EXHIBIT 10.7
SECOND AMENDMENT AND WAIVER
TO
SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
AND TO
THE AMENDED AND RESTATED
REIMBURSEMENT AGREEMENT
THIS SECOND AMENDMENT AND WAIVER (the "Amendment and Waiver") dated as of
June 9, 1997 is entered into by and among PEN-TAB INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), Pen-Tab Holdings, Inc. (formerly known as Pen-Tab
Industries, Inc.), a Virginia corporation (the "Parent") and BANK OF AMERICA
ILLINOIS (the "Bank").
W I T N E S E T H:
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WHEREAS, the Borrower, the Parent and the Bank are parties to a certain
Second Amended and Restated Loan and Security Agreement dated as of February 4,
1997, as amended and modified through the date hereof (herein called the "Credit
Agreement"; terms used but not otherwise defined herein are used herein as
defined in the Credit Agreement);
WHEREAS, the Borrower, the Parent and the Bank are also parties to a certain
Amended and Restated Reimbursement Agreement dated as of February 4, 1997
(herein called the "Reimbursement Agreement");
WHEREAS, the Borrower and the Parent have reported to the Bank the existence
of certain non-compliance with Section 11.2 of the Credit Agreement and certain
non-compliance with Section 7.1 of the Reimbursement Agreement, and have
requested that the Bank waive such noncompliance; and
WHEREAS, the Borrower and the Parent have further requested that the Credit
Agreement be amended (i) to revise the definition of Minimum Consolidated Net
Worth, and (ii) to permit the issuance of certain performance standby letters of
credit;
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Borrower, the Parent and the Bank hereby agree as
follows:
SECTION 1. WAIVER.
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Subject to and upon the terms and conditions hereof and in reliance on the
Borrower's and the Parent's warranties set forth in Section 3 below, as of the
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date hereof, the Bank waives
the Borrower's non-compliance with Section 11.2 of the Credit Agreement and the
Borrower's related non-compliance with Section 7.1 of the Reimbursement
Agreement from the Closing Date to and including the date hereof; provided, that
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at all times from the Closing Date to and including the date hereof the Minimum
Consolidated Net Worth shall have equalled or exceeded - $27,150,000.
SECTION 2. AMENDMENTS.
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Subject to and upon the terms and conditions hereof and in reliance on the
Borrower's and the Parent's warranties set forth in Section 3 below, as of the
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date hereof the Credit Agreement is amended as follows:
(a) Clause (a) of the definition of Minimum Consolidated Net Worth set
forth in Section 1.1 of the Credit Agreement is amended by replacing the
reference therein to "$-26,400,000" with a reference to "$-27,150,000".
(b) The first sentence of Section 2.2 of the Credit Agreement is amended
to read in its entirety as follows:
SECTION 2.2 LC Commitment. The Bank agrees to issue from time to time
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before the Termination Date such performance standby letters of credit and
commercial and import letters of credit (such letters of credit being herein
collectively called "Letters of Credit" and individually a "Letter of
Credit") as the Borrower may request."
(c) Section 3.2 of the Credit Agreement is amended to read in its entirety
as follows:
SECTION 3.2 Expiration and other Terms. Each Letter of Credit may expire
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before, on or after the Termination Date; provided, that with respect to each
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Letter of Credit expiring after the Termination Date, (i) the Borrower hereby
agrees to pledge cash collateral to the Bank, no later than thirty (30) days
prior to the Termination Date, in an amount, and pursuant to documentation,
satisfactory to the Bank, and (ii) with respect to commercial and import
Letters of Credit, in no event shall the expiration date exceed more than one
year from the date of issuance of such Letter of Credit."
SECTION 3. WARRANTIES.
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To induce the Bank to enter into this Amendment and Waiver, the Borrower
and the Parent warrant to the Bank as of the date hereof that:
(a) After giving effect to this Amendment and Waiver, all representations
and warranties contained in the Credit Agreement, the Loan Documents, the
Reimbursement Agreement and the LC Documents are true and correct in all
material respects on and as of the date hereof (except to the extent such
representations and warranties expressly refer to an earlier date).
(b) After giving effect to this Amendment and Waiver, no Default or Event of
Default (such terms are used herein as defined in the Credit Agreement and the
Reimbursement Agreement) has occurred and is continuing.
(c) The execution, delivery and performance by the Borrower and the Parent
of this Amendment and Waiver have been duly authorized by all necessary
corporate and other action and do not and will not require any registration
with, consent or approval of, notice to or action by, an Person (including any
Governmental Authority) in order to be effective and enforceable. The Credit
Agreement and the Reimbursement Agreement as modified by this Amendment and
Waiver constitute the legal, valid and binding obligations of the Borrower and
the Parent, enforceable against them in accordance with the Credit Agreement's
and the Reimbursement Agreement's respective terms, without defense,
counterclaim or offset.
SECTION 4. GENERAL.
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(a) As hereby modified, each of the Credit Agreement and the Reimbursement
Agreement shall remain in full force and effect and is hereby ratified, approved
and confirmed in all respects.
(b) The Borrower and the Parent each acknowledge and agree that the
execution and delivery by the Bank of this Amendment and Waiver shall not be
deemed to create a course of dealing or otherwise obligate the Bank to execute
similar waivers under the same or similar circumstances in the future.
(c) This Amendment and Waiver shall be binding upon and shall inure to the
benefit of the Borrower, the Parent and the Bank and the respective successors
and assigns of such Persons.
(d) This Amendment and Waiver may be executed in any number of counterparts
and by the different parties on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment and Waiver.
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Delivered at Chicago, Illinois, as of the date and year first above written.
BANK OF AMERICA ILLINOIS
By: /s/ L. Xxxxxxx XxXxxxxx
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Name: L. Xxxxxxx XxXxxxxx
Title: Vice President
PEN-TAB INDUSTRIES, INC., a
Delaware corporation
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Vice President
PEN-TAB HOLDINGS, INC. (formerly
known as Pen-Tab Industries, Inc.),
a Virginia Corporation
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Vice President
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