1
Exhibit 10.3.15.a
EXECUTION COPY
WAIVER AND AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this
"Amendment") is made and entered into as of this 14th day of November, 2000, by
and between D.I.Y. HOME WAREHOUSE, INC., (the "Borrower"), and NATIONAL CITY
COMMERCIAL FINANCE, INC. (the "Lender").
WITNESSETH:
WHEREAS, the Borrower, the Lenders which are signatories thereto,
National City Commercial Finance, Inc., as Agent and National City Bank as
Letter of Credit Bank, executed and delivered a Credit and Security Agreement
dated as of October 27, 1998 (the "Credit Agreement"); and
WHEREAS, the Borrower has requested the Lender to waive certain of the
covenants contained in the Credit Agreement and to amend the Credit Agreement as
hereafter set forth, and the Lender is willing to do so on the terms and
conditions hereafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is mutually agreed as follows:
1. Definitions. Capitalized terms used in this Amendment that are
defined in the Credit Agreement shall have the respective meanings given to them
in the Credit Agreement.
2. Amendments. The following amendments shall be made to the Credit
Agreement:
(a) Section 2.9(g) of the Credit Agreement shall be amended by
deleting it in its entirety and replacing it with the following:
(g) INVENTORY APPRAISAL. The Borrower agrees to pay for the
services and out-of-pocket expenses associated with any Inventory
appraisal, provided, that, so long as no Potential Default or Event
of Default has occurred and is continuing and which has not been
waived in writing by the Required Lenders, the Borrower does not
have to pay for more than four (4) Inventory appraisals per year.
Each such Inventory appraisal shall be performed by Xxxxxx
Xxxxxxxx, Hilco, Great American or any other appraiser reasonably
acceptable to the Agent.
(b) Section 8.3(d) of the Credit Agreement shall be amended by
deleting it in its entirety and replacing it with the following:
(d) LIENS; LEASES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, (i) acquire or hold any property
subject to any Lien, (ii) sell or otherwise transfer any Accounts,
whether with or without recourse, (iii) provide any other Person
with a commitment not to place a Lien on any real property of the
Borrower, or its Subsidiaries, or (iv) suffer or permit any
property now owned or hereafter acquired by it to be or become
encumbered by a Lien;
WAIVER AND AMENDMENT
2
EXECUTION COPY
provided, that this Section 8.3(d) shall not prohibit: (A) any
lien for a tax, assessment or government charge or levy for
taxes, assessments or charges not yet due and payable or not
yet required to be paid pursuant to Section 8.2(i), (B) any
deposit or pledges securing only workers' compensation,
unemployment insurance or similar obligations (other than
Liens arising under ERISA) in the ordinary course of business,
(C) any mechanic's, carrier's, landlord's or similar common
law or statutory lien incurred in the ordinary course of
business for amounts that are not yet due and payable or which
are being diligently contested in good faith, so long as the
Agent has been notified thereof and adequate reserves are
maintained for their payment, (D) zoning or deed restrictions,
public utility easements, rights of way, minor title
irregularities and similar matters relating to real property
of the Borrower, or its Subsidiaries, in all such cases having
no material adverse effect as a practical matter on the
ownership or use of any of the real property in question, as
such property is used in the ordinary course of business of
the Borrower or the Borrower's Subsidiaries, (E) any Lien
which (1) arises in connection with judgments or attachments
the occurrence of which does not constitute an Event of
Default under Section 9.13, (2) the execution or other
enforcement of which is effectively stayed and the claims
secured thereby are being actively contested in good faith and
by appropriate proceedings and (3) is junior in priority to
the Liens of the Agent, (F) deposits or cash pledges securing
performance of contracts, bids, tenders, leases (other than
Capitalized Leases), statutory obligations, surety and appeal
bonds (other than contracts for the payment of Indebtedness
for borrowed money) arising in the ordinary course of
business, (G) any Lien in favor of the Agent created under the
Loan Documents or any existing Lien fully disclosed in the
Supplemental Schedule, (H) any operating lease entered into by
the Borrower or a Subsidiary of the Borrower as lessee;
provided, that the scheduled rental payments in respect to all
such leases of the Borrower (when taken together with all such
leases of the Borrower and the Borrower's Subsidiaries) shall
not at any time exceed Five Million Dollars ($5,000,000) in
the aggregate during any Fiscal Year of Borrower, (I) any
transfer of a check or other medium of payment for deposit or
collection, or any similar transaction in the ordinary course
of business, (J) any Lien (including any Lien in respect of a
Capitalized Lease of personal property) which is created in
connection with the purchase of personal property; provided,
that: (x) the Lien is confined to the property in question,
(y) the Indebtedness secured thereby does not exceed the total
cost of the purchase, and (z) the aggregate outstanding
Indebtedness secured by such Liens does not at any time exceed
Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate, (K) security deposits to secure the performance of
operating leases and deposits received from customers, in each
case in the ordinary course of business, or (L) Liens securing
the replacement, extension or renewal of any Indebtedness
permitted to be refinanced by Section 8.3(c) so long as such
Lien is upon the same property previously subject thereto.
(c) Section 8.4 of the Credit Agreement shall be amended by
deleting it in its entirety and replacing it with the following:
WAIVER AND AMENDMENT 2
3
EXECUTION COPY
8.4 FINANCIAL COVENANTS.
(a) MINIMUM EBITDA. The Borrower shall not permit its
monthly EBITDA as measured at the end of each of the
following months to be less than: (i) ($575,000) for
November, 2000, (ii) ($725,000) for December, 2000,
(iii) ($650,000) for January, 2001, and (iv)
($700,000) for February, 2001.
(d) EXHIBIT D-2 to the Credit Agreement shall be amended by
deleting it in its entirety and replacing it with Exhibit D-2 attached to this
Amendment.
(e) The definition of "AVAILABILITY" contained in Annex II of
the Credit Agreement shall be amended by deleting it in its entirety and
replacing it with the following:
"AVAILABILITY" means, (a) at any time on or prior to
March 31, 2001, an amount equal to the difference of: (i) the
lesser of (A) the Total Revolving Credit Commitment or (B) the
then Borrowing Base and (ii) the then aggregate amount of
Outstandings; and (b) at any time after March 31, 2001, an
amount equal to the difference of: (i) the lesser of (A) the
Total Revolving Credit Commitment or (B) twenty percent (20%)
of the then Borrowing Base and (ii) the then aggregate amount
of Outstandings.
(f) Subsection (a) of the definition of "BORROWING BASE"
contained in Annex II of the Credit Agreement shall be amended by deleting the
amount "Sixty percent (60%)" contained therein and replacing it with the amount
"Fifty percent (50%)," but leaving it the same in all other respects.
3. Waiver. The Borrower hereby acknowledges that it is in default
under Section 8.4 of the Credit Agreement and that such default constitutes an
Event of Default under the Credit Agreement. Subject to the satisfaction of the
conditions to effectiveness of this Amendment set forth in Section 5 below, the
Lender hereby waives the Borrower's compliance with the financial covenant
requirements contained in Section 8.4 of the Credit Agreement for the reporting
period ending September 30, 2000 and further waives the Event of Default that
resulted from the Borrower's failure to comply with such financial covenants.
4. Representations and Warranties. The Borrower represents and
warrants to the Lender as follows:
(a) Incorporation of Representations and Warranties. Except as
listed on EXHIBIT 4(a) hereto, each and every representation and
warranty made by the Borrower in Articles 6 and 7 of the Credit
Agreement is incorporated herein as if fully rewritten herein at length
and is true, correct and complete as of the date hereof (other than
representations and warranties which expressly speak only as of a
different date);
WAIVER AND AMENDMENT 3
4
EXECUTION COPY
(b) Requisite Authority. The Borrower has all requisite power
and authority to execute and deliver and to perform its obligations in
respect of this Amendment and each and every other agreement,
certificate or document required by this Amendment;
(c) Due Authorization: Validity. The Borrower has taken all
necessary action to authorize the execution, delivery and performance
by it of this Amendment and every other instrument, document and
certificate relating hereto. This Amendment has been duly executed and
delivered by the Borrower and when executed and delivered by the Lender
will be a legal, valid and binding obligation of the Borrower
enforceable against it in accordance with its terms;
(d) No Consent. No consent, approval or authorization of, or
registration with any governmental authority or other Person is
required in connection with the execution, delivery and performance of
this Amendment and the transactions contemplated hereby;
(e) Performance. The Borrower has performed and complied with
all of the agreements and conditions contained in the Credit Agreement
and this Amendment required to be performed or complied with by it as
of the date hereof;
(f) No Defaults. There will exist no Potential Default or
Event of Default under the Credit Agreement as amended by this
Amendment that has not been waived by the Lender; and
(g) Security Interests. The Borrower confirms that the
Borrower's obligations under the Credit Agreement, as amended by this
Amendment, continue to be secured by the security interest granted by
the Borrower in favor of the Agent for the benefit of the Lenders and
that such security interest continues to be perfected and to have the
priority required under the Credit Agreement.
5. Conditions to Effectiveness of this Amendment. The obligation
of the Lender to enter into this Amendment shall be subject to the Borrower's
satisfaction of the following conditions:
(a) On or before the date of this Amendment:
(i) The Lender shall have received a counterpart of this
Amendment duly executed by the Borrower;
(ii) The Lender shall have received a Certificate of Good
Standing from the State of Ohio and Articles of
Incorporation of the Borrower, each dated as of a
date not more than 30 days prior to the date of this
Amendment, certified by the Ohio Secretary of State;
and
(iii) The Lender shall have received such other
certificates, opinions, agreements and documents as
it shall reasonably request.
WAIVER AND AMENDMENT 4
5
EXECUTION COPY
(b) On or before November 21, 2000:
(i) The Lender shall have received the favorable opinion
of counsel for the Borrower in a form substantially
similar to EXHIBIT 1 attached hereto;
(ii) The Lender shall have received a copy of the
resolutions authorizing the execution, delivery and
performance of this Amendment certified by the
Secretary of the Borrower and in form and substance
satisfactory to the Lender;
(iii) The Lender shall have received an incumbency
certificate certifying the names of the Borrower's
officers and their signatures, certified by the
Secretary of the Borrower;
(iv) The Lender shall have received a copy of the
Borrower's by-laws certified by the Borrower's
Secretary; and
(v) The Lender shall have received such other
certificates, opinions, agreements and documents as
it shall reasonably request.
6. No Waiver. The execution and delivery of this Amendment by the
Lender shall not constitute a waiver or release of any obligation or liability
of the Borrower under the Credit Agreement as in effect prior to the
effectiveness of this Amendment or as amended hereby other than as expressly
waived herein or a waiver or release of any Event of Default or Possible Default
existing at any time, other than expressly waived herein.
7. Expenses. The Borrower shall reimburse the Lender for all
costs and expenses incurred by it in the preparation, negotiation and execution
of this Amendment including, without limitation, the legal fees and
out-of-pocket expenses of Xxxxxxxx Xxxx & Xxxxx LLP.
8. Effect on Other Provisions. Except as expressly amended by
this Amendment, all provisions of the Credit Agreement continue unchanged and in
full force and effect and are hereby confirmed and ratified. All provisions of
the Credit Agreement shall be applicable to this Amendment.
9. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
WAIVER AND AMENDMENT 5
6
IN WITNESS WHEREOF, the parties hereto, each by an officer thereunto
duly authorized, have caused this Waiver and Amendment to Credit and Security
Agreement to be executed and delivered as of the date first above written.
D.I.Y. HOME WAREHOUSE, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Its: President & CEO
NATIONAL CITY COMMERCIAL FINANCE, INC.,
as Agent and Lender
By:
------------------------------------
Name:
Its:
Signature page to Waiver and Amendment to Credit and Security Agreement
7
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto, each by an officer thereunto
duly authorized, have caused this Waiver and Amendment to Credit and Security
Agreement to be executed and delivered as of the date first above written.
D.I.Y. HOME WAREHOUSE, INC.
By:
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Its: President & CEO
NATIONAL CITY COMMERCIAL FINANCE, INC.,
as Agent and Lender
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Its: Senior Vice President
Signature page to Waiver and Amendment to Credit and Security Agreement
8
EXECUTION COPY
EXHIBIT 1
November 14, 2000
National City Commercial Finance, Inc.,
for itself and as Agent for the Lenders
from time to time parties to the Credit
Agreement (defined below)
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Re: D.I.Y. Home Warehouse, Inc.
Ladies and Gentlemen:
We are the attorneys for D.I.Y. Home Warehouse, Inc., an Ohio
corporation ("Borrower").
In such capacity we have represented Borrower in connection with the
execution and delivery of that certain Credit and Security Agreement among
Borrower, the Lenders which are signatories thereto, National City Commercial
Finance, Inc., as Agent ("NCCF") and National City Bank, as Letter of Credit
Bank, dated as of October 27, 1998 (the "Credit Agreement") and that certain
Waiver and Amendment of Credit and Security Agreement by and between Borrower
and NCCF, dated as of the date hereof (the "Amendment").
In so acting, we have examined execution copies (or copies certified or
otherwise identified to our satisfaction) of the Credit Agreement, the Amendment
and the documents delivered by Borrower in connection with the Credit Agreement
and the Amendment. The Amendment and the documents delivered by Borrower in
connection with the Amendment are collectively referred to herein as the "Loan
Documents". In addition, we have examined and are familiar with originals or
copies, certified or otherwise identified to our satisfaction, of such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below. To the extent that any opinion given herein relates to or is
dependent upon factual information, or is expressed in terms of our knowledge or
awareness, we have relied exclusively upon the actual conscious knowledge of the
attorneys of this firm actively involved in the review and negotiation of the
Loan Documents and the preparation of this opinion.
This opinion is governed by, and shall be interpreted in accordance
with, Part II of the Report of the AD Hoc Committee of the Business Law Section
of the State Bar of Michigan on Standardized Legal Opinions in Business
Transactions dated August 1, 1991, incorporated herein by reference. Without
limiting the generality of the foregoing, the meaning of the terms and phrases
used in this opinion (other than those defined in the Loan Documents) is
governed by and is subject to such Part II.
9
EXECUTION COPY
National City Commercial Finance, Inc.
National City Bank
November 14, 2000
Page 2
In rendering the opinions set forth below, we have made such
investigation of the statutes and published regulations of the State of Ohio
(including without limitation Chapter 1701, Ohio Revised Code), and such
reported cases thereunder, as we deemed necessary in order to permit us to issue
the opinions set forth below relating to matters of Ohio law.
Based on the foregoing and subject to the qualifications and
limitations stated herein, we are of the opinion that as of the date hereof:
l. Borrower is a corporation validly existing and in good
standing under the laws of the State of Ohio. Borrower is in good standing as a
foreign corporation qualified to do business in each state wherein, to our
knowledge, the nature of Borrower's activities or ownership of property make
such qualification necessary and where the failure to be so qualified would have
a material, adverse effect on the conduct of Borrower's business. Borrower has
all requisite corporate power and authority to execute, deliver and perform its
obligations under the Loan Documents, and to own its properties and to carry on
the business in which it is now engaged.
2. The execution and delivery by Borrower of the Loan Documents,
and the performance thereof and of the transactions contemplated thereby, have
been duly authorized by all necessary corporate action of Borrower. The Loan
Documents have been duly executed and delivered by Borrower.
3. The execution, delivery and performance by Borrower of the
Loan Documents does not and will not violate any contract or agreement known to
us or any obligation to any third party known to us and will not require any
approval or consent of any holder of any indebtedness or other obligation of
Borrower known to us which has not been obtained.
4. To our knowledge, there are no pending or threatened
investigations, suits or proceedings against or affecting Borrower or any of its
properties in any court or before any governmental authority or arbitration
board or tribunal that, if adversely determined, individually or in the
aggregate, would reasonably be expected to adversely and materially affect the
properties or financial condition of the Borrower or the consummation of the
transactions contemplated by the Loan Documents.
5. Borrower's execution and delivery of the Loan Documents and
its performance and compliance with the terms thereof do not violate the
Articles of Incorporation or the Code of Regulations of Borrower.
10
EXECUTION COPY
National City Commercial Finance, Inc.
National City Bank
November 14, 2000
Page 2
This opinion is for the benefit of NCCF only and may not be relied upon
by any other party without the express written consent of the undersigned.
Very truly yours,
11
EXECUTION COPY
EXHIBIT D-2
COMPLIANCE CERTIFICATE
To: National City Commercial Finance, Inc., as Agent
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am a duly appointed officer of D.I.Y. Home Warehouse, Inc:, (the
"Borrowers' Agent");
(2) I have reviewed the terms of the Credit and Security Agreement
dated as of October 27, 1998 among the Borrower, the Lenders which are
signatories thereto, National City Commercial Finance, Inc., as Agent and
National City Bank as Letter of Credit Bank, as it may be amended from time to
time, (the "Credit Agreement") and I have made, or have caused to be made under
my supervision, a detailed review of the transactions and conditions of each
Borrower during the accounting period covered by the Attachment hereto;
(3) The examination described in paragraph (2) did not disclose, and I
have no knowledge, whether arising out of such examinations or otherwise, of the
existence of any condition or event which constitutes a Default or an Event of
Default (as such terms are defined in the Credit Agreement) during or at the end
of the accounting period covered by the Attachment hereto or as of the date of
this Certificate, except as described below (or on a separate attachment to this
Certificate). The following exceptions set forth, in detail, the nature of the
condition or event, the period during which it has existed and the action which
each Borrower has taken, are taking or propose to take with respect to each such
condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certification, together with the computations in the
Attachment hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ____ day of ____________, ____,
pursuant to Section 8.1(c) of the Credit Agreement.
D.I.Y. Home Warehouse, Inc.
By:
----------------------------------------
Title:
-------------------------------------
COMPLIANCE CERTIFICATE
12
EXECUTION COPY
ATTACHMENT TO COMPLIANCE CERTIFICATE
AS OF ____________________ , ______ WHICH PERTAINS
TO THE MONTH OF __________________ , ________
Terms defined in the Credit Agreement, as amended, are used herein as
defined therein and Section references herein refer to Sections of the Credit
Agreement.
Minimum EBITDA
A. Current monthly EBITDA $
--------
B. Minimum EBITDA permitted by Section 8.4(a)
(i) For November, 2000 ($575,000)
(ii) For December, 2000 ($725,000)
(iii) For January, 2001 ($650,000)
(iv) For February, 2001 ($700,000)
COMPLIANCE CERTIFICATE
13
Exhibit 4A
to
Waiver and Amendment to Credit and Security Agreement
between
D:I.Y: Home Warehouse, Inc. (Borrower)
and
National City Commercial Finance, Inc:, as Agent for Lenders,
Secured Party
1. The locations of the Borrower, its Subsidiaries and of the Collateral
set forth in the Supplemental Schedule referenced by Section 6.6 of the Credit
and Security Agreement dated October 27, 1998, shall be amended to include only
the following locations:
ASHTABULA
0000 X. Xxxxx Xx., Xxxx
Xxxxxxxxx, Xxxx 00000
CUYAHOGA COUNTY
00000 Xxxxxxxxx Xx.
Xxxxxxxxx, Xxxx 00000
00000 Xxxxxxx Xx.
Xxxxx Xxxx, Xxxx 00000
Cleveland Express Trucking Co., Inc.
0000 Xxxxxxxxxxx Xxx.
Xxxxxxxxx, Xxxx 00000
XXXX XXXXXX
00000 Xxxx Xx.
Xxxxxxxx, Xxxx 00000
0000 Xxxxxx Xxx.
Xxxxxx, Xxxx 00000
LORAIN COUNTY
000 Xxxx Xx.
Xxxxxx, Xxxx 00000
MEDINA
0000 Xxxxxxxxx Xx.
Xxxxxx, Xxxx 00000
SUMMIT COUNTY
0000 X. Xxxxxxxxx Xx.
Xxxxx, Xxxx 00000
TRUMBULL COUNTY
0000 Xxx Xxxxxx
Xxxxxx, Xxxx 00000
14
2. Section 6.7 of the Credit and Security Agreement dated October 27,
1998, shall be amended by replacing the Agent's consent regarding the Borrower's
storing of inventory at Dedicated Transport, Inc. and Reserve Lumber with the
Agent's consent regarding the Borrower's storing of inventory at Cleveland
Express Trucking Co., Inc.
