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EXHIBIT 10.1
AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This 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 LASALLE BANK NATIONAL ASSOCIATION, a national banking
association ("Bank").
BACKGROUND
A. Borrower and Bank are parties to an Amended and Restated Loan and
Security Agreement dated as of November 17, 1999 (as the same may be hereafter
amended, modified or supplemented from time to time, the "Loan Agreement"),
pursuant to which Bank extended to Borrower a $12,000,000 revolving line of
credit.
B. Borrower has requested that Bank modify its Tangible Net Worth covenant
and its Capital Expenditures covenant.
C. Bank is willing to modify such financial covenants, provided that
Borrower and Bank 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, measured on a quarterly basis showing
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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 Bank to amend the Loan Agreement and grant the requested waivers,
Borrower represents and warrants to Bank 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 the Borrower of this Amendment will not (i)
violate any provision of law, any order of any court or other agency of
government, of 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 Bank to amend the Loan Agreement is subject to the
delivery by Borrower to the Bank of the following:
3.1 In form and substance satisfactory to the Bank, such documents which
the Bank may reasonably request from the Borrower to effect the intent of this
Amendment.
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 hereby affirmed,
confirmed and ratified in all respects. Borrower ratifies, confirms and affirms
without condition, all liens and security interests granted to the Bank
pursuant to the Loan Agreement and the Loan Documents, and such liens and
security interests shall continue to secure the Obligations, including but not
limited to, all loans made by the Bank to the 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.
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
Bank 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 Bank's counsel, and any filing
fees required in connection
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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" 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 Bank 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/ Tim Yost
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Title: VP Finance
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BANK:
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ John C. Thurston
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Title: Vice President
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