EXHIBIT 7.40
IMAGINE INVESTMENTS, INC.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
April 4, 2003
Riverside Group, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: J. Xxxxxx Xxxxxx
Gentlemen:
Contemporaneously herewith, the undersigned and you (along with others)
are entering that certain Agreement for Conveyance of Shares of Wickes, Inc. in
Lieu of Foreclosure and Xxxx of Sale, of even date with the date of this letter,
providing for the conveyance of 2,797,743 shares of the common capital stock of
Wickes, Inc. by Riverside Group, Inc. ("Riverside") to Imagine Investments, Inc.
("Imagine") (the "Agreement"). All capitalized terms used in this letter and not
otherwise defined herein shall have the same meaning as given them in the
Agreement.
In addition to the Wickes Shares sold and conveyed by Riverside to
Imagine pursuant to the Agreement, Riverside owns an additional 53,700 shares of
the common capital stock of Wickes, Inc. (the "Additional Wickes Shares"), that
are pledged to Liberty Savings Bank to secure an indebtedness in the principal
amount of $113,000 (the "Liberty Pledge").
In consideration of the Agreement, Riverside hereby grants to Imagine,
the exclusive option to purchase all of the Additional Wickes Shares, free and
clear of all liens, encumbrances, pledges, securing interests and the like (the
"Option"). The term of the Option shall commence on the date hereof and shall
terminate ten (10) days after the Remaining Riverside Debt (and all other
amounts owed by Riverside to Imagine) has been paid in full. If Imagine elects
to exercise the Option, Imagine will exchange an additional $268,500 of
Riverside Debt owed on the Riverside Notes identified in the Agreement as the
A-2 Notes as a "deemed payment" in exchange for the Additional Wickes Shares, in
the same manner as set forth in the Agreement.
Riverside agrees that it shall discharge the debt secured by the
Liberty Pledge and to deliver certificates for the Additional Wickes Shares,
together with blank stock powers with signatures guaranteed, to Imagine at c/o
Xxxx Xxxxx, 0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
within ten (10) business days after Imagine has given Riverside written notice
that it has exercised the Option.
At its sole option and without any obligation to do so, Imagine may pay
the entire indebtedness secured by the Liberty Pledge, and all of the provisions
of Paragraph 3 of
the Agreement shall apply with respect thereto. Further, the undersigned hereby
agree that if Imagine exercises the Option, all of the provisions of the
Agreement are hereby incorporated by reference in this letter and shall apply to
the Additional Wickes Shares, just as if the Additional Wickes Shares had been
made the subject of the Agreement, in addition to the Wickes Shares. If the
Holder of the Liberty Pledge forecloses on the Additional Shares, Riverside
shall not be deemed to be in breach of this letter agreement but Riverside shall
immediately give written notice to Imagine if any such foreclosure proceedings
are initiated and shall keep it promptly advised regarding all developments in
such foreclosure.
Please sign this letter where indicated below to acknowledge your
acceptance hereof as a legally binding contract on both your and our part.
Very truly yours,
Imagine Investments, Inc.
By: /s/ Xxxx X. Xxxxx
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Title: Vice President
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Agreed to:
Riverside Group, Inc.
By: /s/ J. Xxxxxx Xxxxxx
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Title: Chairman/CEO
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Date: 4/4/03
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