23, 1998, between Riverside and Imagine Investments (incorporated by reference to Exhibit B of Amendment No. 2 to the Schedule 13D, filed with the Securities and Exchange Commission on January 19, 1999 (File No. 005-42945)).

 

7.7. Letter agreement re: 82,000 shares acquired by Imagine Investments on 12/29/98.*

 

7.8. Letter Agreement dated effective January 25, 1999, between Imagine Investments and Riverside, extending the term of the Option under the Stock Purchase Agreement (incorporated by reference to Exhibit B of Amendment No. 3 to the Schedule 13D, filed with the Securities and Exchange Commission on February 8, 1999 (File No. 005-42945)).

 

7.9. Letter Agreement dated January 26, 1999, between Imagine Investments and Riverside, regarding the exercise of the remainder of the Option (incorporated by reference to Exhibit C of Amendment No. 3 to the Schedule 13D, filed with the Securities and Exchange Commission on February 8, 1999 (File No. 005-42945)).

 

7.10. Credit Agreement dated as of April 1, 1999, among Riverside, as borrower, the Holders, as lenders, and Mitchell W. Legler, as agent for the Holders, relating to the extension of credit by the Holders to Riverside in the aggregate original principal amount of $10,000,000 (incorporated by reference to Exhibit 4.1(a) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).

 

7.11. Form of 11% Secured Promissory Note dated April 1, 1999 (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).

 

7.12. Pledge and Security Agreement dated as of April 1, 1999, between Riverside and Mitchell W. Legler, as agent for the Holders, relating to, among other things, the shares of common stock of the Issuer pledged by Riverside to Mitchell W. Legler, as agent for the Holders, to secure the extension of credit by the Holders to Riverside in the aggregate original principal amount of $10,000,000, which pledge is subject to the prior pledge of such shares by Riverside to American Founders Life Insurance Company.*

 

7.13. Intercreditor Agreement dated as of August 24, 1999, among the Holders, Mitchell W. Legler, as agent for the Holders, and American Founders Life Insurance Company, relating to the priority of AFL with respect to, among other things, the 11% Note Pledged Shares.*

 

7.14. Letter Agreement dated August 30, 1999, between Riverside and Imagine Investments, releasing 81,970 shares of common stock of the Issuer held by Riverside from a pledge by Riverside to Imagine Investments to secure the $1,800,000 loan.*

 

7.15. Loan Agreement dated as of August 31, 1999, between Imagine Investments, as lender, and Riverside, as borrower, relating to the $1,800,000 loan (incorporated by reference to Exhibit 4.1(a) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999).

 

7.16. Demand Promissory Note dated August 31, 1999, by Riverside in favor of Imagine Investments, in the principal amount of $1,800,000 (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999).

 

7.17. Stock Pledge Agreement dated as of August 31, 1999, between Riverside and Imagine Investments, relating to the shares of common stock of the Issuer pledged by Riverside to Imagine Investments to secure the $1,800,000 loan (incorporated by reference to Exhibit 4.1(c) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999).

 

7.18. First Amendment to Loan Agreement and Stock Pledge Agreements dated as of August 31, 2000, between Imagine Investments, as lender, and Riverside, as borrower, renewing and modifying the $1,800,000 loan, including increasing the principal amount thereof to $2,021,628.01 (incorporated by reference to Exhibit 4.1(c) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).

 

7.19. First Amended and Restated Promissory Note dated August 31, 2000, by Riverside in favor of Imagine Investments, in the principal amount of $2,021,628.01 (incorporated by reference to Exhibit 4.1(d) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).

 

7.20. First Amendment to Pledge and Security Agreement dated as of September 15, 2000, between Riverside and Mitchell W. Legler, as agent for the Holders, relating to the addition of collateral to secure the extension of credit by the Holders to Riverside in the aggregate original principal amount of $10,000,000, which pledge is subject to the prior pledge of such shares by Riverside to American Founders Life Insurance Company.*

 

7.21. Estoppel Agreement dated as of February 20, 2001, between Riverside and Imagine Investments, pursuant to which, among other things, Riverside warrants the validity and enforceability of the 11% Notes.*

 

7.22. Assignment of Notes and Interest in Collateral Documents dated February 7, 2001, among Imagine Investments and Cecil Altmann, pursuant to which such person assigned the 11% Note in favor of such person to Imagine Investments.*

 

7.23. Assignment of Notes and Interest in Collateral Documents dated February 15, 2001, among Imagine Investments and Southern Farm Bureau Casualty Insurance Company, pursuant to which such entity assigned the 11% Note in favor of such entity to Imagine Investments. *

 

7.24. Nonrecourse Assignment of Loan Documents dated February 15, 2001, between Imagine Investments and American Centennial Insurance Company, pursuant to which American Centennial Insurance Company assigned the 11% Note in its favor to Imagine Investments.*

 

7.25. Form of Purchase and Sale of Notes and Interest in Collateral Documents Agreement, among Imagine Investments, Stone Holdings, as guarantor, and each of the following Holders on the dates indicated, pursuant to which such Holder assigned the 11% Note in favor of such Holder to Imagine Investments: Kenneth M. Kirschner (March 20, 2001); Lovco, Inc. (March 20, 2001); Creek Farms Corp. (March 20, 2001); East Adams Corporation (March 20, 2001); Frederick H. Schultz 1994 Trust (March 20, 2001); Fujita Investment Company Limited (March 26, 2001); and North American Company for Life and Health Insurance (April 6, 2001) (incorporated by reference to Exhibit 1 of Amendment No. 4 to the Schedule 13D, filed with the Securities and Exchange Commission on September 18, 2001 (File No. 005-42945)).

 

7.26. Allonges, between Imagine Investments and each of the following Holders on the dates indicated, pursuant to which such Holder assigned the 11% Note in favor of such Holder to Imagine Investments: Bost & Company (Note 008 and Note 009) and Pitt & Company (Note 010 and Note 011).*

 

7.27. Forbearance Agreement dated as of March 1, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(i) to Riverside’s Annual Report on Form 10-K for the year ended December 31, 2000).

 

7.28. Forbearance Agreement dated as of April 13, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).

 

7.29. Forbearance Agreement dated as of May 14, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(c) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).

 

7.30. Forbearance Agreement dated as of June 15, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(a) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001).

 

7.31. Forbearance Agreement dated as of July 15, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001).

 

7.32. Amendment to Loan Agreement and Note dated as of June 25, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 1999 Loan was extended to September 30, 2002.*

 

7.33. Amendment to Credit Agreement and Notes dated as of June 25, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 11% Notes was extended to September 30, 2002.*

 

7.34. Promissory Note dated August 5, 2002, by Riverside in favor of Imagine Investments, in the principal amount of $116,000.*

 

7.35. Second Amendment to Loan Agreement and Note dated as of September 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 1999 Loan was extended to November 30, 2002.**

 

7.36. Third Amendment to Loan Agreement and Note dated as of November 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 1999 Loan was extended to January 31, 2003.**

 

7.37. Second Amendment to Credit Agreement and Notes dated as of September 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 11% Notes was extended to November 30, 2002.**

 

7.38. Third Amendment to Credit Agreement and Notes dated as of November 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 11% Notes was extended to January 31, 2003.**

 

7.39. Agreement for Conveyance of Shares of Wickes, Inc. in Lieu of Foreclosure and Bill of Sale dated as of April 4, 2003, by and among Riverside, J. Steven Wilson, Wilson Financial Corporation, and Imagine Investments.**

 

7.40. Letter Agreement dated as of April 4, 2003, between Imagine Investments and Riverside, providing for the grant of an option to purchase 53,700 shares of common stock of Wickes, Inc. to Imagine Investments from Riverside.**

 

7.41. Power of Attorney.**

 

7.42. Letter Agreement dated October 1, 2003, between Imagine Investments and Wickes, Inc. pursuant to which Imagine Investments agreed to provide certain financing to Wickes, Inc. (incorporated

 

by reference to the exhibit of the same number of Amendment No. 8 to the Schedule 13D, filed with the Securities and Exchange Commission on October 30, 2003 (File No. 005-42945)).

 

7.43. Voting Agreement dated November 5, 2003, among Wickes, Inc., Imagine Investments, and Robert T. Shaw (incorporated by reference to the exhibit of the same number of Amendment No. 9 to the Schedule 13D, filed with the Securities and Exchange Commission on December 12, 2003 (File No. 005-42945)).

 

7.44. Amended and Restated Letter Agreement dated December 10, 2003, between Imagine Investments and Wickes, Inc.+

 

7.45. Joint Filing Statement+

* Incorporated by reference to the exhibit of the same number of Amendment No. 6 to the Schedule 13D, filed with the Securities and Exchange Commission on August 27, 2002.

 

** Incorporated by reference to the exhibit of the same number of Amendment No. 7 to the Schedule 13D, filed with the Securities and Exchange Commission on April 21, 2003.

 

+ Filed herewith.

 

[Signature page follows.]

 

SIGNATURE

 

After reasonable inquiry, and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

IMAGINE INVESTMENTS, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

Title:

Date:

  

Gary M. Goltz

Vice President

February 6, 2004

STONE INVESTMENTS, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

Title:

Date:

  

Gary M. Goltz

Vice President

February 6, 2004

STONE CAPITAL, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

Title:

Date:

  

Gary M. Goltz

Vice President

February 6, 2004

STONE HOLDINGS, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

Title:

Date:

  

Gary M. Goltz

Executive Vice President

February 6, 2004

P.S.F. HOLDINGS LIMITED PARTNERSHIP,

a Texas limited partnership

By: Winn Holdings, LLC,

a Texas limited liability company,

its general partner

By:  

*

   

Kathryn Fail Luttrull

Sole member

Date:    
   

 

THE MARITAL TRUST

By:

  

*

   

James M. Fail

Trustee

Date:

    
   

THE JAMES M. FAIL LIVING TRUST

By:

  

*

   

James M. Fail

Trustee

Date:

    
   
   

*

James M. Fail

Date:

    
   

WINN HOLDINGS, LLC,

a Texas limited liability company

By:

  

*

   

Kathryn Fail Luttrull

Sole member

Date:

    
   
   

*

Kathryn Fail Luttrull

Date:

    
   

/s/ GARY M. GOLTZ

*By Gary M. Goltz, as Attorney-in-Fact

Date:

  

February 6, 2004

 

SCHEDULE I

 

IMAGINE INVESTMENTS, INC.

 

The following is a list of all executive officers and directors of Imagine Investments, Inc., the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

 

Robert T. Shaw    President and Director
Harry T. Carneal    Executive Vice President and Director
R. Brad Oates    Director
Gary M. Goltz    Vice President and Secretary
Charles Greiner(1)    Vice President
Patricia W. Gliessner    Vice President and Assistant Secretary
Jay Bryan    Treasurer
Gordon Lewaren    Assistant Treasurer
Dianne Richardson    Assistant Secretary

 

STONE INVESTMENTS, INC.

 

The following is a list of all executive officers and directors of Stone Investments, Inc., the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

 

James M. Fail    Chairman of the Board, Chief Executive Officer and Director
Harry T. Carneal    President, Treasurer and Director
R. Brad Oates    Director
Jay Bryan    Vice President
Gary M. Goltz    Vice President, General Counsel and Secretary
Gordon Lewaren    Assistant Treasurer
Mark S. Powell    Assistant Secretary
Kathryn Fail Luttrull    Assistant Secretary
Diane Richardson    Assistant Secretary

 

STONE CAPITAL, INC.

 

The following is a list of all executive officers and directors of Stone Capital, the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., an investment company, 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

 

24

James M. Fail

    Chairman of the Board, Chief Executive Officer and Director

Harry T. Carneal

    President, Treasurer, Secretary and Director

Gary M. Goltz

    Vice President, General Counsel and Assistant Secretary

Victoria L. Garrett (2)

    Assistant Vice President, Assistant Secretary and Assistant Treasurer

Gordon Lewaren

    Assistant Treasurer

Kathryn Fail Luttrull

    Director

Marcia Fail Boykin

    Director

Jay Bryan

    Assistant Treasurer

Pam Norrell

    Assistant Secretary

Diane Richardson

    Assistant Secretary

Anna E. Dolak

    Special Counsel

 

STONE HOLDINGS, INC.

 

The following is a list of all executive officers and directors of Stone Holdings, the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., an investment company, 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

 

James M. Fail

    Chairman of the Board, Chief Executive Officer and Director

Harry T. Carneal

    President, Treasurer, Secretary and Director

Jay Bryan

    Vice President

Gary M. Goltz

    Executive Vice President, General Counsel and Assistant Secretary

Kathryn Fail Luttrull

    Vice President and Director

Marcia Fail Boykin

    Director

Gordon Lewaren

    Assistant Treasurer

Mark S. Powell

    Assistant Secretary

Tom Dwyer

    Vice President of Strategy and Special Counsel

Diane Richardson

    Assistant Secretary

 

P.S.F. HOLDINGS LIMITED PARTNERSHIP

 

The General Partner of P.S.F. Holdings Limited Partnership is Winn Holdings, LLC, a Texas limited liability company. For information pertaining to Winn Holdings, LLC, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

 

THE MARITAL TRUST

 

James M. Fail is a trustee of the Marital Trust. For information pertaining to Mr. Fail, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

 

THE JAMES M. FAIL LIVING TRUST

 

James M. Fail is a trustee of the James M. Fail Living Trust. For information pertaining to Mr. Fail, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

 

WINN HOLDINGS, LLC

 

Kathryn Fail Luttrull is the sole member and manager of Winn Holdings, LLC. For information pertaining to Ms. Luttrull, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

 

(1) Mr. Greiner’s present principal employer is Azair, Inc., the address of which is P.O. Box 320159, Birmingham, Alabama 35232

 

(2) Ms. Garrett’s present principal employer is Delaware Trust Capital Management Company, the address of which is 300 Delaware Avenue, 9th Floor, Wilmington, DE 19801.

 

 EX-7.44 3 dex744.htm AMENDED AND RESTATED LETTER AGREEMENT Amended and Restated Letter Agreement

 

Exhibit 7.44

 

IMAGINE INVESTMENTS, INC.

8150 NORTH CENTRAL EXPRESSWAY

SUITE 1901

DALLAS, TEXAS 75206

 

December 10, 2003

 

Wickes Inc.

706 N. Deerpath Drive,

Vernon Hills, Illinois 60061

 

Attn: President and Board of Directors

 

Amended and Restated Letter Agreement

 

Gentlemen:

 

This letter agreement amends and restates the letter agreement dated October 1, 2003 between Imagine Investments, Inc. (“Imagine”) and Wickes Inc. (“Wickes”) regarding the obligation of Imagine to provide up to $10.5 million of financing to Wickes. The parties have determined to modify the financing proposal set forth in the October 1, 2003 letter from Imagine to Wickes (the “Original Letter”) to a loan participation arrangement pursuant to which Imagine will purchase a 100% participation interest from Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services, Inc. (“Merrill”) in an additional term loan of up to $10.5 million (the “Additional Term Loan”) to be made by Merrill, as a lender, to Wickes under the terms of the Credit Agreement dated February 26, 2003 (as heretofore or hereafter amended, modified and supplemented from time to time, the “Credit Agreement”). The terms and conditions of this letter agreement govern Imagine’s obligation to purchase a participation interest in the Additional Term Loan (the “Participation Interest”), including Wickes’ issuance of a warrant (as provided for in Paragraph 6 hereof) to Imagine as inducement to acquire the Participation Interest. Capitalized terms used herein which are not otherwise defined shall have the meanings given such terms in the Credit Agreement.

 

1. Amount and Nature of Additional Term Loan. The amount of the Additional Term Loan shall not exceed $10.5 million and the amount of the Additional Term Loan shall be limited to the amount necessary to fund the cash portion of the Offer to Exchange described in that certain Offering Memorandum issued by Wickes dated November 4, 2003 (the “Offer”). The purchase price for the Participation Interest shall equal the principal amount of the Additional Term Loan. The Additional Term Loan shall be a last-out, subordinated loan, the repayment of which is subject to payment in full of all other Loans under the Credit Agreement; provided, however, that payment of interest on the Additional Term Loan and reimbursement of ordinary course, pre-default expenses to Imagine shall be permitted to be made to Imagine on a current basis.

 

1

2. Term. The Additional Term Loan shall come due on the earlier of (a) February 26, 2007, or (b) the date on which Agent or the Required Lenders elect to terminate the Revolving Loan Commitment pursuant to Section 9.2 of the Credit Agreement. The Additional Term Loan may not be prepaid without the consent of all the Lenders unless all Obligations under the Credit Agreement (other than the Additional Term Loan) have been paid in full and all commitments to lend thereunder have been terminated. Notwithstanding the foregoing, Imagine may effect a repayment of all or any portion of the balance (including accrued interest) of the Additional Term Loan, on a dollar-for-dollar basis, by offset against the exercise price of the “Warrant” described in Paragraph 6 hereof as long as Imagine holds all right, title and interest in and to such Warrant and Imagine will be authorized by Merrill to exercise such offsets as if Imagine was the direct Lender of the Additional Term Loan under the Credit Agreement.

 

3. Interest Rate. The Additional Term Loan shall bear interest at the rate of 10% per annum, payable monthly.

 

4. Security. The Additional Term Loan shall be secured by a lien on all the same collateral that presently secures the other Loans under the Credit Agreement, including a mortgage lien on all real estate and a security interest in all accounts receivable, inventory, general intangibles, machinery, equipment, deposit accounts, intellectual property and all other tangible and intangible personal property of Wickes and its subsidiaries. Imagine shall not have any obligation to make the Additional Term Loan unless (i) the value, as of the closing of the Additional Term Loan, of Wickes’ Eligible Accounts plus Wickes’ Eligible Inventory exceeds the sum of (a) the Revolving Loan Outstandings plus (b) the outstanding balance of the Term Loan, by at least $22,000,000; and (ii) the value of Wickes’ “good and current” inventory and accounts receivable, as calculated using generally accepted accounting principles using the most recent information reasonably available, exceeds the sum of (a) the Revolving Loan Outstandings plus (b) the outstanding balance of the Term Loan, by at least $30,000,000 as of the date of closing. The definition of “Borrowing Base” in the Credit Agreement shall be amended such that in no event will the Borrowing Base exceed amount by which (a) the “Indenture Limit” exceeds (b) the then outstanding principal balance of the Additional Term Loan, where the “Indenture Limit” is a dollar amount equal to the sum of (i) 95% of the net book value of Borrower’s Accounts plus (ii) 75% of Borrower’s Inventory. Wickes represents and warrants to Imagine that, as of December 2, 2003, the value of Wickes’ Eligible Inventory and Eligible Accounts is approximately $98 million, that the value of its “good and current” inventory and accounts receivable, as calculated using generally accepted accounting principles using the most recent information reasonably available, is approximately $106 million, and that the sum of the Revolving Loan Outstandings plus the outstanding balance of the Term Loan is $61,193,730.88.

 

5. Covenants. The Additional Term Loan and the acquisition of the Participation Interest shall be documented in a manner consistent with commercial loans and participations of this size and nature. As part of such documentation (i.e. pursuant to the Amended Credit Agreement, as defined in Paragraph 8 hereof), Wickes and its subsidiaries shall restate all the representations and warranties contained in the Credit Agreement as of the closing of the Additional Term Loan, and Wickes agrees in advance that Imagine may rely on such representations and warranties. The loan

 

2

documents and documentation pertaining to the Participation Interest shall contain numerous affirmative and negative covenants, all of which must be satisfactory to Imagine.

 

6. Warrant. In consideration of Imagine’s agreement to purchase the Participation Interest, Wickes shall issue to Imagine a warrant (the “Warrant”) to purchase, at an exercise price of $1.00 per share, a number of shares of common stock of Wickes equal to the principal amount of the Additional Term Loan, upon the closing of the acquisition of the Participation Interest. The Warrant shall terminate on the later of (a) thirty days after receipt by Imagine of written notice from Wickes that the Additional Term Loan has been paid in full (provided it has, in fact, been paid in full), or (b) February 26, 2008. Wickes shall authorize the creation of a sufficient number of common shares and shall agree to reserve such shares for the potential exercise of the Warrant into shares of common stock of Wickes. Imagine shall not have any obligation whatsoever to exercise the Warrant. If, prior to the exercise of the Warrant, Wickes issues any other shares of its common stock, or any instrument convertible into shares of its common stock, or any options, warrants, preferred shares, rights or the like to purchase shares of common stock of Wickes (except for the grant of options to officers, directors and employees of Wickes to purchase up to 1,000,000 shares of common stock, and the exercise of such options by, officers, directors or employees of Wickes; provided, however, that such options may not be exercised if and to the extent the exercise thereof would result in a reduction of Imagine’s, Consolidated National Corporation’s, and Robert T. Shaw’s collective beneficial ownership interest of the outstanding common stock of Wickes to less than 50.1% (excluding all warrants), unless Imagine agrees otherwise in writing), at a price of less than $2.00 per common share of Wickes (excluding the issuance of (a) convertible debt in exchange for Subordinated Notes pursuant to the “Offer” referenced in Paragraph 7 hereof, and (b) rights, pursuant to a rights offering to the then existing shareholders of Wickes, to purchase shares of Wickes on an adjusted basis for $1.00 or more per share, as adjusted, which rights must be issued and exercised between the date hereof and December 15, 2004), the exercise price shall be automatically reduced and the number of shares of common stock of Imagine issued upon exercise of the Warrant shall be automatically increased so that the number of shares of common stock issuable to Imagine upon exercise of the Warrant shall represent the same percentage of issued and outstanding shares of common stock, and for the same aggregate consideration, that would have been issuable to Imagine (calculated on a fully diluted basis) if such shares, convertible debt, options, warrants, preferred shares, rights or the like to purchase shares of common stock had not been issued at a price of less than $2.00 per share. Wickes shall grant Imagine customary demand and piggyback registration rights with respect to all of the shares of Wickes common stock issued pursuant to the exercise of the Warrant, if it should occur, as well as all other shares of common stock of Wickes owned by Imagine. In addition to the anti-dilution provisions described above, the agreements pertaining to the Warrant shall contain standard anti-dilution provisions with respect to such Wickes shares.

 

7. Use of Proceeds. The Additional Term Loan proceeds shall not be advanced until, and shall be used solely for the purpose of funding, the cash portion of the Offer to Exchange described in the Offer. It shall be an additional condition to Imagine’s obligation to acquire the Participation Interest that at least 95% of the Subordinated Notes (by dollar amount) shall have been reacquired by Wickes and cancelled, simultaneously with the funding of the Additional Term Loan. It shall be within the sole discretion of Imagine whether to waive this condition and any other of the

 

3

conditions with respect to the acquisition of the Participation Interest. Imagine’s obligation to acquire the Participation Interest is further conditioned on there being no change in the terms of the Offer after the date hereof without the written consent of Imagine, which consent may be withheld for any reason.

 

8. Conditions. In addition to other conditions referenced herein, the occurrence of each of the following shall be a condition to Imagine’s obligation to acquire the Participation Interest: (a) Imagine shall have reviewed and shall be satisfied in all respects with Wickes’ financial condition and that no material adverse change shall have occurred with respect to Wickes since the date of the most recent financial statements issued prior to the Original Letter; (b) Imagine shall be satisfied that Section 203 (and the other provisions) of the Delaware Corporation Laws does not prohibit or adversely affect the ability of Imagine, Robert T. Shaw, or their affiliates to vote any shares of Wickes that may be currently held by any of them or the shares of Wickes that they may acquire upon exercise of the Warrant with respect to all matters whatsoever, including the receipt of a legal opinion from counsel to Wickes acceptable to Imagine in connection with such matter; (c) Wickes shall have obtained all necessary consents and approvals, including but not limited to the consent of the Agent and the Lenders, in form and substance satisfactory to Imagine; (d) Wickes shall have supplied all its financial information and other data to Imagine promptly upon request and Imagine shall have approved the same in its sole discretion; (e) Wickes, Agent and the Lenders shall have executed and delivered an “Amended and Restated Credit Agreement,” in form and substance satisfactory to Imagine (“Amended Credit Agreement”), that provides for the Additional Term Loan in a manner that is consistent with all the terms and conditions set forth in this letter agreement; (f) all the terms and conditions of the documentation for the acquisition of the Participation Interest and the making of the Additional Term Loan, including but not limited to the terms of the Amended Credit Agreement and a “Subordinated, Last-Out Participation Agreement” between Merrill and Imagine, shall be consistent with the terms and conditions set forth in this letter agreement and shall otherwise be acceptable to Imagine in its sole discretion; (g) all title insurance policies and down-date endorsements, UCC financing statements, and mortgages and other collateral agreements and instruments securing the Additional Term Loan must be sufficient, in Imagine’s sole judgment, to secure adequately the Additional Term Loan in a manner consistent with secured commercial loans of this size and nature; (h) counsel to Wickes shall have furnished an opinion letter to Agent and the Lenders containing opinions on corporate matters, enforceability of loan documents and such other matters as Imagine reasonably requires, which opinion letter shall contain language authorizing reliance thereon by Imagine; and (i) the Additional Term Loan must be funded by Merrill no later than December 15, 2003; otherwise Imagine may cancel this commitment without liability to Wickes or anyone else.

 

9. Loan Documentation: Imagine’s Costs and Expenses. Wickes agrees to promptly pay the fees and expenses incurred by Imagine (including Imagine’s, Agent’s and Lenders’ attorneys’ fees and expenses) in conjunction with (a) negotiating and documenting the Additional Term Loan, the acquisition of the Participation Interest, and the issuance of the Warrant, whether or not the Additional Term Loan is ever funded or the Participation Interest is acquired by Imagine; (b) the continued administration of the Additional Term Loan, the Participation Interest, the Warrant and all documents related thereto, including any amendments, modifications, consents and waivers to and/or

 

4

under any and all such documents; and (c) all costs and expenses of Imagine in connection with any workout, collection, bankruptcy, insolvency and other enforcement proceedings under the Financing Documents or the documents governing the Participation Interest. On the closing date for the Additional Term Loan, and on a current basis before such closing date, as a condition to Imagine’s obligations hereunder, Wickes shall have paid and shall pay all fees and expenses of Imagine (including attorneys’ fees and expenses) incurred through the closing date and shall sign a letter agreement substantially in the form attached hereto as Exhibit A and incorporated herein by reference.

 

10. Confidentiality and Public Announcements. Except as required by applicable law or the rules of any stock exchange or Nasdaq, neither party hereto shall disclose or permit their respective officers, directors, representatives, agents or employees to disclose the terms of this letter to any third party without the prior written consent of the other party hereto; provided, however, Imagine may make such disclosure to any of its affiliates and to Consolidated National Corporation and its affiliates; and further provided, that both parties hereto may make such disclosure to their respective lawyers, accountants and consultants and to Merrill and the Lenders.

 

11. Applicable Law. This letter agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without giving effect to the principles of conflicts of law thereof.

 

12. Entire Agreement; Modification. This letter agreement contains the entire understanding between the parties with respect to the subject matter hereof and supercedes the Original Letter and any prior or contemporaneous understanding or written or oral agreements between them respecting such subject matter. No amendment or modification hereto shall be effective unless made in pursuant to a writing signed by both parties hereto.

 

If Wickes desires to accept this commitment for Imagine to acquire the Participation Interest as outlined in this letter agreement, please countersign a copy of this letter where indicated below and return it to me at the address set forth above by no later than December 10, 2003.

 

We look forward to hearing from you regarding this matter.

 

Very truly yours,

Imagine Investments, Inc.

By:

  

/s/ Robert T. Shaw

   
   

Robert T. Shaw, President

 

5

Wickes hereby accepts this commitment for Imagine to acquire the Participation Interest as outlined in this letter and agrees that it is legally bound by the terms of this letter.

 

Wickes Inc.

By:

  

/s/ James J. O’Grady

   

Title:

  

President

Date:

  

December 10, 2003

 

6

EXHIBIT A

 

Side Letter

IMAGINE INVESTMENTS, INC.

Suite 1901

8150 North Central Expressway

Dallas, Texas 75206

 

December     , 2003

 

Wickes Inc.

706 North Deerpath Drive

Vernon Hills, Illinois 60061

 

Side Letter

 

  Re: Imagine’s participation in Wickes’ $10,500,000 loan from Merrill Lynch Capital

 

Gentlemen:

 

On the date hereof, Imagine Investments, Inc. (“Imagine”) has entered into that certain Subordinated, Last-Out Participation Agreement (the “Participation Agreement”) with Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc. (“Merrill”) and has agreed to advance, through a participation structure described therein, the amount of up to $10,500,000, which funds are to be used by Wickes Inc. (“Wickes”) solely in connection with its exchange offer relating to the 10% Convertible Notes due 2007 (the “New Swap Transaction” as defined in the Participation Agreement). Merrill has agreed to lend such amount as an advance under Wickes’ existing senior credit facility, pursuant to the terms of that certain Amended and Restated Credit Agreement, dated as of the date hereof, among Merrill, Wickes and the Lenders (the “Amended Credit Agreement”). Capitalized terms used herein which are not otherwise defined shall have the meanings given such terms in the Amended Credit Agreement.

 

In consideration for Imagine’s agreeing to advance said funds for Wickes’ benefit pursuant to the terms of the Participation Agreement and the Amended Credit Agreement and for other good and valuable consideration, Wickes hereby agrees as follows:

 

1. Imagine’s Consent Required for Certain Actions. Without the prior written consent of Imagine, (a) so long as Imagine, Robert T. Shaw, Consolidated National Corporation and/or each of their affiliates collectively beneficially own in excess of [40%] of the voting capital stock of Wickes, neither Wickes nor its subsidiaries shall enter into any material modification or amendment of the Amended Credit Agreement or any of the Financing Documents that would materially and adversely affect Imagine’s rights as a participant under the Amended Credit Agreement; and (b) neither Wickes nor its subsidiaries shall obtain any loans, advances or other extensions of credit from the Agent, the Lenders or any other person, other than those expressly permitted by the terms of the Amended Credit Agreement (without giving effect to any amendments thereof) and other than loans that are not secured by any of the Collateral or, if secured by any of the Collateral, are fully subordinate (both as to repayment and collateral ranking) to the Additional Term Loan.

 

2. Costs and Expenses. Wickes hereby agrees to promptly pay:

 

  1. all reasonable costs and expenses of Imagine (including, but not limited to, legal and accounting costs and expenses) in connection with the examination, review, due diligence investigation, documentation;, negotiation and closing of the transactions contemplated by the Warrant Agreement, Registration Rights Agreement, Participation Agreement, the Amended Credit Agreement and the Financing Documents (collectively, the “Loan Documents”), and in connection with the continued administration of the Loan Documents, including any amendments, modifications, consents and waivers to and/or under any and all Loan Documents; and

 

  2. all costs and expenses of Imagine (including, but not limited to, legal and accounting costs and expenses) in connection with any workout, collection, bankruptcy, insolvency and other enforcement proceedings under any and all Loan Documents and the Participation Agreement.

 

3.

Indemnification. Wickes hereby agrees to indemnify, pay and hold harmless Imagine and the officers, directors, employees and counsel of Imagine (collectively, the “Indemnitees”) from and against any and all liabilities, obligations, losses, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel and accountants for such Indemnitee) in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnitee shall be designated a party thereto and including any such proceeding initiated by or on behalf of Wickes, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Imagine) asserting any right to payment for the transactions contemplated hereby, which may be imposed on, incurred by or asserted against such Indemnitee as a result of or in connection with the transactions contemplated hereby or by the Operative Documents or the Loan Documents (including (i)(A) as a direct or indirect result of the presence on or under, or escape, seepage, leakage, spillage, discharge, emission or release from, any property now or previously owned, leased or operated by Wickes, any Subsidiary or any other Person of any Hazardous Materials or any Hazardous Materials Contamination, (B) arising out of or relating to the offsite disposal of any materials generated or present on any such property or (C) arising out of or resulting from the environmental condition of any such property or the applicability of any governmental requirements relating to Hazardous Materials, whether or not occasioned wholly or in part by any condition, accident or event caused by any act or omission of Wickes or any Subsidiary, and (ii) proposed and actual extensions of credit under the Amended Credit Agreement) and the use or intended use of the proceeds of the Additional Term Loan, except that Wickes shall have no obligation hereunder to an Indemnitee with respect to any liability resulting from the gross negligence or willful misconduct of such Indemnitee, as determined by final order by a court of competent jurisdiction. To the extent

 

 

that the undertaking set forth in the immediately preceding sentence may be unenforceable, Wickes shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all such indemnified liabilities incurred by the Indemnitees or any of them.

 

4. Representations and Warranties. Wickes hereby represents and warrants to Imagine that, as of the date hereof, each of the representations and warranties made in the Operative Documents by each Credit Party is true and correct, and such representations and warranties are hereby incorporated herein by reference with the same effect as though set forth in their entirety herein, as qualified therein, except to the extent that such representation or warranty relates to a specific date, in which case Wickes hereby represents and warrants that such representation and warranty was true as of such earlier date. Wickes acknowledges that Imagine is relying on such representations and warranties in making its decision to acquire the Participation Interest.

 

5. Additional Covenant. From the date on which all Obligations under the Amended Credit Agreement (other than the Additional Term Loan) have been paid in full and all commitments to lend thereunder have been terminated, until the repayment in full of the Additional Term Loan (the “Covenant Period”), Wickes shall not permit the sum of its Eligible Accounts and Eligible Inventory to be reduced to an amount less than $22,000,000 and shall not permit the value of its “good and current” inventory and accounts receivable to be reduced to an amount less than $30,000,000. Violation of this covenant during the Covenant Period shall be an “Event of Default” under the Amended Credit Agreement.

 

6. Section 203. Wickes acknowledges that Section 203 of the Delaware Corporation Laws (together with any successor statute, “Section 203”) could affect the rights of persons who have acquired or seek to acquire shares from Imagine, Consolidated National Corporation, Robert T. Shaw, or any of their respective affiliates in the future (“Transferees,” which term shall not be read to exclude Imagine, Consolidated National Corporation, Robert T. Shaw or any of their respective affiliates). Wickes agrees not to take any action that would cause the provisions of subsection (a) of Section 203 to apply to any shares now owned or hereafter acquired by any Transferee without the written consent of Imagine. In addition, Wickes agrees, upon written request of Imagine, to take any reasonable action necessary to cause subsection (a) of Section 203 to not affect the rights of Transferees, including but not limited to causing and facilitating the adoption and filing of an amendment to the certificate of incorporation or bylaws to be submitted for shareholder approval, which amendment shall expressly elect for Wickes not to be governed by Section 203, and the substance of which amendment must be reasonably acceptable to Imagine. The fees and expenses relating to such amendments shall be paid for by Wickes. Wickes’ obligations under this Section 6 shall expire on the later of (a) February 26, 2008, or (b) the date on which Imagine, Consolidated National Corporation, and Robert T. Shaw cease to have, collectively, beneficial ownership of at least 15% of the outstanding common stock of Wickes; provided, that Wickes’ obligations under this Section 6 shall never expire with respect to any proposed transfer between Imagine and Consolidated National Corporation.

 

3

7. Notices. Wickes agrees to promptly forward Imagine a copy of (a) any written notice Wickes receives under the Amended Credit Agreement, (b) any written notice, report or other document delivered to Agent or the Lenders pursuant to subsections g, h, i, k, r, s, or t of Section 4.1 of the Amended Credit Agreement, and (c) such other notices, reports, financial statements, information and data as Imagine may reasonably request from time to time.

 

The terms of this letter may be modified only by a written instrument signed by the parties hereto.

 

[signatures appear on the following page]

 

4

IMAGINE INVESTMENTS, INC.
By:    
   

Its:

    
   

 

Accepted and agreed to:
WICKES INC.
By:    
   

Title:

    
   

 

Date: December     , 2003

 

5

EX-7.45 4 dex745.htm JOINT FILING STATEMENT Joint Filing Statement

Exhibit 7.45

 

JOINT FILING STATEMENT

 

Each of the undersigned agrees that (i) the Amendment No. 10 to Statement on Schedule 13D relating to common stock, par value $.01 per share, of Wickes, Inc. has been adopted and filed on behalf of each of them, (ii) all future amendments to such Statement on Schedule 13D will, unless written notice to the contrary is delivered as described below, be jointly filed on behalf of each of them, and (iii) the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934 apply to each of them. This Agreement may be terminated with respect to the obligations to jointly file future amendments to such Statement on Schedule 13D as to any of the undersigned upon such person giving written notice thereof to each of the other persons signatory hereto, at the principal office thereof.

 

IMAGINE INVESTMENTS, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

  

Gary M. Goltz

Title:

  

Vice President

Date:

  

February 6, 2004

 

STONE INVESTMENTS, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

  

Gary M. Goltz

Title:

  

Vice President

Date:

  

February 6, 2004

 

STONE CAPITAL, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

  

Gary M. Goltz

Title:

  

Vice President

Date:

  

February 6, 2004

 

STONE HOLDINGS, INC.,

a Delaware corporation

By:  

/s/ GARY M. GOLTZ

   

Name:

  

Gary M. Goltz

Title:

  

Executive Vice President

Date:

  

February 6, 2004

 

P.S.F. HOLDINGS LIMITED PARTNERSHIP,

a Texas limited partnership

By:  

Winn Holdings, LLC, a Texas limited liability

company, its general partner

By:  

*

   

Kathryn Fail Luttrull

Sole member

Date:

    
   

 

THE MARITAL TRUST

By:  

*

   

James M. Fail

Trustee

Date:

    
   

 

THE JAMES M. FAIL LIVING TRUST

By:  

*

   

James M. Fail

Trustee

Date:

    
   

 

   

*

   

James M. Fail

Date:

    
   

 

WINN HOLDINGS, LLC,

a Texas limited liability company

By:  

*

   

Kathryn Fail Luttrull

Sole member

Date:

    
   

 

   

*

   

Kathryn Fail Luttrull

Date:

    
   

 

   

/s/ GARY M. GOLTZ

   

*By Gary M. Goltz, as Attorney-in-Fact

Date:

  

February 6, 2004

 

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