EXHIBIT 10.16
THIRD AMENDMENT TO AMENDMENT AND RESTATEMENT OF
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT (this
"Amendment") dated effective as of April 30, 1999 (the "Effective Date"), is by
and between HANDY HARDWARE WHOLESALE, INC. ("Borrower"), and CHASE BANK OF
TEXAS, NATIONAL ASSOCIATION, formerly known as Texas Commerce Bank National
Association, a national banking association, whose principal office is located
in Houston, Texas ("Bank").
PRELIMINARY STATEMENT. Bank and Borrower have entered into an Amendment and
Restatement of Credit Agreement dated as of April 30, 1996, as amended by a
First Amendment to Amendment and Restatement of Credit Agreement dated as of
April 30, 1997, and as amended by a Second Amendment to Amendment and
Restatement of Credit Agreement dated as of April 30, 1998 ("Credit Agreement").
"Agreement", as used in the Credit Agreement, shall also refer to the Credit
Agreement as amended by this Amendment. All capitalized terms defined in the
Credit Agreement and not otherwise defined herein shall have the same meanings
herein as in the Credit Agreement. Bank and Borrower have agreed to amend the
Credit Agreement to the extent set forth herein, and in order to, among other
things, renew, modify and extend the Commitment.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, Bank and Borrower hereby agree as follows:
Section 1. Revolving Credit Note. Section 1.1 of the Credit Agreement is amended
by substituting the following for the Section 1.1 of the Credit Agreement:
"Subject to the terms and conditions hereof, Bank agrees to make loans
("Loan" or "Loans") to Borrower from time to time before the
Termination Date, not to exceed at any one time outstanding
$7,500,000.00 (the "Commitment "). Borrower has the right to borrow,
repay and reborrow. Each Loan must be at least the minimum amount
required in the Note or the balance of the Commitment, whichever is
less, and each repayment must be at least the amount required in the
Note or the principal balance of the Note, whichever is less. The Loans
may only be used for capital expenditures and working capital. Chapter
346 of the Texas Finance Code will not apply to this Agreement, the
Note or any Loan. The Loans will be evidenced by, and will bear
interest and be payable as provided in, the promissory note of Borrower
dated April 30, 1999 (together with any and all renewals, extensions,
modifications and replacements thereof and substitutions therefor, the
"Note"), which is given in renewal, modification and extension of that
certain promissory note dated April 30, 1998 in the original principal
amount of $7,500,000.00 (including all prior notes of which said note
represents a renewal, extension, modification, increase, substitution,
rearrangement or replacement thereof, the "Renewed Note"). The term
"Note" as used in the Credit Agreement shall also refer to the "Note"
as used in this Amendment. "Termination Date" means the earlier of: (a)
April 30, 2001; or (b) the date specified by Bank pursuant to Section
6.1 of this Agreement."
Section 2. Exhibit A of the Credit Agreement is hereby amended by replacing
prior Exhibit A with the attached Exhibit A incorporated into this Amendment and
the Credit Agreement for all purposes.
Section 3. Exhibit B of the Credit Agreement is hereby amended by replacing
prior Exhibit B with the attached Exhibit B incorporated into this Amendment and
the Credit Agreement for all purposes.
Section 4. Section 3 of the Credit Agreement (Representations and Warranties) is
amended by adding a new Section 3.11 which shall read as follows:
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"YEAR 2000 3.11 Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i)
Borrower's computer systems and (ii) equipment containing
embedded microchips (including systems and equipment
supplied by others or with which Borrower's systems
interface) and the testing of all such systems and
equipment, as so reprogrammed, will be completed by December
1, 1999. The cost to Borrower of such reprogramming and
testing and of the reasonably foreseeable consequences of
year 2000 to Borrower (including, without limitation,
reprogramming errors and the failure of others' systems or
equipment) will not result in a an Event of Default or an
event which with notice or lapse of time, or both, would
become an Event of Default or have a material adverse effect
on the ability of Borrower to fulfill its obligations under
the Loan Documents or on the financial condition or business
operations of Borrower. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary,
the computer and management information systems of the
Borrower are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to
be, sufficient to permit Borrower to conduct its business
without any material adverse effect."
Section 5. Borrower hereby represents and warrants to the Bank that after giving
effect to the execution and delivery of this Amendment: (a) the representations
and warranties set forth in the Credit Agreement are true and correct on the
Effective Date as though made on and as of such date; and (b) to the best of the
undersigned's knowledge after reasonable investigation performed in good faith,
no default or Event of Default has occurred under the Agreement and is
continuing as of the Effective Date.
Section 6. This Amendment shall become effective as of the Effective Date upon
its execution and delivery by each of the parties named in the signature lines
below.
Section 7. Borrower further acknowledges that each of the other Loan Documents
is in all other respects ratified and confirmed, and all of the rights, powers
and privileges created thereby or thereunder are ratified, extended, carried
forward and remain in full force and effect except as the Credit Agreement is
amended by this Amendment.
Section 8. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.
Section 9. This Amendment shall be included within the definition of "Loan
Documents" as used in the Agreement.
Section 10. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS AND AS APPLICABLE, THE LAWS OF THE UNITED STATES
OF AMERICA.
THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS & COMMERCE CODE,
AND REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF BANK AND THE PARTIES.
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed effective as of the Effective Date.
BORROWER: HANDY HARDWARE WHOLESALE, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
Title: President
Address: 0000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
BANK: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ Xxxxxx Xxxxxx, Jr.
-------------------------
Name: Xxxxxx Xxxxxx, Jr.
Title: Vice President
Address: 0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
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EXHIBIT A
NOTICE OF REQUESTED BORROWING
LETTERHEAD OF BORROWER
Chase Bank of Texas, National Association
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Re: Request for Loan under Revolving Line of Credit
Account No. ___________________; Note No. ____________________
Attention: Xxxxxx Xxxxxx
Gentlemen:
We hereby request (check one): |_| LIBOR Loan |_| Prime Rate Loan in
accordance with that certain Credit Agreement dated as of April 30, 1996 (as
amended from time to time, the "Credit Agreement") executed by HANDY HARDWARE
WHOLESALE, INC. ("Borrower") and Chase Bank of Texas, National Association
("Bank") and that certain Revolving Promissory Note executed by Borrower and
payable to the order of the Bank in the principal amount of $7,500,000.00 (as
renewed, modified or replaced, the "Note"). Any term used by not defined in this
letter shall have the same meaning here as in the Credit Agreement and the Note.
The proposed Loan is to be in the amount of $[ ] and is to be made
on [ ], 19[ ], which is a Business Day at least (check one): [ ] two the
Business Day (for a LIBOR Loan) [ ] the Business Day of the proposed Borrowing
Date (for a Prime Rate Loan). The proposed LIBOR Loan shall have an Interest
Period of (check one): [ ] one [ ] two [ ] three [ ] six months. The proceeds of
the proposed Loan should be (check one): [ ] deposited into account number
[ ] with Bank [ ].
The undersigned hereby certifies that:
(1) The representations and warranties made by Borrower in the Credit Agreement
and the Note are materially true and correct on and as of this date as though
made on this date.
(2) The proposed Loan complies materially with all applicable provisions of the
Credit Agreement.
(3) No Event of Default has occurred and is continuing.
Sincerely,
HANDY HARDWARE WHOLESALE, INC.
By:
Name: Xxxxx X. Xxxxxx
Title: President
OR
By:
Name: Xxxx Xxxxxx
Title: Chief Financial Officer
EXHIBIT B to Amendment and Restatement of Credit Agreement between
HANDY HARDWARE WHOLESALE, INC. ("Borrower") and
Texas Commerce Bank National Association ("Bank")
dated the April 30, 1996 (as amended, restated and supplemented from
time to time, the "Agreement").
REPORTING REQUIREMENTS, FINANCIAL COVENANTS AND
COMPLIANCE CERTIFICATE FOR CURRENT REPORTING PERIOD
ENDING _____, 19__ ("END DATE")
A. REPORTING PERIOD. THIS EXHIBIT WILL BE IN PROPER FORM AND SUBMITTED WITHIN 30
DAYS OF THE END OF EACH CALENDAR QUARTER. BORROWER'S FISCAL YEAR ENDS ON , 19 .
B. Financial Reporting. Borrower will provide the following financial
information within the times indicated: Compliance Certificate
WHO WHEN DUE WHAT Compliance
(Circle)
Yes No
BORROWER (i) Within 90 days of fiscal Financial Statements (balance Yes No
year end sheet, income statement, cash
flow statement) Audited (with
unqualified opinion) by
independent certified public
accountants reasonbly
satisfactory to Bank,
accompanied by Compliance
Certificate
(ii) Within 30 days of each Unaudited Financial Statements Yes No
calendar quarter end, excluding accompanied by Compliance
final period of fiscal year Certificate and accounts
receivable aging
C. Financial Covenants. Borrower will Compliance Certificate
comply with the following financial covenants,
defined in accordance with GAAP and the
definitions in Section 8, and incorporating the
-----------------
calculation adjustments indicated on the
----------------------------------------
Compliance Certificate:
----------------------
REQUIRED ACTUAL REPORTED Compliance
Except as specified otherwise, each covenant will For Current Reporting Period/as of the End Date (Circle)
be maintained at all times and reported for each Yes No
Reporting Period or as of each Reporting Period
End Date, as appropriate:
I. Maintain a Tangible Net Worth as adjusted in Stockholders' Equity $ Yes No
an amount no less than $1,500,000.00 less than ----------------
the Borrower's actual Tangible Net Worth at Minus: Goodwill $
each December 31. (The bank has discretion ----------------
subject to adjust the Minimum Tangible Net Other Intangible Assets $
Worth at any time on an annual basis for ----------------
each calendar year by notice to Borrower.) Loans/Advances to
For fiscal year 1999, the required Minimum Equity holders $
Tangible Net Worth as adjusted is at ----------------
least $17,368,000.00
Loans to Affiliates $
----------------
Capitalized Interest $
----------------
= Tangible Net worth as adjusted $
----------------
THE ABOVE SUMMARY REPRESENTS SOME OF THE COVENANTS AND AGREEMENTS CONTAINED IN
THE AGREEMENT AND DOES NOT IN ANY WAY RESTRICT OR MODIFY THE TERMS AND
CONDITIONS OF THE AGREEMENT. IN CASE OF CONFLICT BETWEEN THIS EXHIBIT B AND THE
AGREEMENT, THE AGREEMENT SHALL CONTROL.
The undersigned hereby certifies that the above information and computations are
materially true and correct and not misleading as of the date hereof, and that
since the date of the Borrower's most recent Compliance Certificate (if any):
o To the best of the undersigned's knowledge after reasonable
investigation performed in good faith, no default or Event of Default
has occurred under the Agreement during the current Reporting Period,
or been discovered from a prior period, and not reported.
o A default or Event of Default (as described below) has occurred during
the current Reporting Period or has been discovered from a prior period
and is being reported for the first time and:
o was cured on
------------------------.
o was waived by Bank in writing on
---------------.
o is continuing.
Description of Event of Default:
---------------------------------------
Executed this day of , 1999.
--------- ---------------------------------
BORROWER: HANDY HARDWARE WHOLESALE, INC.
SIGNATURE:
--------------------------
NAME: Xxxx Xxxxxx
TITLE: Chief Financial Officer
ADDRESS: 0000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000
