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EXHIBIT 10.3
FOURTH AMENDMENT TO LINE OF CREDIT AGREEMENT
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FOURTH AMENDMENT TO
LINE OF CREDIT AGREEMENT
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THIS FOURTH AMENDMENT TO LINE OF CREDIT AGREEMENT ("Amendment") is made
as of the 24th day of October, 1997, 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 OF COLUMBUS, formerly known as National City Bank, Columbus, a national
banking association, with its principal office located at 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxx 00000 ("NCBC"), and OLD KENT BANK, f/k/a 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,
(NCBC and Old Kent each herein, separately, called a "Bank" and, collectively,
called the "Banks"), and NCBC, as agent for itself and Old Kent (the "Agent").
RECITALS
A. The Banks and the Borrower have entered into a certain Line of
Credit Agreement for Real Estate Loans dated as of April 28, 1995, as amended by
the First Amendment to Line of Credit Agreement dated as of September 15, 1995,
as further amended by the Second Amendment to Line of Credit Agreement dated as
of December 22, 1995, and as further amended by the Third Amendment to Line of
Credit Agreement dated as of December 23, 1996 (collectively, the "Loan
Agreement"), pursuant to which the Banks have loaned to the Borrower an
aggregate principal amount of Seven Million Nine Hundred Seventy-Five Thousand
Dollars ($7,975,000.00) ("Loan").
B. The Loan is evidenced by two (2) Mortgage Notes dated April 28,
1995, by the Borrower to each of NCBC and Old Kent, each in the original
principal amount of One Million Six Hundred Eighty-Seven Thousand Five Hundred
Dollars ($1,687,500.00) and two (2) Mortgages Notes dated September 15, 1995, by
the Borrower to each of NCBC and Old Kent, each in the original principal amount
of Two Million Three Hundred Thousand Dollars ($2,300,000.00) (collectively, the
"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. 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 $33,500,000.00 plus the sum of all Net Income
Adjustments as calculated quarterly commencing with the third quarter
of fiscal year 1997. As used herein, "Net Income Adjustment" shall mean
an amount equal to fifty percent (50%) of the
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Borrower's net income as measured at the end of each fiscal quarter
commencing with the third quarter of fiscal year 1997. 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.
2. 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 Eleven Million Dollars ($11,000,000.00) during any one (1) fiscal
year commencing with fiscal year 1997. 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.
3. 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 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.
4. REFERENCES TO LOAN AGREEMENT. All references in each of the Notes to
the Loan Agreement shall mean and refer to the Loan Agreement, as amended by
this Amendment.
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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 OF COLUMBUS, D.I.Y. HOME WAREHOUSE, INC.
formerly known as National City
Bank, Columbus
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxx
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Its: Assistant Vice President Its: Vice President
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OLD KENT BANK NATIONAL CITY BANK OF
COLUMBUS, formerly known as National
City Bank, Columbus, as Agent
By: /s/ Xxxxxxx X'Xxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Its: Vice President Its: Assistant Vice President
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