Exhibit 10.50
FIRST AMENDMENT TO
REIMBURSEMENT AGREEMENT
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This First Amendment to Reimbursement Agreement (the "Amendment") is
made as of the 11th day of March, 1998 by and between Mellon Bank, N.A.
("Lender"), and Klearfold, Inc., a Pennsylvania corporation ("Borrower").
WHEREAS, on August 1, 1997 Borrower and Lender entered into a Letter
of Credit Reimbursement Agreement (the "Reimbursement Agreement") relating to
the issuance of a letter of credit by Lender in the amount of $4,078,440.00 (the
"Letter of Credit") for the account of Borrower for the benefit of the Trustee
for holders of $4,000,000.00 in industrial bonds used to finance a manufacturing
facility operated by the Borrower (the "Facility");
WHEREAS, pursuant to a certain Subrogation Agreement of even date
herewith, Bank of America National Trust & Savings Association, as agent
("Agent") on behalf of certain banks from time to time under that certain credit
agreement ("Credit Agreement") of even date herewith, as amended, shall be
subrogated to Lender's rights arising out of the Reimbursement Agreement and to
Lender's rights with respect to certain collateral;
NOW THEREFORE, in consideration of the mutual agreements contained in
this Amendment, Lender and Borrower agree as follows:
1. Lender agrees to waive any default arising under the
Reimbursement Agreement occurring on or before the effective date
of this Amendment; provided, however, that Lender does not hereby
waive future violations of the Reimbursement Agreement or this
Amendment.
2. Recital "A" of the Reimbursement Agreement is hereby deleted in
its entirety and shall be of no further force or effect as of the
date of this Amendment.
3. Recital "E" of the Reimbursement Agreement is amended in its
entirety to read as follows:
"E. The Letter of Credit shall be issued for the account of
the Company by Mellon."
4. Each reference to the "Revolving Credit Loan Agreement" in the
Reimbursement Agreement shall be deleted in its entirety and
shall be of no further force and effect as of the date of this
Amendment.
5. Each reference to "Boston" and "NatWest" in the Reimbursement
Agreement shall be deleted in its entirety.
6. Subsection 2.2 (a) of the Reimbursement Agreement is amended in
its entirety to read as follows:
"(A) REIMBURSEMENT PAYMENTS. The Company hereby agrees to
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pay to Mellon a sum equal to each amount drawn under the
Letter of Credit on the same Business Day that such drawing
is honored, and directs Mellon to seek repayment by making a
claim to Bank of America National Trust & Savings
Association ("BOA") for payment pursuant to that certain BOA
Irrevocable Standby Letter of Credit C ____________("Back-up
L/C") if Mellon does not receive payment from the Company."
6. Subsection 2.2(d) of the Reimbursement Agreement is amended in
its entirety to read as follows:
"(D) COMMITMENT FEES. So long as any credit remains
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available to the Trustee under the Letter of Credit, the
Company shall pay to Mellon a Letter of Credit commitment
fee computed at 3.00% per annum (as described below) on the
average daily Letter of Credit Amount during the preceding
quarterly period (or portion thereof in the case of the
first such payment and in the case of a termination of the
Letter of Credit on a day other than a date on which a
quarterly payment is scheduled); provided that, for purposes
of computing such average daily Letter of Credit Amount,
there shall be added to the Letter of Credit Amount for each
day the aggregate amount of any Interest Drafts theretofore
honored by Mellon in respect of which Mellon may thereafter
be required to reinstate the Letter of Credit pursuant to
the terms thereof. Computations of Letter of Credit
commitment fees under this Section shall be for the actual
number of days in the applicable period based on a 365-day
year. As of March ___, 1998, the estimated amount of such
fee to be paid through August 21, 1998 is $ ______________,
which shall be paid in full on March ___, 1998. If the
Letter of Credit is replaced prior to August 21, 1998,
Mellon will refund the applicable portion of such fee on a
pro rata basis for the days for which the Letter of Credit
is not outstanding."
7. Subsection 2.3(c) of the Reimbursement Agreement is amended by
adding a new paragraph as follows:
"Notwithstanding anything herein to the contrary, Mellon
will not agree to reinstate any amounts drawn under the
Letter of Credit without the prior written consent of BOA,
except for interest draws to the extent repaid by the
Company."
8. Section 3.2 of the Reimbursement Agreement is hereby amended by
deleting the phrase "and all Obligations under the Revolving
Credit Loan Agreement"
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where it appears in the second and third lines of such section
and by deleting the parenthetical "(for itself as collateral
agent for the Banks)."
9. Subsection 3.4(a) of the Reimbursement Agreement is hereby
amended by deleting the phrase "(for itself and as collateral
agent for the Banks)."
10. Subsection 3.4(c) of the Reimbursement Agreement is amended by
adding a new sentence as follows to the end of such subsection:
"Notwithstanding anything herein to the contrary, Mellon
shall not release the Pledged Bonds without the prior
written consent of Agent."
11. Section 3.6 of the Reimbursement Agreement is hereby deleted in
its entirety and shall be of no further force or effect as of the
date of this Amendment.
12. Subsection 4.1(b)(2) of the Reimbursement Agreement is hereby
deleted.
13. The covenants set forth in Subsections 5.2(a) and (d) of the
Reimbursement Agreement are hereby deleted in their entirety and
shall be of no further force or effect as of the date of this
Amendment.
14. Subsections 6.1(g) and (h) and 6.2(d) and (e) of the
Reimbursement Agreement are hereby deleted in their entirety and
shall be of no further force or effect as of the date of this
Amendment and a new subsection 6.1(g) is hereby added to the
Reimbursement Agreement reading as follows:
"(g) If Mellon draws against the Back-up L/C because such L/C is
set to expire at any time during the 30 days following such
drawing."
15. Section 7.10 of the Reimbursement Agreement is hereby deleted in
its entirety and shall be of no further force or effect as of the
date of this Amendment.
16. Bank of America National Trust and Savings Association,
individually and as agent on behalf of the lenders from time to
time under that certain Credit Agreement of even date herewith,
as amended, among Agent, borrowers and the other parties thereto
is hereby made a third party beneficiary of the Reimbursement
Agreement and the other documents and agreements contemplated
thereby, and no such document or agreement shall be further
amended without the prior written consent of the Agent.
17. Except as expressly amended hereby, the Reimbursement Agreement
is not further amended or modified and remains in full force and
effect.
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IN WITNESS WHEREOF, the parties have duly executed this Amendment as
of the date forth above written.
MELLON BANK, N.A.,
a National Banking Association
By: [SIGNATURE ILLEGIBLE]
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Title: Vice President
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KLEARFOLD, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: President
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