FINOVA
AMENDMENT NO. 1 TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
CO-BORROWERS: USA DETERGENTS, INC., a Delaware corporation ("USA")
BIG CLOUD POWDER CORPORATION, a Delaware corporation ("POWDER")
CHICAGO MANAGEMENT POWDER CORP., a Delaware corporation
("MANAGEMENT")
CHICAGO CONTRACT POWDER CORPORATION, an Illinois corporation
("CONTRACT")
ADDRESS: 0000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX 00000
DATE: AS OF NOVEMBER 5, 1999
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
("AMENDMENT" ), dated the date set forth above, is entered into by and between
the Co-Borrowers named above (jointly and severally, individually and
collectively, "BORROWER"), whose address is set forth above, and FINOVA Capital
Corporation ("FINOVA"), in its capacity as contractual representative for itself
and the other Lenders (as defined below), who has an office at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
RECITALS
--------
A. Borrower, FINOVA, as Agent, and the Lenders (as defined therein) are
parties to that certain Amended and Restated Loan and Security Agreement dated
FEBRUARY 25, 1999 (as amended hereby, together with the "Schedule" thereto, as
defined therein, the "LOAN AGREEMENT");
B. The Lenders and the Agent (with the consent of the Lenders), have agreed
to enter into this Amendment on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and adequacy
of which are hereby acknowledged, Borrower, Lenders and Agent agree to the
amendments with respect to the Loan Agreement and the other Loan Documents as
set forth below. Capitalized terms used in this Amendment which are not
otherwise defined herein shall have the meanings given such terms in the Loan
Agreement.
1. AMENDMENTS TO LOAN AGREEMENT. As of the date hereof, the financial
covenants set forth in Section 6.1.13 (page S-7 of the Schedule) and the Capital
Expenditures negative covenant set forth in Section 6.2 (page S-10 of the
Schedule), are hereby restated as follows:
a. CURRENT RATIO. Borrower shall maintain a ratio of Current Assets to
Current Liabilities of not less than the following:
Period Ending
(tested at each
calendar quarter end) Current Ratio
-------------------- -------------
12/31/98 1.0 to 1.0
03/31/99 1.0 to 1.0
06/30/99 1.0 to 1.0
09/30/99 1.0 to 1.0
12/31/99 1.0 to 1.0
DURING FISCAL YEAR 2000 1.0 to 1.0
DURING FISCAL YEAR 2001 1.1 to 1.0
DURING FISCAL YEAR 2002 and 1.1 to 1.0
thereafter
provided that for purposes of this calculation,
Current Liabilities shall exclude: (i) Mandatory Term
Loan C Payments, and (ii) Obligations under the Loans;
but in each case shall include regularly scheduled
current portions of long term Indebtedness for
Borrowed Money. For purpose of this computation, that
portion of obligations of Borrower under loans that
are classified as a current liability for financial
reporting purposes under GAAP (i.e., balloon portion
of Term Loan A, Term Loan C, and the balance of the
Revolving Credit Loans in the year such obligations
become due), except for regularly scheduled payments,
are to be excluded.
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b. DEBT TO NET WORTH. Borrower shall maintain a ratio of Indebtedness for
Borrowed Money to Net Worth of not greater than the
following for each period set forth below:
Period Ending
(tested at each
calendar quarter end) Debt to Net Worth
-------------------- -----------------
12/31/98 2.40 TO 1.0
03/31/99 2.40 TO 1.0
06/30/99 2.30 TO 1.0
09/30/99 2.20 TO 1.0
12/31/99 2.26 TO 1.0
03/31/00 2.04 TO 1.0
06/30/00 1.86 TO 1.0
09/30/00 1.67 TO 1.0
12/31/00 and thereafter 1.60 TO 1.0
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c. NET WORTH. Borrower shall maintain Net Worth of not less than the
following amounts for each period set forth below:
Period Ending
(tested at each
calendar quarter end) Net Worth
-------------------- ---------
12/31/98 $17,000,000.00
03/31/99 $18,000,000.00
06/30/99 $19,000,000.00
09/30/99 $20,000,000.00
12/31/99 $18,160,000,00
03/31/00 $18,275,000.00
06/30/00 $19,360,000.00
09/30/00 $20,625,000.00
12/31/00 $21,900,000.00
03/31/01 $22,900,000.00
06/30/01 $23,900,000.00
09/30/01 $24,900,000.00
12/31/01, and thereafter $25,900,000.00
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d. SENIOR DEBT SERVICE
COVERAGE RATIO As of the last day of each calendar quarter ended
MARCH 31, JUNE 30, SEPTEMBER 30 or DECEMBER 31, the
ratio of Borrower's Operating Cash Flow/Actual to
Borrower's Senior Contractual Debt Service for the
consecutive 12-month period ending as of such date
must be at least the following:
Period Ending Senior Debt Service
(tested at each -------------------
calendar quarter end) Coverage Ratio
-------------------- --------------
12/31/98 1.20 TO 1.0
03/31/99 1.20 TO 1.0
06/30/99 1.20 TO 1.0
09/30/99 1.50 TO 1.0
12/31/99 1.10 TO 1.0
03/31/00 1.10 TO 1.0
06/30/00 1.19 TO 1.0
09/30/00 1.25 TO 1.0
12/31/00 1.35 TO 1.0
03/31/00, and thereafter 1.50 TO 1.0
e. NEGATIVE COVENANTS (SECTION 6.2):
CAPITAL EXPENDITURES: Borrower shall not make or incur any Capital
-------------------- Expenditure if, after giving effect thereto, the
aggregate amount of all Capital Expenditures by
Borrower (i) for the calendar quarter ended DECEMBER
31, 1999, would exceed $1,250,000, (ii) for the
calendar quarter ended MARCH 31, 2000, would exceed
$350,000, (iii) for the calendar quarter ended JUNE
30, 2000, would exceed $1,300,000, (iv) for the
calendar quarter ended SEPTEMBER 30, 2000, would
exceed $2,350,000, (iv) for the calendar quarter ended
DECEMBER 31, 2000, would exceed $1,000,000, and (v) in
any fiscal year thereafter, would exceed $2,000,000;
provided however, that such Capital Expenditure limit
may be increased to $7,000,000 commencing with the
2001 fiscal year and each year thereafter, in each
case, if Borrower
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demonstrates to Agent prior to making such increased
capital expenditures that, according to the Compliance
Certificate and financial statements for the prior
fiscal year end, Borrower would have been in
compliance with the Senior Debt Service Coverage Ratio
requirements set forth above for such prior fiscal
year, after adjustment for the higher Capital
Expenditure amount.
f. ADDITIONAL PROVISIONS. The following shall be added as a new
subparagraphs 3(g), 3(h) and 3(i) to the "Additional Provisions" section of
the Schedule (at the top of S-16):
(g) Extension of 1999 Mandatory Term Loan C Prepayment. With respect to
subparagraph 3(e) (Mandatory Tenn Loan C Prepayments) set forth above, Agent and
the Lenders agree that, solely as a result of Borrower's failure to comply with
the consolidated net income requirement for the 1999 fiscal year and the
consolidated EBITDA requirement for the 1999 fiscal year (as set forth in
subsection 3(d) above), Agent and the Lenders shall not cause the $2,000,000 of
the Cash Collateral Amount to be applied as a mandatory prepayment to Term Loan
C provided that Agent and the Lenders expressly reserve the right to so apply
such Cash Collateral Amount at any time after the occurrence and during the
continuance of an Event of Default.
(h) 2000 Fiscal Year. If: (i) no Event of Default has occurred and is
continuing under this Agreement and no Event of Default would result from the
making of the 2000 101 Realty Payment (as hereinafter defined), (ii) according
to Borrower's audited financial statements for the 2000 fiscal year, as
certified by the Borrower's Chief Financial Officer, Borrower has: (x) a
consolidated net income for the 2000 fiscal year, as determined in accordance
with GAAP, of at least $4,000,000, and (y) a consolidated EBITDA, as determined
in accordance with GAAP, of at least $8,690,000, and (iii) Borrower will have at
least $2,000,000 of Excess Availability under the Revolving Credit Loans after
giving effect to the 2000 101 Realty Payment (collectively, the "2000 101 REALTY
PAYMENT REQUIREMENTS"), then Borrower may direct Agent in writing and Agent
shall cause the remaining TWO MILLION DOLLARS ($2,000,000) of the Cash
Collateral Amount to be paid to 101 Realty as a final principal prepayment in
respect of Borrower's mortgage indebtedness to 101 Realty (collectively, the
"2000 101 REALTY PAYMENT"). Borrower shall have up to THIRTY (30) days after the
date of delivery to Agent of its certified annual audited financial statements
and Compliance Certificate required pursuant to this Agreement (the "2000
DELIVERY DATE") to provide written notice to Agent stating that Borrower is in
compliance with the foregoing 2000 101 Realty Payment Requirements and directing
Agent to cause the 2000 101 Realty Payment to be paid to 101 Realty.
(i) 2000 Mandatory Term Loan C Prepayments. In the event that Borrower is
unable to comply with the foregoing requirements for a 2000 101 Realty Payment
within such thirty (30) day period following the 2000 Delivery Date or if
Borrower does not deliver its certified audited financial statements to Agent
within the time period required in Section 9.1(b) of this Agreement, then, upon
written notification to Borrower at any time thereafter, Agent shall, if so
directed by the Required Lenders, cause to be paid to the Lenders the remaining
TWO MILLION DOLLAR ($2,000,000)
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of the Cash Collateral Amount as a mandatory prepayment, to be applied in the
inverse order of maturity, to the Obligations outstanding under Term Loan C.
g. LOAN DOCUMENTS. As of the date of this Amendment, the term "Loan
Documents" as defined in Section 1.1 of the Loan Agreement shall include
(in addition to the Loan Documents described in the Loan Agreement) this
Amendment and any other agreements, instruments or other documents executed
in connection herewith.
2. LIMITED WAIVER. Agent and each of the Lenders hereby waives, effective
as of the date of this Amendment, the failure of Borrower to comply with the
following covenants for the calendar quarter ending September 30, 1999: (i) Net
Worth (Section 6.1.13), and (ii) Senior Debt Service Coverage Ratio (Section
6.1.13). This Waiver is expressly limited to the quarterly period ended
September 30, 1999 and shall not affect any breach of these covenants for any
other period.
3. TIME OF ESSENCE. Time is of the essence with respect to each and every
provision of this Amendment.
4. SEVERABILITY. Wherever possible, each provision of this Amendment, the
Loan Agreement, the Agency Agreement and related documents shall be interpreted
in such a manner so as to be effective and valid under applicable law, but if
any provision of any such document is held to be prohibited by or invalid under
applicable law, such provision or provisions shall be ineffective only to the
extent of such provision or invalidity, without invalidating the remainder of
such document.
5. SUCCESSORS AND ASSIGNS. All covenants and agreements contained in this
Amendment by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether or not so expressed.
6. EXPENSES. Borrower shall pay all of Agent's fees and expenses
(including, without limitation, fees and expenses and attorneys' fees and
expenses) incurred in connection with this Amendment and the transactions and
Loan Documents contemplated hereby.
7. CONDITIONS OF EFFECTIVENESS. This Amendment shall not become effective
(the "EFFECTIVE DATE") unless and until:
a. Amendment. This Amendment shall have been duly executed by the
Borrower, the Lenders and the Agent (with six (6) original counterpart
signature pages);
b. Fee. Borrower shall have paid to Agent, for the pro rata benefit of
the Lenders, an Amendment Fee in respect of this Amendment in the amount of
$100,000, which shall be fully earned as of the date hereof and shall be
non-refundable.
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8. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. Borrower hereby jointly
and severally represents and warrants as of the Effective Date as follows:
a. The execution and delivery of this Amendment and the performance by
Borrower of its obligations hereunder are within the Borrower's powers and
authority, have been duly authorized by all necessary corporate action and
do not and will not contravene or conflict with the Articles of
Incorporation or By-laws of Borrower;
b. The Loan Agreement (as amended by this Amendment) and the other Loan
Documents constitute legal, valid and binding obligations of Borrower
enforceable in accordance with their terms by Agent and the other Lenders
against Borrower, and Borrower expressly reaffirms its Obligations under
the Loan Agreement (as amended by this Amendment) and each of the other
Loan Documents. Borrower further expressly acknowledges and agrees that
Agent, for the ratable benefit of the Lenders has a valid, duly perfected,
first priority and fully enforceable security interest in and lien against
each item of Collateral to the extent set forth in the Loan Agreement.
Borrower agrees that it shall not dispute the validity or enforceability of
the Loan Agreement (as stated before and after this Amendment) or any of
the other Loan Documents or any of its respective Obligations thereunder,
or the validity, priority, enforceability or extent of Agent's security
interest in or lien against any item of Collateral, in any judicial,
administrative or other proceeding;
c. No consent, order, qualification, validation, license, approval or
authorization of, or filing, recording, registration or declaration with,
or other action in respect of, any governmental body, authority, bureau or
agency or other Person is required in connection with the execution,
delivery or performance of, or the legality, validity, binding effect or
enforceability of, this Amendment or the Loan Documents contemplated
hereby;
d. The execution, delivery and performance of this Amendment and the
Loan Documents contemplated hereby does not and will not violate any law,
governmental regulation, judgment, order or decree applicable to Borrower
and does not and will not violate the provisions of, or constitute a
default or any event of default under, or result in the creation of any
security interest or lien upon any property of Borrower pursuant to, any
indenture, mortgage, instrument, contract, agreement or other undertaking
to which Borrower is a party or is subject or by which Borrower or any of
its real or personal property may be bound, except as contemplated hereby;
e. No Event of Default or events which, with the passage of time or
notice would constitute an Event of Default, exists under the Loan
Agreement or the other Loan Documents; and
f. Upon the Effective Date of this Amendment, Borrower hereby reaffirms
all covenants, representations and warranties made in the Loan Agreement
and the other Loan Documents to the extent the same are not amended hereby,
and agrees that all such
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covenants, representations and warranties shall be deemed to have been
remade as of the Effective Date of this Amendment.
9. REFERENCE TO THE EFFECT ON THE LOAN AGREEMENT.
a. References. Upon the Effective Date of this Amendment each reference
in the Loan Agreement to "this Loan Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement, as amended hereby.
b. Ratification. Except as specifically modified above, the Loan
Agreement, and all other documents, instruments and agreements executed
and/or delivered in connection therewith shall remain in full force and
effect, and are hereby ratified and confirmed.
c. No Waiver. Agent's and/or the Lenders' failure, at any time or times
heretofore or hereafter, to require strict performance by Borrower of any
provision or term of the Loan Agreement, this Amendment or the other Loan
Documents shall not waive, affect or diminish any right of Agent and/or the
Lenders thereafter to demand strict compliance and performance therewith.
Any suspension or waiver by Agent and/or the Lenders of a breach of this
Amendment or any Event of Default under the Loan Agreement shall not
suspend, waive or affect any other breach of this Amendment or any Event of
Default under the Loan Agreement, whether the same is prior or subsequent
thereto and whether of the same or of a different kind or character. None
of the undertakings, agreements, warranties, covenants and representations
of Borrower contained in this Amendment, the Loan Agreement or in any of
the other Loan Documents, and no breach of this Amendment, or Event of
Default under the Loan Agreement shall be deemed to have been suspended or
waived by Agent and/or the Lenders unless such suspension or waiver is (a)
in writing and signed by Agent and the Lenders, and (b) delivered to
Borrower. In no event shall Agent's and the Lenders' execution and delivery
of this Amendment establish a course of dealing among Agent, the Lenders,
the Borrower or any other Loan Party or obligor or in any other way
obligate Agent and the Lenders to hereafter provide any amendments or
waivers with respect to the Loan Agreement or any other Loan Documents.
10. MISCELLANEOUS. Section 9 of the Loan Agreement is incorporated herein
as if repeated herein, including, without limitation, the waivers contained in
Section 9.25 (GOVERNING LAW; WAIVERS) and Section 9.26 thereof (MUTUAL WAIVER OF
RIGHT TO JURY TRIAL).
11. COUNTERPARTS. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile shall also deliver a manually executed
counterpart of this Amendment, but the
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failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
BORROWER: USA DETERGENTS, INC., a Delaware corporation
BIG CLOUD POWDER CORPORATION, a Delaware
corporation;
CHICAGO MANAGEMENT POWDER CORP., a Delaware
corporation
CHICAGO CONTRACT POWDER CORPORATION, an
Illinois corporation
By: /s/ Uri Evan
---------------------------------------------
Uri Evan, President and Chief Executive
Officer of, and intending to legally bind,
each of the above corporations.
[Notary certification for Borrower attached]
00
XXXXX XX XXX XXXXXX )
) SS
COUNTY OF MONMOUTH )
The foregoing Amendment No. 1 to Loan and Security Agreement and Agency
Agreement was executed and acknowledged before me this __ day of November, 1999,
by Uri Evan, personally known to me to be the President and Chief Executive
Officer of USA Detergents, Inc., a Delaware corporation, Big Cloud Powder
Corporation, a Delaware corporation, Chicago Management Powder Corp., a Delaware
corporation, and Chicago Contract Powder Corporation, an Illinois corporation,
on behalf of each such corporation.
XXXXX XXXXXXXXX
NOTARY PUBLIC OF NEW JERSEY
COMMISSION EXPIRES 4/14/2004
(SEAL)
Notary Public /s/ Xxxxx Xxxxxxxxx
---------------------------------
My commission expires 4/14/2004
-------------------------
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SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
AGENT:
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By /s/ Xxxxx X. Xxxxxx
----------------------------------
Vice President
LENDER:
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By /s/ Xxxxx X. Xxxxxx
----------------------------------
Vice President
Notice Address: 0000 Xxxxx Xxxxxx--0xx Xxxxx
Xxxx xx Xxxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to: FINOVA Capital Corporation
Attn: Group Counsel - Corporate
Finance
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Fax No.: (000) 000-0000
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SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT
LENDER: First Source Financial LLP
By: First Source Financial, Inc.
Its: Agent/Manager
By /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Its: Senior Vice President
------------------------------------------
Notice Address: 0000 Xxxx Xxxx Xxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn:
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxxxxx, Esq.
Senior Counsel
First Source Financial LLP
0000 X. Xxxx Xxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
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SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
LENDER: LaSalle Business Credit, Inc.
By /s/ Xxxxxx Xxxxxxx
--------------------------------------
First Vice President
Notice Address: Xx. Xxxxxx Xxxxxxx
LaSalle Business Credit, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
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