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Exhibit 10.8
D.I.Y. Home Warehouse, Inc.
0000 Xxxxx Xxxx, Xxxxx 000 Xxxxxx 0, 0000
Xxxxxxxxx, Xxxx 00000
Dear Xxxxx:
Upon execution by D.I.Y. Home Warehouse, Inc., having a principle place of
business located at 0000 Xxxxx Xxxx, Xxxxxx Xxxx, Xxxx 00000 ("Merchant"),
this letter shall serve as the agreement (the "Agreement") between Merchant
and Schottenstein Xxxxxxxxx Capital Group, LLC having a principle place of
business located at 0000 Xxxxx Xxxx, Xxxxxxxx, Xxxx 00000 (the "Agent") for
Agent to act as Merchant's sole and exclusive agent to sell all of the
merchandise (the "Merchandise") in Merchant's stores listed on Schedule A
attached (collectively, the "Stores" or individually a "Store") by means of a
"Store Closing," and or "Total Liquidation," sale (the "Sale"). In
consideration of the mutual promises and covenants contained herein and other
good and valuable consideration, Merchant and Agent agree as follows:
1. AGENCY. Merchant appoints Agent its exclusive agent for the purpose of
conducting the Sale of the Merchandise located at the Stores. Agent shall be
responsible, with Merchant's assistance, for securing any required licenses
and permits and complying with any "going-out-of-business" laws, rules,
ordinances and regulations. Merchant shall pay any fees and expenses incurred
in connection therewith and Agent will post any bonds required in connection
with such licenses and permits.
2. INVENTORY. As soon as practicable after Merchant's acceptance of this
Agreement, Merchant shall cause to be taken a "retail dollar" and or SKU
physical inventory of the Merchandise at the Stores (the "Inventory Count").
The date that the Inventory Count is taken in each Store shall be referred to
as to each Store as the "Inventory Date". The Inventory Count shall be taken
by RGIS or another independent inventory service mutually designated by
Merchant and Agent (the "Inventory Service") the cost of which shall be shared
equally by Merchant and Agent. Each Store shall be closed during the Inventory
Count and during the Inventory Count, neither Merchant nor Agent shall enter
such Store without each having a representative present, except in the case of
an emergency. Merchant and Agent, will provide one or more representative at
the Store during the Inventory Count. The Inventory Count shall be taken on
the basis of the lowest ticketed price of each item of Merchandise except for
(i) out of season inventory which shall be valued at fifty (50%) percent of
the lowest ticketed price and (ii) damaged, display and clearance Merchandise
price for which Merchant and Agent shall agree upon a price. Merchant shall
remove from the Sale any item of damaged, clearance, or display Merchandise
for which a price cannot be agreed upon as well as Merchandise as to which
Merchant and Agent cannot agree upon the seasonality. Notwithstanding any of
the above, the reduction in the Retail Value, resulting from Merchant and
Agent's pricing of damaged, display and clearance Merchandise, shall not
exceed Fifty Thousand Dollars ($50,000) per Store.
3. RETAIL VALUE. The term "Retail Value" herein shall mean the aggregate of
the item values of the respective items of all the Merchandise. Merchandise
shall include all goods owned by Merchant and located at the Stores on the
Inventory Date except: (i) goods which Merchant shall have reasonably shown to
belong to sublessees, licensees or concessionaires of Merchant or to have been
placed in the Stores on consignment; and (ii) furniture, fixtures, equipment
and improvements to realty located in the Stores. The ticketed price of any
item of Merchandise shall not include any sales or gross receipts taxes. If
any item of Merchandise has more than one ticket, the lower retail price shall
prevail unless Merchant establishes that such Merchandise was inadvertently
priced incorrectly. Merchandise arriving at the Stores following the Start
Date ("On Order Merchandise"), shall be valued at the lowest ticketed price
less the discount then prevailing in the Stores.
4. SALE TERM. The Sale shall start no later than August 31, 2000 (the "Start
Date"), and shall end no later than the close of business at each Store,
approximately eight weeks thereafter, unless extended by agreement of the
parties (the "End Date"). Agent may terminate the Sale prior to the End Date
at any Store in its reasonable discretion. At the conclusion of the Sale,
Agent agrees to leave the Stores in "broom clean" condition, with all
Merchandise (regardless of the condition) being removed by Agent, except for
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removal of furniture, fixtures, equipment and remaining Supplies (as defined
in Section 10 hereof) and to leave the Stores in the same condition as on the
Start Date, ordinary wear and tear excepted.
5. GUARANTEED PAYMENT. Agent guarantees that Merchant shall receive an amount
equal to forty-nine and one-half percent (49.5%) of the Retail Value (the
"Guaranteed Payment") of the Merchandise. In the event that the aggregate
value of all the Merchandise shall be less than Five Million Seven Hundred
Thousand Dollars ($5,700,000), the Merchant will transfer to the Stores'
inventory of a mix and quality to be agreed upon so that the inventory level
is equal to or greater than $5,700,000.
In addition to the Guaranteed Payment, Merchant will be entitled to sixty
percent (60%) of the Net Profit of the Sale. For purposes of this Agreement,
Net Profit of the Sale is the gross proceeds of the sale after payment of the
Guaranteed Payment, Expenses of Sale and payment to Agent of an amount equal
to one percent (1%) of the Retail Value.
Merchant shall retain all amounts collected during the Sale, as well as any
insurance proceeds resulting from the loss of any Merchandise subject to this
Agreement (the "Proceeds"), out of which it shall pay Expenses of Sale, as set
forth below, and satisfy the Guaranteed Payment. After satisfaction of the
Guaranteed Payment and payment of Expenses of Sale, and subject to the sharing
of the Net Profit of the Sale set forth above, Agent shall be entitled to
receive its share of the Proceeds as its commission herein. As security for
the Guaranteed Payment and Expenses of Sale, Agent will deliver to Merchant an
irrevocable Letter of Credit, in a form attached hereto as Schedule B from
Xxxxx Fargo Bank in the amount of $2,115,000 having an expiration date of not
earlier than November 30, 2000. Reductions in the Letter of Credit amount will
be permitted as appropriate. In the event, following the End Date, that
Proceeds from the Sale are insufficient to satisfy the Guaranteed Amount and
Expenses of Sale, Merchant shall be entitled to draw down upon the Letter of
Credit for the amount of the deficiency.
6. SALE CONDUCT. Agent shall conduct the Sale in the name of Merchant in full
and complete compliance with applicable laws, rules, or ordinances in the
manner in which Agent in its discretion reasonably deems fit, including, but
not limited to, advertising, pricing of Merchandise, number and type of
personnel, Store hours, Store maintenance and security. Agent may advertise
the Sale as a Store Closing, or Total Liquidation or similar type sale in
accordance with applicable law and applicable leasehold agreements.
Notwithstanding the Guaranteed Payment, Agent acknowledges that Merchant will
after the End Date have a significant number of stores in Ohio which will
continue to operate under Merchant's name. As a result, Agent will conduct the
Sale using its best efforts and in such a manner as to minimize any bad
publicity or loss of goodwill arising from the conduct of the Sale. Agent may
use Merchant's employees to the extent Agent deems feasible, and Agent may
select and schedule the number and type of Merchant's employees required for
the Sale, however, Merchant's employees shall at all times remain employees of
Merchant. On and after the Start Date, Merchant shall pay, as an Expense of
Sale, as hereinafter defined, the gross wage payroll paid to Merchant's
employees used in the Stores by the Agent during the Sale plus (a) the related
payroll taxes (including FICA and Unemployment), (b) Worker's Compensation and
(c) health care insurance benefits (subsections (a), (b) and (c) collectively,
the "Benefits") not in excess of nineteen percent (19%) of said gross payroll
(the "Fringe Benefit Cap"). Any amounts in excess of the Fringe Benefit Cap
shall be at Merchant's Expense, as hereinafter defined.
Merchant and Agent acknowledge and agree, that (i) nothing herein nor any of
Agent's actions taken in respect hereto shall be deemed to constitute an
assumption by Agent of any of Merchant's obligations relating to any of
Merchant's employees including, without limitation, vacation, pension,
withdrawal, severance pay, vacation pay, sick leave or pay, maternity leave or
pay, Worker Adjustment Retraining Act ("WARN") claims (if any) and other
termination type claims and obligations; and (ii) Merchant hereby indemnifies
Agent in respect to any claims asserted by any of Merchant's employees, except
as to claims arising out of the negligence or wrongful act or omission of
Agent, and Merchant is solely and specifically responsible for all of
Merchant's obligations under any collective bargaining agreements and any
purported oral service contracts.
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7. EXPENSES OF SALE. Merchant shall collect all Proceeds out of which shall be
paid all "Expenses of Sale." In the event that Proceeds are not sufficient to
pay such Expenses of Sale, Merchant shall be entitled to draw down upon the
Letter of Credit, as set forth in Paragraph 5, for the amount of the
deficiency after the End Date. Expenses of Sale shall be (i) the actual gross
wage payroll paid to Merchant's employees used in the Stores by the Agent
during the Sale plus the cost of the Benefits for such employees not to exceed
the Fringe Benefit Cap; (ii) advertising expense; (iii) signage for the Sale;
(iv) security in the Stores; (v) bank card fees and charge backs; (vi)
telephone charges for the Stores in excess of base charges; (vii) Agent's
supervision expenses, including supervisor bonuses not to exceed thirty-five
percent (35%) of supervisor's salary; (viii) any other expenses directly
attributable to the Sale authorized by Agent and (ix) occupancy costs on a per
diem per Store basis as per attached Schedule C. Agent shall xxxx Xxxxxxxx
weekly for any Expenses of Sale paid by Agent which shall be promptly paid
from Proceeds collected by Merchant.
8. MERCHANT'S EXPENSES. During the Sale, Merchant shall be responsible for
payment of the following items none of which shall be deemed an Expense of
Sale: (i) all occupancy costs not included in Schedule C; (ii) any Benefits in
excess of the Fringe Benefit Cap; (iii) all other employee benefits, including
but not limited to union dues, termination pay, pension benefits, severance
pay, vacation pay, sick leave or pay, maternity leave or pay and WARN claims
(if any); (iv) major maintenance; and (v) costs not directly attributable to
the Sale.
9. TAXES. Merchant shall collect all sales, excise and gross receipts taxes
(and not income taxes) (collectively the "Sales Taxes") payable to any taxing
authority having jurisdiction, which taxes shall be added to the sales price
and be paid by the customer at the time Merchandise is purchased. Merchant
shall indemnify and hold Agent harmless from and against any and all costs
(including, but not limited to, reasonable attorneys' fees), assessments,
fines or penalties which Agent may incur as a direct or indirect consequence
of the failure by Merchant to pay Sales Taxes to the proper taxing authorities
and/or the failure by Merchant to promptly file with taxing authorities any
and all returns, reports and other documents required by applicable law to be
filed or delivered to such taxing authorities.
10. SUPPLIES. Agent shall have the right to use in connection with the Sale,
without any charge, all signs and promotional materials, furniture, equipment,
fixtures and supplies, including, but not limited to, bags, boxes, twine,
paper and similar sales materials ("Supplies"), located at the Stores on the
Start Date. Agent shall have no obligation to account to Merchant for any of
the Supplies used during the Sale, but all Supplies remaining in the Stores on
the End Date shall be left on the premises and remain Merchant's property.
Should additional Supplies be required in the Stores during the Sale, Merchant
agrees to promptly provide such additional Supplies to Agent, if available at
Merchant's cost plus shipping costs, such cost to be an Expense of Sale.
Merchant covenants and warrants that it has not and will not remove any
Supplies from the Stores in contemplation of this Agreement.
11. CREDIT CARDS, GIFT CERTIFICATES AND RETURNS. All sales shall be for cash
or upon bank credit cards (excluding private label cards). During the Sale,
all bank credit card sales shall be through Merchant's bank credit card
system. All bank card fees including charge backs in connection with the Sale
shall be an Expense of Sale. Agent will be responsible for any reserves
required by Merchant's bank credit card provider. For fourteen (14) days
following the Start Date, Agent shall accept customer returns of first quality
goods purchased prior to the Start Date. Items accepted for return shall be
added to Merchandise for the purpose of calculating Retail Value, but shall
not reduce Proceeds. All sales shall be advertised, "FINAL," and all sales
receipts shall be marked "FINAL," by Agent. Agent shall accept Merchant's gift
certificates during the Sale. Gift Certificates shall be treated as cash and
the value thereof added to Proceeds. Agent shall, on behalf of Merchant, offer
refunds to customers with goods on layaway. The amounts refunded to layaway
customers shall not reduce Proceeds.
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12. MERCHANT'S WARRANTIES. Merchant hereby warrants and represents:
a. Merchant is a corporation, duly and validly existing and in good standing
under the laws of the State of Ohio. Merchant is and during the Sale will be
authorized and duly qualified as a corporation to do business and is in good
standing in the jurisdiction in which the Stores are located.
b. (i) This Agreement and all other documents executed by Merchant in
accordance with this Agreement are the valid and binding obligations of
Merchant enforceable in accordance with their terms; (ii) Merchant has taken
all necessary corporate action required to authorize the execution,
performance and delivery of this Agreement and the related documents; (iii) no
court order or decree of any federal, state or local government authority, or
other action known to Merchant, is in effect which will or may prevent or
impair consummation of the transactions contemplated by this Agreement; and
(iv) the consent of any person or entity, including any landlord, is not
required with respect to the transaction contemplated herein.
c. Except for the lien of National City Commercial Finance, Merchant owns and
will own at the Start Date and during the Sale good and marketable title to
all of the Merchandise (together with the proceeds and accounts receivable
arising therefrom), free and clear of all liens, mortgages, pledges, charges,
encumbrances, equities or claims whatsoever. Agent shall be entitled to retain
all proceeds, subject to section 5, free and clear of all liens, mortgages,
pledges, charges, encumbrances, equities or claims whatsoever.
d. Except for the balancing of inventory between the Stores, Merchant shall
not ship goods into or out of the Stores without Agent's consent, which
consent will not be unreasonably withheld, nor raise any prices of the
Merchandise in contemplation of the Sale. The mix of Merchandise in the Stores
shall be comparable to that found in the Merchant's ongoing stores.
e. No actions or proceedings have been instituted against Merchant or have
been threatened, preventing or which may prevent the consummation of the
transactions contemplated by this Agreement. Merchant is reasonably current on
all accounts payable, due and owing to parties whose cooperation is necessary
for operation of the Sale, including but not limited to landlords, newspapers
and utilities.
f. No notice of terminable default under the leases, licenses or subleases
relating to the Stores have been noticed thereunder, and such leases do not
prohibit the transactions under this Agreement or of the Sale contemplated
herein.
g. Merchant represents and warrants that it will not prior to or during the
Sale grant any lien or encumbrance on the Merchandise or the Proceeds.
h. There is no outstanding order, judgment, injunction award or decree of any
court, governmental or regulatory body or arbitration tribunal by which the
Merchant or the Merchandise is bound which would materially interfere with the
transactions herein, and as of the date of execution herein there is no
action, suit, claim, legal, administrative or arbitral proceedings (whether or
not the defense thereof or liabilities in respect thereof are covered by
insurance) against the Merchant or the Merchandise which would, if determined
adversely to the Merchant, be likely to have a material adverse effect upon
the transactions contemplated hereby, nor to the best of Merchant's knowledge
are there any facts which are likely to give rise to any such action, suit,
claim or legal, administrative or arbitral proceeding or investigation.
i. The Retail Value of the Merchandise shall be not less than Five Million
Seven Hundred Thousand Dollars ($5,700,000).
j. Agent shall be permitted to pass on all applicable manufacturers warranties
to customers.
k. Merchant represents and warrants that it has not raised any prices in
contemplation of the Inventory Count and that all pricing, including pricing
of On-Order merchandise and merchandise from the distribution center will be
done in accordance with Merchant's historic practices.
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l. The Stores will have been operated up through the Start Date in a manner
consistent with Merchant's ongoing stores.
m. No point of sale activity shall have occurred outside the ordinary course
of business.
n. Merchandise offered for Sale by Agent with a discount of no lower than ten
percent (10%) shall be lower in price then the same Merchandise advertised in
Merchant's circulars scheduled to run on August 13. In the event of any such
discrepancy herein, Agent shall be entitled to offer customers the lower of
the two prices. Agent's sole remedy shall be a credit from Merchant for the
amount of the discrepancy.
13. AGENT'S WARRANTIES. Agent hereby warrants and represents:
a. Agent is a limited liability corporation, duly and validly existing and in
good standing under the laws of the State of Delaware. Agent is, and during
the Sale will be, authorized and duly qualified to do business in each
jurisdiction where the failure to so qualify would have a material adverse
effect on Agent's ability to perform hereunder.
b. (i) This Agreement and all other documents executed by Agent in accordance
with this Agreement are the valid and binding obligations of Agent enforceable
in accordance with their terms; (ii) Agent has taken all necessary action
required to authorize the execution, performance and delivery of this
Agreement and the related documents; (iii) no court order or decree of any
federal, state or local government authority, or other action known to Agent,
is in effect which will or may prevent or impair consummation of the
transactions contemplated by this Agreement; and (iv) the consent of any
person or entity, is not required with respect to the transactions
contemplated herein.
c. There is no outstanding order, judgment, injunction award or decree of any
court, governmental or regulatory body or arbitration tribunal by which the
Agent is bound which would materially interfere with the transactions herein,
and there shall be no action, suit, claim, legal, administrative or arbitral
proceedings (whether or not the defense thereof or liabilities in respect
thereof are covered by insurance) against the Agent which would, if determined
adversely to the Agent, be likely to have a material adverse effect upon the
transactions contemplated hereby, nor are there any facts which are likely to
give rise to any such action, suit, claim or legal, administrative or arbitral
proceeding or investigation.
14. NON COMPETE. During the Sale, neither Merchant nor any affiliate of
Merchant shall run a store closing, liquidation or similar sale in competition
with the Sale at any store trading under the D.I.Y. Home Warehouse name within
the advertising area of the Stores without the prior written approval of
Agent.
15. INSURANCE. a. Merchant at its expense shall continue until the End Date,
in such amounts as Merchant currently has in effect, all of Merchant's
liability insurance policies, including but not limited to, comprehensive
public liability policies covering injuries to persons and property in or in
connection with Merchant's operation of the Stores and, from and after the
acceptance by Merchant of this Agreement, shall cause Agent to be named as
additional insured, as its interests may appear, with respect to all such
policies. On or before the Start Date, Merchant shall deliver to Agent
certificates evidencing such insurance policies, setting forth the duration
thereof and the naming of Agent as an additional insured, as its interests may
appear, in accordance with the provisions hereof, all in form reasonably
satisfactory to Agent. Merchant shall be responsible for the payment of all
deductibles, retentions or self-insured amounts under such policies except in
the event liability arises by reason of the negligence or wrongful act or
omission of Agent or Agent's independent contractors.
b. Merchant at its expense shall provide fire, theft and extended coverage
casualty insurance on the Merchandise in a total amount at least equal to the
retail value thereof. From and after the Start Date, said coverage will
contain a loss payable clause in favor of Merchant's lender and Agent, as
their interests may appear. In the event of a loss to the Merchandise included
in the Inventory Count occurring on or after the
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Start Date, the proceeds of such insurance attributable to the Merchandise
shall be paid to Agent and such proceeds shall be included as part of the
Proceeds. On or before the Start Date, Merchant shall deliver to Agent
certificates evidencing such insurance policies, setting forth the duration
thereof and the naming of Agent as a loss payee in accordance with the
provisions hereof, all in form reasonably acceptable to Agent. Merchant shall
be responsible for the payment of all deductibles or self-insured amounts
under such policies except in the event liability arises by reason of the
negligence or wrongful act or omission of Agent or Agent's independent
contractors.
c. Merchant shall at all times during the Sale maintain in full force and
effect Worker's Compensation Insurance in compliance with all statutory
requirements.
d. During the performance and length of this Agreement, Agent will maintain
workers compensation, commercial general liability and automobile liability
insurance and will name Merchant as an additional insured on all such
policies.
16. PEACEFUL POSSESSION. Merchant agrees during the Sale to grant and provide
Agent peaceful and quiet possession of the Stores and to take no action
relating to the Stores which would disturb such possession, including, without
limitation, any action to modify or terminate any existing ADT or similar
security system or cash register maintenance agreements or remove any of the
furniture, fixtures or equipment from the Stores. Merchant agrees to maintain
in operation at the expense of Merchant for the benefit of Agent (i) the point
of sale equipment in the Stores and (ii) the management information systems.
17. INDEMNIFICATION. Agent and Merchant each agree to indemnify and defend and
hold harmless the other from any and all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorneys'
fees, costs and expenses, asserted against, resulting to or imposed upon
Merchant or Agent, directly or indirectly, by reason of or resulting from
either's (i) material breach or failure to comply with any of the agreements,
covenants, representations or warranties contained in this Agreement, or (ii)
any negligent or wrongful act or omission of either or its employees.
18. DEFAULT. a. For the purpose of this Agreement, an "Event of Default" shall
be deemed to have occurred:
(1) upon the failure by Merchant or Agent to perform promptly and fully any
material obligation or covenant hereunder or any material obligation or
covenant in any document delivered pursuant hereto or any collateral agreement
to this Agreement after having received five (5) days' prior written notice,
except in the case of a nonmonetary default which is incapable of being cured
within such notice period and diligently proceeds to cure said default and (a)
the party in default has taken all steps necessary to commence to cure such
default within such notice period and (b) such failure to cure, in the case of
a default by Merchant, will not adversely affect, in any material way, Agent's
ability to conduct the Sale in the manner contemplated herein;
(2) if any of the warranties or representations made by Merchant or Agent
herein proves to be untrue or false in a material way; or
(3) if any breach of this Agreement by Merchant results in the Agent being
unable to conduct or complete the Sale at any Store as contemplated herein.
b. In the event of an interruption of the Sale and/or occurrence of an Event
of Default resulting from any act or omission of Merchant which prevents Agent
from conducting or completing the Sale at any Store as provided by this
Agreement, Agent may, at its option, either (i) proceed with the Sale at the
Store location(s) affected; or (ii) require Merchant, at Merchant's expense,
to move the Merchandise to another reasonably proximate Store designated by
Agent; or (iii) notify Merchant as to the termination of the Sale as to the
particular Store location, in which event, Agent shall be made whole and (i)
Agent shall be reimbursed for all its out of pocket expenses referable to such
Store; and (ii) Merchant shall be entitled to
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retain all Proceeds at such Store prior to the interruption or Event of
Default as well as any remaining Merchandise. Merchant acknowledges that Agent
would be irreparably injured in the event of any failure by Merchant to
promptly and fully perform any obligation hereunder if such failure directly
or indirectly interferes with the conduct by Agent of the Sale, and hereby
consents, in the event of any such failure or in the event that any such
failure is threatened or appears imminent, to the entry of an injunction
specifically enforcing the terms of this Agreement.
c. No right or remedy granted in or pursuant to this Agreement shall be
exclusive of any other right or remedy so granted or otherwise available.
Every such right or remedy shall be cumulative and shall be in addition to
every other right or remedy so granted or existing at law or in equity or by
statute, or created, granted or existing pursuant to any agreement to which
Agent and/or Merchant is or may hereafter become a party.
19. JURISDICTION. This Agreement shall be governed and construed in accordance
with the laws of the State of Ohio without regard to the conflicts of laws
principles thereof.
20. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to these transactions and supersedes and cancels all
prior agreements including, but not limited to all proposals, letters of
intent or representations, written or oral, with respect thereto.
21. MODIFICATIONS. This Agreement may not be modified except in a writing
executed by each of the parties.
22. ASSIGNMENT. Except as specifically provided in this Section, or upon
written consent of the parties hereto, this Agreement shall not inure to the
benefit of, or, shall not be assignable to, any person or entity other than
Merchant and Agent. All of the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the successors in
interest of the respective parties hereto.
23. NOTICES. All notices under this Agreement shall be sent by hand, by
recognized overnight courier service or by certified mail, return receipt
requested to: (a) Merchant at the address listed on the first page hereof, to
the attention of Xx. Xxxxxxxx Xxxxxxxx , President, with a copy to Xx. Xxxxxx
X. Xxxxxxxx, Xx., Cavitch, Familo, Xxxxxx and Xxxxxxx Co. L.P.A, 00xx Xxxxx,
Xxxx Xxxx Xxxxxxxx, Xxxxxxxxx, Xxxx 00000; (b) Agent, at the address listed on
the first page hereof to the attention of Xxxxx Xxxxxxxxx, Esq. All notices
delivered hereunder will be effective upon receipt.
24. CONFIDENTIAL NATURE OF TRANSACTION.The parties agree to keep the existence
of this transaction confidential until Merchant announces the closing of the
Stores to its employees. Agent agrees to notify all employees and/or agents
that have or will have knowledge of this transaction of the confidential
nature of this transaction. The parties agree that they will jointly approve
any news release(s) regarding this transaction. Agent acknowledges that
Merchant may suffer significant damages if the existence of this transaction
becomes known to customers and/or employees.
25. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. Such execution may be by facsimile.
Any party signing via facsimile shall forward an original hard copy of such
signature to the other party, but the failure to send said original signature
shall not affect the enforceability of this Agreement against such party, the
parties hereto agreeing that a facsimile signature may be treated as an
original signature hereunder.
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Please acknowledge your acceptance hereof by signing a copy and returning it
to us.
Very truly yours,
SCHOTTENSTEIN XXXXXXXXX CAPITAL GROUP, LLC
By: /s/ Xxxxx Xxxxxxxx
------------------
Its: Principal
---------
ACCEPTED THIS 7th DAY OF August, 2000.
D.I.Y. HOME WAREHOUSE, INC.
By: /s/ R. Xxxxx Xxxxx
--------------------
Printed Name: R. Xxxxx Xxxxx
----------------
Title: V.P. Operations
----------------
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Schedules
Schedule A - Stores
Schedule B - Form of Letter of Credit
Schedule C - Per Diem Occupancy
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TALLMADE STORE
0000 Xxxx Xxxxxxxxx
Xxxxx, Xxxx
NORTH XXXXXXX STORE
0000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxx
SCHEDULE A
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LETTER OF CREDIT
GUARANTEED PAYMENT
IRREVOCABLE LETTER OF CREDIT
Beneficiary Applicant
----------- ---------
Schottenstein Xxxxxxxxx Capital Group, LLC
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Amount
------
USD $2,115,000.00 (U.S. Dollars)
Expiry: November 30, 2000
Dear Sir(s):
We hereby issue in your favor our Irrevocable Letter of Credit in the amount
of Two Million One Hundred Fifteen Thousand and 00/100 Dollars ($2,115,000.00)
U.S. Dollars.
We hereby irrevocably authorize you to draw on us, in an aggregate amount not
to exceed the amount of this Letter of Credit, by your draft or drafts,
payable at sight, drawn on Xxxxx Fargo Bank bearing the clause: "Drawn under
Xxxxx Fargo Bank Letter of Credit No. _______" and accompanied by your
certificate appropriately completed and signed by you in the form of the
attached Annex A.
Special Conditions:
1. Xxxxx Fargo Bank is not responsible for any calculations confirming the
proper amount of the draft pursuant to the attached Annex A, Certificate for
Drawing.
2. This original Letter of Credit my be returned with any drawing hereunder
which results in the full or partial payment of the amount of this Letter of
Credit.
3. Upon delivery to us of a Reduction Certificate, the amount of this Letter
of Credit shall be reduced by the amount set forth in such Reduction
Certificate.
4. Upon delivery to us of a certificate from you in the form of Annex C, the
expiry date shall be the date set forth in such certificate, which in no event
shall be later than November 30, 2000.
SCHEDULE B, Page 1 of 3
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We certify that your draft drawn and in conformity with the terms of this
Letter of Credit will be duly honored on presentation after receipt if
presented to us on or before the expiry date. Payment upon the draft shall be
made by us to you in immediately available funds by wire transfer to your
account in the United States specified for payment in the draft presented to
us at the earliest opportunity.
We hereby undertake that we will not modify, revoke or terminate this Letter
of Credit without your written consent.
Yours Faithfully,
XXXXX FARGO BANK
------------------------------------
Authorized Signature
SCHEDULE B, Page 2 of 3
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CERTIFICATE FOR DRAWING
The undersigned, being the President of, hereby certifies with reference to
Xxxxx Fargo, Letter of Credit No. _______ that:
1. The amount of the sight draft which accompanies this drawing certificate is
$_________________.
2. The undersigned has determined that the Proceeds are insufficient to
satisfy the Guaranteed Payment, Expenses of Sale, as those terms are defined
in the Agreement, dated _____________ (the "Agreement"), by and between D.I.Y.
Home Warehouse, Inc. and Schottenstein Xxxxxxxxx Capital Group, LLC.
3. Merchant is not in material default under the terms of the Agreement.
4. ___________ three (3) business days notice to the Agent of its intent to
submit the sight draft which accompanies this certificate.
5. Capitalized terms used herein but not defined shall have the meanings set
forth in the Agreement.
IN WITNESS WHEREOF, __________d this Certificate for Drawing to be executed
and delivered as of the _______ day of ____________, 2000.
_________________________________________
By: ____________________________________
President
Sworn to before me this
______ day of ____________, 2000.
_______________________________
Notary Public
SCHEDULE B, Page 3 of 3
14
DIY HOME WAREHOUSE
SCHEDULE C
PER DIEM SCHEDULE
6 Months ended 6/00
2 11
DAILY TOTAL N. Xxxxxxx X. Akron
----- ------
OCCUPANCY RENT 1,403.84 255,498 255,498 --
OCCUPANCY MORTGAGE INTEREST -- -- -- --
OCCUPANCY DISPOSAL 26.09 4,749 2,313 2,436
OCCUPANCY RE TAX 455.10 82,829 48,491 34,338
OCCUPANCY UTILITIES 679.93 123,748 58,999 64,749
--------
2,564.97
