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EXHIBIT 1(b)
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT (the "First Amendment") to that certain Agreement
and Plan of Merger, dated as of August 13, 1998 (the "Agreement") among Xxxx
Industries, Inc. ("Parent"), Xxxxxxxx Acquisition Corp. ("Subsidiary"), Queen
Carpet Corporation ("Company") and Xxxxxx Xxxx, Xxxxx Xxxx, Xxxxx Xxxx Family
Trust, Xxxxxx Xxxx Family Trust and Xxxxx Xxxx Schejola Family Trust
(collectively, "Shareholders") is entered into as of the 6th day of October,
1998, by and among PARENT, SUBSIDIARY, COMPANY and the SHAREHOLDERS in
accordance with the provisions of the Agreement. Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Agreement.
WHEREAS, the Agreement contemplated that the Company would be merged
with and into the Subsidiary, with the Subsidiary being the Surviving
Corporation;
WHEREAS, the parties hereto wish to amend the Agreement to provide that
(i) the Company will be merged with and into Parent (instead of Subsidiary),
with Parent being the Surviving Corporation, (ii) the Note to be delivered at
Closing be substituted with shares of common capital stock of M Corp., and under
certain circumstances, a cash payment, and (iii) certain other provisions be
revised to reflect the current agreement of the Parties.
NOW, THEREFORE, in consideration of the foregoing, the agreements set
forth below and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
1. The Agreement is hereby amended as follows:
A. Section 2.1 shall be deleted in its entirety and the
following shall be inserted in lieu thereof:
2.1 Merger.
Subject to the terms and conditions of this
Agreement, at the Effective Time, Company shall be merged with
and into Parent in accordance with the provisions of Section
14-2-1101 et seq. of the GBCC and with the effect provided in
Section 14-2-1106 of the GBCC (the "Merger"). Parent shall be
the Surviving Corporation resulting from the Merger (the
"Surviving Corporation") and shall continue to be governed by
the laws of the State of Georgia. The Merger shall be
consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the respective boards of
directors of Company, Parent and Subsidiary, and has been
approved by the Shareholders as all of the shareholders of
Company, as required by applicable law.
B. Section 3.1 shall be deleted in its entirety and the
following shall be inserted in lieu thereof:
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3.1 Charter.
The Articles of Incorporation of Parent in effect
immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation until duly
amended or repealed.
C. The word "Subsidiary" shall be deleted and the word
"Parent" inserted in lieu thereof in each of the following:
1. RECITALS - third sentence
2. SECTION 1 (DEFINITIONS)
"Contemplated Transactions" - subparagraph (d)
3. SECTION 3.2 (Bylaws)
4. SECTION 3.3 (Directors and Officers)
5. SECTION 4.1 (Conversion of Company Common Stock)
Paragraph (c) (iii)
6. SECTION 4.9 (Taking of Necessary Action; Further
Actions)
7. SECTION 6.2(a) (Authority; No Conflict)
8. SECTION 12.4 (Indemnification and Payment of Damages
by Parent - Other Matters)
9. SECTION 13.3 (Section 1362(e)(3) Election)
D. The fifth sentence of the recitals shall be deleted
in its entirety and the following shall be inserted in lieu thereof:
This Agreement also provides for the employment of Executive
as Executive Vice President of the Parent and President of the
Queen Carpet Division of the Parent and the appointment of
Executive to the Board of Directors of Parent.
E. The last sentence of Section 3.3 shall be deleted in
its entirety and the following shall be inserted in lieu thereof:
The officers of the Company at the Effective Time shall become
divisional officers of the Queen Carpet Division of Parent
with the same titles (together with such additional or
different officers as Parent shall appoint from time to time),
provided that Executive shall be elected Executive Vice
President of Parent and President of the Queen Carpet Division
of Parent.
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F. Section 4.1(c)(i)(A) shall be deleted in its entirety
and the following shall be inserted in lieu thereof:
(A) The sum of $70,000,000 which shall be deemed
delivered by means of the delivery by Parent of 3.15 million
shares of the common capital stock ("M Corp. Stock") of The
Maxim Group, Inc. ("M Corp."), freely transferable under
applicable federal and state securities laws, and free of all
Encumbrances, except restrictions on transfer of the M Corp.
Stock at any time prior to December 31, 1998 under that
certain Stock Purchase Option from the Parent in favor of M
Corp., a copy of which is attached to this First Amendment as
EXHIBIT A (the "M Corp. Option); provided that in the event
the aggregate value of M Corp. Stock valued as of the Closing
Date is less than $70,000,000, based on the closing price of M
Corp. Stock on the Closing Date as reported by the Wall Street
Journal published on the next business day, then in addition
to the delivery of 3.15 million shares of M Corp. Stock, fifty
percent (50%) of the amount by which $70,000,000 exceeds such
aggregate value of M Corp. Stock shall be paid by Parent
within two (2) business days following such determination in
cash, by wire transfer or other immediately available funds;
plus
G. The last sentence of Section 4.1(c)(ii)(B) shall be
deleted.
H. Section 4.2(a)(ii) shall be amended to delete the
reference to "Subsidiary".
I. Section 4.2(b)(ii) shall be amended to delete the
words "Subsidiary and".
J. Section 5.13(l) is hereby amended by adding at the
beginning of the subsection "Except as disclosed in Schedule 5.13(l), . . ."
K. Section 5.13(m) is hereby amended by adding at the
beginning of the subsection "Except as disclosed in Schedule 5.13(m),"
L. Section 6.2(a) shall be deleted in its entirety and
the following shall be inserted in lieu thereof:
(a) This Agreement constitutes the legal, valid and
binding obligation of Parent and Subsidiary, enforceable
against Parent and Subsidiary in accordance with its terms.
Upon execution and delivery by Parent of the Certificate of
Merger, the Employment Agreement and the Real Property
Agreements (collectively, the "Parent's Closing Documents"),
the Parent's Closing Documents will constitute the legal,
valid and binding obligations of Parent, enforceable against
Parent in accordance with their respective terms. Parent and
Subsidiary have the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and the
Parent's Closing Documents and to perform their obligations
under this Agreement and the Parent's Closing Documents.
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M. Section 7.7(a) shall be deleted in its entirety and
the following shall be inserted in lieu thereof:
(a) Subject to the provisions of the GBCC, Company shall
be entitled to make one or more distributions on Company
Common Stock to its Shareholders in an aggregate amount of
$131 million. Such distribution shall result in a reduction of
Merger Consideration as provided in Section 4.1(c) of this
Agreement. In addition, Company shall be entitled to make tax
distributions as contemplated by Section 4.1(c)(ii)(A) in the
amount of $18.625 million, which tax distribution shall not
result in a reduction of Merger Consideration as provided in
Section 4.1(c) of this Agreement.
2. With respect of the provisions of Section 4.1(c)(ii) of the
Agreement, the Parties acknowledge and agree as follows:
(A) With respect to the provisions of subparagraph
(ii)(A), the reduction in the Merger Consideration as of the
Closing Date for dividends and other distributions as
contemplated by such subparagraph is in the aggregate amount
of $131 million and the amount of dividends and distributions
for estimated Tax payments which do not reduce Merger
Consideration as contemplated by such paragraph is $18.625
million.
(B) With respect to special bonuses contemplated by
subparagraph (i)(B), the amount of special bonuses shall be
$24,200,000 which shall be paid by Parent following the
Effective Time, fifty percent (50%) in cash and fifty percent
(50%) in shares of Parent Common Stock valued as determined
pursuant to the Executive Incentive Agreements between the
Company and the individual recipients of the bonuses, the form
of which is set forth as Exhibit B attached to this First
Amendment (the "Executive Incentive Agreements"). Special
bonus payments shall be made net of any tax withholdings. It
is acknowledged that the Board of Directors of the Company
have designated the bonus pool of participants and has advised
Parent of such designations and delivered originals of such
Executive Incentive Agreements to Parent.
3. Pursuant to Section 9.4(c) of the Agreement, Shareholders
shall deliver to Parent and M Corp. their written agreement as set forth in and
as part of the M Corp. Option, pursuant to which the Shareholders agree to
accept and be bound by all the terms and conditions of the M Corp. Option and
agree that all such terms and conditions shall be binding upon the Shareholders
and their successors, personal representatives and heirs to the same extent as
if the Shareholders had originally been a party to the M Corp. Option.
4. Except as modified by Paragraphs 1 and 2 of this First
Amendment, the Agreement shall remain in full force and effect.
5. This First Amendment shall be governed by the laws of the
State of Georgia without regard to conflicts of laws principles.
6. This First Amendment may be executed in counterparts and shall
be binding upon each party executing this or any counterpart.
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IN WITNESS WHEREOF, this First Amendment has been executed as of the
date and year first above written.
XXXX INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President
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XXXXXXXX ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President
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QUEEN CARPET CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Vice President Finance
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/s/ Xxxxxx Xxxx
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XXXXXX XXXX
/s/ Xxxxx Xxxx Schejola
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XXXXX XXXX SCHEJOLA
XXXXX XXXX FAMILY TRUST
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx, Trustee
XXXXXX XXXX FAMILY TRUST
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Trustee
XXXXX XXXX SCHEJOLA FAMILY TRUST
By: /s/ Xxxxx Xxxx Schejola
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Xxxxx Xxxx Schejola, Trustee
