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EXHIBIT 2.1.1
THE MAXIM GROUP, INC.
000 XxxxXxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
August 9, 1998
Xxxx Industries, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attn: Chairman
Re: Agreement and Plan of Merger, dated June 23, 1998 (the
"Merger Agreement"), among Xxxx Industries, Inc., Xxxx
Carpet Showplace, Inc., CMAX Acquisition, Inc. and The
Maxim Group, Inc.
Ladies and Gentlemen:
This letter will serve as an amendment and modification by the
Company, Target1, the Subsidiary and Parent to the Merger Agreement. From and
after the date hereof, the Merger Agreement shall be deemed to mean the Merger
Agreement, as amended hereby. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
A. The parties hereto hereby agree to amend and modify the
Merger Agreement as follows:
1. Section 2.1 of Article II of the Merger Agreement is
hereby amended by deleting therefrom the phrase "the Subsidiary" and inserting
in lieu thereof the phrase "Target1".
2. Section 3.2(b)(i) of Article III of the Merger Agreement
is hereby amended by deleting therefrom the reference to the phrase "Target 3".
3. Section 3.2(b)(ii) of Article III of the Merger
Agreement is hereby deleted in its entirety and the following is inserted in
lieu thereof:
(ii) (A) Within thirty (30) days after the Closing Date,
the Company shall deliver to Parent a final balance
sheet related to the retail stores listed on Schedule
6.13, which final balance sheet (x) shall reflect the
net book value of the consolidated assets and Accrued
Liabilities (as hereinafter defined) of Target as of the
Effective Time in accordance with generally accepted
accounting principles consistently applied ("GAAP")
following the transfers contemplated by Section 6.13
hereof and (y) shall be in substantially the same form
as the Opening Balance Sheet (the "Closing Balance
Sheet"). Parent and its representatives may participate
in the preparation of the Closing Balance Sheet.
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(B) As soon as practicable after the Closing Date
and in any event within sixty (60) days thereafter, the
Company shall cause Xxxxxx Xxxxxxxx LLP, the independent
public accountants of the Company, to review the Closing
Balance Sheet pursuant to the procedures set forth in the
engagement letter, dated July 22, 1998, from Xxxxxx
Xxxxxxxx LLP to, and accepted by, the Company and Parent,
with such changes to such procedures (i) as may be approved
by Company and Parent from time to time, or (ii) as may be
separately requested by either of Company or Parent,
provided, that in the event either Company or Parent
separately requests changes to such procedures and such
changes are not approved by the other party then the
additional costs incurred as a result of such request, if
any, shall be the sole responsibility of the requesting
party (the "Engagement Letter"); provided, however, that
the net book value of goodwill shall be valued for all
purposes under this Agreement at the value reflected in the
Opening Balance Sheet. Any adjustments made by Xxxxxx
Xxxxxxxx LLP following its review of the Closing Balance
Sheet pursuant to the procedures set forth in the
Engagement Letter shall be set forth in a report provided
to each of the Company and Parent (the Closing Balance
Sheet as adjusted by such report being hereinafter referred
to as the "Post-Closing Report"). The Post-Closing Report
shall be submitted to each of Parent and the Company for
their approval, which shall not be unreasonably withheld,
within 20 days following submission by the accountants.
Other than as provided above, Parent and the Company shall
each bear one-half of the costs incurred in connection with
the preparation of the Post-Closing Report and each of
Parent and Company shall bear their respective expenses
incurred in connection with their review of the Post-
Closing Report.
4. Section 3.2(b) of Article III of the Merger Agreement is
hereby further amended by adding the following new subsection (v) thereto:
(v) The Company hereby agrees that Parent and Target shall
bear no responsibility for liabilities that do not relate
to the operation of the retail stores listed on Schedule
6.13, and Company will immediately reimburse Parent and/or
Target, as the case may be, for any of such liabilities
that are paid by Parent and/or Target after the Effective
Time. The Company and Parent hereby further agree that
those certain liabilities described on Exhibit "D" that
relate to the operation of the retail stores listed on
Schedule 6.13 will be accrued on the Closing Balance Sheet
in accordance with GAAP (the "Accrued Liabilities"), and
the same will be subject to adjustment pursuant to the
Post-Closing Report (such Accrued Liabilities, as so
adjusted being hereinafter referred to as the "Final
Accrued Liabilities"). Parent agrees to pay, or to cause
Target to pay, all of the payables relating to the
operation of the retail stores listed on Schedule 6.13;
provided, that the Company hereby agrees to reimburse
Parent and/or Target, as the case may be, immediately for
any and all payables that relate to the operation of the
retail stores listed on Schedule 6.13 prior to the Closing
Date (the "Pre-Closing Payables"), except for the Final
Accrued Liabilities, for which no reimbursement will be
owed unless the Parent's or Target's
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payment exceeds the amount reserved in the Closing Balance
Sheet, as adjusted pursuant to the Post-Closing Report, in
which event Company will reimburse Parent and/or Target,
as the case may be, immediately for any payments made in
excess of such reserve. If and to the extent that trade
payable invoices rendered by third party vendors include
Pre-Closing Payables and non-Pre-Closing Payables, the
same shall be appropriately segregated by the Company and
Parent. Utility bills and similar expenses that cannot be
readily segregated shall be prorated on a per diem basis
with the Pre-Closing Payables to include the prorated
share that is allocated to periods that are prior to the
Closing Date.
5. Section 4.1(a) of Article IV of the Merger Agreement is
hereby amended by deleting therefrom the reference to the phrase and
parenthetical "Xxxx Retail Properties, Inc. ("Target3")."
6. Section 4.1(a) of Article IV of the Merger Agreement is
hereby further amended by deleting therefrom any and all references to the
phrase "Target3."
7. Section 4.1(e) of Article IV of the Merger Agreement is
hereby amended by deleting subsection (iii) thereof in its entirety and
inserting the following in lieu thereof: "(iii) [Intentionally Reserved]."
8. Section 6.10 of Article VI of the Merger Agreement is
hereby amended by deleting therefrom both references to the word
"Administrative" and inserting in lieu thereof the word "Transition".
9. Section 7.4(b) of Article VII of the Merger Agreement is
hereby amended by deleting therefrom the reference to "Indemnitor" appearing in
the second line thereof and inserting in lieu thereof a reference to
"Indemnitee".
10. The Merger Agreement is hereby amended by adding thereto a
new Exhibit "D", which Exhibit "D" shall be in the form attached hereto.
11. Section 7.2 of Article VII of the Merger Agreement is
hereby amended by (i) deleting the period at the end of subsection (e) and
substituting a semicolon followed by the term "or" in lieu thereof, and (ii)
adding the following new subsection (f) to the end thereof:
(f) Any litigation matters disclosed in Schedule 4.9 of
the Merger Agreement or any litigation pending or
threatened against the Company, a Target, a predecessor in
interest or any of their respective affiliates at or prior
to the Effective Time whether or not disclosed to Parent
at or prior to Closing arising out of events occurring
before the Effective Time.
12. Section 7.7 of Article VII of the Merger Agreement is
hereby amended by adding the term "or Section 7.2(f)" (i) to the end of
subsection (a) of Section 7.7, and (ii) immediately after the reference to
Section 7.2(b) appearing in subsection (c) of Section 7.7.
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13. The Schedules to the Merger Agreement are hereby amended
by deleting therefrom Schedule 6.13 in its entirety and inserting in lieu
thereof the replacement Schedule 6.13 attached hereto.
B. The Company agrees that it will provide, at the request of
Parent or any other Indemnitee, an assurance letter to third parties, in form
and substance reasonably acceptable to such third parties, indicating that such
litigation matters (or any future litigation matters for which the Company is
providing indemnification under Article VII of the Merger Agreement) are not in
any way the responsibility or liability of Parent or any other Indemnitee and
are the sole responsibility of the Company.
C. The Company hereby represents and warrants to Parent that
all the transfers contemplated by Section 6.13 of the Merger Agreement are
complete and all liabilities of Target, other than liabilities related to the
operation of the retail stores listed on Schedule 6.13 specifically assumed by
Parent pursuant to the Merger Agreement, have been transferred from Target to
the Company or another entity controlled by the Company.
Please evidence your acceptance of and agreement to the
above-listed amendments by executing this letter agreement in the space provided
for below.
By signing below, each party hereto represents and warrants
that all representations, warranties, covenants and agreements made by such
party in the Merger Agreement are true, correct and accurate as of the date
hereof and that each such party remains bound thereby.
Sincerely,
THE MAXIM GROUP, INC.
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Executive Vice
President - Finance
Agreed to and accepted this 9th
day of August, 1998:
CMAX ACQUISITION, INC. XXXX CARPET SHOWPLACE, INC.
By: /s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxx, Vice President Xxxxxx X. Xxxxxxxx, Vice President and
and Treasurer Secretary
XXXX INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Vice President
and Secretary
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