AMENDMENT No. 3, dated as of October 31, 2002 (this "Amendment"), to the
Loan and Security Agreement, dated as of October 29, 2001 (as heretofore or
hereafter amended, supplemented and otherwise modified, the "Agreement"), among
Woodworkers Warehouse, Inc. (the "Borrower"), the financial institutions listed
on the signature pages hereof (such financial institutions, together with their
respective successors and assigns, are referred to hereinafter each individually
as a "Lender" and collectively as the "Lenders") and Bank of America, N.A. as
agent for the Lenders (in its capacity as agent, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Agent and the Lenders are parties to the
Agreement;
WHEREAS, the Borrower has requested that the Lenders modify and waive
certain provisions of the Agreement and the Lenders are willing to do so on the
terms and conditions as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
herein have the respective meanings ascribed thereto in the Agreement.
2. Waiver of Certain Covenants. The Lender hereby waives any non-compliance
by Borrower with the financial covenants set forth in Section 10.27 for the
Fiscal Quarter ended August 24, 2002.
3. Amendments to the Agreement. The Agreement is hereby amended as follows:
(a) Section 1 of the Agreement is hereby amended by adding the
following paragraph at the end of the definition of "EBITDA":
"EBITDA shall exclude one time severance, recruiting and legal cost of
$751,000 and up to an additional $200,000 of such costs, including
legal and professional fees in connection with the Chapter 11 Case No.
00-15431-CJK to be paid no later than February 28, 2003.
(b) Section 1 of the Agreement is hereby amended by deleting the
words "borrowed money" in the definition of Fixed Charges Ratio and
replacing them with the word "Debt".
(c) The following new Section 10.26 of the Agreement is hereby
added:
"10.26 EBITDA. On a consolidated basis, the Borrower shall have
cumulative EBITDA for the four consecutive fiscal quarters ended on
the last day of the fiscal quarter set forth below of not less than
the amount set forth below opposite such fiscal quarter:
Period Ending EBITDA
------------- ------
November, 2002 $350,000.00"
(d) Section 10.27 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"10.27 Fixed Charges Ratio. Borrower on a consolidated basis shall
maintain a Fixed Charges Ratio, determined as of the last day of each
fiscal quarter set forth below for the preceding four fiscal quarters
ending on such last day, of not less than the amounts set forth below:
Ratio
-----
February, 2003 60 : 1.00
May, 2003 75 : 1.00
August, 2003 90 : 1.00
November, 2003 (and each fiscal quarter thereafter) 1.00 : 1.00
4. Representations and Warranties. To induce the Lenders to enter into this
Amendment, the Borrower hereby represents and warrants as follows, with the same
effect as if such representations and warranties were set forth in the
Agreement:
(1) The Borrower has the power and authority to enter into this
Amendment and has taken all corporate action required to
authorize the Borrower's execution, delivery and performance of
this Amendment. This Amendment has been duly executed and
delivered by the Borrower, and the Agreement, as amended hereby,
constitutes the valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms.
The execution, delivery, and performance of this Amendment and
the Agreement, as amended hereby, by the Borrower will not
violate its certificate of incorporation or by-laws or any
material agreement or legal requirement binding on the Borrower.
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(ii) On the date hereof and after giving effect to the terms of this
Amendment, (A) the Agreement and the other Loan Documents are in
full force and effect and constitute binding obligations,
enforceable against the Borrower in accordance with their
respective terms; (B) no Default or Event of Default has occurred
and is continuing; and (C) the Borrower has no defense to or
setoff, counterclaim or claim against payment of the Obligations
and enforcement of the Loan Documents based upon a fact or
circumstance existing or occurring on or prior to the date
hereof.
5. Limited Effect. Except as expressly amended hereby, all of the
covenants, representations and warranties (including, without limitation, those
found in Section 9.1), and provisions of the Agreement are and shall continue to
be in full force and effect. Upon the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of like import and each reference in the other Loan Documents to the
Agreement shall mean and be a reference to the Agreement as amended hereby.
6. Conditions of Effectiveness. This Amendment shall become effective when
and only when (a) this Amendment shall be executed and delivered by the Borrower
and the Majority Lenders and (b) the Agent shall have received, for the pro-rata
benefit of each Lender, a fee in connection with the execution of this Amendment
of $30,000.00.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF
LAWS PROVISIONS) OF THE STATE OF NEW YORK.
8. Counterparts. This Amendment may be executed by the parties hereto in
any number of separate counterparts, each of which shall be an original, and all
of which taken together shall be deemed to constitute one and the same
instrument.
9. Amendment. No modification or waiver of any provision of this Amendment,
or any consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
"BORROWER"
Woodworkers Warehouse, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: CEO & President
"AGENT"
Bank of America, N.A.
as the Agent
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
"LENDERS"
Bank of America, N.A.
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Foothill Capital Corporation
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
Transamerica Business Capital Corporation
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
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