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EXHIBIT 10.2
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
This FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
made as of September 30, 2000 by and between SPINCYCLE, INC., a Delaware
corporation (the "Borrower") and ALLIANCE LAUNDRY SYSTEMS LLC, a Delaware
limited liability company ("Lender")
BACKGROUND
A. Borrower and Lender are parties to a Loan and Security Agreement
dated as of November 12, 1999 (as the same may be hereafter amended, modified
or supplemented from time to time, the "Loan Agreement"), pursuant to which
Lender extended to Borrower a $3,000,000 term loan.
B. Borrower has requested that Lender modify its Tangible Net Worth
covenant and its Capital Expenditures covenant.
C. Lender is willing to modify such financial covenants, provided
that Borrower and Lender enter into this Amendment and upon the terms and
conditions set forth herein.
D. Capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION 1. AMENDMENTS TO LOAN AGREEMENT.
1.1 Section 8.20(i) of the Loan Agreement is hereby amended to
provide that for Borrower's 2000 Fiscal Year only, Borrower shall be permitted
to make up to $2,000,000 in Capital Expenditures. After the end of Borrower's
2000 Fiscal Year, Borrower shall again be limited to up to $1,000,000 in
Capital Expenditures in any Fiscal Year.
1.2 Section 11.1 of the Loan Agreement is hereby amended and
restated in its entirety as follows:
"11.1 Tangible Net Worth. Borrower shall maintain its Tangible Net
Worth in an amount of not less than the amount set forth opposite the
periods set forth below,
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measured on a quarterly basis showing the results for each
period during such Fiscal Quarter, as of the last day of
each Fiscal Quarter:
MINIMUM TANGIBLE NET WORTH
Reporting Period Minimum Level
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FISCAL 2000
Period 7-Period 10 $75,000,000
Period 11-Period 13 $70,000,000
FISCAL 2001
Period 1-Period 5 $70,000,000
Period 6-Period 7 $65,000,000
Period 8 $62,500,000
Period 9 $60,000,000
SECTION 2. REPRESENTATIONS AND WARRANTIES.
To induce Lender to amend the Loan Agreement and grant the requested
waivers, Borrower represents and warrants to Lender that:
2.1 Compliance with Loan Agreement. Upon the effectiveness of this
Amendment, no Event of Default specified in Article VII of the Loan Agreement
nor any event which would, upon notice or lapse of time, or both, constitute
such an Event of Default, has occurred, and to the best of Borrower's knowledge,
on the date hereof, Borrower is in compliance with the terms and provisions set
forth in the Loan Agreement (as modified by this Amendment).
2.2 Representations and Warranties. On the date hereof, the
representations and warranties and covenants set forth in the Loan Agreement (as
modified by this Amendment) are true and correct with the same effect as though
such representations and warranties and covenants had been made on the date
hereof, except to the extent that such representations and warranties and
covenants expressly relate to an earlier date.
2.3 Corporate Authority of Borrower. Borrower has full power and
authority to enter into this Amendment, to borrow additional funds and to incur
and perform the obligations provided for under this Amendment and the Loan
Agreement, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of stockholders or of any public
authority or regulatory body is required as a condition to the validity or
enforceability of this Amendment.
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2.4 Amendment as Binding Agreement. This Amendment constitutes the
valid and legally binding obligation of Borrower, fully enforceable against
Borrower, in accordance with its terms.
2.5 No Conflicting Agreements. To the best of Borrower's knowledge,
the execution and performance by Borrower of this Amendment will not (i)
violate any provision of law, any order of any court or other agency of
government, or the Certificate of Incorporation or Bylaws of Borrower, or (ii)
violate any indenture, contract, agreement or other instrument to which
Borrower is a party, or by which its property is bound, or be in conflict
with, result in a breach of or constitute (with due notice and/or lapse of
time) a default under, any such indenture, contract, agreement or other
instrument, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of
Borrower.
SECTION 3. CONDITIONS PRECEDENT.
The agreement by Lender to amend the Loan Agreement is subject to the
delivery by Borrower to Lender of the following:
3.1 In form and substance satisfactory to Lender, such documents
which Lender may reasonably request from Borrower to effect the intent of this
Amendment. Without limiting the generality of the foregoing, Borrower shall
deliver to Lender comparable documentation and other materials as Borrower
delivers to Bank in connection with the parallel modification of that certain
Amended and Restated Loan and Security Agreement dated as of November 17, 1999
between Bank and Borrower.
SECTION 4. GENERAL PROVISIONS.
4.1 Except as amended by this Amendment, the terms and provisions of
the Loan Agreement shall remain in full force and effect and are herby affirmed,
confirmed and ratified in all respects. Borrower ratifies, confirms and affirms,
without condition, all liens and security interests granted to Lender pursuant
to the Loan Agreement and the Loan Documents, and Borrower agrees that such
liens and security interests shall continue to secure the Obligations,
including but not limited to, all loans made by Lender to Borrower under the
Loan Agreement as amended by this Amendment.
4.2 This Amendment shall be construed in accordance with and
governed by the laws of the State of Illinois, and the obligations of Borrower
under this Amendment are and shall arise absolutely and unconditionally upon
the execution and delivery of this Amendment.
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4.3 This Amendment may be executed in any number of counterparts.
4.4 Borrower hereby agrees to pay all out-of-pocket expenses incurred by
Lender in connection with the preparation, negotiation and consummation of this
Amendment, and all other documents related thereto, including without
limitation, the reasonable fees and expenses of Lender's counsel, and any
filing fees required in connection with the filing of any documents necessary
to consummate the provisions of this Amendment.
4.5 On or after the effective date hereof, each reference in the Loan
Agreement or any of the Loan Documents to this "Agreement," the "Loan
Agreement," or words of like import, shall unless the context otherwise
requires, be deemed to refer to the Loan Agreement as amended hereby.
IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be
duly executed by their duly authorized officers, all as of the date and year
first above written.
Borrower:
SPINCYCLE, INC.
By: /s/ Xxx Xxxx
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Title: VP Finance
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LENDER:
ALLIANCE LAUNDRY SYSTEMS LLC
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President - CFO
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