FOURTH AMENDMENT AGREEMENT
This FOURTH AMENDMENT AGREEMENT ("Agreement" or "Fourth Amendment Agreement")
entered into at Boston, Massachusetts, as of April 17, 2001, between PAPER
WAREHOUSE, INC. and PAPER WAREHOUSE FRANCHISING, INC. (hereinafter,
collectively, the "Borrower"), each a Minnesota corporation with its principal
executive offices at 7630 Excelsior Boulevard, Minneapolis, Minnesota 55426, and
FLEET RETAIL FINANCE INC., f/k/a BankBoston Retail Finance Inc., with an address
of 40 Broad Street, Boston, MA 02109 (the "Lender").
WHEREAS, Lender established a revolving line of credit (the "Revolving Credit")
pursuant to a Loan and Security Agreement dated as of June 7, 1999 (as amended
and modified from time to time, the "Loan Agreement") for the Borrower under
which the Lender agreed to make advances to, and other financial accommodations
for the benefit of, the Borrower until the Maturity Date subject to the terms
and conditions of the Loan Agreement. All initially capitalized terms shall have
the definitions ascribed to them in the Loan Agreement, unless otherwise defined
WHEREAS, the Borrower has requested that the Lender consent to an amendment to
the financial covenants in the Loan Agreement.
WHEREAS, subject to the terms and conditions in this Agreement, the Lender is
willing to modify the terms of the Loan Agreement in order to accommodate the
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Lender and the Borrower mutually agree as
1. EFFECTIVE DATE: The "Effective Date" of this Agreement shall be the
date upon which the Lender receives this Fourth Amendment Agreement
in form and substance satisfactory to the Lender and executed and
delivered by all parties required by the Lender.
2. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby amended as
(a) Effective as of February 2, 2001, Clause (a) (Fixed Charge
Coverage Ratio) of Section 5.12.2 of the Loan Agreement is
hereby deleted and replaced with the following: "(a) FIXED
CHARGE COVERAGE RATIO. The Borrower shall not permit or suffer
to exist the ratio of its Cash Flow to its Contractual
Obligations, calculated on a cumulative basis for the period
January 30, 2000 through February 2, 2001, to be less than
(b) Effective as of April 10, 2001, Section 5.12.1 of the Loan
Agreement is hereby deleted and replaced with the following:
"5.12.1 MINIMUM EXCESS AVAILABILITY. The Borrower shall not
permit Availability, less all then held checks (if any), less
accounts payable which are beyond credit terms then accorded the
Borrower, less overdrafts, and less any charges to the Loan
Account, to be less than Six Hundred Thousand Dollars
(c) Effective as of April 10, 2001, Section 5.12.2 of
the Loan Agreement is hereby deleted and replaced
with the following: "5.12.2. Reserved."
3. AMENDMENT FEE. Borrower agrees to pay to Lender a modification fee of
$30,000.00, which fee shall be fully earned, payable, and
nonrefundable upon Lender's signing of this Fourth Amendment
Agreement. The Borrower authorizes the Lender to charge the Loan
Account with the amount of such fee.
4. ENFORCEABILITY, ETC. Except as otherwise expressly provided herein,
the Loan Agreement and the other Loan Documents are, and shall
continue to be, in full force and effect and are hereby ratified and
confirmed in all respects, except that on and after the Effective
Date hereof (i) all references in the Loan Agreement to "this
Agreement", "hereto", "hereof", "hereunder", or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as
amended by this Agreement and (ii) all references in the other Loan
Documents to the "Loan Agreement", "thereto", "thereof", "thereunder"
or words of like import referring to the Loan Agreement shall mean
the Loan Agreement as amended by this Agreement. Except as expressly
provided herein, the execution, delivery and effectiveness of this
Agreement shall not operate as an amendment of any right, power or
remedy of the Lender under the Loan Agreement or any other Loan
Document, nor constitute an amendment of any provision of the Loan
Agreement or any other Loan Documents.
5. GENERAL PROVISIONS
a) INTEGRATION; AMENDMENT; WAIVERS. This Agreement and Loan Documents
set forth in full are terms of agreement between the parties and
are intended as the full, complete and exclusive contract
governing the relationship between the parties, superseding all
other discussions, promises, representations, warranties,
agreements and the understandings between the parties with respect
thereto. No term of the Loan Documents may be modified or amended,
nor may any rights thereunder be waived, except in a writing
signed by the party against whom enforcement of the modification,
amendment or waiver is sought. Any waiver of any condition in, or
breach of, any of the foregoing in a particular instance shall not
operate as a waiver of other or subsequent conditions or breaches
of the same or a different kind. The Lender's exercise or failure
to exercise any rights under any of the foregoing in a particular
instance shall not operate as a waiver of its right to exercise
the same or different rights in subsequent instances. Except as
expressly provided to the contrary in this Agreement, or in
another written agreement, all the terms, conditions, and
provisions of the Loan Documents shall continue in full force
and effect. If in this Agreement's description of an agreement
between the parties, rights and remedies of Lender or obligations
of the Borrower are described which also exist under the terms of
the other Loan Documents, the fact that this Agreement may omit or
contain a briefer description of any rights, remedies and
obligations shall not be deemed to limit any of such rights,
remedies and obligations contained in the other Loan Documents.
b) PAYMENT OF EXPENSES. Without limiting the terms of the Loan
Documents, the Borrower shall pay all costs and expenses
(including reasonable attorneys' fees) arising under or in
connection with the Loan Documents,
including without limitation, in connection with the negotiation,
preparation, execution, delivery, and enforcement of this
Agreement and any and all consents, waivers or other documents or
instruments relating thereto.
c) NO THIRD PARTY BENEFICIARIES. Except as may be otherwise expressly
provided for herein, this Agreement does not create, and shall not
be construed as creating, any rights enforceable by any person not
a party to this Agreement.
d) SEPARABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal or
unenforceable, the remaining provisions of this Agreement shall
nevertheless remain in full force and effect.
e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which together shall constitute one and the same
f) TIME OF ESSENCE. Time is of the essence in each of the Liabilities
of the Borrower and with respect to all conditions to be satisfied
by the Borrower.
g) CONSTRUCTION; VOLUNTARY AGREEMENT; REPRESENTATION BY COUNSEL. This
Agreement has been prepared through the joint efforts of all the
parties. Neither its provisions nor any alleged ambiguity shall be
interpreted or resolved against any party on the ground that such
party's counsel was the draftsman of this Agreement. Each of the
parties declares that such party has carefully read this Agreement
and the agreements, documents and instruments being entered into
in connection herewith and that such party knows the contents
thereof and sign the same freely and voluntarily. The parties
hereto acknowledge that they have been represented in negotiations
for and preparation of this Agreement and the agreements,
documents and instrument being entered into in connection herewith
by legal counsel of their own choosing, and that each of them has
read the same and had their contents fully explained by such
counsel and is fully aware of their contents and legal effect.
h) GOVERNING LAW; FORUM SELECTION. This Agreement has been entered
into and shall be governed by the laws of the Commonwealth of
i) FURTHER ASSURANCES. The Borrower agrees to take all further
actions and execute all further documents as the Lender may from
time to time reasonably request to carry out the transactions
contemplated by this Agreement.
j) NOTICES. All notices, requests and demands to or upon the
respective parties hereto shall be given in accordance with the
k) MUTUAL WAIVER OF RIGHT TO JURY TRIAL. THE LENDER AND BORROWER
EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO:
(I) THIS AGREEMENT, OR ANY OF THE AGREEMENTS, INSTRUMENTS OR
DOCUMENTS REFERRED TO HEREIN; OR (II) ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN THEM; OR (III) ANY CONDUCT, ACTS
OR OMISSIONS OF THE LENDER OR OF THE BORROWER OR ANY OF ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER
PERSONS AFFILIATED WITH THEM; IN EACH OF THE FOREGOING CASES,
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
l) COPIES AND FACSIMILES. This Agreement and all documents which
have been or may be hereinafter furnished by the Borrower to the
Lender may be reproduced by the Lender by any photographic,
photostatic, microfilm, xerographic or similar process, and any
such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such
reproduction was made in the regular course of business).
This Fourth Amendment Agreement is executed under seal as of the date first
Paper Warehouse, Inc.
/s/ Cheryl W. Newell By: /s/ Yale T. Dolginow
CFO Yale T. Dolginow, Chairman and Chief
Paper Warehouse Franchising, Inc.
/s/ Cheryl W. Newell By: /s/ Yale T. Dolginow
CFO Yale T. Dolginow, Chairman and Chief
Fleet Retail Finance Inc.
/s/ Melissa O'Donnell By: /s/ D M Murray
Name: DM Murray
Title: Mg. Dir.