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EXHIBIT 10.1
THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT
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THIRD AMENDMENT TO
REVOLVING CREDIT AGREEMENT
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THIS THIRD AMENDMENT TO REVOLVING 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 5811 Canal
Road, Suite 180, Valley View, Ohio 44125 (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 155 East
Broad Street, Columbus, Ohio 43251 ("NCBC"), and OLD KENT BANK, f/k/a Old Kent
Bank and Trust Company, a Michigan banking corporation, with its principal
office located at One Vandenberg Center, Grand Rapids, Michigan 49503 ("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 Revolving
Credit Agreement dated December 7, 1994, as amended by the First Amendment to
Revolving Credit Agreement dated as of December 22, 1995, and as further amended
by the Second Amendment to Revolving Credit Agreement dated as of December 23,
1996 (collectively, the "Loan Agreement"), pursuant to which the Banks have
agreed to loan to the Borrower on a revolving credit basis ("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 NCBC 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 NCBC 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, 2001, and the
Supplemental Commitment Maturity Date is extended to December 1, 1998. 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. 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 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.
3. 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.
4. 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.
5. 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.
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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/ Joseph L. Kwasny, Jr. By: /s/ Marilyn A. Eisele
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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/ Timothy O'Rouke By: /s/ Joseph L. Kwasny, Jr.
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Its: Vice President Its: Assistant Vice President
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