AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF REORGANIZATION
This AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF REORGANIZATION
("Amendment No. 2") is made as of May 14, 1996 between CROWLEY, MILNER AND
COMPANY, a Michigan corporation ("Crowley's"), and the shareholders of
STEINBACH STORES, INC., an Ohio corporation ("Steinbach"), listed on the
signature page hereof (collectively, the "Shareholders").
Recitals
1. Prior to the date hereof, the parties hereto entered into
that certain Agreement and Plan of Reorganization dated November 17, 1995 as
amended by Amendment No. 1 thereto dated December 29, 1995 (collectively,
the "Agreement and Plan of Reorganization").
2. The parties hereto desire to further amend the Agreement and
Plan of Reorganization.
Agreement
NOW, THEREFORE, in consideration of these premises and subject to
the terms and conditions contained herein and for the other consideration
provided herein, the parties agree to amend the Agreement and Plan of
Reorganization as follows:
A. Delivery of Disclosure Schedules. Section 4.2(b) of the
Agreement and Plan of Reorganization is amended and restated in its entirety
as follows:
(b) Delivery of Disclosure Schedules. The
Shareholders shall deliver the several Schedules described
herein as being part of the Disclosure Schedules (collectively,
the "Disclosure Schedules") on or before February 23, 1996.
B. Delivery of Disclosure Exhibits. Section 4.3(b) of the
Agreement and Plan of Reorganization is amended and restated in its entirety
as follows:
(b) Delivery of Disclosure Exhibits. Crowley's shall
deliver the several Exhibits described herein as being part of the
Disclosure Exhibits (collectively, the "Disclosure Exhibits") on or
before Thursday, February 1, 1996.
C. Due Diligence Review by Shareholders. The last sentence of
Section 5.9 of the Agreement and Plan of Reorganization is amended and
restated in its entirety as follows:
The condition precedent set forth in this Section 5.9 shall expire
on May 31, 1996.
D. Due Diligence Review by Crowley's. The last sentence of
Section 6.6 of the Agreement and Plan of Reorganization is amended and
restated in its entirety as follows:
The condition precedent set forth in this Section 6.6 shall expire
on May 31, 1996.
E. Termination -- Methods. Sections 8.1(d), (e) and (h) of the
Agreement and Plan of Reorganization are amended and restated in their
entirety as follows:
(d) On or before May 31, 1996, by the Shareholders if
the conduct or results of the Shareholders' due diligence review
described in Section 5.9 hereof shall not have been satisfactory to
the Shareholders and their advisors as determined in their sole
discretion.
(e) On or before May 31, 1996, by Crowley's if the
conduct or results of Crowley's due diligence review described in
Section 6.6 hereof shall not have been satisfactory to Crowley's and
its advisors as determined in their sole discretion.
(h) By either the Shareholders or Crowley's if the
Closing has not occurred on or before July 31, 1996.
F. Exchange of Steinbach and Crowley's Common Stock;
Steinbach's Net Book Value. Sections 1.1 and 1.5 of the Agreement and Plan
of Reorganization are amended and restated in their entirety as follows:
1.1 Exchange of Steinbach and Crowley's Common Stock.
Subject to and upon the representations, warranties, covenants,
agreements, terms and conditions in this Agreement, at the Closing
(as defined herein) and as of the Closing Date (as defined herein),
Crowley's shall acquire from the Shareholders and the Shareholders
shall deliver to Crowley's an aggregate of 100 shares of Common
Stock, without par value (the "Steinbach Common Stock"), of
Steinbach, constituting all of the issued and outstanding shares of
the capital stock of Steinbach, in exchange for 514,800 shares of
Common Stock of Crowley's (the "Crowley's Common Stock"), or
approximately thirty-five percent (35%) of the total amount of the
Crowley's Common Stock to be outstanding immediately after the
Closing (the "Consideration").
1.5 Steinbach's Net Book Value. Attached hereto as
Annex 1.5 is a balance sheet (the "December 1995 Balance Sheet")
relative to the net book value of Steinbach's assets and liabilities
as at the close of business on December 30, 1995 (i.e., "Steinbach's
Net Book Value") which has been prepared by Steinbach in accordance
with generally accepted accounting principles (except as otherwise
provided below). It is acknowledged and agreed that (x) for
purposes of determining Steinbach's Net Book Value, neither the
December 1995 Balance Sheet nor Steinbach's Net Book Value contains
or reflects any of the Excluded Assets (as defined herein) or the
Excluded Liabilities (as defined herein) or any of the actions to be
taken by the Shareholders with respect to the disposition thereof as
contemplated in Sections 4.9 and 4.10 hereof, and (y) for purposes
of determining Steinbach's Net Book Value, the fixed assets have
been determined at Steinbach's historical cost and not in accordance
with generally accepted accounting principles.
G. Waivers. Crowley's hereby waives any failure by the
Shareholders to comply with the provisions of Section 4.2(b) prior to
February 23, 1996 and the Shareholders hereby waive any failure by Crowley's
to comply with the provisions of Section 4.3(b) prior to February 1, 1996.
H. Effective Date. The effective date of this Amendment No. 2
is as of the date first written above.
I. Continuation of Agreement. Except as expressly modified or
amended hereby, all of the terms and conditions of the Agreement and Plan of
Reorganization shall continue and remain in full force and effect.
J. Definitions. Capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Agreement and Plan of
Reorganization.
K. Counterparts. This Amendment No. 2 may be executed in any
number of counterparts, each of which shall be treated as an original but
all of which, collectively, shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
CROWLEY, MILNER AND COMPANY, Crowley's
By: /s/ DENNEY CALLAHAN
------------------------------------
Its: President/CEO
--------------------------------
JEROME SCHOTTENSTEIN SUB CHAPTER S TRUST
NOS. 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10,
each a Shareholder and collectively the
Shareholders
By: /s/ JAY L. SCHOTTENSTEIN
---------------------------------------
Jay L. Schottenstein, Trustee for
each of the above-named Trusts
ANNEX 1.5
to
Agreement and Plan of Reorganization
December 1995 Balance Sheet; Steinbach's Net Book Value
PROJECTED BALANCE SHEETS
FISCAL 1995
STEINBACH
DECEMBER
---------
ASSETS
Cash and equivalents $ 265,500
Merchandise inventories 15,236,509
Markdown reserve (3,284,000)
----------
Net inventory 11,952,509
Prepaid expenses 286,766
----------
Total Current Assets 12,504,775
Properties 6,144,828
----------
Total Assets $ 18,649,603
==========
LIABILITIES
Accounts payable $ 6,357,330
Accruals 2,824,190
Capital lease obligations 199,447
---------
Total Current Liabilities 9,380,967
LONG TERM DEBT
Capital lease obligations 3,268,636
---------
Total Long Term Debt $ 3,268,636
STOCKHOLDERS' EQUITY
Common stock --
Other capital 6,000,000
---------
Total Equity 6,000,000
Total Liabilities & Equity $ 18,649,603
==========