Amendment No. 8 to Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PyU4G8b/n5jNDNRYEjZ+YYDZ2eq+hL2pJFN5LH9tmXytZV4mFboli9NfGmcReFQv +kdlzf0sGKEKYWIDrpHx+A== 0001193125-03-070148.txt : 20031030 0001193125-03-070148.hdr.sgml : 20031030 20031030171718 ACCESSION NUMBER: 0001193125-03-070148 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20031030 GROUP MEMBERS: JAMES M. FAIL GROUP MEMBERS: JAMES M. FAIL LIVING TRUST GROUP MEMBERS: KATHYRN FAIL LUTTRULL GROUP MEMBERS: P.S.F. HOLDINGS LIMITED PARTNERSHIP GROUP MEMBERS: STONE CAPITAL, INC. GROUP MEMBERS: STONE HOLDINGS, INC. GROUP MEMBERS: STONE INVESTMENTS, INC. GROUP MEMBERS: THE MARITAL TRUST GROUP MEMBERS: WINN HOLDINGS, LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: IMAGINE INVESTMENTS INC CENTRAL INDEX KEY: 0001051043 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 8150 N CENTRAL EXPRESSWAY STE 1901 CITY: DALLAS STATE: TX ZIP: 75206 BUSINESS PHONE: 2143651900 MAIL ADDRESS: STREET 1: 8150 N CENTRAL EXPRESSWAY STE 1901 CITY: DALLAS STATE: TX ZIP: 75206 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WICKES INC CENTRAL INDEX KEY: 0000910620 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS [5211] IRS NUMBER: 363554758 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42945 FILM NUMBER: 03967457 BUSINESS ADDRESS: STREET 1: 706 N DEERPATH DR CITY: VERNON HILLS STATE: IL ZIP: 60061 BUSINESS PHONE: 8473673400 MAIL ADDRESS: STREET 1: 706 NORTH DEERPATH DR CITY: VERNON HILLS STATE: IL ZIP: 60061 FORMER COMPANY: FORMER CONFORMED NAME: WICKES LUMBER CO /DE/ DATE OF NAME CHANGE: 19930813 SC 13D/A 1 dsc13da.htm AMENDMENT NO. 8 TO SCHEDULE 13D Amendment No. 8 to Schedule 13D

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under The Securities Exchange Act of 1934

(Amendment No. 8) (1)

Wickes, Inc.

(Name of Issuer)

Common Stock, par value $.01 per share

(Title of Class of Securities)

967 446 10 5

(CUSIP Number)

Gary M. Goltz

Imagine Investments, Inc.

8150 North Central Expressway, Suite 1901

Dallas, Texas 75206

(214) 365-1905

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

Copies to:

Sally A. Schreiber

Munsch Hardt Kopf & Harr, P.C.

4000 Fountain Place

1445 Ross Avenue

Dallas, Texas 75202

(214) 855-7500

October 1, 2003

(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 that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7(b) for other parties to whom copies are to be sent.

(1) 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 the purpose 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 Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person Imagine Investments, Inc. 75-2709444

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Delaware

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person CO

Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments, Inc. (“Imagine Investments”). Includes 10,500,000 shares Imagine Investments may have the right to acquire in connection with a loan Imagine Investments is committed to make to the Issuer on or before December 12, 2003. See Item 6.

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person Stone Investments, Inc. 86-0740106

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Delaware

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

—

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

—

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person HC, CO

Does not include any shares of the Issuer owned by Robert T. Shaw, President and a director of Imagine Investments. Includes 10,500,000 shares Imagine Investments may have the right to acquire in connection with a loan Imagine Investments is committed to make to the Issuer on or before December 12, 2003. See Item 6.

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person Stone Capital, Inc. 75-2262907

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Delaware

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

—

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

—

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person HC, CO

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person Stone Holdings, Inc. 75-2681508

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Delaware

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

—

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

—

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%*

14.	Type of Reporting Person HC, CO

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person P.S.F. Holdings Limited Partnership

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Texas

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

—

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

—

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person HC, PN

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person The Marital Trust established pursuant to the provisions of Section 3 of Article 3 of the agreement establishing the James M. Fail Living Trust.

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only WC

4.	Source of Funds*

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Alaska

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

—

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

—

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person HC, OO

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person James M. Fail Living Trust

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Alaska

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

—

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

—

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%*

14.	Type of Reporting Person HC, OO

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person James M. Fail

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization United States

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

—

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

—

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person HC, IN

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person Winn Holdings, LLC 75-2891040

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization Texas

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person HC, OO

SCHEDULE 13D

CUSIP No. 967 446 10 5


1.	Name of Reporting Person, S.S. or I.R.S. Identification No. of above person Kathryn Fail Luttrull

2.	Check the Appropriate Box if a Member of a Group* (a) ¨ (b) ¨

3.	SEC Use Only

4.	Source of Funds* WC

5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)	¨

6.	Citizenship or Place of Organization United States

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7. Sole Voting Power

8. Shared Voting Power

14,379,743*

9. Sole Dispositive Power

10. Shared Dispositive Power

14,379,743*

11.	Aggregate Amount Beneficially Owned by Each Reporting Person 14,379,743*

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*	x

13.	Percent of Class Represented by Amount in Row (11) 76.5%

14.	Type of Reporting Person HC, IN

SCHEDULE 13D/A

This Amendment No. 8 to Schedule 13D filed on October 15, 1998, with the Securities and Exchange Commission, as amended by that certain Amendment No. 1 to Schedule 13D filed on November 24, 1998, that certain Amendment No. 2 to Schedule 13D filed on January 19, 1999, that certain Amendment No. 3 to Schedule 13D filed on February 8, 1999, that certain Amendment No. 4 to Schedule 13D filed on September 18, 2001, that certain Amendment No. 5 to Schedule 13D filed on February 6, 2002, that certain Amendment No. 6 to Schedule 13D filed on August 27, 2002, and that certain Amendment No. 7 to Schedule 13D filed on April 21, 2003 (as so amended, the “Schedule 13D”), with respect to the common stock, par value $.01 per share, of Wickes, Inc., a Delaware corporation (the “Issuer”). The Schedule 13D is hereby incorporated by reference for all purposes. Capitalized terms used but not defined herein shall have the meanings subscribed to them on Schedule 13D.

Item 2. Identity and Background.

Item 2 is hereby amended and restated to read as follows:

(a) This statement is filed by (i) Imagine Investments, Inc., a Delaware corporation (“Imagine Investments”), (ii) Stone Investments, Inc., a Delaware corporation (“Stone Investments”), (iii) Stone Capital, Inc., a Delaware corporation (“Stone Capital”), (iv) Stone Holdings, Inc., a Delaware corporation (“Stone Holdings”), (v) P.S.F. Holdings Limited Partnership, a Texas limited partnership (“P.S.F.”), (vi) the Marital Trust established pursuant to the provisions of Section 3 of Article B of the agreement establishing the James M. Fail Living Trust (the “Marital Trust”), (vii) James M. Fail Living Trust (the “Living Trust”), (viii) James M. Fail, (ix) Winn Holdings, LLC, a Texas limited liability company (“Winn Holdings”), and (x) Kathryn Fail Luttrull (collectively, the “Reporting Persons”).

Imagine Investments is a wholly-owned subsidiary of Stone Investments. Stone Investments is a wholly-owned subsidiary of Stone Capital. Stone Capital is a wholly-owned subsidiary of Stone Holdings. Each of the Marital Trust, Living Trust, and P.S.F. owns approximately 25%, 45%, and 30%, respectively, of the common stock of Stone Holdings. Additionally, the Marital Trust and the Living Trust own, in the aggregate, approximately 22.6% of the preferred stock of Stone Holdings. Mr. Fail is a trustee of each of the Marital Trust and the Living Trust and has sole voting and dispositive power with respect to each of such trusts. Winn Holdings has a 1.1117% general partnership interest in and is the general partner in P.S.F. Kathryn Fail Luttrull is the sole member and manager of Winn Holdings.

(b) The business address of each of the Reporting Persons is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

(c) The principal business of Imagine Investments, Stone Investments, Stone Capital, Stone Holdings, P.S.F., and Winn Holdings is investments, including investing in securities of other entities. The principal business of each of the Marital Trust and Living Trust is to implement and effectuate the investment activities of Mr. Fail and his family, including investing in securities of other entities. The present principal occupation of James M. Fail is Chairman of the Board and Chief Executive Officer of Stone Holdings and serving in other principal positions in certain other of the Reporting Persons as more fully described on Schedule 1 attached hereto and incorporated herein by reference. The present principal occupation of Kathryn Fail Luttrull is manager and sole member of Winn Holdings and serving in other principal positions in certain other of the Reporting Persons as more fully described on Schedule 1 attached hereto and incorporated herein by reference.

(d) During the last five years, none of the Reporting Persons or the Covered Persons (as hereinafter defined) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five years, none of the Reporting Persons or the Covered Persons has been 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.

(f) The place of organization for each of Imagine Investments, Stone Investments, Stone Capital, and Stone Holdings is Delaware. The place of organization of each of P.S.F. and Winn Holdings is Texas. The place of organization of each of the Marital Trust and the Living Trust is Alaska. The place of citizenship of James M. Fail and Kathryn Fail Luttrull is the United States of America. Unless otherwise indicated on Schedule 1 attached hereto and incorporated herein by reference, the place of citizenship of each of the Covered Persons is the United States of America.

For additional information required by Instruction C to Schedule 13D with respect to the general partners, controlling persons, executive officers, and directors of the foregoing Reporting Persons, to the extent applicable (collectively, “Covered Persons”), please see Schedule 1 attached hereto and incorporated herein by reference.

Item 5. Interest in Securities of the Issuer.

Item 5 is hereby amended and restated to read as follows:

(a)

As a result of the transactions described below in Item 6, as of the date of this Amendment No. 8, Imagine Investments is the record owner of 3,879,743 shares of common stock of the Issuer, which shares represent approximately 46.7% of the issued and outstanding shares of the common stock of the Issuer as of July 31, 2003 (or 20.6%, assuming the issuance of the 2003 Loan Shares (as hereinafter defined)), and the beneficial owner of the 10,500,000 shares of common stock (the “2003 Loan Shares”) of the Issuer that Imagine Investments may have the right to acquire, and the Issuer may be obligated to issue, pursuant to the 2003 Loan (as hereinafter defined), which shares represent approximately 55.8% of the issued and outstanding shares of the common stock of the Issuer as of July 31, 2003, assuming the issuance of such 2003 Loan Shares.

By virtue of the relationships described in Item 2 of this Schedule 13D, each of the Reporting Persons may be deemed to share the beneficial ownership of all of the shares of common stock of the Issuer beneficially owned by Imagine Investments and each of the Reporting Persons other than Imagine Investments may be deemed to share the beneficial ownership of all of the shares of common stock of the Issuer beneficially owned by Stone Investments.

(b)

Each of Imagine Investments and Stone Investments has the direct power to vote and direct the disposition of the shares of common stock of the Issuer actually owned by it. By virtue of the relationships described in Item 2 of this Schedule 13D, each of the Reporting Persons may be deemed to share the indirect power to vote and direct the disposition of all of the shares of common stock of the Issuer owned of record by Imagine Investments and each of the Reporting Persons other than Imagine Investments may be deemed to share the indirect power to vote and direct the disposition of all of the shares of common stock of the Issuer owned of record by Stone Investments.

(c)

As of October 1, 2003, Imagine Investments and the Issuer entered into a letter agreement (the “October 2003 Letter Agreement”) pursuant to which Imagine Investments agreed to provide up to $10,500,000 of financing in the form of a loan (the “2003 Loan”) to the Issuer on or before December 12, 2003, to enable it to make a cash tender offer for, or otherwise acquire, its Senior Subordinated Notes due December 15, 2003 (the “2003 Senior Subordinated Notes”). Although the exact mechanics of providing the financing have not been finalized, Imagine Investments will have the right to acquire that number of shares equal to the original principal amount of the 2003 Loan.

(d)

Not applicable.

(e)

Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended and restated to read as follows:

In order to provide a better understanding of the beneficial ownership of common stock of the Issuer by the Reporting Persons, the following chronology is provided:

(a)

Imagine Investments has been, prior to the transactions set forth in Items 6(p) and 6(q) below (the “April 2003 Transactions”), the pledgee of shares of Riverside Group, Inc., a Florida corporation (“Riverside”). Prior to the consummation of the April 2003 Transactions, Riverside owned a significant percentage of the shares of the Issuer and Wilson Financial Corporation currently owns a significant portion of the shares of Riverside. See the Schedule 13D filed by Imagine Investments with respect to Riverside, as the same has been and may be amended from time to time, for more specific information.

(b)

On October 5, 1998, Imagine Investments and Riverside entered into a Stock Purchase Agreement (as amended from time to time, the “Stock Purchase Agreement”), pursuant to which, among other things, (1) Imagine Investments purchased 250,000 shares of common stock of the Issuer from Riverside (3.0% of the outstanding) for $3.25 per share, (2) Riverside granted to Imagine Investments an option (the “Option”) to purchase 750,000 shares of common stock of the Issuer held by Riverside (9.2% of the outstanding) for $3.25 per share (subject to certain limitations that are described below), (3) Riverside had the right to require Imagine Investments to exercise the Option for up to 200,000 shares of common stock of the Issuer underlying the Option, and (4) Riverside granted to Imagine Investments a right of first refusal, for a period of 18 months following the date of the Stock Purchase Agreement, on all of the shares of common stock of the Issuer held by Riverside other than the 250,000 shares purchased by Imagine Investments under the Stock Purchase Agreement (estimated to be approximately 3,599,113 shares (43.9%). As described below, the Option was eventually exercised in full by Imagine Investments, including through the use of the put option by Riverside. Imagine Investments’ right of first refusal under the Stock Purchase Agreement expired on April 5, 2000, without being exercised. In addition, under the Stock Purchase Agreement, (1) Riverside assigned its rights under that certain Registration Rights Agreement dated September 2, 1993, between Riverside and the Issuer, with respect to the shares of common stock of the Issuer acquired by Imagine Investments under the Stock Purchase Agreement, and (2) upon request by Imagine Investments, Riverside agreed to use its best efforts to cause the Issuer to effect the securities law registration of the common stock of the Issuer held by Imagine Investments. The Option could not be exercised by Imagine Investments to the extent it would cause Imagine Investments to become an “interested stockholder,” within the meaning of Section 203 of the Delaware General Corporation Law, of the Issuer unless the Board of Directors of the Issuer approved the acquisition by Imagine Investments of more than 15% of the outstanding common stock of the Issuer.

(c)

On or about November 5, 1998, Riverside exercised its put option under the Stock Purchase Agreement and required Imagine Investments to purchase 200,000 shares of common stock of the Issuer underlying the Option from Riverside.

(d)

On or about December 14, 1998, Imagine Investments acquired 185,000 shares of common stock of the Issuer pursuant to its exercise of a portion of the Option.

(e)

On December 29, 1998, Imagine Investments purchased from Riverside 82,000 shares of common stock of the Issuer, which shares were not subject to the Option, for $3.75 per share.

(f)

On or about January 26, 1999, Imagine Investments exercised the remainder of the Option and acquired 365,000 shares of common stock of the Issuer from Riverside.

(g)

On August 31, 1999, Riverside, borrowed $1,800,000 (as the same has been, and may be further, amended, modified and renewed from time to time, the “1999 Loan”) from Imagine Investments. On August 31, 2000, the 1999 Loan was modified and renewed and, in connection therewith, Riverside executed and delivered to Imagine Investments a promissory note in the principal amount of $2,021,628, which note amended and restated in its entirety the existing note in the principal amount of $1,800,000. The 1999 Loan was secured by, among other things, 758,155 shares of common stock of the Issuer owned by Riverside (921,845 shares were initially pledged, but 81,970 were released pursuant to a letter agreement dated August 30, 1999, between Riverside and Imagine Investments, and 81,720 shares were released on August 31, 2000, in connection with the modification and renewal of the 1999 Loan) (as such number of shares may be further modified from time to time, the “1999 Pledged Shares”). The 1999 Pledged Shares represented approximately 9.1% of the issued and outstanding shares of common stock of the Issuer as of October 31, 2002. As additional security for the 1999 Loan, Riverside assigned to Imagine Investments any and all registration rights of Riverside with respect to, among other things, the shares of common stock of the Issuer held by Riverside to the extent Imagine Investments has foreclosed upon or otherwise acquired the same. The 1999 Loan has reached its maturity date several times without being paid but has been extended several times, most recently pursuant to that certain Third Amendment to Loan Agreement and Note dated as of November 30, 2002. See Item 6(n) below.

(h)

On or about December 19, 2000, Imagine Investments transferred to Stone Investments 1,082,000 shares of common stock of the Issuer for and in consideration of $4.3125 per share or $4,666,125 in the aggregate.

(i)

On or about March 5, 2001, Stone Investments transferred to Imagine Investments 615,000 shares of common stock of the Issuer for and in consideration of $3.28 per share or $2,017,200 in the aggregate.

(j)

During the period of March through August 2001, Imagine Investments acquired from several persons 11% Secured Promissory Notes dated April 1, 1999 (collectively, the “11% Notes”) with an outstanding principal balance of $9,500,000 (the holders of the Notes being called, collectively, the “Holders”). The 11% Notes were originally sold by Riverside on or about April 1, 1999, pursuant to a Credit Agreement (the “11% Note Credit Agreement”) dated as of April 1, 1999, between Riverside and the Holders and. the 11% Notes. Imagine Investments acquired the 11% Notes pursuant to, among other things, several individual Purchase and Sale of Notes and Interest in Collateral Documents Agreements (collectively, the “Purchase Agreements”) entered into between Imagine Investments and various Holders. Pursuant to the Purchase Agreements, Imagine Investments acquired the 11% Notes in exchange for cash and delivery to the Holders of an aggregate of 601,790 shares of common stock of the Issuer held by Imagine Investments (the “11% Note Purchase Shares”). The Purchase Agreements provided that Imagine Investments had the absolute, irrevocable, and unconditional right and option to purchase the 11% Note Purchase Shares between the date of closing of the purchase of the 11% Notes

and December 31, 2001, at a price of $5.025 per share, subject to adjustment as provided therein. The Purchase Agreements also provided that the Holders had the absolute, irrevocable, and unconditional right and the option to require Imagine Investments to purchase the 11% Note Purchase Shares between the date of closing of the purchase of the 11% Notes and December 31, 2001, at a price of $5.025 per share, subject to adjustment as provided therein. Additionally, between the date of closing of the purchase of the 11% Notes and December 31, 2001, Imagine Investments had the right to vote the 11% Note Purchase Shares. As a result of the put/call option and voting provisions of the Purchase Agreements, Imagine Investments was deemed to continue to be the beneficial owner of the 11% Note Purchase Shares. On or about November 1, 2001, Imagine Investments exercised its call option under the Purchase Agreements and purchased all right, title, and interest in and to the 11% Note Purchase Shares for a purchase price of $5.43 per share, or $3,265,733.80 in the aggregate. The 11% Note Purchase Shares represented approximately 7.2% of the issued and outstanding shares of common stock of the Issuer as of October 31, 2002. The 11% Notes were secured by, among other things, a second lien on 2,016,168 shares of common stock of the Issuer owned by Riverside (the “11% Note Pledged Shares”), which shares represented approximately 24.3% of the issued and outstanding common stock of the Issuer as of October 31, 2002. The 11% Note Pledged Shares were pledged pursuant to the Pledge and Security Agreement (the “11% Note Pledge Agreement”) dated as of April 1, 1999, executed by Riverside and Mitchell W. Legler, as agent for the Holders. Pursuant to the 11% Note Pledge Agreement, Riverside may not sell or encumber the 11% Note Pledged Shares except pursuant to the 11% Note Credit Agreement and the Intercreditor Agreement referred to therein. The 11% Notes have reached their maturity date several times without being paid but have been extended several times, most recently pursuant to that certain Third Amendment to Credit Agreement and Notes dated as of June 25, 2002. See Item 6(o) below.

(k)

On June 25, 2002, the maturity date of the 1999 Loan was extended from December 15, 2000, to September 30, 2002, pursuant to that certain Amendment to Loan Agreement and Note dated as of June 25, 2002.

(l)

On June 25, 2002, the maturity date of the 11% Notes was extended from September 30, 2000, to September 30, 2002, pursuant to that certain Amendment to Credit Agreement and Notes dated as of June 25, 2002.

(m)

Commencing on August 5, 2002 and continuing through February 7, 2003, Imagine Investments loaned Riverside an additional aggregate $858,799 pursuant to various Promissory Notes, which loans were secured by the 1999 Pledged Shares (the “2002/2003 Loans”).

(n)

On September 30, 2002, the maturity date of the 1999 Loan was extended from September 30, 2002, to November 30, 2002, pursuant to that certain Second Amendment to Loan Agreement and Note dated September 30, 2002. On November 30, 2002, the maturity date of the 1999 Loan was extended from November 30, 2002, to January 31, 2003 pursuant to that certain Third Amendment to Loan Agreement and Note dated November 30, 2002.

(o)

On September 30, 2002, the maturity date of the 11% Notes was extended from September 30, 2002, to November 30, 2002, pursuant to that certain Second Amendment to Credit Agreement and Notes dated September 30, 2002. On November 30, 2003, the maturity date of the 11% Notes was extended from November 30, 2002, to January 31, 2003 pursuant to that certain Third Amendment to Credit Agreement and Notes dated November 30, 2002.

(p)

On April 4, 2003, Imagine Investments entered into that certain Agreement for Conveyance of Shares of Wickes, Inc. in Lieu of Foreclosure and Bill of Sale

dated as of April 2003 pursuant to which Imagine Investments acquired the 1999 Pledged Shares, the 11% Note Pledged Shares, and an additional 23,420 shares (the “Additional Issuer Shares” and, together with the 1999 Pledged Shares and the 11% Note Pledged Shares, the “Wickes Shares”) of the Issuer that were not otherwise pledged to it. Pursuant to the terms of the April 2003 Agreement, 717,923 shares of the 1999 Pledged Shares were acquired by Imagine Investments in exchange for the deemed payment of $3,589,615.17 of the principal amount outstanding, plus accrued interest through March 31, 2003, on the 1999 Loan and the 2002/2003 Loans. Additionally, 40,232 shares of the 1999 Pledged Shares, the 11% Note Pledged Shares, and the Additional Issuer Shares were acquired by Imagine Investments in exchange for the deemed payment of $10,399,099.83 of the $12,590,022.73 principal amount outstanding, plus accrued interest through March 31, 2003, on the 11% Notes. The parties to the April 2003 Agreement agreed that the amount of the foregoing indebtedness exchanged for the common stock of the Issuer acquired pursuant thereto was calculated to be $5.00 of indebtedness per each share of common stock of the Issuer even though the parties believed that the fair market value of a share of common stock of the Issuer as of that date was substantially less. In addition, Imagine Investments has agreed to pay Riverside certain amounts that Imagine Investments receives with respect to the Wickes Shares upon the sale, liquidation, or redemption thereof if certain conditions are met.

(q)

On April 4, 2003, Imagine Investments entered into that certain Letter Agreement dated April 4, 2003, between Imagine Investments and Riverside (the “Liberty Option Agreement”) pursuant to which Riverside granted to Imagine Investments an option to purchase the 53,700 shares of common stock of the Issuer that are pledged to Liberty Savings Bank to secure indebtness owed to Liberty Savings Bank by Riverside (the “Liberty Loan”) for an exercise price of $5.00 per share. Pursuant to the provisions of the Liberty Option Agreement, the term of the option commenced on April 4, 2003 and expired without being exercised by Imagine Investments.

(r)

On or about June 4, 2003, Stone Investments transferred to Imagine Investments 467,000 shares of common stock of the Issuer for and in consideration of $3.298 per share or $1,540,300 in the aggregate.

(s)

As of October 1, 2003, Imagine Investments and the Issuer entered into the October 2003 Letter Agreement pursuant to which Imagine agreed to provide up to $10,500,000 of financing in the form of a loan (the 2003 Loan) to the Issuer on or before December 12, 2003, to enable it to make a cash tender offer for its 2003 Senior Subordinated Notes. Although the exact mechanics of providing the financing have not been finalized, Imagine Investments will have the right to acquire that number of shares equal to the original principal amount of the 2003 Loan. Pursuant to the terms of the October 2003 Letter Agreement, the 2003 Loan shall bear interest at the rate of 10% per annum, payable monthly, and come due on July 30, 2004; however, Imagine Investments shall have the right to extend the term of the 2003 Loan for up to one additional year. It is contemplated by the October 2003 Letter Agreement that the 2003 Loan shall be secured by a security interest in all of the Issuer’s inventory and receivables, second in priority to the lien that secures the Issuer’s existing bank revolving credit and term loan facility, and that the proceeds shall be used solely for the purpose of funding the closing and consummation of a tender offer or other offer to reacquire or repurchase the 2003 Senior Subordinated Notes.

Item 7. Material to be Filed as Exhibits.

7.1.

Stock Purchase Agreement dated as of October 5, 1998, between Riverside and Imagine Investments, pursuant to which, among other things, (1) Imagine Investments purchased 250,000 shares of common stock of the Issuer from Riverside, (2) Riverside granted to

Imagine Investments an option to purchase 750,000 shares of common stock of the Issuer held by Riverside, (3) Riverside had the right to put up to 200,000 shares of common stock of the Issuer underlying such option to Imagine Investments, and (4) Riverside granted to Imagine Investments a right of first refusal with respect to up to all of the shares of common stock of the Issuer held by Riverside other than the 250,000 shares purchased by Imagine Investments (incorporated by reference to Exhibit A of the Schedule 13D, filed with the Securities and Exchange Commission on October 15, 1998 (File No. 005-42945)).

7.2.

Amendment No. 1 to Stock Purchase Agreement dated as of November 4, 1998, between Riverside and Imagine Investments (incorporated by reference to Exhibit B of Amendment No. 1 to the Schedule 13D, filed with the Securities and Exchange Commission on November 24, 1998 (File No. 005-42945)).

7.3.

Amendment No. 2 to Stock Purchase Agreement dated as of November 18, 1998, between Riverside and Imagine Investments (incorporated by reference to Exhibit C of Amendment No. 1 to the Schedule 13D, filed with the Securities and Exchange Commission on November 24, 1998 (File No. 005-42945)).

7.4.

Amendment No. 3 to Stock Purchase Agreement dated as of November 30, 1998, between Riverside and Imagine Investments.*

7.5.

Amendment No. 4 to Stock Purchase Agreement dated as of December 9, 1998, between Riverside and Imagine Investments.*

7.6.

Amendment No. 5 to Stock Purchase Agreement dated as of December 23, 1998, between Riverside and Imagine Investments (incorporated by reference to Exhibit B of Amendment No. 2 to the Schedule 13D, filed with the Securities and Exchange Commission on January 19, 1999 (File No. 005-42945)).

7.7.

Letter agreement re: 82,000 shares acquired by Imagine Investments on 12/29/98.*

7.8.

Letter Agreement dated effective January 25, 1999, between Imagine Investments and Riverside, extending the term of the Option under the Stock Purchase Agreement (incorporated by reference to Exhibit B of Amendment No. 3 to the Schedule 13D, filed with the Securities and Exchange Commission on February 8, 1999 (File No. 005-42945)).

7.9.

Letter Agreement dated January 26, 1999, between Imagine Investments and Riverside, regarding the exercise of the remainder of the Option (incorporated by reference to Exhibit C of Amendment No. 3 to the Schedule 13D, filed with the Securities and Exchange Commission on February 8, 1999 (File No. 005-42945)).

7.10.

Credit Agreement dated as of April 1, 1999, among Riverside, as borrower, the Holders, as lenders, and Mitchell W. Legler, as agent for the Holders, relating to the extension of credit by the Holders to Riverside in the aggregate original principal amount of $10,000,000 (incorporated by reference to Exhibit 4.1(a) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).

7.11.

Form of 11% Secured Promissory Note dated April 1, 1999 (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).

7.12.

Pledge and Security Agreement dated as of April 1, 1999, between Riverside and Mitchell W. Legler, as agent for the Holders, relating to, among other things, the shares of common stock of the Issuer pledged by Riverside to Mitchell W. Legler, as agent for the Holders, to secure the extension of credit by the Holders to Riverside in the aggregate original principal amount of $10,000,000, which pledge is subject to the prior pledge of such shares by Riverside to American Founders Life Insurance Company.*

7.13.

Intercreditor Agreement dated as of August 24, 1999, among the Holders, Mitchell W. Legler, as agent for the Holders, and American Founders Life Insurance Company,

relating to the priority of AFL with respect to, among other things, the 11% Note Pledged Shares.*

7.14.

Letter Agreement dated August 30, 1999, between Riverside and Imagine Investments, releasing 81,970 shares of common stock of the Issuer held by Riverside from a pledge by Riverside to Imagine Investments to secure the $1,800,000 loan.*

7.15.

Loan Agreement dated as of August 31, 1999, between Imagine Investments, as lender, and Riverside, as borrower, relating to the $1,800,000 loan (incorporated by reference to Exhibit 4.1(a) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999).

7.16.

Demand Promissory Note dated August 31, 1999, by Riverside in favor of Imagine Investments, in the principal amount of $1,800,000 (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999).

7.17.

Stock Pledge Agreement dated as of August 31, 1999, between Riverside and Imagine Investments, relating to the shares of common stock of the Issuer pledged by Riverside to Imagine Investments to secure the $1,800,000 loan (incorporated by reference to Exhibit 4.1(c) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999).

7.18.

First Amendment to Loan Agreement and Stock Pledge Agreements dated as of August 31, 2000, between Imagine Investments, as lender, and Riverside, as borrower, renewing and modifying the $1,800,000 loan, including increasing the principal amount thereof to $2,021,628.01 (incorporated by reference to Exhibit 4.1(c) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).

7.19.

First Amended and Restated Promissory Note dated August 31, 2000, by Riverside in favor of Imagine Investments, in the principal amount of $2,021,628.01 (incorporated by reference to Exhibit 4.1(d) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).

7.20.

First Amendment to Pledge and Security Agreement dated as of September 15, 2000, between Riverside and Mitchell W. Legler, as agent for the Holders, relating to the addition of collateral to secure the extension of credit by the Holders to Riverside in the aggregate original principal amount of $10,000,000, which pledge is subject to the prior pledge of such shares by Riverside to American Founders Life Insurance Company.*

7.21.

Estoppel Agreement dated as of February 20, 2001, between Riverside and Imagine Investments, pursuant to which, among other things, Riverside warrants the validity and enforceability of the 11% Notes.*

7.22.

Assignment of Notes and Interest in Collateral Documents dated February 7, 2001, among Imagine Investments and Cecil Altmann, pursuant to which such person assigned the 11% Note in favor of such person to Imagine Investments.*

7.23.

Assignment of Notes and Interest in Collateral Documents dated February 15, 2001, among Imagine Investments and Southern Farm Bureau Casualty Insurance Company, pursuant to which such entity assigned the 11% Note in favor of such entity to Imagine Investments. *

7.24.

Nonrecourse Assignment of Loan Documents dated February 15, 2001, between Imagine Investments and American Centennial Insurance Company, pursuant to which American Centennial Insurance Company assigned the 11% Note in its favor to Imagine Investments.*

7.25.

Form of Purchase and Sale of Notes and Interest in Collateral Documents Agreement, among Imagine Investments, Stone Holdings, as guarantor, and each of the following Holders on the dates indicated, pursuant to which such Holder assigned the 11% Note in favor of such Holder to Imagine Investments: Kenneth M. Kirschner (March 20, 2001); Lovco, Inc. (March 20, 2001); Creek Farms Corp. (March 20, 2001); East Adams

Corporation (March 20, 2001); Frederick H. Schultz 1994 Trust (March 20, 2001); Fujita Investment Company Limited (March 26, 2001); and North American Company for Life and Health Insurance (April 6, 2001) (incorporated by reference to Exhibit 1 of Amendment No. 4 to the Schedule 13D, filed with the Securities and Exchange Commission on September 18, 2001 (File No. 005-42945)).

7.26.

Allonges, between Imagine Investments and each of the following Holders on the dates indicated, pursuant to which such Holder assigned the 11% Note in favor of such Holder to Imagine Investments: Bost & Company (Note 008 and Note 009) and Pitt & Company (Note 010 and Note 011).*

7.27.

Forbearance Agreement dated as of March 1, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(i) to Riverside’s Annual Report on Form 10-K for the year ended December 31, 2000).

7.28.

Forbearance Agreement dated as of April 13, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).

7.29.

Forbearance Agreement dated as of May 14, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(c) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).

7.30.

Forbearance Agreement dated as of June 15, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(a) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001).

7.31.

Forbearance Agreement dated as of July 15, 2001, between Imagine Investments and Riverside, relating to the forbearance by Imagine Investments of the enforcement of its rights with respect to the 11% Notes (incorporated by reference to Exhibit 4.1(b) to Riverside’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001).

7.32.

Amendment to Loan Agreement and Note dated as of June 25, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 1999 Loan was extended to September 30, 2002.*

7.33.

Amendment to Credit Agreement and Notes dated as of June 25, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 11% Notes was extended to September 30, 2002.*

7.34.

Promissory Note dated August 5, 2002, by Riverside in favor of Imagine Investments, in the principal amount of $116,000.*

7.35.

Second Amendment to Loan Agreement and Note dated as of September 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 1999 Loan was extended to November 30, 2002.**

7.36.

Third Amendment to Loan Agreement and Note dated as of November 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 1999 Loan was extended to January 31, 2003.**

7.37.

Second Amendment to Credit Agreement and Notes dated as of September 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 11% Notes was extended to November 30, 2002.**

7.38.

Third Amendment to Credit Agreement and Notes dated as of November 30, 2002, between Riverside and Imagine Investments, pursuant to which, among other things, the maturity date of the 11% Notes was extended to January 31, 2003.**

7.39.

Agreement for Conveyance of Shares of Wickes, Inc. in Lieu of Foreclosure and Bill of Sale dated as of April 4, 2003, by and among Riverside, J. Steven Wilson, Wilson Financial Corporation, and Imagine Investments.**

7.40.

Letter Agreement dated as of April 4, 2003, between Imagine Investments and Riverside, providing for the grant of an option to purchase 53,700 shares of common stock of Wickes, Inc. to Imagine Investments from Riverside.**

7.41.

Power of Attorney.**

7.42.

Letter Agreement dated October 1, 2003, between Imagine Investments and Wickes, Inc. pursuant to which Imagine Investments agreed to provide certain financing to Wickes, Inc. +

* incorporated by reference to the exhibit of the same number of Amendment No. 6 to the Schedule 13D, filed with the Securities and Exchange Commission on August 27, 2002.

** incorporated by reference to the exhibit of the same number of Amendment No. 7 to the Schedule 13D, filed with the Securities and Exchange Commission on April 21, 2003.

+ Filed herewith.

[Signature page follows.]

SIGNATURE

After reasonable inquiry, and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

IMAGINE INVESTMENTS, INC., a Delaware corporation

By:		/s/ Robert T. Shaw

Name:		Robert T. Shaw
Title:		President
Date:		October 30, 2003

STONE INVESTMENTS, INC., a Delaware corporation

By:		/s/ Harry T. Carneal

Name:		Harry T. Carneal
Title:		President
Date:		October 30, 2003

STONE CAPITAL, INC., a Delaware corporation

By:		/s/ Harry T. Carneal

Name:		Harry T. Carneal
Title:		President
Date:		October 30, 2003

STONE HOLDINGS, INC., a Delaware corporation

By:		/s/ Harry T. Carneal

Name:		Harry T. Carneal
Title:		President
Date:		October 30, 2003

P.S.F. HOLDINGS LIMITED PARTNERSHIP, a Texas limited partnership

By:		Winn Holdings, LLC, a Texas limited liability company, its general partner

By:		*

		Kathryn Fail Luttrull Sole member
Date:

THE MARITAL TRUST

By:		*

		James M. Fail Trustee
Date:

THE JAMES M. FAIL LIVING TRUST

By:		*

		James M. Fail Trustee
Date:



*
James M. Fail

Date:

WINN HOLDINGS, LLC, a Texas limited liability company

By:		*

		Kathryn Fail Luttrull Sole member
Date:

*
Kathryn Fail Luttrull

Date:

/s/ Harry T. Carneal
*By Harry T. Carneal, as Attorney-in-Fact
Date:		October 30, 2003

SCHEDULE 1

IMAGINE INVESTMENTS, INC.

The following is a list of all executive officers and directors of Imagine Investments, Inc., the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

Robert T. Shaw		President and Director
Harry T. Carneal		Executive Vice President and Director
R. Brad Oates		Director
Gary M. Goltz		Vice President and Secretary
Charles Greiner(1)		Vice President
Patricia W. Gliessner		Vice President and Assistant Secretary
Jay Bryan		Treasurer
Gordon Lewaren		Assistant Treasurer
Dianne Richardson		Assistant Secretary

STONE INVESTMENTS, INC.

The following is a list of all executive officers and directors of Stone Investments, Inc., the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

James M. Fail		Chairman of the Board, Chief Executive Officer and Director
Harry T. Carneal		President, Treasurer and Director
R. Brad Oates		Director
Jay Bryan		Vice President
Gary M. Goltz		Vice President, General Counsel and Secretary
Gordon Lewaren		Assistant Treasurer
Mark S. Powell		Assistant Secretary
Kathryn Fail Luttrull		Assistant Secretary
Diane Richardson		Assistant Secretary

STONE CAPITAL, INC.

The following is a list of all executive officers and directors of Stone Capital, the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., an investment company, 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

James M. Fail		Chairman of the Board, Chief Executive Officer and Director
Harry T. Carneal		President, Treasurer, Secretary and Director
Gary M. Goltz		Vice President, General Counsel and Assistant Secretary
Victoria L. Garrett (2)		Assistant Vice President, Assistant Secretary and Assistant Treasurer
Gordon Lewaren		Assistant Treasurer
Kathryn Fail Luttrull		Director
Marcia Fail Boykin		Director
Jay Bryan		Assistant Treasurer
Pam Norrell		Assistant Secretary
Diane Richardson		Assistant Secretary
Anna E. Dolak		Special Counsel

STONE HOLDINGS, INC.

The following is a list of all executive officers and directors of Stone Holdings, the present principal occupation of each of which (unless otherwise indicated) is serving in the capacities hereinafter set forth and in other capacities set forth on this Schedule 1, as applicable. Unless otherwise indicated, each officer’s and director’s business address is c/o Stone Investments, Inc., 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206. Unless otherwise indicated, the name, principal business and address of any corporation or other organization in which such present principal occupation or employment of the following persons is conducted is c/o Stone Investments, Inc., an investment company, 8150 North Central Expressway, Suite 1901, Dallas, Texas 75206.

James M. Fail		Chairman of the Board, Chief Executive Officer and Director
Harry T. Carneal		President, Treasurer, Secretary and Director
Jay Bryan		Vice President
Gary M. Goltz		Executive Vice President, General Counsel and Assistant Secretary
Kathryn Fail Luttrull		Vice President and Director
Marcia Fail Boykin		Director
Gordon Lewaren		Assistant Treasurer
Mark S. Powell		Assistant Secretary
Tom Dwyer		Vice President of Strategy and Special Counsel
Diane Richardson		Assistant Secretary

P.S.F. HOLDINGS LIMITED PARTNERSHIP

The General Partner of P.S.F. Holdings Limited Partnership is Winn Holdings, LLC, a Texas limited liability company. For information pertaining to Winn Holdings, LLC, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

THE MARITAL TRUST

James M. Fail is a trustee of the Marital Trust. For information pertaining to Mr. Fail, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

THE JAMES M. FAIL LIVING TRUST

James M. Fail is a trustee of the James M. Fail Living Trust. For information pertaining to Mr. Fail, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

WINN HOLDINGS, LLC

Kathryn Fail Luttrull is the sole member and manager of Winn Holdings, LLC. For information pertaining to Ms. Luttrull, please see the cover pages and Items 2-6 contained in this Schedule 13D of which this Schedule 1 is a part.

(1) Mr. Greiner’s present principal employer is Azair, Inc., the address of which is P.O. Box 320159, Birmingham, Alabama 35232

(2) Ms. Garrett’s present principal employer is Delaware Trust Capital Management Company, the address of which is 300 Delaware Avenue, 9th Floor, Wilmington, DE 19801.

EX-7.42 3 dex742.htm LETTER AGREEMENT DATED OCTOBER 1, 2003 Letter Agreement dated October 1, 2003

Exhibit 7.42

IMAGINE INVESTMENTS, INC.

8150 NORTH CENTRAL EXPRESSWAY

SUITE 1901

DALLAS, TEXAS 75206

October 1, 2003

Wickes, Inc.

706 N. Deerpath Drive,

Vernon Hills, Illinois 60061

Attn: President and Board of Directors

Re:

$10.5 Million Loan

Gentlemen:

Imagine Investments, Inc. or one of its affiliates (collectively, “Imagine”) proposes to make a loan of up to $10.5 million (the “Loan”) to Wickes, Inc., (“Wickes”) on the terms and conditions set forth in this letter. The terms of the Loan shall be as follows:

1. Amount. The amount of the Loan shall not exceed $10.5 Million.

2. Term. The Loan shall come due on July 30, 2005; however, Imagine shall have the right to extend the term of the Loan for up to one (1) additional one (1) year, at its sole discretion. The Loan may be prepaid at any time without premium or penalty, provided that in the event of prepayment the conversion or exercise rights described in Paragraph 6 shall survive until the later to occur of the one year anniversary of the maturity date of the Loan or 30 days after the date on which the Loan is repaid.

3. Interest Rate. The Loan shall bear interest at the rate of 10% per annum, payable monthly.

4. Security. The Loan shall be secured by a security interest in all of Wickes’ inventory and receivables, second in priority only to the existing bank revolving credit and term loan facility which Wickes presently has in place and which has an unpaid balance of approximately $65 Million as of the date hereof (the “Bank Loan”). It shall be a condition to the making of the Loan that the holder of the Bank Loan shall have consented to the Loan and the foregoing security interest to secure the Loan, in form and substance satisfactory to Imagine. Imagine shall not have any obligation to make the Loan unless the value, at the closing of the Loan, of Wickes’ “good and current” inventory and accounts receivable securing both the Bank Loan and the Loan exceeds the balance of the Bank Loan by at least $30 Million (the “Excess Value”). Imagine and Wickes shall agree upon a formula for determining the value and eligibility of Wickes’ inventory and receivables for this purpose, that must be satisfactory to

Imagine in all respects. Wickes has represented to Imagine that the value of Wickes’ “good and current” inventory and accounts receivable is approximately $106 Million. Wickes shall agree not to take an additional draw on the Bank Loan if such draw would reduce the Excess Value to an amount that would be less than $30 Million. If the Excess Value were ever to be reduced or fall below $30 Million it shall be a default on the Loan. Wickes must obtain all other consents necessary for the Loan, in form and substance satisfactory to Imagine.

5. Covenants. The Loan shall be documented in a manner consistent with commercial loans of this size and nature and which shall contain numerous affirmative and negative covenants, all of which must be satisfactory to Imagine.

6. Conversion. The Loan shall be convertible (at all times until the extended maturity date of the Loan regardless of any prepayment of the Loan) into common stock of Wickes at the rate of $1.00 of Loan balance per one (1) common share of Wickes. Alternatively, at Imagine’s option, the Loan shall not be convertible, in which case at the funding of the Loan Wickes shall issue to Imagine a warrant (the “Warrant”) to purchase at an exercise price of $1.00 per share a number of shares of common stock of Wickes equal to the principal amount of the Loan. Wickes shall authorize the creation of a sufficient number of common shares and shall agree to reserve such shares for the potential conversion of the Loan or exercise of the Warrant into shares of common stock of Wickes. Imagine shall not have any obligation whatsoever to exercise such conversion rights or exercise the Warrant and if it does not do so, the Loan shall remain due and payable in accordance with its terms. If prior to the repayment or conversion of the Loan or exercise of the Warrant Wickes issues any other shares of its common stock, or any instrument convertible into shares of its common stock, or any warrants, rights or the like to purchase shares of common stock of Wickes (except for the grant of options to officers, directors and employees of Wickes to purchase up to 1,000,000 shares of common stock, and the exercise of such options by, officers, directors or employees of Wickes; provided, however, that such options may not be exercised if and to the extent the exercise thereof would result in a reduction of Imagine’s ownership of the outstanding common stock of Wickes to less than 50.1%, unless Imagine agrees otherwise), at a price of less than $2.00 per common share of Wickes, the conversion or exercise price shall be reduced so that the number of shares of common stock issuable to Imagine upon conversion of the Loan or exercise of the Warrant shall represent the same percentage of issued and outstanding shares of common stock that would have been issuable to Imagine (calculated on a fully diluted basis) if shares of common stock had not been issued at a price of less than $2.00 per share. Wickes shall grant Imagine customary demand and piggyback registration rights with respect to all of the shares of Wickes common stock issued pursuant to the conversion of the Loan or the exercise of the Warrant, if either should occur, as well as all other shares of common stock of Wickes owned by Imagine. The Loan documents shall contain standard anti-dilution provisions with respect to such Wickes shares.

7. Use. The Loan proceeds shall not be advanced until, and shall be used solely for the purpose of funding, the closing and consummation of a tender offer or other offer to reacquire or repurchase the outstanding unsecured bonds issued by Wickes that are due in December of 2003, and which have an unpaid principal balance of $21.0 Million (the “Bonds”), at a purchase price in cash of not more than $0.50 on the dollar per Bond, or a total of $10.5 Million with respect to all of such Bonds (the “Offer”). It shall be an additional condition to Imagine’s obligation to make the Loan that at least 95% of these Bonds (by dollar amount)

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shall have been reacquired by Wickes and cancelled, simultaneously with the funding of the Loan. It shall be within the sole discretion of Imagine whether to waive this condition and any other of the conditions with respect to the Loan. Imagine understands that, as an alternative to the cash tender offer described above, Wickes may want to offer an exchange to the holders of the Bonds (the “Bondholders”); accordingly, Imagine would not object to Wickes proposing to issue new bonds in exchange for the Bonds, on the basis of not more than $1.00 of new bonds for each dollar of Bonds tendered to Wickes; the new bonds shall have a term of not less than two (2) years and shall bear interest at a rate not higher than 10% per annum. In the event any of the Bondholders accept this offer to exchange Bonds for the new bonds of Wickes, the amount of the Loan shall be reduced by $0.50 for each $1.00 of Bonds so redeemed and cancelled. Any changes in these terms shall require Imagine’s consent, which consent may be withheld for any reason.

8. Conditions. It shall be a condition to the making of the Loan that Imagine shall have reviewed and shall be satisfied in all respects with Wickes’ financial condition and that no material adverse change shall have occurred with respect to Wickes. Wickes shall supply all of its financial and other data to Imagine promptly as requested. It shall be a further condition that the Loan must be funded by no later than December 12, 2003; otherwise Imagine may cancel this commitment.

9. Loan Documentation; Attorneys’ Fees. All of the Loan documentation for the Loan shall be prepared by counsel of Imagine’s choosing, and all the terms and conditions of which shall be satisfactory to Imagine in its sole discretion. Wickes agrees to pay the reasonable fees and expenses of Imagine’s counsel in conjunction with negotiating and documenting the Loan, whether or not the Loan is ever funded.

10. Confidentiality and Public Announcements. Except as required by applicable law or the rules of any stock exchange or Nasdaq, neither party hereto shall disclose or permit their respective officers, directors, representatives, agents or employees to disclose the terms of this letter to any third party without the prior written consent of the other party hereto; provided; however, Imagine may make such disclosure to any of its affiliates and to Consolidated National Corporation and its shareholders.

11. Applicable Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without giving effect to the principles of conflicts of law thereof.

12. Conditions. In addition to the other conditions set forth above, the proposed transactions (other then the payment of attorneys fees pursuant to paragraph 9) are subject to the approval of the board of directors of Wickes within 3 days after the date of this letter and of the senior lenders of Wickes, and the execution of the definitive documentation evidencing the proposed transactions, subject to the terms and conditions expressed therein.

13. Entire Agreement. This commitment letter contains the entire understanding between the parties with respect to the subject matter hereof and supercedes any prior understanding or written or oral agreements between them respecting such subject matter.

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If Wickes desires to accept this commitment for the Loan as outlined in this letter, please countersign the copy of this letter where indicated below and return it to me at the address set forth above by no later than October 2, 2003.

We look forward to hearing from you regarding this matter.

Very truly yours,

Imagine Investments, Inc.

By:		/s/ Robert T. Shaw

		Robert T. Shaw, President

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Wickes hereby accepts this commitment for the Loan as outlined in this letter and agrees that it is legally bound by the terms of this letter.

Wickes, Inc.

By:		/s/ Jim O’Grady

Title:		President

Date:		October 1, 2003

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