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Exhibit 10.1
FOURTH AMENDMENT TO
REVOLVING CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO REVOLVING CREDIT AGREEMENT ("Amendment") is
made as of the 4th day of April, 1998, among D.I.Y. HOME WAREHOUSE, INC., an
Ohio corporation, with its principal place of business located at 0000 Xxxxx
Xxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxx 00000 (the "Borrower"), as borrower, NATIONAL
CITY BANK, formerly known as National City Bank of Columbus, a national banking
association, with its principal office located at 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxx 00000 ("NCB"), and OLD KENT BANK, formerly known as Old Kent Bank
and Trust Company, a Michigan banking corporation, with its principal office
located at Xxx Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxx 00000 ("Old Kent"), as
lenders (NCB and Old Kent each herein, separately, called a "Bank" and,
collectively, called the "Banks"), and NCB, as agent for itself and Old Kent
(the "Agent").
RECITALS
A. The Banks and the Borrower have entered into a certain Revolving
Credit Agreement dated December 7, 1994, as amended by the First Amendment to
Revolving Credit Agreement dated as of December 22, 1995, as further amended by
the Second Amendment to Revolving Credit Agreement dated as of December 23, 1996
and as further amended by the Third Amendment to Revolving Credit Agreement
dated as of October 24, 1997 (collectively, the "Loan Agreement"), pursuant to
which the Banks have agreed to loan to the Borrower on a revolving credit basis
(the "Loan") an aggregate amount not to exceed Twenty-Three Million Dollars
($23,000,000.00).
B. The Loan is evidenced by two (2) Amended and Restated Revolving
Notes dated December 22, 1995, by the Borrower to each of NCB and Old Kent, each
in the principal amount of Ten Million Dollars ($10,000,000.00) and two (2)
Amended and Restated Revolving Notes dated December 22, 1995, by the Borrower to
each of NCB and Old Kent, each in the principal amount of One Million Five
Hundred Thousand Dollars ($1,500,000.00) (collectively, the "Revolving Credit
Notes").
C. The Banks and the Borrower have agreed to certain amendments with
respect to the Loan.
NOW, THEREFORE, for and in consideration of the foregoing and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the Banks agree as follows:
1. ACKNOWLEDGMENT OF EXTENSION OF MATURITY. The Borrower and the Banks
hereby acknowledge that, pursuant to the terms of the Loan Agreement, the
Original Commitment Maturity Date is extended to January 1, 2002, and the
Supplemental Commitment Maturity Date is extended to December 1, 1999. The
Original Commitment Maturity Date and the Supplemental Commitment Maturity Date
may be further extended pursuant to the terms of the Loan Agreement as provided
for therein.
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2. CERTAIN DEFINITIONS. Effective as of the date of this Amendment, the
original term "Domestic Loans" is deleted in its entirety and the following
terms are added to the defined terms contained in Section 1.1 of the Loan
Agreement:
"Domestic Loans" means Prime Loans, CD Loans or Standby Letter
of Credit Loans whether issued and outstanding individually or
collectively.
"Standby Letter of Credit Loan" means a Loan to be made as a
Standby Letter of Credit pursuant to the applicable Letter of
Credit Notice.
3. INTEREST RATES. Effective as of the date of this Amendment, Section
2.13(c) of the Loan Agreement is deleted in its entirety and the following
inserted in lieu thereof:
(c) The Borrower shall pay to the Agent (i) fees ("Documentary
Letters of Credit Fees") with respect to Documentary Letters of Credit
in amount of 0.25% per annum times the average daily Documentary Letter
of Credit Outstandings and (ii) fees ("Standby Letters of Credit Fees")
with respect to Standby Letters of Credit, in the applicable amount per
annum set forth in the pricing schedule in Section 2.4(e) of this
Agreement times the average daily Standby Letter of Credit
Outstandings. The Agent shall pay to NCB one hundred percent (100%) of
the Documentary Letters of Credit Fees and fifty percent (50%) of the
Standby Letters of Credit Fees and shall pay Old Kent fifty percent
(50%) of the Standby Letters of Credit Fees. All Documentary Letters of
Credit Fees and Standby Letters of Credit Fees (collectively, "Letters
of Credit Fees") shall be computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed and shall be payable
quarterly in arrears commencing with the first (1st) Domestic Business
Day after the end of each fiscal quarter following issuance of each
Letter of Credit and on the earlier of the Original Commitment Maturity
Date or the acceleration of the Revolving Credit Notes.
4. PRICING OPTIONS. Effective as of the date of this Amendment,
paragraph 3(d) in the Second Amendment to Revolving Credit Agreement is deleted
in its entirety and the following Section 2.4(e) is inserted into the Loan
Agreement:
(e) For the purposes of determining the pricing of any Prime
Loan, Euro-Dollar Loan, CD Loan and/or Standby Letter of Credit Loan,
the Fixed Charge Coverage Ratio of the Borrower at the date such Loan
is made shall be deemed to be the fixed charge coverage ratio as shown
on the compliance certificate last delivered to the Banks. Any change
in the Fixed Charge Coverage Ratio shall be effective sixty (60) days
after the end of the fiscal quarter during which such change occurs;
provided, however, that if the compliance certificate evidencing the
computation of the Fixed
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Charge Coverage Ratio is not delivered on a date that is on or before
sixty (60) days after the end of a fiscal quarter, the interest rate on
any Loan made between, and the interest rate on any Prime Loan,
Euro-Dollar Loan, CD Loan or Standby Letter of Credit Loan the Interest
Period for which commences between, the date that is sixty (60) days
after the end of such fiscal quarter and the date on which such
compliance certificate is delivered to the Banks shall be determined as
if the Fixed Charge Coverage Ratio during such period were 1.25x
[EQUALS TO OR GREATER THAN] 1.29x; provided, further, that any change
in the Fixed Charge Coverage Ratio shall affect only (i) Loans made
subsequent to such date and (ii) the interest rate on any Prime Loan,
Euro-Dollar Loan, CD Loan or Standby Letter of Credit Loan the Interest
Period for which commences subsequent to such date.
The pricing schedule is as follows:
Pricing Options
Fixed Charge Ratio Prime LIBOR CD Rate Standby L/C's
[EQUALS TO OR GREATER THAN] 1.95x +0 bp +125 bp +137.5 bp +100 bp
1.75x [EQUALS TO OR GREATER THAN] 1.94x +0 bp +145 bp +157.5 bp +120 bp
1.50x [EQUALS TO OR GREATER THAN] 1.74x +35 bp +160 bp +172.5 bp +135 bp
1.40x [EQUALS TO OR GREATER THAN] 1.49x +45 bp +170 bp +182.5 bp +145 bp
1.30x [EQUALS TO OR GREATER THAN] 1.39x +55 bp +180 bp +192.5 bp +155 bp
1.25x [EQUALS TO OR GREATER THAN] 1.29x +75 bp +200 bp +212.5 bp +175 bp
bp = basis points
5. CASH FLOW. Section 7.1 of the Loan Agreement is deleted in its
entirety and the following inserted in lieu thereof:
7.1 CASH FLOW. Permit the ratio of (a) the sum of its net
income for the preceding twelve (12) month period plus its depreciation
expense and amortization expense for the same period to (b) the sum of
scheduled principal payments of Indebtedness for the same period plus
one hundred percent (100%) of its total capital expenditures for the
same period to be less than 1.0 to 1.0 as measured at the end of the
fiscal quarter ending April 4, 1998 through the last fiscal quarter of
1998. For each fiscal quarter thereafter, such ratio shall not be less
than 2.0 to 1.0.
6. FIXED CHARGE COVERAGE. Section 7.2 of the Loan Agreement is deleted
in its entirety and the following inserted in lieu thereof:
7.2 FIXED CHARGE COVERAGE. Permit the ratio of (a) the sum of
its net income before taxes for the preceding twelve (12) month period
plus its interest, rent and lease expense for the same period to (b)
the sum of its interest, rent and lease expense for the same period to
be less than 1.25 to 1.0 effective at the end of the fiscal quarter
ending April 4, 1998 and at the end of each fiscal quarter of the
Borrower thereafter.
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7. MINIMUM TANGIBLE NET WORTH. Section 7.3 of the Loan Agreement is
deleted in its entirety and the following inserted in lieu thereof:
7.3 MINIMUM TANGIBLE NET WORTH. Permit its tangible net worth
to be less than $37,000,000.00 PLUS the sum of all Net Income
Adjustments as calculated quarterly commencing with the fiscal quarter
ending April 4, 1998. As used herein, "Net Income Adjustment" shall
mean an amount equal to fifty percent (50%) of the Borrower's net
income as measured at the end of each fiscal quarter commencing with
the fiscal quarter ending April 4, 1998. For purposes of this
Agreement, losses shall be considered zero (0) net income for the
determination of a change in the required minimum tangible net worth
and tangible net worth shall be defined as shareholders' equity minus
intangible assets such as goodwill, Restricted Investments, capitalized
loan fees, underwriters' discounts, non-compete agreements and deferred
costs.
8. CAPITAL EXPENDITURES. Section 7.4 of the Loan Agreement is deleted
in its entirety and the following inserted in lieu thereof:
7.4 CAPITAL EXPENDITURES. Make capital expenditures for real
estate, machinery, equipment, vehicles, furniture, fixtures, leasehold
improvements or any other fixed assets in an aggregate amount greater
than Five Million Dollars ($5,000,000.00) during any one (1) fiscal
year commencing with fiscal year 1998. No unused portion of any capital
expenditure allowance provided for in this Section 7.4 for any fiscal
year shall be available to the Borrower for use in any subsequent
fiscal year.
9. RATIFICATION AND CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES.
The Loan Agreement is in all respects ratified and confirmed by the parties
hereto, and the Loan Agreement and this Amendment shall be read, taken and
construed as one and the same instrument. Except as modified herein, the Loan
Agreement remains unchanged and in full force and effect. Except as otherwise
defined herein, all capitalized terms shall have the meanings ascribed to them
in the Loan Agreement. The Borrower hereby acknowledges and certifies that all
other representations and warranties made in the Loan Agreement continue to be
true and correct as of the date hereof and that there are no defaults existing
under the covenants or other terms of the Loan Agreement. The Borrower hereby
ratifies and confirms the Borrower's obligations and all liability to the Banks
under the terms and conditions of the Loan Agreement and the Revolving Credit
Notes, and acknowledges that the Borrower has no defenses to or rights of setoff
against the Borrower's obligations and all liability to the Banks thereunder.
The Borrower hereby further acknowledges that the Banks have performed all of
the Banks' obligations to date under the Loan Agreement.
10. REFERENCES TO CREDIT AGREEMENT. All references in each of the
Revolving Credit Notes to the Credit Agreement shall mean and refer to the Loan
Agreement, as amended by this Amendment.
11. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by each in manner and form sufficient to bind them and duly authorized
in the premises as of the day and year first above written.
NATIONAL CITY BANK, formerly known D.I.Y. HOME WAREHOUSE, INC.
as National City Bank of Columbus
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxxxxxx X. Xxxxxxxx
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Its: Vice President Its: President
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OLD KENT BANK, formerly known as NATIONAL CITY BANK, formerly known
Old Kent Bank and Trust Company as National City Bank of Columbus, as Agent
By: /s/ Xxxxxxx X'Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxxx X'Xxxxxx Name: Xxxxxx X. Xxxxxx
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Its: Vice President Its: Vice President
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