<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Wickes Lumber Company
(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
967446105
(CUSIP Number)
T. Malcolm Graham, Esq.
Kirschner, Main, Petrie, Graham, Tanner & Demont
One Independent Drive, Suite 2000
Jacksonville, Florida 32202
(904) 354-4141
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications)
January 11, 1996
(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 which is the subject of this Schedule 13D, and is filing this
statement of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [X]. (A fee
is not required only if the filing person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
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 purposes 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 Acts (however, see the
Notes).
<PAGE> 2
CUSIP NO. 967446105
- --------------------------------------------------------------------------------
1) Name of Reporting Persons SS. or I.R.S. Identification Nos. of Above Persons
Riverside Group, Inc.
- --------------------------------------------------------------------------------
2) Check the Appropriate Row if a Member of a Group (See Instructions)
(a) X
(b)
- --------------------------------------------------------------------------------
3) Sec Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
WC; OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Itmes 2(d)
or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power............2,749,219*
Benficially Owned by 8) Shared Voting Power..........1,468,069
Reporting Person: 9) Sole Dispositive Power.......Same as #7
10) Shared Dispositive Power.....Same as #8
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
4,217,288*
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
55.2
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
- -------------------
* Includes 2,000,000 shares acquirable pursuant to Stock Purchase
Agreement with the Issuer.
2
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CUSIP NO. 967446105
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1) Name of Reporting Persons SS. or I.R.S. Identification Nos. of Above Persons
American Financial Acquisition Corporation
- --------------------------------------------------------------------------------
2) Check the Appropriate Row if a Member of a Group (See Instructions)
(a) X
(b)
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3) Sec Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
WC; OO
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Itmes 2(d)
or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power.............0
Benficially Owned by 8) Shared Voting Power..........1,468,069
Reporting Person: 9) Sole Dispositive Power.......Same as #7
10) Shared Dispositive Power.....Same as #8
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,468,069
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
26.0
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
3
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CUSIP NO. 967446105
- --------------------------------------------------------------------------------
1) Name of Reporting Persons SS. or I.R.S. Identification Nos. of Above Persons
American Founders Life Insurance Company
- --------------------------------------------------------------------------------
2) Check the Appropriate Row if a Member of a Group (See Instructions)
(a) X
(b)
- --------------------------------------------------------------------------------
3) Sec Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
WC
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Itmes 2(d)
or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power.............0
Benficially Owned by 8) Shared Voting Power..........951,486
Reporting Person: 9) Sole Dispositive Power.......Same as #7
10) Shared Dispositive Power.....Same as #8
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
951,486
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
16.9
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions)
IC
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4
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This Statement on Schedule 13D is being filed pursuant to Section
13(d) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this Statement
relates is common stock, par value $0.01 per share, ("Common Stock"), issued by
Wickes Lumber Company, a Delaware corporation ("Wickes"), the principal
executive offices of which are located at 7601 Deerpath Drive, Vernon Hills,
Illinois 60061.
ITEM 2. IDENTITY AND BACKGROUND.
The names of the persons filing this Statement are: Riverside Group,
Inc. ("Riverside"), a Florida corporation principally engaged through
subsidiaries in retailing and distributing building materials, the address of
the principal business and office of which is 7800 Belfort Parkway,
Jacksonville, Florida 32256; American Financial Acquisition Corporation
("AFAC"), a Delaware corporation principally engaged in the ownership of
insurance companies, the address of the principal business and office of which
is 2720 East Camelback Road, Phoenix, Arizona 85016; and American Founders Life
Insurance Company ("AFL"), a Texas stock life insurance company the address of
the principal business and office of which is 2720 East Camelback Road,
Phoenix, Arizona 85016. The executive officers and directors of Riverside,
AFAC and AFL (together with their principal occupations and business addresses)
are set forth on Schedule 1 hereto.
Riverside is controlled by Wilson Financial Corporation, a Florida
corporation principally engaged in investment operations, the address of the
principal business and office of which is 7800 Belfort Parkway, Jacksonville,
Florida 32256. The executive officers and directors of Wilson Financial
(together with their principal occupations and business addresses) are set
forth on Schedule 1 hereto. Wilson Financial is controlled by Mr. J. Steven
Wilson, information with respect to whom is set forth on Schedule 1 hereto.
All the individuals listed pursuant to this Item 2 are United States
citizens with their business addresses at 7800 Belfort Parkway, Suite 100,
Jacksonville, Florida 32256.
No person listed pursuant to this Item 2 was, during the last five
years, 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, and no such
5
<PAGE> 6
person has been during the last five years, convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The amount of funds or other consideration to be used in the
acquisition to which this Statement relates will be $10,000,000 to be derived
from Riverside's general corporate funds, including funds to be derived from
the proposed sale by Riverside of its American Founders Life Insurance Company
subsidiary.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the acquisition of securities by Riverside was to
increase Riverside's investment in Wickes, which Riverside currently controls.
Pursuant to a Stock Purchase Agreement between Riverside and Wickes
dated January 11, 1996 (the "Stock Purchase Agreement", Riverside agreed to
acquire 2,000,000 newly-issued shares of Common Stock for $10,000,000 in cash.
The terms of the definitive agreement were approved and recommended to the
Boards of Directors of Riverside and Wickes by committees comprised of the
independent directors of each company. Wickes' board committee also received
the opinion of its financial advisor to the effect that the transaction is
fair, from a financial point of view, to Wickes. Closing of the Stock Purchase
Agreement is subject to, among other things, completion by Riverside of the
sale of AFL and completion by Wickes of a satisfactory amendment of its bank
revolving credit agreement. The foregoing is a summary of certain provisions
of the Stock Purchase Agreement and is qualified in its entirety by reference
to the Stock Purchase Agreement, which is attached as Exhibit A hereto.
Subject to the foregoing, Riverside, AFAC and AFL may from time to time seek to
acquire additional shares of Common Stock subject to availability at prices
deemed attractive, or dispose of shares of Common Stock.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
On the date hereof, Riverside and its subsidiaries directly own
2,217,288 shares of Common Stock, or approximately 39.3 percent of the
outstanding shares of Common Stock. Of these 2,217,288 shares,749,219, 516,583
and 951,486 are directly owned by Riverside, AFAC and AFL, respectively.
Following the purchase contemplated by the Stock Purchase Agreement, Riverside
will beneficially own 4,217,288 shares, or approximately 55.2% percent, of the
outstanding shares of Common Stock.
6
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Schedule 1 lists the shares of Common Stock beneficially owned by the
persons listed pursuant to Item 2 hereof.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
For information concerning the Stock Purchase Agreement, see Item 4
hereof and the copy of the Stock Purchase Agreement included as Exhibit A
hereto.
Riverside and its subsidiary, American Financial Acquisition
Corporation ("AFAC"), Wickes and Bankers Trust (Delaware) ("BT") are parties to
an agreement dated September 20, 1993. Among other things, pursuant to this
agreement (i) a representative of BT is entitled to notice of and to attend
meetings of Wickes' Board of Directors, (ii) Riverside and AFAC agreed, until
BT owns less than 5 percent of both classes of Wickes' common stock in the
aggregate (collectively, "Wickes Stock") and is eligible to effect sales under
Rule 144(k), in connection with any cumulative sales of Common Stock by
Riverside and AFAC in excess of 5 percent of outstanding Wickes Stock to
provide BT the same opportunity pro rata opportunity to sell shares of Wickes
Stock held by BT.
The 749,219 shares of Common Stock presently directly owned by
Riverside and the 516,583 shares of Common Stock presently directly owned by
AFAC are pledged to secure indebtedness of AFAC pursuant to a loan agreement
with First Interstate Bank of California, N.A. and Bank of Montreal.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Attached as exhibits hereto are the following:
Exhibit Description
------- -----------------------------------------------------------------
A Stock Purchase Agreement dated January 12, 1996 between Riverside
Group, Inc. and Wickes Lumber Company
B BT/Riverside Agreement between Riverside Group, Inc., American
Financial Acquisition Corporation and Bankers Trust (Delaware)
dated September 20, 1993
C Pledge Security Agreement dated April 19, 1994 between
AFAC/Riverside Group, Inc. and First Interstate Bank of
California, N.A. and Bank of Montreal.
D Pledge Security Agreement dated April 19, 1994 between AFAC and
First Interstate Bank of California, N.A. and Bank of Montreal.
7
<PAGE> 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 19, 1996 RIVERSIDE GROUP, INC.
By:________________________________
Wayne A. Schreck
Executive Vice President
8
<PAGE> 9
Schedule 1
to Schedule 13D
EXECUTIVE OFFICERS AND DIRECTORS OF RIVERSIDE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION AND BUSINESS SHARES OF COMMON STOCK BENEFICIALLY OWNED
ADDRESS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. Steven Wilson Chairman, President and Chief 16,000 (1), (2)
Executive Officer
7800 Belfort Pkwy.
Jacksonville, FL 32256
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Kenneth M. Kirschner Vice Chairman, and Secretary 17,466 (3)
One Independent Dr.
Jacksonville, FL 32209
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Edward M. Carey Director 500
214 Atlantic Ave.
Brooklyn, NY 11201
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Frederick H. Schultz Director 107,927 (4)
50 N. Laura St., #2725
Jacksonville, FL 32202
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Varina M. Steuert Director 500
25 Old Farm Rd.
Darien, CT 06820
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C. Herman Terry Director None
2216 Riverplace Tower
Jacksonville, FL 32207
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Wayne A. Schreck Executive Vice President 800
2720 E. Camelback Rd.
Phoenix, AZ 85016
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</TABLE>
(1) Excludes shares beneficially owned by Riverside, which Mr. Wilson may be
deemed to control.
(2) Includes 16,000 shares presently acquirable under employee stock options.
(3) Includes 7,100 shares presently acquirable under employee stock options.
(4) Includes 1,777 shares presently acquirable under director stock options.
9
<PAGE> 10
EXECUTIVE OFFICERS AND DIRECTORS OF AFAC
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION AND BUSINESS SHARES OF COMMON STOCK BENEFICIALLY OWNED
ADDRESS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. Steven Wilson See Above See Above
- -----------------------------------------------------------------------------------------------------------
Kenneth M. Kirschner See Above See Above
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Wayne A. Schreck See Above See Above
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</TABLE>
10
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Executive Officers and Directors of AFL
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION AND SHARES OF COMMON STOCK
BUSINESS ADDRESS BENEFICIALLY OWNED
- --------------------------------------------------------------------------------------
<S> <C> <C>
J. Steven Wilson See Above See Above
Kenneth M. Kirschner See Above See Above
Wayne A. Schreck See Above See Above
Duane T. Miller Executive Vice President None
2720 East Camelback Rd.
Phoenix, AZ 85016
Robert C. Schumacher Executive Vice President 2,500
2720 East Camelback Rd.
Phoenix, AZ 85016
</TABLE>
Executive Officer and Sole Director of Wilson Financial
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION AND SHARES OF COMMON STOCK
BUSINESS ADDRESS BENEFICIALLY OWNED
- --------------------------------------------------------------------------------------
<S> <C> <C>
J. Steven Wilson See Above See Above
</TABLE>
11
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EXHIBIT A
STOCK PURCHASE AGREEMENT
BETWEEN
RIVERSIDE GROUP, INC.
AND
WICKES LUMBER COMPANY
DATED AS OF JANUARY 11, 1996
================================================================================
<PAGE> 13
EXHIBIT A
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
I. SALE OF SHARES; PURCHASE PRICE . . . . . . . . . . . . . 1
1.1 Sale of Shares. . . . . . . . . . . . . . . . . . 1
1.2 Purchase Price; Payment. . . . . . . . . . . . . . 1
II. REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . 1
2.1 Organization and Good Standing . . . . . . . . . . 2
2.2 Authority Relative to Agreement, Etc. . . . . . . 2
2.3 Effect of Agreement . . . . . . . . . . . . . . . 2
2.4 The Shares . . . . . . . . . . . . . . . . . . . . 3
2.5 Opinions of Financial Advisor . . . . . . . . . . 3
2.6 Brokers, Finders, etc. . . . . . . . . . . . . . . 3
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . . . . . 3
3.1 Organization and Good Standing . . . . . . . . . . 3
3.2 Authority Relative to Agreement, Etc. . . . . . . 4
3.3 Effect of Agreement, Etc. . . . . . . . . . . . . 4
3.4 Investment Representations. . . . . . . . . . . . 4
3.5 Brokers, Finders, etc. . . . . . . . . . . . . . . 5
IV. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER . . 5
4.1 Accuracy of Representations and Warranties . . . . 5
4.2 No Restraint or Litigation . . . . . . . . . . . . 5
4.3 No Defaults. . . . . . . . . . . . . . . . . . . . 6
4.4 Officer's Certificate . . . . . . . . . . . . . . 6
4.5 Sale of AFLIC . . . . . . . . . . . . . . . . . . 6
4.6 Registration Rights Agreement . . . . . . . . . . 6
4.7 Seller Credit Agreement. . . . . . . . . . . . . . 6
4.8 HSR Act . . . . . . . . . . . . . . . . . . . . . 6
V. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER . . . . 6
5.1 Accuracy of Representations and Warranties. . . . 6
5.2 No Restraint or Litigation. . . . . . . . . . . . 7
5.3 Officer's Certificates . . . . . . . . . . . . . . 7
5.4 HSR Act. . . . . . . . . . . . . . . . . . . . . . 7
5.5 Credit Agreement Amendment. . . . . . . . . . . . 7
VI. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.1 Closing Date. . . . . . . . . . . . . . . . . . . 7
6.2 Seller Closing Documents. . . . . . . . . . . . . 7
6.3 Purchaser Closing Documents. . . . . . . . . . . . 8
6.4 Proceedings. . . . . . . . . . . . . . . . . . . . 8
</TABLE>
i
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EXHIBIT A
<TABLE>
<CAPTION>
Page
<S> <C>
VII. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 8
7.1 Termination . . . . . . . . . . . . . . . . . . . 8
7.2 Effect of Termination . . . . . . . . . . . . . . 9
VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 9
8.1 Waivers and Amendments. . . . . . . . . . . . . . 9
8.2 Fees and Expenses . . . . . . . . . . . . . . . . 9
8.3 Notices. . . . . . . . . . . . . . . . . . . . . . 10
8.4 Entire Agreement. . . . . . . . . . . . . . . . . 10
8.5 Binding Effect; Benefits. . . . . . . . . . . . . 10
8.6 Assignability. . . . . . . . . . . . . . . . . . . 10
8.7 Specific Performance. . . . . . . . . . . . . . . 10
8.8 Representations and Warranties. . . . . . . . . . 11
8.9 Applicable Law. . . . . . . . . . . . . . . . . . 11
8.10 Section and Other Headings. . . . . . . . . . . . 11
8.11 Counterparts. . . . . . . . . . . . . . . . . . . 11
</TABLE>
ii
<PAGE> 15
EXHIBIT A
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of January 11, 1996, by and
between Wickes Lumber Company, a Delaware corporation ("Seller"), and Riverside
Group, Inc., a Florida corporation ("Purchaser").
WITNESSETH:
WHEREAS, on the Closing Date (as hereinafter defined), Seller
desires to sell to Purchaser, and Purchaser desires to purchase from Seller,
2,000,000 shares (the "Shares") of common stock, par value $.01 per share, of
Seller, upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
I. SALE OF SHARES; PURCHASE PRICE
1 Sale of Shares. Pursuant to the terms and subject to the conditions
set forth in this Agreement, at the Closing (as hereinafter defined), Seller
shall sell and deliver to Purchaser, and Purchaser shall purchase from Seller,
the Shares.
2 Purchase Price; Payment.
(a) The aggregate purchase price (the "Purchase Price") for the
Shares shall be Ten Million Dollars ($10,000,000).
(b) On the Closing Date, Purchaser shall pay to Seller the
Purchase Price, by wire transfer of immediately available funds to a bank
account designated by Seller.
II. REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller hereby represents and warrants to Purchaser as follows:
1 Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power to own, operate and lease its
properties and carry on its business as the same is now being conducted.
<PAGE> 16
EXHIBIT A
2 Authority Relative to Agreement, Etc. Seller has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement. The transactions contemplated hereby have been recommended
by the Related Party Committee of the Company's Board of Directors (the "Related
Party Committee") to the Board of Directors for its approval and found by such
Committee to be on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction on an arms-length
basis from a person that is not an affiliate of Seller. The entire Board of
Directors of the Company has authorized the execution and delivery by Seller of
this Agreement and the consummation by Seller of the transactions contemplated
hereby, constituting all necessary corporate action on the part of Seller. The
execution and delivery by Seller of this Agreement and the consummation by
Seller of the transactions contemplated hereby (i) except for applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act"), do not require the consent, waiver, approval, license or
authorization of any person or governmental authority or filing with any
governmental authority, (ii) do not violate any provision of law applicable to
Seller and (iii) do not conflict with or result in a breach of any provision of,
or constitute a default or give rise to a right of termination or acceleration
under, or result in the creation of any lien, charge or encumbrance upon any of
the properties or assets of Seller or its subsidiaries pursuant to, the Restated
Certificate of Incorporation or By-laws of Seller, any material mortgage, lease
or agreement or any order, judgment or decree, to which Seller or any of its
subsidiaries is a party or by which any of the assets or properties of Seller or
any of its subsidiaries may be bound (assuming for the purposes of this Section
2.2 that the notice required to be given by Seller pursuant to Section 8.12(b)
of Seller's Credit Agreement (as defined in Section 4.7 hereof) is or has been
given to the Agent thereunder in accordance with the requirements of such
Section 8.12(b)), except where failure to obtain such consent, waiver, approval,
license or authorization, such violation of law or the occurrence of such
conflict, breach, default, right, lien, charge or encumbrance, would not have a
material adverse effect on (i) the ability of this parties to perform their
respective obligations under this Agreement, (ii) the ability of Purchaser to
exercise full rights of ownership of the Shares after purchase pursuant to the
terms of this Agreement or
2
<PAGE> 17
EXHIBIT A
(iii) the business, assets, results of operations or financial condition of
Seller and its subsidiaries taken as a whole.
3 Effect of Agreement. This Agreement has been duly executed and
delivered by Seller and (assuming the due authorization, execution and delivery
by Purchaser) constitutes a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors' rights and remedies generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or at equity).
4 The Shares. The Shares, when issued in accordance with the terms of
this Agreement, will be validly authorized, issued and delivered, free and clear
of all liens, claims and encumbrances, and fully paid and nonassessable.
5 Opinions of Financial Advisor. Seller has received the following
opinions of Donaldson Lufkin & Jenrette ("DLJ"), financial advisor to the
Related Party Committee of Seller's Board of Directors: (i) that, as of the date
of this Agreement, the consideration to be received by the Seller for the sale
of the Shares pursuant to this Agreement is fair, from a financial point of
view, to Seller and (ii) that, as of the date of this Agreement, the sale of the
Shares contemplated hereby is on terms that are no less favorable to Seller than
those that might reasonably have been obtained in a comparable transaction on an
arm-length basis from a person that is not an affiliate of Seller.
6 Brokers, Finders, etc. Seller has not employed any broker, finder,
consultant or other advisor in connection with the sale of the Shares who would
have a valid claim for a fee or commission from Purchaser in connection with
such transaction.
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3
<PAGE> 18
EXHIBIT A
Purchaser hereby represents and warrants to Seller as follows:
1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has all requisite corporate power to own, operate and lease its
properties and carry on its business as the same is now being conducted.
2 Authority Relative to Agreement, Etc. Purchaser has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement. The execution and delivery by Purchaser of this Agreement,
and the consummation by Purchaser of the transactions contemplated hereby, have
been authorized by all necessary corporate action on the part of Purchaser and
(i) except for applicable requirements of the HSR Act, do not require the
consent, waiver, approval, license or authorization of any person or filing with
any public authority, (ii) do not violate any provision of law applicable to
Purchaser and (iii) do not conflict with or result in a breach of any provision
of, or constitute a default or give rise to a right of termination or
acceleration under, or result in the creation of any lien, charge or encumbrance
upon any of the properties or assets of Purchaser pursuant to, the Articles of
Incorporation or By-laws of Purchaser or material mortgage, lease or agreement
or any order, judgment, or decree to which Purchaser is a party or by which any
of its assets or properties may be bound, except where failure to obtain such
consent, waiver, approval, license or authorization, such violation of law or
the occurrence of such conflict, breach, default, right, lien, charge or
encumbrance, would not have a material adverse effect on (i) the ability of the
parties to perform their respective obligations under this Agreement or (ii) the
business, assets, results of operations or financial condition of Purchaser and
its subsidiaries taken as a whole.
3 Effect of Agreement, Etc. This Agreement has been duly executed and
delivered by Purchaser and (assuming the due authorization, execution and
delivery by Seller) constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
enforceability may be limited by
4
<PAGE> 19
EXHIBIT A
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or at
equity).
4 Investment Representations. The Shares to be purchased by Purchaser
hereunder are being purchased by it as principal solely for its own account, for
investment purposes only and not with a view to the distribution thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act"), or
any applicable state securities law, and Purchaser has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment as contemplated hereby. Purchaser hereby
acknowledges that the Shares have not been registered under the Securities Act
or any other securities law and may not be sold in the United States except
pursuant to a registration statement effective under the Securities Act or
pursuant to an exemption from registration under the Securities Act, and in
compliance with all other applicable securities laws. Purchaser agrees that the
Shares may bear the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SHARES MAY NOT BE
SOLD OR TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT WITH RESPECT TO THE SHARES OFFERED THEREBY,
WHICH REGISTRATION STATEMENT IS CURRENT OR (B) AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION UNDER SUCH
ACT EXISTS OR (C) OTHER EVIDENCE SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED WITH RESPECT TO THE PROPOSED SALE OR
TRANSFER.
5 Brokers, Finders, etc. Purchaser has not employed any broker, finder,
consultant or other advisor in connection with the transactions contemplated
hereby who would have a valid claim for a fee or commission from Seller in
connection with such transactions.
5
<PAGE> 20
EXHIBIT A
IV. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
The obligations of Purchaser to effect the transactions contemplated by
this Agreement shall, at the option of Purchaser, be subject to the
satisfaction, on or prior to the Closing Date (as hereinafter defined), of the
following conditions:
.1 Accuracy of Representations and Warranties. Each of the representations
and warranties of Seller contained herein shall be true and correct in all
material respects on and as of the Closing Date, with the same force and effect
as though the same had been made on and as of the Closing Date.
.2 No Restraint or Litigation. No party hereto shall be legally enjoined
by any injunction or court order from consummating the transactions contemplated
by this Agreement, and no proceeding shall have been commenced by any
governmental authority seeking to enjoin the consummation of the transactions
contemplated hereby.
.3 No Material Adverse Change. Seller shall not have suffered after the
date of this Agreement any material adverse change to its financial condition
from such condition as of the date of this Agreement.
.4 Officer's Certificate. Purchaser shall have received a certificate from
the Seller to the effect set forth in Sections 4.1 and 4.3 hereof, dated the
Closing Date, signed by a duly authorized officer of Seller.
.5 Sale of AFLIC. Purchaser shall have consummated the sale of American
Founders Life Insurance Company ("AFLIC").
.6 Registration Rights Agreement. Seller shall have executed and
delivered to Purchaser the Registration Rights Agreement in the form of Exhibit
A hereto.
.7 Seller Credit Agreement. Purchaser shall be reasonably satisfied that
Seller shall have entered into an amendment (the "Credit Agreement Amendment")
to its Credit Agreement, dated October 22, 1993 ("Seller's Credit
6
<PAGE> 21
EXHIBIT A
Agreement"), with each of the financial institutions signatory thereto, BT
Commercial Corporation, as agent for such financial institutions, and Bankers
Trust Company, as issuing bank, substantially in accordance with the terms and
provisions set forth in Exhibit B hereto and such Credit Agreement Amendment
shall have been duly executed by Seller and the other parties to the Seller's
Credit Agreement and shall be in full force and effect (provided that this
condition shall not apply unless any objection by Purchaser to such Credit
Agreement Amendment shall be delivered to Seller in accordance with the
provisions of Section 8.3 hereof within one business day of the execution of
the Credit Agreement Amendment by the parties thereto).
.8 HSR Act. Any waiting period applicable to the transactions contemplated
hereby under the HSR Act shall have expired or been terminated.
V. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligations of Seller to effect the sale of the Shares shall, at
the option of Seller, be subject to the satisfaction, on or prior to the Closing
Date, of the following conditions:
1 Accuracy of Representations and Warranties. Each of the
representations and warranties of Purchaser contained herein shall be true and
correct in all material respects as of the Closing Date, with the same force and
effect as though the same had been made on and as of the Closing Date.
2 No Restraint or Litigation. No party hereto shall be legally enjoined
by any injunction or court order from consummating the transactions contemplated
by this Agreement, and no proceeding shall have been commenced by any
governmental authority seeking to enjoin the consummation of the transactions
contemplated hereby.
3 Officer's Certificates. Seller shall have received a certificate from
Purchaser to the effect set forth in Section 5.1 hereof, dated the Closing Date,
signed by a duly authorized officer of Purchaser.
7
<PAGE> 22
EXHIBIT A
4 HSR Act. Any waiting period applicable to the transactions
contemplated hereby under the HSR Act shall have expired or been terminated.
5.5 Credit Agreement Amendment. The Related Party Committee shall have
approved the Credit Agreement Amendment prior to the execution and delivery
thereof by Seller.
VI. CLOSING
1 Closing Date. The closing with respect to the transactions provided
for in this Agreement (the "Closing") shall take place at 10:00 a.m., local
time, at the offices of Weil, Gotshal & Manges, 767 Fifth Avenue, New York, New
York 10153 (or at such other time or location as Purchaser and Seller may
agree), on the second business day following the date on which all of the
conditions specified in Articles IV and V hereof are satisfied or earlier waived
(such date being herein referred to as the "Closing Date").
2 Seller Closing Documents. At the Closing, Seller shall deliver or
cause to be delivered to Purchaser the following:
(a) one or more certificates representing the Shares,
registered in the name of Purchaser (or one or more of its wholly owned
subsidiaries, as designated by Purchaser prior to the Closing Date);
(b) the officer's certificate of Seller referred to in Section
4.4 hereof;
(c) the Registration Rights Agreement; and
(d) the Credit Agreement Amendment referred to in Section 4.7
hereof.
3 Purchaser Closing Documents. At the Closing, Purchaser shall deliver
or cause to be delivered to Seller the following:
(a) the Purchase Price in accordance with Section 1.2 hereof;
8
<PAGE> 23
EXHIBIT A
(b) the officer's certificate of Purchaser referred to in
Section 5.3 hereof; and
(c) the Registration Rights Agreement.
4 Proceedings. All proceedings that shall be taken and all documents
that shall be executed and delivered by the parties hereto on the Closing Date
shall be deemed to have been taken and executed simultaneously and no
proceedings shall be deemed taken nor any documents executed or delivered until
all have been taken, executed and delivered.
VII. TERMINATION
1 Termination. This Agreement may be terminated and the sale and
purchase of the Shares contemplated hereby abandoned at any time prior to the
Closing:
(a) by the mutual written consent of Purchaser and Seller;
(b) by either Purchaser or Seller if the sale and purchase of
the Shares shall not have been consummated on or prior to June 30, 1996
(provided that the person relying on this Section 7.1(b) is not at such time in
default of its obligations hereunder); and
(c) by either Purchaser or Seller if any court of competent
jurisdiction or any governmental authority shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the sale and purchase of the Shares contemplated hereby and such order, decree,
ruling or other action shall have become final and non- appealable; provided,
however, that any termination pursuant to Section 7.1(a) or by Seller pursuant
to Section 7.1(b) shall require the approval of the Related Party Committee.
2 Effect of Termination. In the event of a termination of this
Agreement in accordance with the provisions of Section 7.1 hereof, this
Agreement shall forthwith become of no further force or effect and, except for a
termination resulting from a breach by a party of this
9
<PAGE> 24
EXHIBIT A
Agreement, there shall be no liability or obligation on the part of either
party hereto in respect of this Agreement.
VIII. MISCELLANEOUS
1 Waivers and Amendments.
(a) This Agreement may be amended, modified or supplemented
only by a written instrument executed by the parties hereto. The provisions of
this Agreement may be waived only by an instrument in writing executed by the
party granting the waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. The approval of the Related Party Committee shall be required for any
amendment or modification of this Agreement, any extension by Seller of the time
for the performance of any obligations or other acts of Purchaser and any waiver
of any of Seller's rights under this Agreement.
(b) No failure on the part of any party to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.
2 Fees and Expenses. Each party hereto shall be responsible for its
costs and expenses, including all fees and expenses of attorneys, financial
advisors and accountants, in connection with the negotiation, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, whether or not such transactions are consummated.
3 Notices. Any and all notices, requests, consents or any other
communication provided for herein shall be made by hand delivery, first-class
mail (registered or certified, return receipt requested), telecopier or
overnight air courier (i) in the case of Seller, to Wickes Lumber Company, 706
North Deerpath Avenue, Vernon Hills, IL 60061, Attn: President (telecopy: (708)
367-3750) (or such other address or telecopy number as Seller may designate),
10
<PAGE> 25
EXHIBIT A
(with copies delivered in the same manner to Claudia Slacik, Chairperson of the
Related Party Committee, 399 Park Avenue, New York, NY 10043 (telecopy: (212)
793-1290) and David W. Heleniak, Esq., Shearman & Sterling, 599 Lexington
Avenue, New York, NY 10022 (telecopy: (212) 848-7179) and (ii) in the case of
Purchaser, to Riverside Group, Inc., 7800 Belfort Parkway, Suite 100,
Jacksonville, Fla. 32256, Attn: President (telecopy: (904) 296-0584)(or to such
other address or telecopy number as may be designated by the Purchaser) (with a
copy delivered in the same manner to Dennis J. Block, Esq., Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, NY 10153 (telecopy (212) 310-8007)).
Except as otherwise provided in this Agreement, each such notice shall be
deemed given at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and the next business day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.
4 Entire Agreement. This Agreement hereto sets forth the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes any prior negotiations, agreements,
understandings or arrangements between the parties hereto with respect to the
subject matter hereof.
5 Binding Effect; Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors.
Nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto, or their respective successors, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
6 Assignability. This Agreement and any rights pursuant hereto shall
not be assignable by any party hereto without the prior written consent of the
other party.
7 Specific Performance. The parties hereto acknowledge that irreparable
damage would result if this Agreement were not specifically enforced, and they
therefore consent that the rights and obligations of the parties under this
Agreement may be enforced by a decree of specific performance issued by a court
of competent jurisdiction. Such remedy shall, however, not be exclusive and
shall be in
11
<PAGE> 26
EXHIBIT A
addition to any other remedies which any party may have under this Agreement or
otherwise.
8 Representations and Warranties. The parties' respective
representations and warranties will survive the Closing of the transactions
contemplated hereby.
9 Applicable Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to contracts made and to be enforced in such
state and without regard to the principles thereof relating to conflicts or
choice of law.
10 Section and Other Headings. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.12 Best Efforts. Each party shall use its respective best efforts to
cause the satisfaction of the other party's conditions to effecting the
transactions contemplated hereby and to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, Purchaser agrees to
use its best efforts to enter into an agreement to sell AFLIC for a price and on
terms and conditions that would be arrived at by a seller and purchaser through
arms' length negotiations under no compulsion to conclude the transaction, to
seek all necessary third party and governmental approvals with respect to such
sale and to consummate such sale in the most expeditious manner practicable.
Purchaser agrees to notify Seller promptly of all material circumstances, events
and developments relating to the progress of Purchaser's efforts to consummate
the sale of AFLIC.
12
<PAGE> 27
EXHIBIT A
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
WICKES LUMBER COMPANY
By: _____________________________
Name:
Title:
RIVERSIDE GROUP, INC.
By:______________________________
Name:
Title:
13
<PAGE> 28
EXHIBIT B
BT/RIVERSIDE AGREEMENT
THIS AGREEMENT is made as of this 20th day of September, 1993, by and
between RIVERSIDE GROUP, INC., Florida corporation (" Riverside"), AMERICAN
FINANCIAL ACQUISITION CORPORATION, a Delaware corporation controlled by
Riverside ("AFAC"), WICKES LUMBER COMPANY, a Delaware corporation (the
"Company"), and BANKERS TRUST (DELAWARE) ("BT").
W I T N E S S E T H :
WHEREAS, AFAC (directly and indirectly) and BT are shareholders of
common stock (the "Common Stock" ) of the Company;
WHEREAS, BT, AFAC and the Company, among others, have entered into
that certain equity Recapitalization agreement dated as of September 20, 1993
(the "Re-capitalization Agreement") by and between the Company and the
individuals listed on Schedule 1 thereto, in the form attached as Exhibit A
hereto;
WHEREAS, BT has waived its right of first offer under Section 5.1 of
that certain Shareholders Agreement dated as of April 29, 1988 (as subsequently
amended, supplemented or otherwise modified through the date hereof and
subsequent hereto, the "Shareholders Agreement") among the company and the
persons listed on Schedules I, II and III thereto with respect to the purchase
by Riverside of shares of Class B Common Stock, par value $.01 per share of the
Company from certain Management Shareholders (as such term is defined in the
Shareholders Agreement);
WHEREAS, AFAC has purchased supplemental employee retirement benefits
described in those certain Employment Agreements each dated as of April 29,1988
between the Company and Merlin Benjet, Richard E. Buck, Frank Chambers, William
A. Hensler, Richard L. Morphet and Lee Pawluk, respectively (collectively, the
"SERP Benefits"); and
WHEREAS, Riverside, AFAC, the Company and BT have agreed to enter
into this Agreement to provide (i) the assignment to BT of 25% of the SERP
Benefits, (ii) the agreement of the Company to purchase and cancel the SERP
Benefits upon the closing of the Common Stock Public Offering (as hereinafter
defined), (iii) the agreement of BT to make certain payment to Riverside in
certain events related to the Settlement Agreement entered into as of August
11, 1993( (the "Settlement Agreement" ) among FynSyn Capital Corp., W. Lumber
Investment Partnership, Arthur M. Goldberg and Riverside, in the form attached
as Exhibit B hereto, (iv) the agreement of the Company to grant BT the right to
have a representative present at certain meetings of the Company's Board of
Directors and (v) certain rights and obligations with respect to the ownership
by AFAC and BT of Common Stock of the Company;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements, covenants and provisions herein contained, the parties hereto
hereby agree as follows:
<PAGE> 29
1. Representations. Each of Riverside, AFAC and BT hereby represents
and warrants to the other that it is the beneficial and record owner of the
shares of Common Stock listed next to its name on Schedule 1 hereto, in each
case, free and clear of all claims, pledges, liens, security interests and
encumbrances not identified on such Schedule 1.
2. Assignment and Sale and Purchase of SERP Benefits and Stock. (a) In
consideration of the payment by BT to AFAC of $365,000 in cash on the date of
the execution and delivery hereof, AFAC hereby (i) sells, assigns and transfers
unto BT, without representation or warranty, 25% all of its rights, title and
interest in and to the SERP Benefits assigned to AFAC pursuant to the Assignment
Agreements entered into on or about August 11, 1993, from Mervyn Benjet, Richard
E. Buck, Frank Chambers, William A. Hensler, Richard L. Morphet and Lee D.
Pawluk, respectively and (ii) agrees to sell, assign and transfer unto BT
without representation or warranty, 875 shares of Common Stock on January 1,
1994 if the Common Stock Public Offering shall not have been completed prior
thereto, provided that AFAC shall and hereby does represent that at the time of
any transfer of shares contemplated by clause (ii) above, such shares shall not
be subject to any "Adverse claim" as such term is defined in section 8.302 of
the Uniform Commercial Code. AFAC hereby directs the Company to pay 25% of all
amounts payable with respect to the SERP Benefits, including without limitation
any survivor benefits, to BT or its designee.
(b) The Company hereby acknowledges and consents to the assignment of
the SERP Benefits effected by subsection (a) of this Section 2 and agrees to pay
to BT directly the amounts so assigned.
(c) Simultaneously with the closing of a public offering of Common
Stock by the Company in which the Company receives gross proceeds of at least
$30 million (the "Common Stock Public Offering"), provided that such closing
occurs on or before December 31, 1993, the Company shall pay to AFAC and BT
$1,275,000 and $425, 000, respectively, in cash. Upon receipt of such payment,
AFAC and BT hereby agree that the company shall have nor further obligation to
them under the SERP Benefits, which shall be canceled and of no further force or
effect.
3. Agreement with Respect to Settlement Agreement. In the event that a
Common Stock Public Offering is consummated, at least 15 days prior to making
any payment required under Article V of the Settlement Agreement, and in any
event no later than 165 days after the completion of the Common Stock Public
Offering, Riverside shall provide BT written notice (the date such notice is
received being referred to as the "BT Settlement Date") of the total amount
payable under such article V. Within 10 days after receipt of such notice, BT
will pay to Riverside an amount equal to the BT Settlement Amount, such amount
to be payable in cash, by transfer from BT to Riverside of shares of New Common
Stock sold in the Common Stock Public Offering (less an amount per share equal
to the underwriting discount in the Common Stock Public Offering), or by any
combination of cash and such shares selected by BT in its sole descretion. "BT
Settlement Amount" shall mean the excess, if any, of (i) 25% of the amount
determined to be payable by Riverside pursuant to clause (i) of Article V of the
settlement Agreement, over (ii) the BT Adjustment Amount.
2
<PAGE> 30
EXHIBIT B
"BT Adjustment Amount" shall mean an amount equal to 25% of the product
of ( x) the sum of (A) 29,235, (B) the number of the shares New Common Stock
paid or payable on 29,235 shares of New Common Stock in connection with the
stock dividend contemplated by section 1.01(d) of the Recapitalization Agreement
and (C) the number of shares of New Common Stock for which 10.333 shares of the
Company's 9% cumulative redeemable preferred stock may be exchanged pursuant to
section 1.02 (a) of the Recapitalization Agreement, and (y) the difference (but
not less than zero) between (I) the Fair Market Value of one share of New Common
Stock and (II) the price per share of the New Common Stock sold in the Common
Stock Public Offering (without deduction for any underwriting discount).
"Fair Market Value" shall mean the average for the ten business days
ending the business day next preceding the BT Settlement Date of the last sale
price, regular way, of the New Common Stock on each such day, or, if there
shall have been no sale on any such day, the average of the closing bid and
asked prices of the New Common Stock on such day, in each case as officially
reported on the principal national securities exchange on which the New Common
Stock is at the time listed or admitted to trading, or if the New Common Stock
is not then listed or admitted to trading on any national securities exchange
but is designated as a national market system security by the NASD, the last
trading price of the New Common Stock on each such day or if there shall have
been no trade on any such day or if the New Common Stock is not so designated ,
the average of the closing bid and asked prices of the New Common Stock on such
day as shown by the NASD automated quotation system.
"New Common Stock" shall have the meaning specified in the
Recapitalization Agreement.
4. Visitation Rights. A representative of BT (provided that BT holds at
least 2% of the Company's outstanding Common Stock) shall be invited to attend
(or make arrangements to participate by conference telephone call) all meeting
of the Board of Directors of the Company. BT shall be entitled to notice of such
meetings, and shall be given such notice in the same manner that notice is given
to directors of the Company pursuant to the by-laws of the Company. (It is
expressly acknowledged however that all such notices must be addressed to BT as
BT shall from time to time require). BT shall receive written notice
simultaneously with notice provided to the Company's Board of Directors as to
any action to be taken by the Board of Directors by unanimous written consent.
5. Parallel Exit Rights. Riverside and AFAC hereby agree as follows:
(a) Until the first day on which (i) BT together with its
affiliates owns less than 5% of the outstanding Common Stock an (ii) BT is
eligible to sell all of its shares of Common Stock pursuant to Rule 144(k) of
the Securities Act of 1933, whenever and on each occasion that Riverside, AFAC
or any transferee of either thereof (that is an Affiliate (as hereinafter
defined)) pursuant to subsection 5(c) hereof (collectively, the "Selling
Shareholders" and each a "Selling Shareholder") shall desire, in one or more
related transactions not involving a public offering, to sell, assign, transfer,
exchange or otherwise dispose of (a "sale") shares of Common Stock owned
3
<PAGE> 31
EXHIBIT B
by it beneficially or of record, such Selling Shareholder shall, if the sale of
such shares together with any previous sales of Common Stock by the Selling
Shareholders in the aggregate constitute at least 5% of the Company's Common
Stock as of the date thereof, give written notice (the "Notice") to BT of the
proposed transaction and shall provide BT the same opportunity to sell, in
accordance with the terms of the Section 5, to the proposed transferee, upon
the same terms and conditions offered to such Selling Shareholder, that
percentage of the total amount of shares of Common Stock owned by BT as is
equivalent to the percentage of the total amount of Common stock owned by the
Selling Shareholders as is represented by the number of shares of Common Stock
which the Selling Shareholder then proposes to sell, assign, transfer, exchange
or otherwise dispose of in such sale. Within 10 business days after its
receipt of a Notice, BT may exercise, by notice to the Selling Shareholder, the
option to sell such percentage of its Common Stock to the proposed transferee
in accordance with the terms described in the Notice, provided that the sale by
the Selling Shareholder is completed. Any such option which is not exercised
within such period shall expire. In the event that the proposed transferee is
unable or unwilling to purchase the additional number of shares of Common Stock
which BT is entitled to sell thereunder, the Selling Shareholder shall reduce
the number of its shares of Common Stock to be sold to the proposed transferee
proportionately to permit BT to participate in the sale in proportion to its
rights set forth above.
(b) The exercise by BT of any option arising pursuant to this Section 5
shall be effected by the giving of written notice of such exercise to the
Selling Shareholder in the time provided in subsection 5(a) hereof.
(c) Notwithstanding the foregoing, the provisions of subsection 5(a)
shall be inapplicable to a sale, assignment or transfer by the Selling
Shareholders of Common Stock: (i) at any time at which the Selling Shareholders
collectively own less than 10% of the outstanding shares of Common Stock, (ii)
by way of a grant of a lien or other security interest on such Common Stock in
connection with a bona fide financing or by way of a foreclosure of any such
lien or other security interest on such Common Stock, (iii) to an Affiliate;
provided, that any transferee pursuant to this clause (iii) shall agree to be
bound by this Agreement to the extent of the Common Stock so transferred and
shall so signify in a writing reasonably satisfactory in form and substance to
BT or (iv) that, together with sales, assignments and transfers (other than
those described in clauses (ii) and (iii) of this subsection 5(c)) effected
within the preceding three calendar months thereto does not exceed 1% of the
Company's Common Stock outstanding as of the date of such sale, assignment or
transfer.
"Affiliate" shall mean any director, officer or employee of a Selling
Shareholder and any other person that, directly or indirectly, controls, is
controlled by or is under common direct or indirect control with such Selling
Shareholder.
(d) Each Selling Shareholder agrees that no sale, assignment, or
transfer of Common Stock may be made by it unless the proposed transferee has
agreed to purchase shares of Common Stock from BT, but only if and to the
extent required by this Section 5, and that, if any transfer of Common Stock is
made by a Selling Shareholder or such transferee contrary to the provisions of
this Section 5, BT may enforce these rights thereunder by actions for specific
4
<PAGE> 32
EXHIBIT B
performance to the extent permitted by law, in addition to any other legal or
equitable remedies which it may have. The Selling Shareholders' only
obligations under this Section 5 are to provide the Notice required by
subsection 5(a) hereof and to refrain from entering into any sales transaction
with a proposed transferee which does not also include the sale of shares by BT
to the extent it wishes to participate in such sale in accordance with the
provisions of this Section 5. Without limiting the foregoing, in no event
shall any Selling Shareholder have any liability or other obligations to BT in
the event that such Selling Shareholder determines not to proceed with any
transaction after it has delivered a Notice to BT.
6. Notices. All notices or other communications required or
contemplated by this Agreement shall be in writing and sent either by prepaid
commercial courier service for next day delivery or by first-class mail in the
manner provided below. Notices and communications given by mail shall be deemed
given and received five(5) days after being mailed postage prepaid, by
first-class registered or certified mail, return receipt requested and
addressed, in each case, as set forth below or to such other address as may
hereafter designated by either party in a written notice to the other party
hereto:
(a) if to BT:
Bankers Trust (Delaware)
280 Park Avenue, 15W
New York, New York 10017
Attention: Peter Offermann
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attention: James M. Schell, Esq.
(b) if to Riverside:
Riverside Group, Inc.
7800 Belfort Parkway
Jacksonville, Florida 32256
Attention: J. Steven Wilson
with a copy to:
Kirschner, Main, Petrie, Graham & Tanner
One Independent Drive, Suite 2000
Jacksonville, Florida 32202
Attention: T. Malcolm Graham, Esq.
5
<PAGE> 33
EXHIBIT B
Notices sent by commercial courier services for next day delivery shall be
deemed to be received the day after they are sent.
7. Amendments and Waivers. This Agreement and any term hereof
may be altered, waived, amended or terminated, in whole or in part, only on the
written consent of each party hereto.
8. Governing Law. This Agreement and the rights and obligations
of the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Delaware, without giving effect to the
choice of law principles thereof.
9. Certain-Remedies. The parties hereto (i) acknowledge that a
non-defaulting party hereto will be irreparably damaged in the event of a breach
or threatened breach hereof, (ii) agree that the provisions hereof shall be
specifically enforceable, and breach thereof shall be enjoinable, by judicial
decree and (iii) the availability of any such remedy of injunction or specific
performance shall be cumulative and not exclusive in respect of any other remedy
to which a non-defaulting party may be entitled.
10. Legends. Each certificate representing Common Stock subject
to Section 5 hereof during the term of this Agreement shall be stamped or
otherwise imprinted with a legend in substantially the following form:
" The shares represented by this Certificate are subject to
certain restrictions on transfer and other rights and obligations
pursuant to the terms of the Agreement dated as of September 20, 1993
between Riverside Group, Inc., American Financial Acquisition
Corporation, Wickes Lumber Company (the "Company") and Bankers Trust
(Delaware). Such shares may be transferred only in compliance with the
terms and conditions specified in said Agreement, to and by which a
transferee may be subject and be bound, as provided therein. A complete
and correct copy of such Agreement is available for inspection at the
principal office of the Company or may be obtained without charge by
any holder of shares of the Company upon written request received at
such registered office of the Company."
11. Miscellaneous. In case any provision of this Agreement
shall be held to be invalid or unenforceable in whole or in part, neither the
validity nor the enforceability of the remainder of this Agreement shall in any
way be affected. The headings in this Agreement are for convenience and
reference only and shall not limit or otherwise affect the provisions hereof.
This
6
<PAGE> 34
EXHIBIT B
Agreement may be executed concurrently in two counterparts, each of which shall
be deemed an original, but both of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be executed by their officers thereunto duly authorized, all as of the day
and year first above written.
RIVERSIDE GROUP, INC.
By: ____________________
Name:
Title:
AMERICAN FINANCIAL
ACQUISITION CORPORATION
By: ____________________
Name:
Title:
WICKES LUMBER COMPANY
By: ____________________
Name:
Title:
BANKERS TRUST (DELAWARE)
By: ____________________
Name:
Title:
7
<PAGE> 35
EXHIBIT B
Schedule 1
<TABLE>
<S> <C>
Riverside Group, Inc. 67,735 shares of Common Stock
Bankers Trust (Delaware) 24,999 shares of Common Stock
</TABLE>
<PAGE> 36
EXHIBIT C
AFAC/RIVERSIDE
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (as from time to time amended,
modified, supplemented or restated, the "AGREEMENT"), dated as of April 19,
1994, is made by AMERICAN FINANCIAL ACQUISITION CORPORATION, a Delaware
corporation (the "BORROWER"), RIVERSIDE GROUP, INC., a Florida corporation
("RIVERSIDE") (the Borrower and Riverside are each individually and
collectively referred to herein as "PLEDGOR"), to FIRST INTERSTATE BANK OF
CALIFORNIA, a California banking corporation ("FICAL"), in its individual
capacity and in its capacity as collateral agent (the "COLLATERAL AGENT") for
the Banks referred to in the Credit Agreement (as defined below), acting in the
manner and to the extent described in Section 10 of the Credit Agreement (the
"PLEDGEE") for the benefit of the Banks.
WITNESSETH:
WHEREAS, the Borrower, FICAL, as Collateral Agent, and the Banks have
entered into that certain Credit Agreement dated April 19, 1994 (as modified,
supplemented, amended or restated from time to time, the "CREDIT AGREEMENT"),
which provides for the making of a certain term loan (the "LOAN") as
contemplated therein;
WHEREAS, Riverside, as the indirect majority owner of the Borrower,
has guaranteed repayment of the Loan pursuant to a Guaranty of Payment dated as
of April 19, 1994 (the "GUARANTY") given by Riverside for the Benefit of the
Banks;
WHEREAS, in order to induce the Banks to make the Loan, and in
consideration therefor, the Pledgor, agreed to grant to the Collateral Agent,
for the benefit of the Banks, a lien on and security interest in certain of the
Pledgor's assets and personal property, whether now or hereafter existing,
owned or acquired all pursuant to the terms of this Agreement; and
WHEREAS, the obligations of the Banks to lend under the Credit
Agreement are conditioned upon the execution and delivery by the Pledgor of a
pledge and security agreement to secure the Secured Obligations (as defined in
the Credit Agreement);
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the
Pledgee and hereby covenants and agrees with the Pledgee as follows:
1. DEFINED TERMS. All terms used in this Agreement and not
defined herein shall have the meanings set forth in the Credit Agreement. As
used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):
"COLLATERAL" means the Pledged Stock; the Pledged Option Stock (it
being understood that the Pledged Option Stock shall become "Collateral"
hereunder immediately upon exercise of the option to
<PAGE> 37
acquire such Stock under the Stock Purchase Agreement); all other or additional
stock or securities or property (other than cash dividends payable to the
Pledgor as provided in SECTION 7) paid or distributed by way of dividend in
respect of the Pledged Stock or the Pledged Option Stock; all other or
additional stock or other securities or property (including cash but excluding
cash dividends payable to the Pledgor as provided in SECTION 7) paid or
distributed in respect of the Pledged Stock or the Pledged Option Stock by way
of stock-split, spinoff, split-up, reclassification, combination of shares, or
similar rearrangement; all other or additional stock or other securities or
property (including cash but excluding cash dividends payable to the Pledgor as
provided in SECTION 7) that may be paid in respect of any of the foregoing by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation, or similar corporate reorganization; and all proceeds of any of
the foregoing.
"PLEDGED OPTION STOCK" means the shares of Capital Stock listed on
ANNEX A hereto, which shares Pledgor has an option to acquire pursuant to that
certain Stock Purchase Agreement dated July 23, 1993 (the "STOCK PURCHASE
AGREEMENT"), between Riverside Group, Inc., FynSyn Capital Corp., a New Jersey
corporation ("FYNSYN"), and W. Lumber Investment Partnership, a New Jersey
general partnership ("WLIP").
"PLEDGED STOCK" means the shares of Capital Stock listed on ANNEX B
attached hereto.
"STOCK" means, at any time, all the issued and outstanding Capital
Stock of any issuing corporation listed on ANNEX B attached hereto, including,
without limitation, the Pledged Stock.
"SECURED OBLIGATIONS" means any and all indebtedness, debts,
obligations, and liabilities (including, without limitation, all amounts of
principal and interest due under the Notes, and all interest thereon and all
indemnities and fees due to the Banks and all Obligations defined in the Credit
Agreement) of the Borrower, whether now existing or hereafter incurred under,
arising out of, or in connection with the Credit Agreement or any other Credit
Document.
2. PLEDGE. (a) In order to secure the payment when due of the
Secured Obligations and the due performance and compliance by the Pledgor with
the terms of the Credit Documents, and for the benefit of the Pledgee, the
Banks, and the holders of the Notes, and their successors and assigns, the
Pledgor: (a) hereby grants to the Pledgee a security interest in all of the
Collateral; (b) hereby pledges and deposits as security with the Pledgee the
Pledged Stock and delivers to the Pledgee certificates therefor accompanied by
stock powers duly executed in blank by the Pledgor and such other instruments
of transfer as are acceptable to the Pledgee; and (c) hereby assigns,
transfers, hypothecates, mortgages, charges, and sets over to the Pledgee all
of the Pledgor's right, title, and interest in and to such Pledged Stock and
Pledged Option Stock (and in and to the certificates or instruments evidencing
such Pledged Stock and Pledged Option Stock), to be held by the Pledgee upon
the terms and conditions set forth in this Agreement.
(b) Notwithstanding anything contained in this Agreement to the
contrary, and excluding the Pledged Option Stock, which if acquired by Pledgor
shall be delivered to Pledgee and subject to a perfected, first-priority
security interest in favor of the Collateral Agent for the benefit of the
Banks, the Pledgee's security interest in the Pledged Stock shall be junior and
subordinate to the lien created by that certain Pledge Agreement between
Riverside Group, Inc. and FynSyn dated as of August 11, 1993 (the "EXISTING
SENIOR LIEN"), and the holder of such Existing Senior Lien may continue to hold
(either directly,
<PAGE> 38
EXHIBIT C
through a duly authorized agent or, in the case of any Collateral as to which
ownership or the existence of a security interest is evidenced by book entries,
through a "financial intermediary" (as defined in the Uniform Commercial Code
in effect in Illinois ("CODE")) any such Collateral.
(c) The Pledgor and the Pledgee agree that the Acknowledgment and
Consent dated August ___, 1993 between FynSyn, WLIP, the Pledgor and the
Collateral Agent (the "CUSTODY AGREEMENT") is and shall remain in full force
and effect and shall apply to the Credit Agreement as if the Credit Agreement
was the "FICAL Credit Agreement" referred to in the Custody Agreement (and the
Collateral Agent and the Pledgee shall be entitled to rely on the Custody
Agreement for the purpose of this Agreement). Without limitation on the
generality of the foregoing, FynSyn and WLIP shall have the continuing
obligation under the Custody Agreement to deliver the Pledged Stock and the
Pledged Option Stock to the Collateral Agent pursuant to the terms of the
Custody Agreement and the Pledgor agrees to (and to instruct FynSyn and WLIP
to) (i) deliver all of the Pledged Stock to the Collateral Agent upon
satisfaction of the obligations secured by the Existing Senior Lien, at which
time the pledge and security interest created by this Agreement shall be a
perfected, first-priority security interest in the Pledged Stock
(notwithstanding references to the Existing Senior Lien elsewhere in this
Agreement), and (ii) deliver all of Pledged Option Stock to the Collateral
Agent upon exercise of the Option under the Stock Purchase Agreement, at which
time the pledge and security interest created by this Agreement shall be a
perfected, first-priority security interest in the Pledged Option Stock.
(d) Notwithstanding anything contained in this Agreement to the
contrary, Pledgor agrees from time to the upon the request of the Collateral
Agent to (i) obtain a certificate of an officer of the Pledgor if any
Collateral is to be held by or on behalf of the holder of such Existing Senior
Lien, certifying that the Pledgor has provided the holder of such Existing
Senior Lien and any other Person who will hold such Collateral (and, in the
case of an Existing Senior Lien on Collateral as to which ownership or the
existence of a security interest is evidenced by book entries, the relevant
"financial intermediary" (as defined in the Code)), with (x) written notice of
the existence of the Pledgee's security interest in such Collateral and (y)
irrevocable written instructions to transfer to or as directed by the Pledgee
any such Collateral and Proceeds thereof remaining after the obligations
secured by such Existing Senior Lien have been satisfied, unless such Person
shall have previously received notice from the Pledgee of the release of the
Pledgee's security interest therein; and (ii) use reasonable best efforts to
obtain (but at no cost or expense to the Pledgor) a writing signed by the
holder of such Existing Senior Lien (x) acknowledging and consenting to the
creation of the Pledgee's security interest in such Collateral, and (y)
irrevocably agreeing to hold any such Collateral for the benefit of the Pledgee
and the Banks, as holders of a junior lien with respect to such Collateral, and
to transfer to or as directed by the Pledgee such Collateral held or received
by such holder immediately upon the satisfaction of the obligations secured by
such Existing Senior Lien, unless such holder has previously received written
notice from the Pledgee of the release of the Pledgee's security interest
therein.
(e) Notwithstanding anything contained in this Agreement to the
contrary, in no event shall the Pledgee be under any obligation to foreclose or
otherwise realize upon the security interest in the Pledged Option Stock
granted pursuant to this SECTION 2. The parties agree that Pledgee, in its
sole and absolute discretion, shall determine if and when such security
interest shall be foreclosed or otherwise realized upon and do not intend by
the grant of such security interest to confer or imply any benefit for any
third party including, without limitation, FynSyn or WLIP. Without limitation
on the generality of the foregoing, and
<PAGE> 39
EXHIBIT C
notwithstanding any contrary provisions of this Agreement, the Credit Documents
or any other document or agreement, neither the Collateral Agent nor the Banks
shall have any liability or obligation whatsoever under the Stock Purchase
Agreement (with respect to the Option or otherwise).
3 . SUBSEQUENTLY ACQUIRED STOCK. Subject to the terms of the
Existing Senior Lien, if the Pledgor shall acquire (by purchase, stock
dividend, delivery from FynSyn, WLIP or otherwise) the Pledged Option Stock,
Pledged Stock or any other Collateral at any time or from time to time after
the date hereof, the Pledgor will forthwith pledge and deposit such Collateral
as security with the Pledgee and deliver to the Pledgee certificates therefor
accompanied by stock powers duly executed in blank by the Pledgor or such other
instruments of transfer as are acceptable to the Pledgee, and will promptly
thereafter deliver to the Pledgee a certificate executed by any of the
President, any Vice President, or the Treasurer of the Pledgor describing such
Stock and certifying that the same has been duly pledged with the Pledgee
hereunder. All such Collateral shall constitute Pledged Stock.
4 . UNCERTIFICATED STOCK. Notwithstanding anything to the
contrary contained in SECTIONS 2 AND 3, if any Collateral (whether now owned or
hereafter acquired) is evidenced by an uncertificated security, the Pledgor
shall promptly notify the Pledgee thereof and, subject to the terms of the
Existing Senior Lien, shall promptly take all actions required to perfect the
security interest of the Pledgee under applicable law (including, in any event,
under Sections 8-313 and 8-321 of the Code). The Pledgor further agrees,
subject to the terms of the Existing Senior Lien, to take such actions as the
Pledgee deems necessary or desirable to effect the foregoing and to permit the
Pledgee to exercise any of its rights and remedies hereunder, and agrees to
provide an opinion of counsel satisfactory to the Pledgee with respect to any
such pledge of uncertificated Collateral promptly upon request of the Pledgee.
5 . APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Stock (and, if acquired by Pledgor, the
Pledged Option Stock), which may be held (in the discretion of the Pledgee) in
the name of the Pledgor, endorsed or assigned in blank or in favor of the
Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by
the Pledgee.
6 . VOTING. Unless and until an Event of Default shall have
occurred and be continuing, the Pledgor shall be entitled to vote any and all
Pledged Stock (and, if acquired by Pledgor, the Pledged Option Stock) and to
give consents, waivers, or ratifications in respect thereof, provided that no
vote shall be cast or any consent, waiver, or ratification given or any action
taken that would violate or be inconsistent with any of the terms of this
Agreement, any other Credit Document, or any other instrument or agreement
referred to herein or therein, or that would have the effect of impairing the
position or interests of the Pledgee, any Bank, or the holder of any Note. All
such rights of the Pledgor to vote and to give consents, waivers, and
ratifications shall cease in case an Event of Default shall occur and be
continuing, and SECTION 8 shall become applicable.
7 . DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event
of Default shall have occurred and be continuing, all cash dividends and
payments payable in respect of the Pledged Stock (and, if acquired by Pledgor,
the Pledged Option Stock) shall be paid to the Pledgor, provided that all cash
dividends and payments payable in respect of the Pledged Stock (and, if
acquired, the Pledged Option Stock) that are determined by the Pledgee, in its
absolute discretion, to represent in whole or in part an
<PAGE> 40
EXHIBIT C
extraordinary, liquidating, or other distribution in return of capital or
principal shall, subject in the case of the Pledged Stock to the terms of the
Existing Senior Lien, be paid to the Pledgee and retained by it as part of the
Collateral. The Pledgee shall, subject to the terms of the Existing Senior
Lien, also be entitled to receive directly and to retain:
(a) all other or additional stock or securities or property (other
than cash) paid or distributed by way of dividend in respect of the Pledged
Stock (and, if acquired by Pledgor, the Pledged Option Stock);
(b) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Stock (and, if
acquired by Pledgor, the Pledged Option Stock) by way of stock-split, spinoff,
split-up, reclassification, combination of shares, or similar rearrangement;
and
(c) all other or additional stock or other securities or property
that may be paid in respect of the Collateral by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation, or similar
corporate reorganization.
8 . REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers, and remedies (whether vested in it by this
Agreement or any other Credit Document or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee shall,
subject in the case of the Pledged Stock, to the terms of the Existing Senior
Lien be entitled, without limitation, to exercise the following rights, which
the Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral
otherwise payable under SECTION 7 to the Pledgor;
(b) to transfer all or any part of the Pledged Stock (and, if
acquired by Pledgor, the Pledged Option Stock) into the Pledgee's name or the
name of its nominee or nominees;
(c) vote all or any part of the Pledged Stock (and, if acquired by
Pledgor, the Pledged Option Stock) (whether or not transferred into the name of
the Pledgee) and give all consents, waivers, and ratifications in respect of
the Collateral and otherwise act with respect thereto as though it were the
outright owner thereof (the Pledgor hereby irrevocably constituting and
appointing the Pledgee the proxy and attorney-in-fact of the Pledgor, with full
power of substitution to do so); and
(d) at any time or from time to time to sell, assign, and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of performance,
advertisement, or notice of intention to sell or of the time or place of sale
or adjournment thereof or to redeem or otherwise (all of which are hereby
waived by the Pledgor), for cash, on credit, or for other property, for
immediate or future delivery without any assumption of credit risk, and for
such price or prices and on such terms as the Pledgee in its absolute
discretion may determine, provided that at least 10 days' notice of the time
and place of any such sale shall be given to the Pledgor. The Pledgor hereby
waives and releases to the fullest extent permitted by law any right or equity
of redemption with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshalling the Collateral and any other
security for the Secured Obligations or otherwise. At any such sale, unless
<PAGE> 41
EXHIBIT C
prohibited by applicable law, the Pledgee on behalf of the Banks and/or the
holders of the Notes may bid for and purchase all or any part of the Collateral
so sold free from any such right or equity of redemption. None of the Pledgee,
the Banks, or the holders of the Notes shall be liable for failure to collect
or realize upon any or all of the Collateral or for any delay in so doing nor
shall any of them be under any obligation to take any action whatsoever with
regard thereto.
9 . APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral, together with all
other moneys received by the Pledgee hereunder, shall be applied to the payment
of all costs and expenses incurred by the Pledgee in connection with such sale,
the delivery of the Collateral, or the collection of any such moneys
(including, without limitation, attorneys' fees and expenses) ("COSTS AND
EXPENSES"), and (b) the balance of such moneys shall be held by the Pledgee and
applied by it to satisfy the remaining Secured Obligations in the following
order of priority:
(i) all accrued and unpaid interest on the Loan;
(ii) the principal amount owing on the Loan;
(iii) all accrued and unpaid Fees; and
(iv) all other Secured Obligations then owing.
If the aggregate Commitment of the Banks is then terminated and no other
Secured Obligation is outstanding, any surplus then remaining shall be paid to
the Pledgor, subject, however, to the rights of the holder of any then existing
Lien of which the Pledgee has actual notice (without investigation). It is
hereby acknowledged that the Pledgor shall remain liable to the extent of any
deficiency between (x) the amount of the proceeds of the Collateral and (y) the
sum of the Costs and Expenses and the amounts referred to in clauses (b)(i),
(ii), (iii), and (iv) of this Section 9.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process, or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. (a) The Pledgor agrees to indemnify, reimburse,
and hold the Pledgee, each Bank, the holder of any Note, and their respective
officers, directors, employees, representatives, and agents (hereinafter in
this SECTION 11 referred to individually as "INDEMNITEE" and collectively as
"INDEMNITEES") harmless from any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses, or
disbursements (including reasonable attorneys' fees and expenses) (for the
purposes of this SECTION 11 the foregoing are collectively called "EXPENSES")
of whatsoever kind or nature that may be imposed on, asserted against, or
incurred by any of the Indemnitees in any way relating to or arising out of
this Agreement, any other Credit Document, or the documents executed in
connection herewith and therewith or in any other way connected with the
administration of the transactions contemplated hereby and thereby or the
enforcement of any of the terms of or the preservation
<PAGE> 42
EXHIBIT C
of any rights under any thereof, or in any way relating to or arising out of
the ownership, purchase, delivery, control, acceptance, possession, operation,
condition, sale, return, or other disposition or use of the Collateral, the
violation by the Pledgor of the laws of any country, state, or other
governmental body or unit, or any contract claim; provided that no Indemnitee
shall be indemnified pursuant to this SECTION 11 for expenses to the extent
caused by the gross negligence or wilful misconduct of such Indemnitee. The
Pledgor agrees that upon written notice by any Indemnitee of any assertion that
could give rise to an expense, the Pledgor shall assume full responsibility for
the defense thereof. Each Indemnitee agrees to use its best efforts to
promptly notify the Pledgor of any such assertion of which such Indemnitee has
knowledge.
(b) Without limiting the application of SECTION 11(A), the Pledgor
agrees to pay, or reimburse the Pledgee for (if the Pledgee shall have incurred
fees, costs, or expenses because the Pledgor shall have failed to comply with
its obligations under this Agreement or any other Credit Document), any and all
fees, costs, and expenses of whatever kind or nature incurred in connection
with the creation, preservation, or protection of the Pledgee's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral, and all other fees, costs, and expenses in connection with
protecting, maintaining, or preserving the Collateral and the Pledgee's
interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits, or proceedings, arising out of or
relating to the Collateral.
(c) Without limiting the application of SECTION 11(A) OR (B), the
Pledgor agrees to pay, indemnify, and hold each Indemnitee harmless from and
against any expenses that such Indemnitee may suffer, expend, or incur in
consequence of or growing out of any misrepresentation or breach of covenants
by the Pledgor in this Agreement or any of the other Credit Documents or in any
statement or writing contemplated by or made or delivered pursuant to or in
connection with this Agreement or any of the other Credit Documents.
(d) If and to the extent that the obligations of the Pledgor under
this SECTION 11 are unenforceable for any reason, the Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
(e) Any amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement shall constitute Secured Obligations hereunder.
The indemnity obligations of the Pledgor contained in this SECTION 11 shall
continue in full force and effect notwithstanding the full payment of the Notes
and all of the other Secured Obligations and notwithstanding the discharge
thereof.
12. FURTHER ASSURANCES. The Pledgor agrees that it will join with
the Pledgee in executing and, at its own expense, file and refile under the UCC
such financing statements, continuation statements, and other documents in such
offices as the Pledgee may deem necessary or desirable and wherever required or
permitted by law in order to perfect and preserve the Pledgee's security
interest in the Collateral and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of the Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional conveyances, assignments,
<PAGE> 43
EXHIBIT C
agreements, and instruments as the Pledgee may reasonably require or deem
advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers, and remedies hereunder.
13. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in
accordance with this Agreement and SECTION 10 of the Credit Agreement all items
of the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement and in SECTION 10 of the Credit Agreement.
14. TRANSFER BY THE PLEDGOR. The Pledgor will not sell or
otherwise dispose of, grant any option with respect to, or create, incur,
assume, or suffer to exist any Lien on any portion of the Collateral (except
the Lien created by this Agreement and the Existing Senior Lien).
15. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE PLEDGOR.
The Pledgor represents and warrants that: (a) it is the legal, record and
beneficial owner of, and has good and marketable title to, the Pledged Stock,
subject to no Lien or restriction (except the Lien created by this Agreement
and the Existing Senior Lien); ((b) it has a valid and enforceable contract
right to acquire the Pledged Option Stock on the terms set forth in the Stock
Purchase Agreement; (c) it has full power, authority, and legal right to pledge
all such Pledged Stock (subject to the Existing Senior Lien) and the Pledged
Option Stock pursuant to this Agreement; (d) this Agreement has been duly
authorized, executed, and delivered by the Pledgor and constitutes a legal,
valid, and binding obligation of the Pledgor enforceable in accordance with its
terms; (e) the execution, delivery, and performance of this Agreement will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award, or decree of any court, arbitrator, or governmental
authority, domestic or foreign, or of the Certificate of Incorporation or
By-Laws of the Pledgor or of any securities issued by the Pledgor or any of its
Subsidiaries, or of any mortgage, indenture, lease, contract, or other
agreement, instrument, or undertaking to which the Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon the Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of any Lien on any of the assets of the Pledgor
or any of its Subsidiaries except as contemplated by this Agreement; (f) all
the shares of such Pledged Stock have been duly and validly issued and are
fully paid and nonassessable and, upon acquisition, all Pledged Option Stock
will have been duly and validly issued and will be fully paid and
nonassessable; (g) none of the shares of Pledged Stock are (and, if acquired by
the Pledgor, none of the Pledged Option Stock shall be) subject to any form of
call option, reversion, forfeiture or other right to acquire under any
shareholders agreement or any other agreement or instrument relating to the
Pledged Stock or the Pledged Option Stock; (h) all of the shares of Pledged
Stock are (and, if acquired by the Pledgor, the Pledged Option Stock shall be)
fully vested under any and all agreements or instruments relating to the
Pledged Stock and the Pledged Option Stock; (i) this Agreement creates, as
security for the Secured Obligations, a valid and enforceable Lien on all of
the Pledged Stock (and will create a valid, enforceable and perfected Lien on
all of the Pledged Option Stock, if acquired by the Pledgor), in favor of the
Pledgee for the benefit of the Pledgee, the Banks, and the holders of the
Notes, subject to no Lien in favor of any other Person except the Existing
Senior Lien; (j) no consent, filing, recording, or registration is required to
grant the Lien purported to be created by this Agreement or the consummation of
any transaction contemplated hereby; (k) each of the representations and
warranties contained in Article VI of the Credit Agreement is true and correct;
and (l) all information set forth in ANNEX A and ANNEX B is
<PAGE> 44
EXHIBIT C
complete and accurate. The Pledgor covenants and agrees that it will defend
the Pledgee's right, title, and Lien in and to the Collateral against the
claims and demands of all Persons; and the Pledgor covenants and agrees that it
will have like title to and right to pledge any other property at any time
hereafter pledged to the Pledgee as Collateral hereunder.
16. PLEDGOR'S SECURED OBLIGATIONS ABSOLUTE. The obligations of
the Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated, or otherwise affected by, any circumstance
or occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment, or modification of, or addition or supplement to or
deletion from, any of the Credit Documents or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (b) any
waiver, consent, extension, indulgence, or other action or inaction under or in
respect of any such instrument or agreement or this Agreement or any exercise
or non-exercise of any right, remedy, power, or privilege under or in respect
of this Agreement or any other Credit Document; (c) any furnishing of any
additional security to the Pledgee or any acceptance thereof or any sale,
exchange, release, surrender, or realization of or upon any security by the
Pledgee; (d) any invalidity, irregularity, or unenforceability of all or part
of the Secured Obligations or of any security therefor; or (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, conservation,
rehabilitation, liquidation, or other like proceeding relating to the Pledgor
or any Subsidiary of the Pledgor, or any action taken with respect to this
Agreement by any trustee or receiver or by any court in any such proceeding,
whether or not the Pledgor shall have notice or knowledge of any of the
foregoing.
17. REGISTRATION. (a) If an Event of Default shall have occurred
and be continuing and the Pledgor shall have received from the Pledgee a
written request or requests that the Pledgor cause any registration,
qualification, or compliance under any federal or state securities law or laws
to be effected with respect to all or any part of the Pledged Stock (and, if
acquired by Pledgor, the Pledged Option Stock), the Pledgor as soon as
practicable and at its expense will use its reasonable best efforts to cause
such registration to be effected (and be kept effective) and will use its
reasonable best efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Pledged Stock (and, if applicable,
such Pledged Option Stock), including, without limitation, registration under
the Securities Act of 1933, as then in effect (or any similar statute then in
effect), appropriate qualifications under applicable blue sky or other state
securities laws, and appropriate compliance with any other government
requirements, provided that the Pledgee shall furnish to the Pledgor such
information regarding the Pledgee as the Pledgor may request in writing and as
shall be required in connection with any such registration, qualification, or
compliance. The Pledgor will cause the Pledgee to be kept reasonably advised
in writing as to the progress of each such registration, qualification, or
compliance and, as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars, or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee and all others participating in the distribution of such Pledged Stock
(and, if applicable, such Pledged Option Stock) against all losses,
liabilities, claims, or damages caused by any untrue statement (or alleged
untrue statement) of a material fact contained therein (or in any related
registration statement, notification, or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification, or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same
<PAGE> 45
EXHIBIT C
may have been caused by an untrue statement or omission based upon information
furnished in writing to the Pledgor by the Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise
its right to sell all or any part of the Pledged Stock (and, if applicable,
such Pledged Option Stock) pursuant to SECTION 8, such Pledged Stock (and, if
applicable, such Pledged Option Stock) or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act of 1933, as then in effect, the Pledgee may, in its sole and absolute
discretion, sell such Pledged Stock (and, if applicable, such Pledged Option
Stock) or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration, provided that at least
10 days' notice of the time and place of any such sale shall be given to the
Pledgor. Without limiting the generality of the foregoing, in any such event
the Pledgee, in its sole and absolute discretion (i) may proceed to make such
private sale notwithstanding that a registration statement for the purpose of
registering such Pledged Stock (and, if applicable, such Pledged Option Stock)
or part thereof shall have been filed under such Securities Act, (ii) may
approach and negotiate with a single possible purchaser to effect such sale,
and (iii) may restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment, and not
with a view to the distribution or sale of such Pledged Stock (and, if
applicable, such Pledged Option Stock) or part thereof. In the event of any
such sale, the Pledgee shall incur no responsibility or liability for selling
all or any part of the Pledged Stock (and, if applicable, such Pledged Option
Stock) at a price that the Pledgee, in its sole and absolute discretion, may in
good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale
were deferred until after registration as aforesaid.
18. TERMINATION; RELEASE.
(a) This Agreement shall terminate when the Loan and all accrued
interest thereon, and when all other Secured Obligations then due and payable,
have been fully paid and when the Banks have no further commitment to lend
under the Credit Agreement, at which time the Pledgee, at the request and
expense of the Pledgor, will execute and deliver to the Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of
this Agreement, and will duly assign, transfer, and deliver to the Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Pledgee and has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee hereunder.
(b) The Pledgor may from time to time request that (i) it be
allowed to sell shares of Common Stock of Wickes Lumber Company which are
Collateral hereunder, and (ii) the Pledgee release such shares in order to
effect such sale; provided that the Pledgor may not, without the consent of the
Majority Banks, make more than an aggregate of 4 requests in any calendar year
during the term of the Loan (and no more than an aggregate of 10 requests
during the term of the Loans); and provided further that any such request must
be at least 5 Business Days prior to the date on which the Pledgor proposes to
sell such shares. Upon receipt of such a request from the Pledgor, the Pledgee
shall (at the Pledgor's expense and without recourse and without any
representation or warranty) release its security interest in and shall assign,
transfer and deliver to the Pledgor the number of shares of such common stock
that the Pledgor has requested pursuant to the foregoing sentence, in each case
upon receipt by the Pledgee of a prepayment under section 4.02 of the Credit
Agreement of an amount equal to (x) if no Default or Event of Default exists,
the product of (i)
<PAGE> 46
EXHIBIT C
$15.00 (adjusted to reflect stock splits, reverse stock splits, stock
dividends, recapitalizations or similar transactions), and (ii) the number of
shares delivered by the Pledgor to the Pledgee, and (y) if a Default or Event
of Default exists, the full amount of the net cash proceeds received by the
Pledgor from such sale.
19. NOTICES. All notices and other communications hereunder shall
be made at the addresses, in the manner, and with the effect provided in the
Credit Agreement.
20. MISCELLANEOUS. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns
of the parties hereto; provided, however, that the Pledgor may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Pledgee. This Agreement may be changed, waived, discharged, or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge, or termination is sought. This
Agreement shall be construed in accordance with and governed by the law of the
State of Illinois without giving effect to conflicts of law principles. The
headings of the several sections and subsections in this Agreement are inserted
for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement. This Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument. The provisions of Section 1.02(a) of the Credit Agreement shall
apply to this Agreement as if the reference therein to "Agreement" were to this
Agreement.
21. JOINT AND SEVERAL LIABILITY. The liability of the Borrower
and Riverside hereunder shall be joint and several.
<PAGE> 47
EXHIBIT C
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Agreement to
be executed by their duly elected officers duly authorized as of the date first
above written.
PLEDGOR:
AMERICAN FINANCIAL
ACQUISITION CORPORATION, a
Delaware corporation
By: ________________________________
Title:________________________
RIVERSIDE GROUP, INC.,
a Florida corporation
By: ________________________________
Title:________________________
COLLATERAL AGENT:
FIRST INTERSTATE BANK OF
CALIFORNIA, as Collateral Agent
By: ________________________________
Title:________________________
<PAGE> 48
EXHIBIT C
ANNEX A TO
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED OPTION STOCK
<TABLE>
<CAPTION>
TYPE OF NUMBER OF
NAME OF ISSUING CORPORATION SHARES SHARES
- --------------------------- ------- ---------
<S> <C> <C>
Wickes Lumber Company Common 374,516
</TABLE>
<PAGE> 49
EXHIBIT C
ANNEX B TO
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED STOCK
<TABLE>
<CAPTION>
TYPE OF NUMBER OF
NAME OF ISSUING CORPORATION SHARES SHARES
- --------------------------- ------- ---------
<S> <C> <C>
Wickes Lumber Company Common 364,682
</TABLE>
<PAGE> 50
EXHIBIT D
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (the "Agreement"), dated as of
April 19, 1994, is made by American Financial Acquisition Corporation, a
corporation organized and existing under the laws of Delaware (the "Pledgor"),
to First Interstate Bank of California ("FICAL") as Collateral Agent (the
"Collateral Agent") acting in the manner and to the extent described in Section
10 of the Loan Agreement defined below (the "Pledgee") for the benefit of the
banks (the "Banks") that are parties to such Loan Agreement.
WHEREAS, the Pledgor, the Banks, and FICAL, as Agent, have entered
into that certain Credit Agreement, dated as of April 19, 1994 (as modified,
supplemented, or amended from time to time, the "Loan Agreement"), providing
for the making of loans (the "Loans") as contemplated therein;
WHEREAS, the Pledgor desires to incur Loans under the Loan Agreement;
WHEREAS, it is a condition precedent to the making of Loans under the
Loan Agreement that the Pledgor shall have executed and delivered to the
Pledgee this Agreement; and
WHEREAS, the Pledgor desires to execute this Agreement to satisfy the
condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the
Pledgee and hereby covenants and agrees with the Pledgee as follows:
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
1.01. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Agreement" means this Pledge and Security Agreement, as modified,
supplemented, or amended from time to time.
"Banks" has the meaning provided in the first paragraph of this
Agreement.
"Collateral" means the Pledged Stock; the Pledged Surplus Debentures;
all other or additional stock or securities or property (other than cash
dividends payable to the Pledgor as provided in Section 5) paid or distributed
by way of dividend in respect of the Pledged Stock; all other or additional
stock or other securities or property (including cash but excluding cash
dividends payable to the Pledgor as provided in Section 5) paid or distributed
in respect of the Pledged Stock or the Pledged Surplus Debentures by way of
stock-split, spinoff, split-up, reclassification, combination of shares, or
similar rearrangement; all other or additional stock or other securities or
property (including cash but excluding cash dividends payable to the Pledgor as
provided in Section 5) that may be paid in respect of any of the foregoing by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation, or similar corporate
<PAGE> 51
EXHIBIT D
reorganization; and all proceeds of any of the foregoing, including, without
limitation, all principal and interest payments made on the Pledged Surplus
Debentures.
"Collateral Agent" has the meaning provided in the first paragraph of
this Agreement.
"Costs and Expenses" has the meaning provided in Section 7.
"Indemnitee" has the meaning provided in Section 9.
"Laurel Life Stock" means all of the issued and outstanding Capital
Stock of Laurel Life Insurance Company.
"Loan Agreement" has the meaning provided in the first recital of this
Agreement.
"Loans" has the meaning provided in the first recital of this
Agreement.
"Pledged Stock" means the shares of Capital Stock listed on Annex A
attached hereto.
"Pledged Surplus Debentures" means the Surplus Debentures listed on
Annex B attached hereto.
"Pledgee" has the meaning provided in the first paragraph of this
Agreement.
"Pledgor" has the meaning provided in the first paragraph of this
Agreement.
"Secured Obligations" means any and all indebtedness, debts,
obligations, and liabilities (including, without limitation, all amounts of
principal and interest due under the Notes, and all interest thereon and all
indemnities and fees due to the Banks and all Obligations defined in the Loan
Agreement) of the Pledgor, whether now existing or hereafter incurred under,
arising out of, or in connection with the Loan Agreement or any other Credit
Document.
"Stock" means, at any time, all the issued and outstanding Capital
Stock of any issuing corporation listed on Annex A attached hereto.
"Surplus Debentures" means, at any time, any surplus debentures issued
by LL.
1.02. Other Terms. All terms used in this Agreement but not defined
herein shall be used as defined in the Loan Agreement.
2
<PAGE> 52
EXHIBIT D
2. PLEDGE OF SECURITY.
2.01. Pledge. In order to secure the payment when due of the Secured
Obligations and the due performance and compliance by the Pledgor with the terms
of the Credit Documents, and for the benefit of the Pledgee, the Banks, and the
holders of the Notes, the Pledgor: (a) hereby grants to the Pledgee a security
interest in all of the Collateral; (b) hereby pledges and deposits as security
with the Pledgee the Pledged Stock and Pledged Surplus Debentures and delivers
to the Pledgee certificates therefor accompanied by stock powers duly executed
in blank by the Pledgor and such other instruments of transfer as are acceptable
to the Pledgee; and (c) hereby assigns, transfers, hypothecates, mortgages,
charges, and sets over to the Pledgee all of the Pledgor's right, title, and
interest in and to such Pledged Stock and Pledged Surplus Debentures (and in and
to the certificates or instruments evidencing such Pledged Stock and Pledged
Surplus Debentures), to be held by the Pledgee upon the terms and conditions set
forth in this Agreement.
2.02. Subsequently Acquired Stock and Surplus Debentures. If the Pledgor shall
acquire (by purchase, stock dividend, or otherwise) any additional Laurel Life
Stock, Surplus Debentures or other Collateral at any time or from time to time
after the date hereof, the Pledgor will forthwith pledge and deposit such
additional Laurel Life Stock, Surplus Debenture or Collateral (as the case may
be) as security with the Pledgee (and the same shall be and become Pledged Stock
or Pledged Surplus Debentures, as the case may be) and deliver to the Pledgee
certificates therefor accompanied by stock powers duly executed in blank by the
Pledgor or such other instruments of transfer as are acceptable to the Pledgee,
and will promptly thereafter deliver to the Pledgee a certificate executed by
any of the President, any Vice President, or the Treasurer of the Pledgor
describing such additional Laurel Life Stock, Surplus Debenture or Collateral
(as the case may be) and certifying that the same has been duly pledged with the
Pledgee hereunder.
2.03. Uncertificated Stock. Notwithstanding anything to the contrary contained
in Sections 2.01 and 2.02, if any Stock or Surplus Debenture (whether now owned
or hereafter acquired) is evidenced by an uncertificated security, the Pledgor
shall promptly notify the Pledgee thereof and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable law
(including, in any event, under Sections 8-313 and 8-321 of the Illinois Uniform
Commercial Code). The Pledgor further agrees to take such actions as the Pledgee
deems necessary or desirable to effect the foregoing and to permit the Pledgee
to exercise any of its rights and remedies hereunder, and agrees to provide an
opinion of counsel satisfactory to the Pledgee with respect to any such pledge
of uncertificated Stock or Surplus Debenture promptly upon request of the
Pledgee.
3 . APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Stock or the Pledged Surplus Debentures or
both, which may be held (in the discretion of the Pledgee) in the name of the
Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any
nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.
4 . VOTING. Unless and until an Event of Default shall have
occurred and be continuing, the Pledgor shall be entitled to vote any and all
Pledged Stock and Pledged Surplus Debentures and to give consents, waivers, or
ratifications in respect thereof, provided that no vote shall be cast or any
consent, waiver, or ratification given or any action taken that would violate
or be inconsistent with any of the terms
3
<PAGE> 53
EXHIBIT D
of this Agreement, any other Credit Document, or any other instrument or
agreement referred to herein or therein, or that would have the effect of
impairing the position or interests of the Pledgee, any Bank, or the holder of
any Note. All such rights of the Pledgor to vote and to give consents,
waivers, and ratifications shall cease in case an Event of Default shall occur
and be continuing, and Section 6 shall become applicable.
5 . DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event
of Default shall have occurred and be continuing, all cash dividends and
payments payable in respect of the Pledged Stock or the Pledged Surplus
Debentures shall be paid to the Pledgor, provided that all cash dividends and
payments payable in respect of the Pledged Stock or the Pledged Surplus
Debentures that are determined by the Pledgee, in its absolute discretion, to
represent in whole or in part an extraordinary, liquidating, or other
distribution in return of capital or principal shall be paid to the Pledgee and
retained by it as part of the Collateral. The Pledgee shall also be entitled
to receive directly and to retain:
(a) all other or additional stock or securities or property (other
than cash) paid or distributed by way of dividend in respect of the Pledged
Stock;
(b) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Stock or the
Pledged Surplus Debentures by way of stock-split, spinoff, split-up,
reclassification, combination of shares, or similar rearrangement; and
(c) all other or additional stock or other securities or property
that may be paid in respect of the Collateral by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation, or similar
corporate reorganization.
6 . REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers, and remedies (whether vested in it by this
Agreement or any other Credit Document or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee shall
be entitled, without limitation, to exercise the following rights, which the
Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 5 to the Pledgor;
(b) to transfer all or any part of the Pledged Stock or the
Pledged Surplus Debentures or both into the Pledgee's name or the name of its
nominee or nominees, subject to any necessary regulatory approval;
(c) subject to any necessary regulatory approval, vote all or any
part of the Pledged Stock and the Pledged Surplus Debentures (whether or not
transferred into the name of the Pledgee) and give all consents, waivers, and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof (the Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to do so); and
4
<PAGE> 54
EXHIBIT D
(d) subject to any necessary regulatory approval, at any time or
from time to time to sell, assign, and deliver, or grant options to purchase,
all or any part of the Collateral, or any interest therein, at any public or
private sale, without demand of performance, advertisement, or notice of
intention to sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by the Pledgor), for cash,
on credit, or for other property, for immediate or future delivery without any
assumption of credit risk, and for such price or prices and on such terms as
the Pledgee in its absolute discretion may determine, provided that at least 10
days' notice of the time and place of any such sale shall be given to the
Pledgor. The Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security for the Secured Obligations
or otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Banks and/or the holders of the Notes may bid for and
purchase all or any part of the Collateral so sold free from any such right or
equity of redemption. None of the Pledgee, the Banks, or the holders of the
Notes shall be liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall any of them be under any
obligation to take any action whatsoever with regard thereto.
7 . APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral, together with all
other moneys received by the Pledgee hereunder, shall be applied to the payment
of all costs and expenses incurred by the Pledgee in connection with such sale,
the delivery of the Collateral, or the collection of any such moneys
(including, without limitation, attorneys' fees and expenses) ("Costs and
Expenses"), and (b) the balance of such moneys shall be held by the Pledgee and
applied by it to satisfy the remaining Secured Obligations in the following
order of priority:
(i) all accrued and unpaid interest on the Loans;
(ii) the principal amount owing on the Loans;
(iii) all accrued and unpaid Fees; and
(iv) all other Secured Obligations then owing.
If the aggregate Commitment of the Banks is then terminated and no other
Secured Obligation is outstanding, any surplus then remaining shall be paid to
the Pledgor, subject, however, to the rights of the holder of any then existing
Lien of which the Pledgee has actual notice (without investigation). It is
hereby acknowledged that the Pledgor shall remain liable to the extent of any
deficiency between (x) the amount of the proceeds of the Collateral and (y) the
sum of the Costs and Expenses and the amounts referred to in clauses (b)(i),
(ii), (iii), and (iv) of this Section 7.
8 . PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process, or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
5
<PAGE> 55
EXHIBIT D
9 . INDEMNITY. (a) The Pledgor agrees to indemnify, reimburse,
and hold the Pledgee, each Bank, the holder of any Note, and their respective
officers, directors, employees, representatives, and agents (hereinafter in
this Section 9 referred to individually as "Indemnitee" and collectively as
"Indemnitees") harmless from any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses, or
disbursements (including reasonable attorneys' fees and expenses) (for the
purposes of this Section 9 the foregoing are collectively called "expenses") of
whatsoever kind or nature that may be imposed on, asserted against, or incurred
by any of the Indemnitees in any way relating to or arising out of this
Agreement, any other Credit Document, or the documents executed in connection
herewith and therewith or in any other way connected with the administration of
the transactions contemplated hereby and thereby or the enforcement of any of
the terms of or the preservation of any rights under any thereof, or in any way
relating to or arising out of the ownership, purchase, delivery, control,
acceptance, possession, operation, condition, sale, return, or other
disposition or use of the Collateral, the violation by the Pledgor of the laws
of any country, state, or other governmental body or unit, or any contract
claim; provided that no Indemnitee shall be indemnified pursuant to this
Section 9 for expenses to the extent caused by the gross negligence or wilful
misconduct of such Indemnitee. The Pledgor agrees that upon written notice by
any Indemnitee of any assertion that could give rise to an expense, the Pledgor
shall assume full responsibility for the defense thereof. Each Indemnitee
agrees to use its best efforts to promptly notify the Pledgor of any such
assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 9(a), the Pledgor
agrees to pay, or reimburse the Pledgee for (if the Pledgee shall have incurred
fees, costs, or expenses because the Pledgor shall have failed to comply with
its obligations under this Agreement or any other Credit Document), any and all
fees, costs, and expenses of whatever kind or nature incurred in connection
with the creation, preservation, or protection of the Pledgee's Liens on, and
security interest in, the Collateral, including without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral, and all other fees, costs, and expenses in connection with
protecting, maintaining, or preserving the Collateral and the Pledgee's
interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits, or proceedings, arising out of or
relating to the Collateral.
(c) Without limiting the application of Section 9(a) or (b), the
Pledgor agrees to pay, indemnify, and hold each Indemnitee harmless from and
against any expenses that such Indemnitee may suffer, expend, or incur in
consequence of or growing out of any misrepresentation or breach of covenants
by the Pledgor in this Agreement or any of the other Credit Documents or in any
statement or writing contemplated by or made or delivered pursuant to or in
connection with this Agreement or any of the other Credit Documents.
(d) If and to the extent that the obligations of the Pledgor under
this Section 9 are unenforceable for any reason, the Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
(e) Any amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement shall constitute Secured Obligations hereunder.
The indemnity obligations of the Pledgor
6
<PAGE> 56
EXHIBIT D
contained in this Section 9 shall continue in full force and effect
notwithstanding the full payment of the Notes and all of the other Secured
Obligations and notwithstanding the discharge thereof.
10. FURTHER ASSURANCES. The Pledgor agrees that it will join with
the Pledgee in executing and, at its own expense, file and refile under the UCC
such financing statements, continuation statements, and other documents in such
offices as the Pledgee may deem necessary or desirable and wherever required or
permitted by law in order to perfect and preserve the Pledgee's security
interest in the Collateral and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of the Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional conveyances, assignments, agreements, and instruments as the Pledgee
may reasonably require or deem advisable to carry into effect the purposes of
this Agreement or to further assure and confirm unto the Pledgee its rights,
powers, and remedies hereunder.
11. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement and Section 10 of the Loan Agreement all items of the
Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement and in Section 10 of the Loan Agreement.
12. TRANSFER BY THE PLEDGOR. The Pledgor will not sell or
otherwise dispose of, grant any option with respect to, or create, incur,
assume, or suffer to exist any Lien on any portion of the Collateral (except
the Lien created by this Agreement).
13. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE PLEDGOR.
The Pledgor represents and warrants that: (a) it is the legal, record and
beneficial owner of, and has good and marketable title to, the Pledged Stock
and Pledged Surplus Debentures, subject to no Lien (including, without
limitation, restrictions on transfer, rights of first refusal, pledges,
options, repurchase agreements or warrants imposed by any certificate of
incorporation, by-law, contract or other agreement or document) (except the
Lien created by this Agreement); (b) it has full power, authority, and legal
right to pledge all such Pledged Stock and Pledged Surplus Debentures pursuant
to this Agreement; (c) this Agreement has been duly authorized, executed, and
delivered by the Pledgor and constitutes a legal, valid, and binding obligation
of the Pledgor enforceable in accordance with its terms; (d) the execution,
delivery, and performance of this Agreement will not violate any provision of
any applicable law or regulation or of any order, judgment, writ, award, or
decree of any court, arbitrator, or governmental authority, domestic or
foreign, or of the Certificate of Incorporation or By-Laws of the Pledgor or of
any securities issued by the Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, contract, or other agreement, instrument, or
undertaking to which the Pledgor or any of its Subsidiaries is a party or which
purports to be binding upon the Pledgor or any of its Subsidiaries or upon any
of their respective assets and will not result in the creation or imposition of
any Lien on any of the assets of the Pledgor or any of its Subsidiaries except
as contemplated by this Agreement; (e) all the shares of such Pledged Stock
have been duly and validly issued and are fully paid, nonassessable and free
and clear of all liens, changes, claims and encumbrances and all of the Pledged
Surplus Debentures have been duly and validly issued; (f) this Agreement
creates, as security for the Secured Obligations, a valid and enforceable (and
upon delivery of the Collateral to the Collateral Agreement, a perfected) Lien
on all of the Collateral, in favor of the
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<PAGE> 57
EXHIBIT D
Pledgee for the benefit of the Pledgee, the Banks, and the holders of the
Notes, subject to no Lien in favor of any other Person; (g) no consent, filing,
recording, or registration is required to perfect the Lien purported to be
created by this Agreement; and (h) each of the representations and warranties
contained in Section 6 of the Loan Agreement is true and correct; and (i) the
Pledged Stock includes all of the outstanding Capital Stock of LL and 516,583
shares of the outstanding stock of Wickes Lumber Company and the Pledged
Surplus Debenture includes all of the Surplus Debentures of LL. The Pledgor
covenants and agrees that it will defend the Pledgee's right, title, and Lien
in and to the Collateral against the claims and demands of all Persons; and the
Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder.
14. PLEDGOR'S OBLIGATIONS ABSOLUTE. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated, or otherwise affected by, any circumstance
or occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment, or modification of, or addition or supplement to or
deletion from, any of the Credit Documents or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (b) any
waiver, consent, extension, indulgence, or other action or inaction under or in
respect of any such instrument or agreement or this Agreement or any exercise
or non-exercise of any right, remedy, power, or privilege under or in respect
of this Agreement or any other Credit Document; (c) any furnishing of any
additional security to the Pledgee or any acceptance thereof or any sale,
exchange, release, surrender, or realization of or upon any security by the
Pledgee; (d) any invalidity, irregularity, or unenforceability of all or part
of the Secured Obligations or of any security therefor; or (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, conservation,
rehabilitation, liquidation, or other like proceeding relating to the Pledgor
or any Subsidiary of the Pledgor, or any action taken with respect to this
Agreement by any trustee or receiver or by any court in any such proceeding,
whether or not the Pledgor shall have notice or knowledge of any of the
foregoing.
15. REGISTRATION. (a) If an Event of Default shall have occurred
and be continuing and the Pledgor shall have received from the Pledgee a
written request or requests that the Pledgor cause any registration,
qualification, or compliance under any federal or state securities law or laws
to be effected with respect to all or any part of the Pledged Stock or Pledged
Surplus Debentures, the Pledgor as soon as practicable and at its expense will
use its reasonable best efforts to cause such registration to be effected (and
be kept effective) and will use its reasonable best efforts to cause such
qualification and compliance to be effected (and be kept effective) as may be
so requested and as would permit or facilitate the sale and distribution of
such Pledged Stock or Pledged Surplus Debentures, including, without
limitation, registration under the Securities Act of 1933, as then in effect
(or any similar statute then in effect), appropriate qualifications under
applicable blue sky or other state securities laws, and appropriate compliance
with any other government requirements, provided that the Pledgee shall furnish
to the Pledgor such information regarding the Pledgee as the Pledgor may
request in writing and as shall be required in connection with any such
registration, qualification, or compliance. The Pledgor will cause the Pledgee
to be kept reasonably advised in writing as to the progress of each such
registration, qualification, or compliance and, as to the completion thereof,
will furnish to the Pledgee such number of prospectuses, offering circulars, or
other documents incident thereto as the Pledgee from time to time may
reasonably request, and will indemnify the Pledgee and all others participating
in the distribution of such Pledged Stock or Pledged Surplus Debentures against
all losses, liabilities, claims, or damages caused by any
8
<PAGE> 58
EXHIBIT D
untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification, or the like)
or by any omission (or alleged omission) to state therein (or in any related
registration statement, notification, or the like) a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to the Pledgor by the
Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise
its right to sell all or any part of the Pledged Stock or Pledged Surplus
Debentures pursuant to Section 6, such Pledged Stock or Pledged Surplus
Debentures or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under the Securities Act of 1933, as then in effect,
the Pledgee may, in its sole and absolute discretion, sell such Pledged Stock
or Pledged Surplus Debentures or part thereof by private sale in such manner
and under such circumstances as the Pledgee may deem necessary or advisable in
order that such sale may legally be effected without such registration,
provided that at least 10 days' notice of the time and place of any such sale
shall be given to the Pledgor. Without limiting the generality of the
foregoing, in any such event the Pledgee, in its sole and absolute discretion
(i) may proceed to make such private sale notwithstanding that a registration
statement for the purpose of registering such Pledged Stock or Pledged Surplus
Debentures or part thereof shall have been filed under such Securities Act,
(ii) may approach and negotiate with a single possible purchaser to effect such
sale, and (iii) may restrict such sale to a purchaser who will represent and
agree that such purchaser is purchasing for its own account, for investment,
and not with a view to the distribution or sale of such Pledged Stock or
Pledged Surplus Debentures or part thereof. In the event of any such sale, the
Pledgee shall incur no responsibility or liability for selling all or any part
of the Pledged Stock or Pledged Surplus Debentures at a price that the Pledgee,
in its sole and absolute discretion, may in good faith deem reasonable under
the circumstances, notwithstanding the possibility that a substantially higher
price might be realized if the sale were deferred until after registration as
aforesaid.
16. TERMINATION; RELEASE.
(a) After the termination of the Total Commitment, and when all
Secured Obligations have been paid in full, this Agreement shall terminate, and
the Pledgee, at the request and expense of the Pledgor, will execute and
deliver to the Pledgor a proper instrument or instruments acknowledging the
satisfaction and termination of this Agreement, and will duly assign, transfer,
and deliver to the Pledgor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Pledgee and
has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by the Pledgee hereunder.
(b) The Pledgor may from time to time request that (i) it be
allowed to sell shares of Common Stock of Wickes Lumber Company which are
Collateral hereunder, and (ii) the Pledgee release such shares in order to
effect such sale; provided that the Pledgor may not, without the consent of the
Majority Banks, make more than an aggregate of 4 requests in any calendar year
during the term of the Loans (and no more than an aggregate of 10 requests
during the term of the Loans); and provided further that any such request must
be at least 5 Business Days prior to the date on which the Pledgor proposes to
sell such shares. Upon receipt of such a request from the Pledgor, the Pledgee
shall (at the Pledgor's expense and without recourse and without any
representation or warranty) release its security interest in and shall assign,
transfer and deliver to the Pledgor the number of shares of such common stock
that the Pledgor has requested pursuant
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<PAGE> 59
EXHIBIT D
to the foregoing sentence, in each case upon receipt by the Pledgee of a
prepayment under section 4.02 of the Loan Agreement of an amount equal to (x)
if no Default or Event of Default exists, the product of (i) $15.00 (adjusted
to reflect stock splits, reverse stock splits, stock dividends,
recapitalizations or similar transactions), and (ii) the number of shares
delivered by the Pledgor to the Pledgee, and (y) if a Default or Event of
Default exists, the full amount of the net cash proceeds received by the
Pledgor from such sale.
17. NOTICES. All notices and other communications hereunder shall
be made at the addresses, in the manner, and with the effect provided in
Section 11.03 of the Loan Agreement.
18. MISCELLANEOUS. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns
of the parties hereto; provided, however, that the Pledgor may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Pledgee. This Agreement may be changed, waived, discharged, or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge, or termination is sought. This
Agreement shall be construed in accordance with and governed by the law of the
State of Illinois. The headings of the several sections and subsections in
this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement. This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
and the same instrument. The provisions of Section 1.02(a) of the Loan
Agreement shall apply to this Agreement as if the reference therein to
"Agreement" were to this Agreement.
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<PAGE> 60
EXHIBIT D
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Agreement to
be executed by their duly elected officers duly authorized as of the date first
above written.
AMERICAN FINANCIAL ACQUISITION
CORPORATION, Pledgor
By:_________________________________
Title:________________________
FIRST INTERSTATE BANK OF CALIFORNIA,
as Pledgee
By:_________________________________
Title:________________________
By:_________________________________
Title:________________________
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<PAGE> 61
EXHIBIT D
ANNEX A TO
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED STOCK
<TABLE>
<CAPTION>
TYPE OF NUMBER OF PERCENTAGE OF OUTSTANDING
NAME OF ISSUING CORPORATION SHARES SHARES SHARES OF CAPITAL STOCK
- --------------------------- ------ --------- -------------------------
<S> <C> <C> <C>
LAUREL LIFE INSURANCE COMMON 700,000 100%
COMPANY
WICKES LUMBER COMPANY COMMON 526,603 8.7%
</TABLE>
12
<PAGE> 62
EXHIBIT D
ANNEX B TO
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED SURPLUS DEBENTURES
<TABLE>
<CAPTION>
OUTSTANDING PERCENTAGE OF OUTSTANDING
NAME OF ISSUING CORPORATION AMOUNT DUE DATE SURPLUS DEBENTURES
- --------------------------- ----------- -------- -------------------------
<S> <C> <C> <C>
LAUREL LIFE INSURANCE $21,428,297 3/31/96 100%
COMPANY
</TABLE>
13
