SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT ("Amendment") is entered into
as of March 31, 1997, by and between Paper Warehouse, Inc., a Minnesota
corporation ("Borrower"), and Richfield Bank & Trust Co., a Minnesota banking
corporation ("Bank").
RECITALS:
WHEREAS, the Borrower is bound by the terms and conditions of that
certain Loan Agreement dated January 29, 1997 as amended by and amendment dated
as of October 31, 1997 (the "Loan Agreement") by and between the Borrower, and
the Bank, pursuant to which the Bank granted to the Borrower a Line of Credit of
$7,500,000 (the "Loan");
WHEREAS, the Borrower has requested an amendment of the terms of the
Loan Agreement and a waiver of compliance with one of the provisions of the Loan
Agreement, and
WHEREAS, the Bank is willing to grant such a request;
NOW, THEREFORE, the Loan Agreement is hereby amended and the Bank and
the Borrower agree as follows:
1. Effective as of the date of the First Amendment to the Loan Agreement as of
October 1, 1997, Section 5.18 of the Loan Agreement shall be deleted in its
entirety and the following inserted in lieu thereof:
Section 5.18 MINIMUM NET INCOME. During the fiscal year ending
in January 1999, the Borrower shall achieve a net income before
distributions to shareholders of not less than $1,500,000.
The Bank hereby waives any default based on the failure of the Borrower to
comply with the provisions of Section 5.18 of the Loan Agreement prior to the
date of this Amendment to the Loan Agreement. The waiver of compliance specified
herein shall be effective only in the specific instance set forth above. Nothing
contained herein shall be construed to constitute the Bank's agreement to waive
any other default under the terms of the Loan Agreement, whether now existing or
hereafter arising.
2. Except as specifically provided herein, all terms and conditions of the Loan
Agreement remain in full force and effect, without waiver or modification. All
terms defined in the Loan Agreement shall have the same meaning when used in
this Amendment, except as otherwise specifically provided herein. This Amendment
and the Loan Agreement shall be read together, as one document.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
Borrower:
PAPER WAREHOUSE, INC.
/S/ Yale Dolginow
--------------------------------
Yale Dolginow
President & CEO
Bank:
RICHFIELD BANK & TRUST CO.
/S/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
Assistant Vice President
Acknowledged and agreed to
as of the 31st day of March, 1998.
Firstar Bank Milwaukee, N.A.,
a participant in the Loan.
By: /s/ illegible
--------------------------------
Title: Vice President
------------------------------
