1
Exhibit 10.9 (b)
RIVERSIDE GROUP, INC.
---------------------
0000 Xxxxxxx Xxxxxxx
--------------------
Xxxxxxxxxxxx, Xxxxxxx 00000
---------------------------
February 24, 1998
Wickes Inc.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Re: Amendment and Closing Agreement
------------------------------------
Ladies and Gentlemen:
You and we are parties to that certain letter agreement dated November 4,
1997 with respect to the transfer of certain operation by you to us (the
"Agreement").
In connection with the completion of the transaction contemplated by the
Agreement on today's date, we have agreed to the amendments to the terms of the
Agreement and certain other matters as set forth herein.
Capitalized terms used herein without definition shall have the same
meanings herein as in the Agreement.
1. Consideration. Section 1(b) of the Agreement is hereby amended in its
-------------
entirety to read as follows:
"(b) Consideration. In addition to the assumption of obligations set
forth above, in consideration of the acquisition, sale and transfer of the
Wickes Plus/xxxxxx.xxx Operations, Riverside agrees:
i. to pay to Wickes 10% of the gross payments received within one
year after the date of the transfer by the Wickes Plus/xxxxxx.xxx
Operations from end-user customers in place September 28, 1997,
payable on a monthly basis. Wickes will provide Riverside with a
list of such customers on or before February 15, 1998.
ii. at the time of the transfer, to deliver to Wickes its unsecured
promissory note in the form of Exhibit A hereto with an original
principal amount equal to the sum of (A) the book value of the
2
Wickes Plus/xxxxxx.xxx Assets shown on Wickes' financial
statements, which Wickes represents is $168,333 on the date
hereof and (B) the operating expenses of the Wickes
Plus/xxxxxx.xxx Operations from September 28, 1997 through the
date of the transfer, which Wickes represents is $756,133 reduced
by (Y) the revenues generated and future expense reductions
(e.g., by "Excel bonus" offsets under Wickes' Excel sponsorship
arrangements with certain of its employees) such operations
during such period, which Wickes represents totals $9,080 and (Z)
severance and related costs with respect to persons hired or
offered to be hired by Riverside that would have been incurred by
Wickes had the Wickes Plus/xxxxxx.xxx Operations been terminated
on September 28, 1997, which Wickes represents totals $43,543.
iii. Installments (applied first to accrued and unpaid interest
described below at the date of payment) payable in cash within 45
days after the end of each calendar quarter equal to 10 percent
of the net income generated by the Wickes Plus/xxxxxx.xxx
Operations during such quarter; provided that aggregate amount of
--------
such installments shall be limited to the cumulative operating
expenses of the Wickes Plus/xxxxxx.xxx Operations prior to
September 28, 1997, which Wickes represents is $437,697, reduced
-------
by the revenues generated by such operations during such period,
--
which Wickes represents is $8,448, and increased by interest on
------------
the aggregate unpaid amount from September 28, 1997 at the rate
which Bankers Trust Company announces from time to time as its
prime lending rate, as in effect from time to time. Should the
payment with respect to any quarter be insufficient to pay
accrued and unpaid interest at the end of such quarter, any
unpaid interest shall be added to the unpaid amount and bear
interest effective at the end of such quarter."
2. Use of Name and Trademark. Section 1(c) of the Agreement is hereby
--------------------------
amended in its entirety to read as follows:
"(c) Use of Name and Trademark. Riverside will not conduct the
Wickes Plus/xxxxxx.xxx Operations under any name including "Wickes" or
utilize any of Wickes' trademarks in the conduct of such business without
the written consent of Wickes."
3
3. Other Provisions Unaffected. All provisions of the Agreement, as
----------------------------
amended hereby, will continue in full force and effect on and after the date
hereof.
4. Further Assurances and Adjustments. The parties hereby agree to take
----------------------------------
all such actions and to execute and deliver all such documents as may be
reasonable and appropriate to effectuate the transfer of the Wickes
Plus/xxxxxx.xxx Operations to Riverside. In addition, the parties agree to
review and finalize the dollar figures set forth in Section 1(b) of the
Agreement, as amended, and to make payments to the other as appropriate to
reconcile the final figures to these set forth in such Section 1(b).
Please indicate your agreement with the foregoing by signing a copy of this
letter agreement in the space provided below.
Very truly yours,
RIVERSIDE GROUP, INC.
By /s/ Xxxxxxxxx X. Xxxx
---------------------
Agreed:
WICKES INC.
By /s/ Xxxxx X. Xxxxxxxx
----------------------
List of Exhibits:
Exhibit A - Riverside Group, Inc. Promissory Note
4
Exhibit A
PROMISSORY NOTE
Principal: $871,844 Dated: January 15, 1998
1. Principal.
---------
FOR VALUE RECEIVED, the undersigned, Riverside Group, Inc., a Florida
corporation (the "Borrower"), promises to pay to the order of Wickes Inc., a
Delaware corporation (the "Lender"), the principal sum of $871,844, with
interest thereon calculated in accordance with the terms and provisions provided
below. All sums owing under this note are payable in lawful money of the United
States of America.
2. Interest.
--------
Interest accrued on this note shall be payable on the last day of each
month commencing February 28, 1998, at the variable per annum rate which Bankers
Trust Company ("BT") announces from time to time as its prime lending rate, as
in effect from time to time, plus two percentage points, until such time as this
note is paid in full. When the last day of a month falls on a day that is not a
business day, interest is due on the first business day of the following month.
When BT changes its prime rate on a day other than the first day of a
calendar month, interest for the month in which such change or changes are made
shall be computed on a per diem basis at the several rates in effect for that
month.
All amounts required to be paid under this note shall be payable at
Lender's office located at 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx
00000, or at such other place as Lender, from time to time, may designate in
writing.
Interest calculations shall be based on a 360-day year and charged on the
basis of actual days elapsed.
The amount of each interest payment that is not paid when due shall bear
interest from the date when due until paid at the rate or rates charged from
time to time on the principal owing under this rate.
3. Principal Payments. Principal shall be paid in thirteen equal quarterly
-------------------
installments, payable on the date 45 days after the date of each calendar
quarter hereafter, commencing May 15, 1998 and ending May 15, 2001. The entire
principal balance of this note, together with all accrued and unpaid interest,
shall be due and payable on May 15, 2001, unless otherwise prepaid in accordance
5
with the terms of this note. When a date when any payment hereunder falls on a
day that is not a business day, such payment shall be is due on the next
business day.
5. Security. This note is unsecured.
--------
6. Prepayment.
----------
Borrower may prepay the whole or any portion of this note on any date, upon
five days' notice to Lender. Any payments of the principal sum received by
Lender under the terms of this note shall be applied in the following order of
priority: (i) first, to any accrued interest due and unpaid as of the date of
such payment; (ii) second, to the outstanding principal sum; and (iii) the
balance, if any, to any accrued, but not yet due and payable, interest.
7. Default and Remedies.
--------------------
If Borrower fails to pay principal or interest on the date on which it
falls due or to perform any of the agreements, conditions, covenants,
provisions, or stipulations contained in this note or the Agreement for
Acquisition of Operations dated November 4, 1997 between Lender and Borrower as
amended and supplemented by the Amendment and Closing Agreement dated the date
hereof between the Lender and the Borrower, then Lender, at its option and
without notice to Borrower, may declare immediately due and payable the entire
unpaid balance of principal with interest from the date of such default at the
rate provided for herein and all other sums due by Borrower hereunder, anything
herein to the contrary notwithstanding. Payment of this may be enforced and
recovered in whole or in part at any time by one or more of the remedies
provided to Lender in this note. In such case, Lender may also recover all costs
in connection with suit, a reasonable attorney's fee for collection, and
interest on any judgment obtained by Lender at the rate provided for herein.
The remedies of Lender and the warranties provided in this note shall be
cumulative and concurrent, and they may be pursued singly, successively, or
together at the sole discretion of Lender. They may be exercised as often as
occasion shall occur, and failing to exercise one shall in no event be construed
as a waiver or release of it.
8. Attorneys' Fees and Costs.
-------------------------
If Lender engages any attorney to enforce or construe any provision of this
note or the Security Agreement, or as a consequence of any default whether or
not any legal action is filed, Borrower shall immediately pay on demand all
reasonable attorneys' fees and other Lender's costs, together with interest from
the date of demand until paid at the highest rate of interest then applicable to
6
the unpaid principal, as if such unpaid attorneys' fees and costs had been added
to the principal.
9. Waivers.
-------
(a) Borrower and all endorsers, sureties, and guarantors hereby jointly
and severally waive presentment for payment, demand, notice of demand, notice of
nonpayment or dishonor, protest, notice of protest of this note, and all other
notices in connection with the delivery, acceptance, performance, default, or
enforcement of the payment of this note. They agree that each shall have
unconditional liability without regard to the liability of any other party, and
that they shall not be affected in any manner by any indulgence, extension of
time, renewal, waiver, or modification granted or consented to by Lender.
Borrower and all endorsers, sureties, and guarantors consent to any and all
extensions of time, renewals, waivers, or modifications that may be granted by
Lender with respect to the payment or other provisions of this Note, and they
agree that additional borrowers, endorsers, guarantors, or sureties may become
parties hereto without notice to them or affecting their liability hereunder.
(b) Lender shall not be deemed by any act of omission or commission to
have waived any of its rights or remedies hereunder, unless such waiver is in
writing and signed by Lender, and then only to the extent specifically set forth
in writing. A waiver on one event shall not be construed as continuing or as a
bar to or waiver of any right or remedy to a subsequent event.
10. Notices.
-------
All notices required under or in connection with this Note shall be
delivered or sent by certified or registered mail, return receipt requested,
postage prepaid, to the following addresses:
If to Lender: Wickes Inc.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: President
If to Borrower: Riverside Group, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President
or to such other address as any party may designate from time to time by notice
to the others in the manner set forth herein. All notices shall be deemed to
have been given or made either at the time of delivery thereof to an officer or
employee or on the third business day following the time of mailing in the
aforesaid manner.
7
11. Costs and Expenses.
------------------
Borrower shall pay the cost of any revenue tax or other stamps now or
hereafter required by law at any time to be affixed to this note.
12. No Partnership or Joint Venture.
-------------------------------
Nothing contained in this note or elsewhere shall be construed as creating
a partnership or joint venture between Lender and Borrower or between Lender and
any other person or as causing the holder of the note to be responsible in any
way for the debts or obligations of Borrower or any other person.
13. Interest Rate Limitation.
------------------------
Notwithstanding anything contained herein to the contrary, the holder
hereof shall never be entitled to collect or apply as interest on this
obligation any amount in excess of the maximum rate of interest permitted to be
charged by applicable law. If the holder of this note ever collects or applies
as interest any such excess, the excess amount shall be applied to reduce the
principal debt; and if the principal debt is paid in full, any remaining excess
shall be paid to the Borrower forthwith. In determining whether the interest
paid or payable in any specific case exceeds the highest lawful rate, the holder
and the Borrower shall to the maximum extent permitted under applicable law (a)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest; (b) exclude voluntary prepayments and the effects of these;
and (c) spread the total amount of interest throughout the entire contemplated
term of the obligation so that the interest rate is uniform throughout the term.
Nothing in this paragraph shall be deemed to increase the total dollar amount of
interest payable under this note.
14. Modification.
------------
This note may be pledged or collaterally assigned by Lender at any time or
from time to time before the maturity date, in which event neither Borrower nor
Lender shall permit any modification of this note without the consent of the
pledgee/assignee.
15. Number and Gender.
-----------------
In this note the singular shall include the plural and the masculine shall
include the feminine and neuter gender, and vice versa, if the context so
requires.
16. Headings.
--------
8
Headings at the beginning of each numbered paragraph of this note are
intended solely for convenience of reference and are not to be construed as
being a part of the note.
17. Time of Essence.
---------------
Time is of the essence with respect to every provision hereof.
18. Governing Law.
-------------
This note shall be construed and enforced in accordance with the laws of
the State of Florida, except to the extent that federal laws preempt the laws of
the State of Florida.
IN WITNESS WHEREOF, Borrower has executed this promissory note on the date
set forth above.
RIVERSIDE GROUP, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Vice Chairman
