EXHIBIT 4.2
AGENTED REVOLVING CREDIT AND
TERM LOAN AGREEMENT
This Agented Revolving Credit and Term Loan Agreement is dated as of
October 15, 2002, among ORCHIDS PAPER PRODUCTS COMPANY, a Delaware corporation
("Borrower"), and BANK OF OKLAHOMA, N.A. and LOCAL OKLAHOMA BANK, N.A.
(individually a "Bank" and collectively the "Banks"), and BANK OF OKLAHOMA,
N.A., as agent for the Banks hereunder (in such capacity, the "Agent").
RECITALS
Subject to the terms and conditions set forth below, Banks have agreed to
extend to Borrower the following loans: (i) a $6,500,000 term loan ("$6,500,000
Term Loan"), (ii) a $4,000,000 term loan ("$4,000,000 Term Loan"), and (iii) a
$4,500,000 revolving line of credit ("$4,500,000 Revolving Line").
AGREEMENT
For valuable consideration received, it is agreed as follows:
1. DEFINED TERMS. As used in this Agreement, the following terms have the
following meanings (terms defined in the singular to have the same meaning when
used in the plural and vice versa).
1.1. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP consistent with those
applied in the preparation of the financial statements referred to in
Section 6.9, and all financial data submitted pursuant to this Agreement
shall be prepared in accordance with such principles.
1.2. "Adjusted LIBOR Rate" shall mean the LIBOR Rate plus the LIBOR
Rate Margin. The Adjusted LIBOR Rate shall be recalculated on not less
than a quarterly basis, upon Agent's receipt of Borrower's quarterly
financial statements. From the date of this Agreement to the first
recalculation, the Adjusted LIBOR Rate shall be set at the LIBOR Rate plus
two and three quarters percent (2.75%) per annum, with the first
recalculation to be effected upon Agent's receipt of Borrower's December
31, 2002 quarterly financial statement, but in no event later than
February 15, 2003.
1.3. "Adjusted Prime Rate" shall mean the Prime Rate plus the Prime
Rate Margin. The Adjusted Prime Rate shall be recalculated on not less
than a quarterly basis, upon Agent's receipt of Borrower's quarterly
financial statements. From the date of this Agreement to the first
recalculation, the Adjusted Prime Rate shall be set at the Prime Rate,
with the first recalculation to be effected upon Agent's receipt of
Borrower's December 31, 2002 quarterly financial statement, but in no
event later than February 15, 2003.
1.4. "Affiliate" means any Person: (i) which directly or indirectly
controls, or is controlled by, or is under common control with, Borrower;
(ii) which directly or indirectly beneficially owns or holds five percent
(5%) or more of any class of voting stock of Borrower; or (iii) five
percent (5%) or more of the voting stock of which is directly or
indirectly beneficially owned or held by Borrower. The term "control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
1.5. "Agreement" means this Agented Revolving Credit and Term Loan
Agreement, as amended, supplemented, or modified from time to time.
1.6. "Borrowing Base" means, at any date of determination thereof,
the sum of eighty percent (80%) of Borrower's Qualified Receivables at
such date, plus fifty percent (50%) of Borrower's Qualified Inventory at
such date, as determined by Agent based upon the most recent information
relating thereto provided to Agent pursuant to Section 2.3; provided,
however, that Qualified Inventory shall not exceed the Qualified Inventory
Cap as determined by Agent in its sole discretion. The "Qualified
Inventory Cap" shall equal the lesser of 50% of Qualified Inventory or 80%
of Borrower's Qualified Receivables such that Qualified Inventory
comprises no more than 50% of the overall Borrowing Base.
1.7. "Borrowing Base Certificate" means each certificate from
Borrower to Agent relating to the Borrowing Base, substantially in the
form of Schedule "1.7" hereto.
1.8. "Borrowing Resolutions" means certified Resolutions from the
Secretary of Borrower, in form and content as set forth on Schedule "1.8"
attached hereto.
1.9. "Business Day" means any day other than a Saturday, Sunday, or
other day on which commercial banks in Oklahoma are authorized or required
to close under the laws of the State of Oklahoma.
1.10. "Capital Lease" means all leases which have been or should be
capitalized on the books of the lessee in accordance with GAAP.
1.11. "Certificates of Good Standing" means a Certificate of Good
Standing issued by the Secretary of State of incorporation for the
Borrower and such other states in which Borrower does business and is
required to domesticate or otherwise register, indicating that Borrower is
in good standing with the laws of such state(s).
1.12. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations and published interpretations
thereof.
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1.13. "Collateral" means all property in which the Banks are
intended to have a security interest, as described in Section 3.
1.14. "Commitment" means each Bank's obligation to make loans to the
Borrower pursuant to this Agreement.
1.15. "Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 414(b) or 414(c) of the Code.
1.16. "Debt" means, including but not limited to: (i) indebtedness
or liability for borrowed money; (ii) obligations evidenced by bonds,
debentures, notes, or other similar instruments; (iii) obligations for
the deferred purchase price of property or services (including trade
obligations); (iv) obligations under letters of credit; (v) obligations
under acceptance facilities; (vi) all guaranties, endorsements (other than
for collection or deposit in the ordinary course of business), and other
contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person or entity, or otherwise to assure a
creditor against loss; and (vii) obligations secured by any Liens, whether
or not the obligations have been assumed.
1.17. "Debt Service Coverage Ratio" shall mean the ratio of (i)
EBITDA for the preceding four (4) consecutive fiscal quarters of Borrower,
to (ii) Borrower's Debt Service Requirement for the same four (4)
consecutive fiscal quarters.
1.18. "Debt Service Requirement" shall mean the sum of (i) interest
expense (whether paid or accrued and including interest attributable to
Capital Leases), (ii) scheduled principal payments on borrowed money, and
(iii) capitalized lease expenditures, all determined without duplication
and in accordance with GAAP.
1.19. "EBITDA" shall mean net income plus (i) interest expense, (ii)
depreciation, depletion, obsolescence and amortization of property, (iii)
capitalized lease expense, and (iv) tax expense, all determined in
accordance with GAAP, and for a particular period.
1.20. "Equipment Appraisal" an appraisal of Borrower's equipment
which is part of the Collateral hereunder, in form and content
satisfactory to the Banks, evidencing an aggregate minimum value
reasonably acceptable to Banks.
1.21. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published
interpretations thereof.
1.22. "$4,333,550 Term Note" shall mean the $4,333,500 Promissory
Note in form and content as set forth on Schedule "1.22" attached hereto.
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1.23. "Funded Debt" shall mean the amount outstanding under notes
payable, capitalized lease obligations and any other similar instruments
of Borrower, on any date of determination.
1.24. "GAAP" means generally accepted accounting principles in the
United States, applied on a consistent basis.
1.25. "Guarantor" means any future Subsidiary which guarantees the
Obligations hereunder in accordance with Section 6.12 hereof.
1.26. "Guaranty Agreement" means the guaranty agreement executed and
provided to Agent by any Guarantor in accordance with Section 6.12 hereof.
1.27. "Initial Default" means any of the events specified in Section
9, whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition has been satisfied.
1.28. "Interest Period" shall mean a period of time equal to the
lesser of: (i) at the election of the Borrower, thirty (30), sixty (60),
or ninety (90) days; or (ii) the number of days between the contemplated
effective date specified by the Borrower in the applicable Interest Rate
Election and the maturity date of the applicable Note.
1.29. "Interest Rate Election" means written notice from Borrower to
Agent no earlier than twenty (20) days and no later than five (5) days
prior to the contemplated effective date, substantially in form and
content as set forth on Schedule "1.29" hereto, whereby Borrower may elect
from time to time that interest shall accrue under the Notes at the
Adjusted Prime Rate or the Adjusted LIBOR Rate.
1.30. "Letter of Credit" means any letter of credit issued pursuant
to Section 2.3, for which, when issued, a Letter of Credit Fee should be
paid.
1.31. "Letter of Credit Fee" means a fee of two percent (2%) per
annum on the face amount of any Letter of Credit issued or renewed after
the date hereof.
1.32. "LIBOR Loan" means any Loan when and to the extent that the
interest rate therefor is determined by reference to the LIBOR Rate.
1.33. "LIBOR Rate" means the London Interbank Offered Rate composite
rate per annum for U.S. Dollars for the applicable Interest Period which
appears on the LIBOR 01 page of the Reuters information service on the day
the Interest Rate Election is received by Agent. The LIBOR Rate shall
remain fixed during the applicable Interest Period.
1.34. "LIBOR Margin" shall mean the following:
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RATIO OF FUNDED DEBT TO EBITDA LIBOR MARGIN
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Greater than 2.5 to 1 3.25%
Greater than or equal to 1.75 to 1 but less than 2.5 to 1 2.75%
Less than 1.75 to 1 2.25%
1.35. "Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of
the foregoing, and the filing of any financing statement under the UCC or
comparable law of any jurisdiction in respect of any of the foregoing.)
1.36. "Loan" means advances under the $4,500,000 Revolving Line, the
$6,500,000 Term Loan or the $4,000,000 Term Loan.
1.37. "Loan Documents" means this Agreement, the Notes, the Security
Agreement, the Mortgage, the UCC-1 Financing Statement and all other
instruments, documents or agreements required under this Agreement.
1.38. "London Interbank Offered Rate" applicable to any Interest
Period for a LIBOR Loan means the arithmetic average of the rates per
annum (rounded upward, if necessary, to the nearest 1/100 of 1%) quoted at
approximately 11:00 a.m. London time, by the principal loan branch of each
Bank two Business Days prior to the first day of such Interest Period for
the offering to leading banks in the London interbank market of Dollar
deposits for a period, and in an amount, comparable to the Interest Period
and principal amount of the LIBOR Loan which shall be made by the Banks
and outstanding during such Interest Period.
1.39. "Matured Default" means any of the events specified in Section
9, provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition has been satisfied.
1.40. "Mortgage" means that certain first and prior Mortgage,
Assignment of Rents and Leases, Security Agreement and Financing Statement
in favor of Agent, for the benefit of the Banks, on the Mortgaged
Property, in form and content substantially as set forth on Schedule
"1.40" hereto.
1.41. "Mortgaged Property" means the property set forth on Schedule
"1.41" hereto.
1.42. "Mortgage Related Documents" means, with regard to the
Mortgaged Property:
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(i) a commitment for title prior to the Closing, and final
title insurance policy within sixty (60) days of the Closing to
Agent, evidencing only those exceptions acceptable to Agent;
(ii) an appraisal on the Mortgaged Property, in form and
content satisfactory to Agent, evidencing an aggregate minimum value
reasonably acceptable to Agent;
(iii) a Phase I Environmental Audit from an auditor and in
form and content acceptable to Agent; and
(iv) evidence that flood insurance is not required by Agent.
1.43. "Multiemployer Plan" means a Plan described in Section
4001(a)(3) of ERISA.
1.44. "Non-use Fee" means the amount payable by the Borrower to the
Agent, for the account of each Bank, from the date hereof to the
Termination Date, computed at a rate equal to three-eighths of one percent
(3/8%) per annum on the average daily amount of the unused portion of the
$4,500,000 Revolving Line payable quarterly on the 15th day of each
January, April, July and October and on the Termination Date or such
earlier date as the $4,500,000 Revolving Line shall terminate as provided
herein, commencing January 15, 2003. Upon receipt of any Non-use Fee, the
Agent will promptly thereafter cause to be distributed such payment to
each Bank in its Pro Rata Share.
1.45. "Note Rate" means (i) the Adjusted Prime Rate or (ii) the
Adjusted LIBOR Rate, as elected by Borrower pursuant to an Interest Rate
Election; provided, that at the end of any applicable Interest Period, the
Note Rate shall revert to the Adjusted Prime Rate unless a new Interest
Rate Election has been properly made by Borrower.
1.46. "Notes" means, separately and collectively, the $4,333,550
Term Note, the $2,166,450 Term Note, the $2,666,800 Term Note, the
$1,333,200 Term Note, the $3,000,150 Line Note and the $1,499,850 Line
Note.
1.47. "Obligations" means the Obligations defined in Section 3.
1.48. "$1,499,850 Line Note" shall mean the $1,499,850 Promissory
Note in form and content as set forth on Schedule "1.48" attached hereto.
1.49. "$1,333,200 Term Note" shall mean the $1,333,200 Promissory
Note in form and content as set forth on Schedule "1.49" attached hereto.
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1.50. "Opinion of Borrower's Counsel" means a legal opinion from
Borrower's legal counsel including, without limitation, the opinions
relating to Borrower and this loan transaction as set forth on Schedule
"1.50" attached hereto.
1.51. "PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
1.52. "Permitted Liens" means, as to Borrower and all Subsidiaries:
(1) Liens in favor of the Banks;
(2) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or, if due and payable or, if
they are being contested in good faith by appropriate proceedings
and for which appropriate reserves are maintained;
(3) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' liens, and other similar
Liens, securing obligations incurred in the ordinary course of
business which are not past due for more than thirty (30) days or
which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established;
(4) Liens under workers' compensation, unemployment insurance,
Social Security, or similar legislation;
(5) Liens, deposits, or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of
money), leases (permitted under the terms of this Agreement), public
or statutory obligations, surety, stay, appeal, indemnity,
performance or other similar bonds, or other similar obligations
arising in the ordinary course of business;
(6) The liens described on Schedule "1.52(6)";
(7) Judgment and other similar liens arising in connection
with court proceedings, provided the execution or other enforcement
of such Liens is effectively bonded, stayed and the claims secured
thereby are being actively contested in good faith and by
appropriate proceedings;
(8) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere
with the occupation, use and enjoyment by the Borrower of the
property or assets encumbered thereby in the normal course of its
business or materially impair the value of the property subject
thereto; and
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(9) Purchase-money liens on any property hereafter acquired or
the assumption of any lien on property existing at the time of such
acquisition (and not created in contemplation of such acquisition),
or a lien incurred in connection with any conditional sale or other
title retention agreement or a Capital Lease; provided that:
(a) Any property subject to any of the foregoing is
acquired by the Borrower or any subsidiary in the ordinary
course of its business; and
(b) Each such lien shall attach only to the property so
acquired and fixed improvements thereon.
1.53. "Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority, or
other entity of whatever nature.
1.54. "Plan" means any pension plan which is covered by Title IV of
ERISA and in respect of which the Borrower or a Commonly Controlled Entity
is an "employer" as defined in Section 3(5) of ERISA.
1.55. "Prime Loan" means any Loan when and to the extent that the
interest rate therefor is determined by reference to the Prime Rate.
1.56. "Prime Rate" means a fluctuating interest rate per annum as in
effect from time to time, which interest rate per annum shall at all times
be equal to the rate of interest announced publicly from time to time
(whether or not charged in each instance), by X.X. Xxxxxx Xxxxx Bank
("Rate Bank"), as its base rate or general reference rate. Each change in
the Prime Rate (or any component thereof) shall become effective hereunder
without notice to Borrower (which notice is hereby expressly waived by
Borrower), on the effective date of each such change. Should the Rate Bank
abolish or abandon the practice of announcing or publishing a Prime Rate,
then the Prime Rate used during the remaining term of the Notes shall be
that interest rate or other general reference rate then in effect at the
Rate Bank which, from time to time, in the reasonable judgment of Agent,
most effectively approximates the initial definition of the "Prime Rate."
Borrower acknowledges that Banks may, from time to time, extend credit to
other borrowers at rates of interest varying from, and having no
relationship to, the Prime Rate. The rate of interest payable upon the
indebtedness evidenced by the Notes shall not, however, at any time exceed
the maximum rate of interest permitted under the laws of the State of
Oklahoma for loans of the type and character evidenced by the Notes.
1.57. "Prime Rate Margin" shall mean the following:
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RATIO OF FUNDED DEBT TO EBITDA PRIME RATE MARGIN
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Less than 2.5 to 1 +.5%
Greater than or equal to 1.75 to 1 but less than 2.5 to 1 Prime
Less than 1.75 to 1 -.5%
1.58. "Principal Office" means the main office of each Bank, set
forth on the signature pages hereof.
1.59. "Prohibited Transaction" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
1.60. "Pro Rata Share" means, as to Bank of Oklahoma, N.A.,
Sixty-six and Sixty-seven Hundredths percent (66.67%), and as to Local
Oklahoma Bank, N.A., Thirty-three and Thirty-three Hundredths percent
(33.33%).
1.61. "Qualified Inventory" means the amount of inventory of
Borrower located in the United States of America or Canada that is not
subject to any Lien or adverse claim and that conforms to the
representations and warranties contained in this Agreement and that is
acceptable to the Agent in its sole discretion, less any packaging
materials and supplies, damaged or unsalvageable goods returned or
rejected by its customers, goods to be returned to its suppliers, goods in
transit to third parties (other than its agent or warehouses) and goods
out at contractors, and less any reserves required by the Agent in its
sole discretion for special order goods, market value declines and xxxx
and hold (deferred shipment) sales. Notwithstanding the foregoing,
however, parent rolls and furnish products shall be included as Qualified
Inventory.
1.62. "Qualified Receivables" means and includes only accounts
receivable of Borrower which meet the following specifications at the time
they came into existence and continue to meet the same until collected in
full.
1.62.1. The account is due and payable. No account shall be
outstanding for more than ninety (90) days from the date of the
applicable invoice.
1.62.2. The account arose from a bona fide outright sale of
goods previously made or from the performance of services, but not
from leasing, and Borrower has possession of or has delivered to
Agent shipping and delivery receipts evidencing shipment of the
goods or, if representing services, the services have been fully
performed for the respective account debtor.
1.62.3. The account is not subject to any assignment, claim,
lien or security interest of any character or subject to any
attachment, levy, garnishment or other judicial process, except the
security interest of Agent.
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1.62.4. The account is not subject to any claim for credit,
setoff, allowance, adjustment by the account debtor or counterclaim,
and Borrower has not received any notice of any such claim for
credit, setoff, allowance, adjustment or counterclaim from or on
behalf of the account debtor.
1.62.5. The account arose in the ordinary course of Borrower's
business and no notice of the bankruptcy, insolvency or adverse
change in the financial condition of the account debtor has been
received by Borrower or Agent.
1.62.6. Agent has not previously notified Borrower that the
account or the account debtor is or has become unsatisfactory, based
upon reasonable credit standards, or the account debtor has been
adjudicated bankrupt or is subject to a similar proceeding.
1.62.7. The account is not evidenced by a judgment, an
instrument or chattel paper.
1.62.8. The account debtor is not a governmental entity or a
foreign (i.e., residing or incorporated in or organized under a
jurisdiction outside the United States) person or company and is not
a parent, subsidiary, officer, employee, director, agent or
Affiliate of any Borrower, and the account debtor and any Borrower
do not have common shareholders, officers or directors.
1.62.9. All receivables of one account debtor shall become
ineligible if more than 10% of such receivables are over ninety (90)
days past due from the invoice.
1.62.10. The accounts receivable of the account debtor cannot
exceed 10% of the total accounts receivable, and any amounts over
10% will be excluded from the Borrowing Base unless specifically
waived in writing in each instance by Agent in its sole discretion.
Notwithstanding the foregoing, the accounts receivable of Dollar
General shall be included as Qualified Receivables up to 40% of the
total accounts receivable, and any amounts over 40% will be excluded
from the Borrowing Base unless specifically waived in writing in
each instance by Agent in its sole discretion.
1.63. "Reportable Event" means any of the events set forth in
Section 4043 of ERISA.
1.64. "Security Agreement" means the Security Agreement and other
Collateral documents described in Section 3.
1.65. "Subsidiary" or "Subsidiaries" means, separately and
collectively, any corporation of which shares of stock having ordinary
voting power (other than stock having
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such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation
are at the time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by the
Borrower.
1.66. "Termination Date" means October 14, 2003.
1.67. "$3,000,150 Line Note" shall mean the $3,000,150 Promissory
Note in form and content as set forth on Schedule "1.67" attached hereto.
1.68. "$2,166,450 Term Note" shall mean the $2,166,450 Promissory
Note in form and content as set forth on Schedule "1.68" attached hereto,
1.69. "$2,666,800 Term Note" shall mean the $2,666,800 Promissory
Note in form and content as set forth on Schedule "1.69" attached hereto.
1.70. "UCC" shall mean the Uniform Commercial Code of the applicable
jurisdiction.
1.71. "UCC-1 Chattel Check" means a UCC Information and/or Copy
Request as to Borrower from the Chattel Records Division of the Secretary
of State of Delaware, the Oklahoma County Clerk, and from any other office
deemed necessary or advisable by Agent, which chattel checks must evidence
no conflicting security interests, except the Permitted Liens.
1.72. "UCC-1 Financing Statement" means a financing statement in
form and content substantially as set forth on Schedule "1.72" attached
hereto, which will be filed with the appropriate office and shall evidence
perfection of a first and prior security interest in the collateral
described in the Security Agreement in favor of Agent, for the benefit of
the Banks, except for the Permitted Liens.
2. AMOUNT AND TERMS OF THE LOANS.
2.1. $6,500,000 Term Loan. Subject to the terms and conditions of
this Agreement, each Bank agrees to loan Borrower said Bank's Pro Rata
Share of the aggregate principal amount of $6,500,000, to be further
evidenced by the $4,333,550 Term Note and the $2,166,450 Term Note. The
purpose of the advance under the $6,500,000 Term Loan is to enable
Borrower to refinance existing term debt.
2.2. $4,000,000 Term Loan. Subject to the terms and conditions of
this Agreement, each Bank agrees to loan Borrower said Bank's Pro Rata
Share of the aggregate principal amount of $4,000,000, to be further
evidenced by the $2,666,800 Term Note and the $1,333,200 Term Note. The
purpose of the advance under the $4,000,000 Term Loan is to enable
Borrower to refinance stockholder equity.
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2.3. $4,500,000 Revolving Line. Subject to the terms and conditions
of this Agreement, and so long as no Initial Default or Matured Default
has occurred, each Bank agrees to loan to Borrower (by advancing funds or
issuing Letters of Credit in amounts not to exceed $4,500,000 in the
aggregate), such amounts up to said Bank's Pro Rata Share of the aggregate
principal amount of $4,500,000 as Borrower may request from time to time
on or before the Termination Date, to be further evidenced by the
$3,000,150 Line Note and the $1,499,850 Line Note; provided that the
aggregate outstanding principal amount of advances at any time outstanding
shall not exceed the lesser of (i) $4,500,000 or (ii) the Borrowing Base.
Such Borrowing Base shall be computed on a monthly basis, and Borrower
agrees to provide to Agent on the 15th day of each month with regard to
the immediately preceding month all information requested in connection
therewith, including without limitation a Borrowing Base Certificate. In
the event Banks shall make advances in excess of the formula set forth
above, any such advance shall, nevertheless, be secured by all Collateral.
In the event outstanding advances with respect to Qualified Receivables or
Qualified Inventory fail to comply with such formula, by reason of any
accounts receivable or inventory ceasing to be so qualified, for whatever
reason, then Borrower shall immediately notify Agent of such situation and
shall, within five (5) Business Days of the imbalance, either (i) reduce
the amount of the outstanding balances to bring such amounts within the
formulas prescribed, or (ii) provide additional Qualified Receivable or
Qualified Inventory, without any additional advance being made by Banks
with respect thereto, necessary to comply with the formulas required
herein. Within the limits set forth in this Section 2.3, Borrower may
borrow, repay and reborrow at any one time and from time to time.
2.4. Notice and Manner of Borrowing. The Borrower shall give the
Agent notice of any Loans under this Agreement, specifying the date and
amount thereof, in writing or via telephone (with voice verification by
the appropriate officer), no later than 12:00 p.m. (Tulsa time) on the
date of such Loan. The Agent shall promptly notify each Bank of each such
notice. Not later than 2:00 p.m. on the date of such Loan, each Bank will
make available to the Agent at Agent's Principal Office in immediately
available funds, such Bank's Pro Rata Share of such Loan. After the
Agent's receipt of such funds, and upon fulfillment of the applicable
conditions, the Agent will make such Loan available to the Borrower in
immediately available funds by crediting the amount thereof to the
following account with the Agent: Account styled Orchids Paper Products
Company, No. 209908802.
2.5. Non-Receipt of Funds by Agent. Unless the Agent shall have
received notice from a Bank prior to the date on which such Bank is to
provide funds to the Agent for a Loan to be made by such Bank that such
Bank will not make available to the Agent such funds, the Agent may assume
that such Bank has made such funds available to the Agent on the date of
such Loan in accordance with Section 2.4 and the Agent in its sole
discretion may, but shall not be obligated to, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent such Bank shall not have made such funds
available to the Agent, such Bank agrees to repay to the Agent forthwith
on demand such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrower until
the date such amount is
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repaid to the Agent, at the customary rate set by the Agent for the
correction of errors among banks for three (3) Business Days and
thereafter at the Prime Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's
Loan for purposes of this Agreement. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower, and if the outstanding balance under
the $4,500,000 Revolving Line is equal to or exceeds the Pro Rata Share of
the Commitment of the remaining Bank, within ten (10) days of such notice
the Borrower shall pay such corresponding amount to the Agent with
interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Agent, at the
rate of interest applicable at the time to such proposed Loan.
Notwithstanding the above, as long as no Initial Default or Matured
Default exists, Bank's shall not unreasonably withhold funding of an
advance requested by Borrower in accordance with the terms of Section 2.3.
Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the
Agent in its sole discretion may, but shall not be obligated to, in
reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from
the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Agent, at the customary rate set by the Agent
for the correction of errors among banks for three (3) Business Days and
thereafter at the Prime Rate.
2.6. Interest Rate Determination. Each Bank agrees to furnish to the
Agent timely information for the purpose of determining each London
Interbank Offered Rate. If any Bank shall not furnish such timely
information to the Agent for determination of any such interest rate, the
Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Bank. The Agent shall give prompt
notice to the Borrower and the Banks of the applicable interest rate
determined by the Agent pursuant to the terms of this Agreement.
2.7. Method of Payment. The Borrower shall make each payment under
this Agreement and under the Notes on the date when due in lawful money of
the United States to the Agent at its Principal Office for the account of
each Bank in immediately available funds. The Agent will promptly
thereafter cause to be distributed each Bank's Pro Rata Share of such
payments of principal and interest in like funds to each Bank. The
Borrower hereby authorizes each Bank, if and to the extent payment is not
made when due under this Agreement or under the Notes, to charge from time
to time against any account of the Borrower with such Bank any amount as
due. Whenever any payment to be made under this Agreement or under the
Notes shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such
extension of
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time shall be included in the computation of the payment of interest and
the Non-use Fee, as the case may be, except, in the case of a LIBOR Loan,
if the result of such extension would be to extend such payment into
another calendar month, such payment shall be made on the immediately
preceding Business Day.
2.8. Illegality. Notwithstanding any other provision in this
Agreement, if any Bank determines that any applicable law, rule, or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank with any request or directive (whether
or not having the force of law) of any such authority, central bank, or
comparable agency shall make it unlawful or impossible for such Bank to
(1) maintain its Commitment, then upon notice to the Borrower by such Bank
the Commitment of such Bank shall terminate; or (2) maintain or fund its
LIBOR Loan, then upon notice to the Borrower by such Bank the outstanding
principal amount of the LIBOR Loan, together with interest accrued
thereon, and any other amounts payable to such Bank under this Agreement
shall be repaid (a) immediately upon demand of such Bank if such change or
compliance with such request, in the judgment of such Bank, requires
immediate repayment; or (b) at the expiration of the last Interest Period
to expire before the effective date of any such change or request.
2.9. Disaster. Notwithstanding anything to the contrary herein, if
Agent determines (which determination shall be conclusive) that:
(1) Quotations of interest rates for the relevant deposits
referred to in the definition of LIBOR Rate, as the case may be, are
not being provided in the relevant amounts or for the relative
maturities for purposes of determining the rate of interest on a
LIBOR Loan as provided in this Agreement; or
(2) The relevant rates of interest referred to in the
definition of LIBOR Rate do not accurately cover the cost to the
Banks of making or maintaining such LIBOR Loan;
then the Agent shall forthwith give notice thereof to the Borrower,
whereupon (a) the obligation of the Banks to make the LIBOR Loan shall be
suspended until the Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist; and (b) any outstanding
LIBOR Loan shall automatically be converted to a Prime Loan on the last
day of the then current Interest Period, unless no later than such date
the Borrower repays in full the then outstanding principal amount of each
LIBOR Loan, together with accrued interest thereon.
2.10. Increased Cost. The Borrower shall pay to the Agent, for the
account of the applicable Bank, from time to time such amounts as any Bank
may determine to be necessary to compensate such Bank for any costs
incurred by such Bank which such Bank determines are attributable to its
making or maintaining any LIBOR Loan hereunder or its obligation to
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make any such Loan hereunder, or any reduction in any amount receivable by
such Bank under this Agreement or the Notes in respect of any such Loan or
obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any change after
the date of this Agreement in U.S. federal, state, municipal, or foreign
laws or regulations (including Regulation D), or the adoption or making
after such date of any interpretations, directives, or requirements
applying to a class of banks including such Bank or under any U.S.
federal, state, municipal, or any foreign laws or regulations (whether or
not having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof
("Regulatory Change"), which: (1) changes the basis of taxation of any
amounts payable to such Bank under this Agreement or the Notes in respect
of any such Loan (other than taxes imposed on the overall net income of
such Bank for any such Loan by the jurisdiction where the Principal Office
is located); or (2) imposes or modifies any reserve, special deposit,
compulsory loan, or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of,
such Bank (including any of such Loans or any deposits referred to in the
definition of LIBOR Rate); or (3) imposes any other condition affecting
this Agreement or the Notes (or any of such extensions of credit or
liabilities). Such Bank will notify the Borrower of any event occurring
after the date of this Agreement which will entitle such Bank to
compensation pursuant to this Section 2.10 as promptly as practicable
after it obtains knowledge thereof and determines to request such
compensation.
Determinations by any Bank for purposes of this Section 2.10 of the
effect of any Regulatory Change on its costs of making or maintaining
Loans or on amounts receivable by it in respect of Loans, and of the
additional amounts required to compensate such Bank in respect of any
Additional Costs, shall be conclusive, provided that such determinations
are made on a reasonable basis.
2.11. Risk-Based Capital. In the event that any Bank determines that
(1) compliance with any judicial, administrative, or other governmental
interpretation of any law or regulation or (2) compliance by such Bank or
any corporation controlling such Bank with any guideline or request from
any central bank or other governmental authority (whether or not having
the force of law) has the effect of requiring an increase in the amount of
capital required or expected to be maintained by such Bank or any
corporation controlling such Bank, and such Bank determines that such
increase is based upon its obligations hereunder, and other similar
obligations, the Borrower shall pay to the Agent, for the account of the
applicable Bank, such additional amount as shall be certified by such Bank
to be the amount allocable to such Bank's obligations to the Borrower
hereunder. Such Bank will notify the Borrower of any event occurring after
the date of this Agreement that will entitle such Bank to compensation
pursuant to this Section 2.11 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation.
Determinations by any Bank for purposes of this Section 2.11 of the
effect of any increase in the amount of capital required to be maintained
by such Bank and of the amount
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allocable to such Bank's obligations to the Borrower hereunder shall be
conclusive, provided that such determinations are made on a reasonable
basis.
2.12. Funding Loss Indemnification. The Borrower shall pay to the
Agent, for the account of the applicable Bank, upon the request of the
Agent, such amount or amounts as shall be sufficient (in the reasonable
opinion of the Agent) to compensate it for any loss, cost, or expense
incurred as a result of any payment of a LIBOR Loan on a date other than
the last day of the Interest Period for such Loan including, but not
limited to, acceleration of the Loans by the Agent pursuant to Section
9.1, unless such loss, cost or expense resulted from the gross negligence
or willful misconduct of Agent, or Banks.
3. SECURITY. As security for any and all indebtedness, obligations or
liabilities of every kind and description of Borrower to Banks, including,
without limitation, all advances and Loans evidenced by the Notes, and any other
advances or loans made pursuant to this Agreement or any other instrument,
document, agreement executed and/or delivered by Borrower to Banks in connection
herewith, including any extensions, renewals or changes in form of any of the
Notes, and any other obligations or liabilities now existing or hereafter
arising, direct or indirect, absolute or contingent, joint and/or several,
howsoever created or obtained (separately and collectively, the "Obligations"),
Borrower grants to Agent, for the benefit of the Banks, the following liens and
security interests and also agrees as follows:
3.1. A first and prior security interest in all accounts, inventory,
equipment, general intangibles and chattel paper of Borrower, whether now
owned or hereafter acquired, howsoever arising or wheresoever located, all
as evidenced by the Security Agreement set forth on Schedule "3.1"
attached hereto.
3.2. A first and prior mortgage lien against the Mortgaged Property,
as evidenced by the Mortgage.
3.3. All proceeds and products of the foregoing.
3.4. Borrower also agrees to execute and deliver all financing
statements or other instruments, documents or agreements required by Agent
in order to effectuate the intent of the parties in connection herewith,
including without limitation documents necessary for proper perfection as
deemed necessary and/or advisable by Agent and legal counsel.
4. CONDITIONS PRECEDENT.
4.1. Closing. The closing shall occur when all conditions described
in this Section 4.1 have been satisfied.
4.1.1. Borrower shall execute and/or deliver to Agent the
following:
A. This Agreement;
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B. $3,000,150 Line Note;
C. $1,499,850 Line Note;
D. $4,333,550 Term Note;
E. $2,166,450 Term Note;
F. $2,666,800 Term Note;
G. $1,333,200 Term Note;
H. Security Agreement;
I. UCC-1 Financing Statement;
J. Mortgage;
K. Opinion of Borrower's Counsel;
L. Equipment Appraisal;
M. Borrowing Resolutions;
N. Certificates of Good Standing;
O. UCC-1 Chattel Check;
P. Mortgage Related Documents;
Q. completion of all schedules to this Agreement; and
R. any other instruments, documents or agreements reasonably
requested by Agent in connection herewith.
4.1.2. The following statements shall be true and correct.
A. The representations and warranties contained in this
Agreement and the other Loan Documents shall be true and
correct; and
B. No Initial Default or Matured Default has occurred and is
continuing or will occur as a result of the execution,
delivery and/or performance by Borrower under any of the Loan
Documents.
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4.1.3. The Agent shall have received such other approvals,
opinions, instruments, documents and/or agreements which it may
reasonably request.
4.2. Post-Closing. Borrower shall, within one hundred twenty (120)
days after closing, deliver to Agent documentation satisfactory to Agent
evidencing that the Easement in favor of Xxxxxxx Purina Company dated
April 19, 1976, recorded in Book 840, Page 914; as assigned to Protein
Technologies International, Inc., has been removed as an exception to the
title insurance policy, or in the alternative provide documentation
satisfactory to Agent that said Easement is properly filed, and does not
materially adversely affect Borrower's interest in the Mortgaged Property.
5. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to
each Bank that:
5.1. Incorporation, Good Standing, and Due Qualification. Borrower
is a corporation duly incorporated, validly existing, and in good standing
under the laws of the State in which it is incorporated; has the corporate
power and authority to own its assets and to transact the business in
which it is now engaged or proposed to be engaged; and is duly qualified
as a foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required.
5.2. Corporate Power and Authority. The execution, delivery, and
performance by Borrower of the Loan Documents have been duly authorized by
all necessary corporate action and do not and will not (1) require any
consent or approval of the stockholders which has not been given; (2)
contravene Borrower's charter or bylaws; (3) violate any provision of any
law, rule, regulation (including, without limitation, Regulations U and X
of the Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination, or award presently in effect
having applicability to Borrower; (4) result in a breach of or constitute
a default under any indenture or loan or credit agreement or any other
agreement, lease, or instrument to which Borrower is a party or by which
it or its properties may be bound or affected; (5) result in, or require,
the creation or imposition of any lien, upon or with respect to any of the
properties now owned or hereafter acquired by Borrower; or (6) cause
Borrower to be in default under any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination, or award or any such
indenture, agreement, lease, or instrument.
5.3. Legally Enforceable Agreement. This Agreement is, and each of
the other Loan Documents when delivered under this Agreement will be,
legal, valid, and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms, except to the extent
that such enforcement may be limited by applicable bankruptcy, insolvency,
and other similar laws affecting creditors' rights generally.
5.4. Financial Statements. The balance sheet of Borrower as of July
31, 2002, the related statements of income and retained earnings of
Borrower for the twelve (12) months
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then ended, are complete and correct and fairly present the financial
condition of Borrower at such dates and the results of the operations of
Borrower for the periods covered by such statements, all in accordance
with GAAP (subject to year-end adjustments in the case of the interim
financial statements), and since July 31, 2002, there has been no material
adverse change in the condition (financial or otherwise), business or
operations of Borrower. There are no liabilities of Borrower, fixed or
contingent, which are material but not reflected in such financial
statements or in the notes thereto, other than liabilities arising in the
ordinary course of business since July 31, 2002. No information, exhibit,
or report furnished by the Borrower to any Bank in connection with the
negotiation of this Agreement contains any material misstatement of fact
or omits to state a material fact or any fact necessary to make the
statement contained therein not materially misleading.
5.5. Labor Disputes and Acts of God. Neither the business nor the
properties of Borrower is affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or other casualty (whether or not covered by
insurance), materially adversely affecting such business or the operation
of Borrower.
5.6. Other Agreements. Borrower is not a party to any indenture,
loan, or credit agreement, or to any lease or other agreement or
instrument, or subject to any charter or corporate restriction, the
performance of which in accordance with the respective terms could have a
material adverse effect on the business, properties, assets, operations,
or condition, financial or otherwise, of Borrower or the ability of
Borrower to carry out its obligations under the Loan Documents. Borrower
is not in material default in any respect in the performance, observance,
or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business to which
it is a party.
5.7. Litigation. There is no pending or threatened action or
proceeding against or affecting Borrower before any court, governmental
agency or arbitrator, which may, in any one case or in the aggregate,
materially adversely affect the financial condition, operations,
properties, or business of Borrower or the ability of Borrower to perform
its obligations under the Loan Documents. Any litigation which does exist
is set forth in detail satisfactory to Agent on Schedule "5.7" hereto, but
Borrower represents to each Bank that such litigation does not violate
this Section 5.7.
5.8. Ownership and Liens. Borrower has title to, or valid leasehold
interests in, all of its properties and assets, real and personal,
including the properties and assets and leasehold interest reflected in
the financial statements referred to in Section 5.4, and none of the
properties and assets owned by Borrower, and none of its leasehold
interests, are subject to any lien, except the Permitted Liens.
5.9. ERISA. Borrower is in compliance in all material respects with
all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any
Plan; no notice of intent to terminate a Plan has been
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filed, nor has any Plan been terminated; no circumstances exist which
constitute grounds entitling the PBGC to institute proceedings to
terminate, or appoint a trustee to administer, a Plan, nor has the PBGC
instituted any such proceedings; neither Borrower nor any Commonly
Controlled Entity has completely or partially withdrawn from a
Multiemployer Plan; Borrower and each Commonly Controlled Entity have met
their minimum funding requirements under ERISA with respect to all of
their Plans and the present value of all vested benefits under each Plan
exceeds the fair market value of all Plan assets allocable to such
benefits, as determined on the most recent valuation date of the Plan and
in accordance with the provisions of ERISA; and neither Borrower nor any
Commonly Controlled Entity has incurred any liability to the PBGC under
ERISA.
5.10. Operation of Business. Borrower possesses all licenses,
permits, franchises, patents, copyrights, trademarks, and trade names, or
rights thereto, to conduct its business substantially as now conducted and
as presently proposed to be conducted, and Borrower is not in violation of
any valid rights of others with respect to any of the foregoing.
5.11. Taxes. Borrower has filed all tax returns (federal, state and
local) required to be filed by law and has paid all taxes, assessments,
and governmental charges and levies thereon to be due, including interest
and penalties, except any such taxes, charges or levies which are being
diligently contested in good faith by appropriate proceedings.
5.12. Debt. Schedule "5.12" is a complete and correct list of all
credit agreements, indentures, purchase agreements, guaranties, Capital
Leases, and other investments, agreements, and arrangements presently in
effect providing for or relating to extensions of credit (including
agreements and arrangements for the issuance of letters of credit or for
acceptance financing) in respect of which Borrower is in any manner
directly or contingently obligated; and the maximum principal or face
amounts of the debt in question, which are outstanding and which can be
outstanding, are correctly stated, and all liens of any nature given or
agreed to be given as security therefor are correctly described or
indicated in such Schedule. With regard to any guaranty or other
contingent obligation of Borrower, Borrower shall promptly notify Agent in
the event any such obligation becomes non-contingent.
5.13. Environment. Borrower has duly complied with, and its
business, operations, assets, equipment, property, leaseholds, or other
facilities are in compliance with, the provisions of all federal, state,
and local environmental, health and safety laws, codes and ordinances, and
all rules and regulations promulgated thereunder, as more fully set forth
in the Mortgage.
6. AFFIRMATIVE COVENANTS. So long as any Note shall remain unpaid or any
Bank shall have any Commitment under this Agreement, Borrower will comply with
the following:
6.1. Maintenance of Existence. Preserve and maintain its corporate
existence and good standing in the states in which it does business, and
qualify and remain qualified as a foreign corporation in each jurisdiction
in which such qualification is required.
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6.2. Maintenance of Records. Keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP,
reflecting all financial transactions.
6.3. Maintenance of Properties. Maintain, keep, and preserve all of
its properties (tangible and intangible) necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear
and tear excepted.
6.4. Lockbox. Upon the request of Agent, Borrower shall establish
and maintain a lockbox in Agent pursuant to an agreement in form and
substance satisfactory to Agent which shall provide, in part, that: (a)
Borrower shall deposit all checks and other instruments with respect to
its notes, chattel paper or accounts receivable in the form received by
them in the lockbox, (b) unless otherwise directed by Agent, Borrower
shall direct its debtors and customers to make all payments in respect to
their accounts receivable directly to the lockbox at Agent, (c) Agent
shall deposit all items received by it to accounts designated by the Agent
for the Borrower, provided no Matured Default shall have occurred and be
continuing, and (d) if a Matured Default shall have occurred and be
continuing, all such payments may be applied to the Indebtedness, at such
times and in such order as Agent may elect.
6.5. Conduct of Business. Continue to engage in an efficient and
economical manner in a business of the same general type as conducted by
it on the date of this Agreement.
6.6. Maintenance of Insurance. Borrower will keep or cause to be
kept adequately insured by financially sound and reputable insurers its
plant, equipment, motor vehicles, and all other property of a character
usually insured by businesses engaged in the same or similar businesses.
Upon demand by the Agent, any insurance policies covering the Collateral
shall include a loss payable endorsement to Agent, shall provide that such
policies may not be canceled, reduced or affected in any manner for any
reason without thirty (30) days prior notice to the Agent, and shall
provide for any other matters which the Agent may reasonably require. Such
insurance shall be against fire, casualty and any other hazards normally
insured against and shall be in the amount of the full value (less a
reasonable deductible not to exceed amounts customary in the industry for
similarly situated businesses and properties) of the property insured. So
long as no Initial Default or Matured Default exists and is continuing,
the proceeds of said insurance policies may be used for repair or
replacement of the damaged property. The Borrower shall at all times
maintain adequate insurance against damage to persons or property, which
insurance shall be by financially sound and reputable insurers and shall,
without limitation, provide the following coverages: comprehensive general
liability (including, without limitation, coverage, where applicable,
damage caused by explosion, broad form property damage coverage, broad
form coverage for contractually independent contractors), worker's
compensation, products liability and automobile liability.
6.7. Compliance with Laws. Comply in all material respects with all
applicable laws, rules, regulations, and orders, such compliance to
include, without limitation, paying
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before the same become delinquent all taxes, assessments, and governmental
charges imposed upon it or upon its property.
6.8. Right of Inspection. At any reasonable time and from time to
time, and following twenty-four (24) hours prior written notice, permit
the Agent or any agent or representative thereof, to reasonably examine
and make copies of (at a cost to Borrower not to exceed $1,000) and
abstracts from the records and books of account of, and visit the
properties of, Borrower, and to discuss the affairs, finances, and
accounts of Borrower with any of its officers and directors and Borrower's
independent accountants. Agent contemplates conducting at least
semi-annual field audits of the Borrower's property.
6.9. Reporting Requirements. Furnish to Agent:
6.9.1. Quarterly Financial Statements. As soon as available
and in any event within forty-five (45) days after the end of each
fiscal quarter of Borrower, Borrower shall deliver to Agent
consolidated interim balance sheets of Borrower as of the end of
such quarter, statements of income and retained earnings of Borrower
for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, and statements of cash flow of
Borrower for the portion of the fiscal year ended with the last day
of such quarter, all in sufficient detail and stating in comparative
form the respective figures for the corresponding date and period in
the previous fiscal year all prepared in accordance with GAAP and
certified by the chief financial officer of Borrower (subject to
normal year end audit adjustments).
6.9.2. Annual Financial Statements. As soon as available and
in any event within ninety (90) days after the end of each fiscal
year of Borrower, commencing with the fiscal year ending December
31, 2002, balance sheets of Borrower as of the end of such fiscal
year, statements of income and retained earnings of Borrower for
such fiscal year, and statements of cash flow of Borrower for such
fiscal year, with explanatory footnotes in sufficient detail
acceptable to the Agent, and stating in comparative form the
respective figures for the corresponding date and period in the
prior fiscal year and all prepared in accordance with GAAP and as to
the statements accompanied by an unqualified opinion thereon
acceptable to the Agent by independent accountants selected by
Borrower and which are acceptable to the Agent;
6.9.3. Management Letters. Promptly upon receipt thereof,
copies of any reports submitted to Borrower by independent certified
public accountants in connection with examination of the financial
statements of Borrower made by such accountants;
6.9.4. Compliance Certificate. Within forty-five (45) days
after the end of each fiscal quarter of Borrower a certificate of
compliance ("Compliance
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Certificate") executed by the chief financial officer of Borrower,
in form and content as set forth in Schedule "6.9.4" hereto;
6.9.5. Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any
court or governmental department, commission, board, bureau, agency,
or instrumentality, domestic or foreign, affecting Borrower, which,
if determined adversely to Borrower, could have a material adverse
effect on the financial condition, properties, or operations of
Borrower;
6.9.6. Notice of Initial Defaults and Matured Defaults. As
soon as possible and in any event within five (5) days after the
occurrence of each Initial Default or Matured Default, a written
notice setting forth the details of such Initial Default or Matured
Default and the action which is proposed to be taken by the Borrower
with respect thereto;
6.9.7. ERISA Reports. As soon as possible, and in any event
within thirty (30) days after Borrower knows or has reason to know
that any circumstances exist that constitute grounds entitling the
PBGC to institute proceedings to terminate a Plan subject to ERISA
with respect to Borrower or any Commonly Controlled Entity, and
promptly but in any event within two (2) Business Days of receipt by
the Borrower or any Commonly Controlled Entity of notice that the
PBGC intends to terminate a Plan or appoint a trustee to administer
the same, and promptly but in any event within five (5) Business
Days of the receipt of notice concerning the imposition of
withdrawal liability with respect to Borrower or any Commonly
Controlled Entity, the Borrower will deliver to the Agent a
certificate of the chief financial officer of the Borrower setting
forth all relevant details and the action which the Borrower
proposes to take with respect thereto;
6.9.8. Reports to Other Creditors. Promptly after the
furnishing thereof, copies of any statement or report furnished to
any other party pursuant to the terms of any indenture, loan,
credit, or similar agreement and not otherwise required to be
furnished to the Agent pursuant to any other clause of this Section
6; and
6.9.9. General Information. Such other information respecting
the condition or operations, financial or otherwise, of Borrower as
the Agent may from time to time reasonably request.
6.10. Environment. Be and remain in material compliance with the
provisions of all federal, state, and local environmental, health and
safety laws, codes and ordinances, and all rules and regulations issued
thereunder, as more fully set forth in the Mortgage.
6.11. Operating Accounts. Maintain its primary operating accounts at
Agent, with the exception of its payroll account.
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6.12. Subsidiaries. At the time of creation or acquisition of any
Subsidiary, Borrower shall cause such Subsidiary to properly become a
Guarantor hereunder.
7. NEGATIVE COVENANTS. So long as any Notes shall remain unpaid or any
Bank shall have any Commitment under this Agreement or any Letter of Credit
issued in connection herewith, Borrower will not:
7.1. Negative Pledge. Create, incur, permit or suffer to exist any
Liens upon any of its assets or properties, now owned or hereafter
acquired, except for the Permitted Liens.
7.2. Debt. Create, incur, assume, or suffer to exist any Debt,
except:
(1) Indebtedness arising out of this Agreement;
(2) Purchase money indebtedness not to exceed $500,000 in the
aggregate for any given fiscal year;
(3) Current liabilities for taxes and assessments incurred in
the ordinary course of business;
(4) Indebtedness in respect of current accounts payable or
accrued (other than for borrowed funds or purchase money
obligations) and incurred in the ordinary course of business,
provided that all such liabilities, accounts and claims shall be
promptly paid and discharged when due or in conformity with
customary trade terms;
(5) Debt described in Schedule "5.12" but no voluntary
prepayment, renewals, extensions, or refinancings thereof;
(6) Unsecured non-Bank Debt in addition to the debt described
in Schedule "5.12" not to exceed $100,000 for the Borrower in the
aggregate in any given fiscal year; and
(7) Accounts payable to trade creditors for goods or services
which are not past due more than ninety (90) days from the billing
date, in each case incurred in the ordinary course of business, as
presently conducted, and paid within the specified time, unless
contested in good faith and by appropriate proceedings.
7.3. Mergers, etc. Wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to any Person.
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7.4. Leases. Without Agent's prior written consent, create, incur,
assume, or suffer to exist, any obligation as lessee for the rental or
hire of any real or personal property, except (1) the leases set forth on
Schedule "7.4" hereto and any extensions or renewals thereof and (2)
leases (other than Capital Leases) which do not in the aggregate require
Borrower to make payments (including taxes, insurance, maintenance, and
similar expenses which the Borrower is required to pay under the terms of
any lease) in any fiscal year of Borrower in excess of Fifty Thousand and
no/100ths Dollars ($50,000). Agent agrees not to unreasonably withhold its
consent and will endeavor to respond within ten (10) days to Borrower's
request therefor.
7.5. Sale and Leaseback. Sell, transfer, or otherwise dispose of any
real or personal property to any Person and thereafter directly or
indirectly lease back the same or similar property.
7.6. Dividends. Except as related to the refinance of stockholder
equity contemplated under Section 2.2 hereof, declare or pay any
dividends; or purchase, redeem, retire, or otherwise acquire for value any
of its capital stock now or hereafter outstanding; or make any
distribution of assets to its stockholders as such whether in cash,
assets, or in obligations of the Borrower; or allocate or otherwise set
apart any sum for the payment of any dividend or distribution on, or for
the purchase, redemption, or retirement of any shares of its capital
stock; or make any distribution by reduction of capital or otherwise in
respect of any shares of its capital stock.
7.7. Sale of Assets. Sell, lease, assign, transfer, or otherwise
dispose of, any of its now owned or hereafter acquired assets (including,
without limitation, shares of stock, receivables, and leasehold
interests), except: (1) inventory disposed of or leased in the ordinary
course of business; (2) the sale or other disposition of assets no longer
used or useful in the conduct of its business; and (3) treasury stock.
7.8. Guaranties, etc. Assume, guarantee, endorse, or otherwise be or
become directly or contingently responsible or liable (including, but not
limited to, an agreement to purchase any obligation, stock, assets, goods,
or services, or to supply or advance any funds, assets, goods, or
services, or an agreement to maintain or cause such Person to maintain a
minimum working capital net worth, or otherwise to assure the creditors of
any Person against loss), for obligations of any Person, except guaranties
by endorsement of negotiable instruments for deposits or collection or
similar transactions in the ordinary course of business.
7.9. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property
or the rendering of any service, with any Affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of each
Borrower's business and upon fair and reasonable terms no less favorable
to the Borrower than would obtain in a comparable arm's-length transaction
with a Person not an Affiliate.
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8. FINANCIAL COVENANTS. So long as any Notes shall remain unpaid or any
Bank shall have any Commitment under this Agreement, Borrower shall comply with
the following on a consolidated basis:
8.1. Funded Debt to EBITDA. Maintain at all times a ratio of Funded
Debt to EBITDA of not greater than 3 to 1.
8.2. Fiscal Year. Not change its fiscal year end.
8.3. Tangible Net Worth. Maintain at all times a tangible net worth
of not less than Eight Million Dollars ($8,000,000).
8.4. Debt Service Coverage Ratio. Maintain at all times a Debt
Service Coverage Ratio not less than 1.25 to 1.
8.5. Capital Expenditures. Not make expenditures for fixed or
capital assets if, after giving effect thereto, the aggregate of all such
expenditures would exceed $1,000,000 during any fiscal year of the
Borrower, beginning December 31, 2002.
9. EVENTS OF DEFAULT.
9.1. Events of Default. If any of the following events shall occur:
(1) Borrower should fail to pay the principal of, or interest
on, the Notes, or any amount of the Commitment or other fee within
ten (10) days as and when due and payable;
(2) Any representation or warranty made or deemed made by
Borrower in this Agreement or the Security Agreement or which is
contained in any certificate, document, opinion, or financial or
other statement furnished at any time under or in connection with
any Loan Document shall prove to have been incorrect, incomplete, or
misleading in any material respect on or as of the date made or
deemed made;
(3) Borrower shall fail to perform or observe any term,
covenant, or agreement contained in this Agreement or any Loan
Documents, following a thirty (30) day notice and cure period as to
non-monetary covenant defaults;
(4) Borrower shall (a) fail to pay any indebtedness for
borrowed money (other than the Notes) or any interest or premium
thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise); or(b) fail to
perform or observe any term, covenant, or condition on its part
required to be performed or observed under any agreement or
instrument relating to any such indebtedness, when required to be
performed or observed, if the effect of such failure to perform or
observe is to accelerate, or to permit the acceleration of, after
the giving
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of any applicable notice or passage of time, or both, the maturity
of such indebtedness, whether or not such failure to perform or
observe shall be waived by the holder of such indebtedness, or any
such indebtedness shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(5) Borrower or any Guarantor (a) shall generally not pay, or
shall be unable to pay, or shall admit in writing its inability to
pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, or petition or apply to any
tribunal for the appointment of a custodian, receiver, or trustee
for it or a substantial part of its assets; or (c) shall commence
any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (d) shall
have had any such petition or application filed or any such
proceeding commenced against it in which an order for relief is
entered or an adjudication or appointment is made, and which remains
undismissed for a period of thirty (30) days or more; or (e) shall
take any corporate action indicating its consent to, approval of, or
acquiescence in any such petition, application, proceeding, or order
for relief or the appointment of a custodian, receiver, or trustee
for all or any substantial part of its properties; or (f) shall
suffer such custodianship, receivership, or trusteeship to continue
undischarged for a period of thirty (30) days or more;
(6) One or more judgments, decrees, or orders for the payment
of money in excess of One Hundred Thousand and no/100ths Dollars
($100,000.00) in the aggregate shall be rendered against Borrower,
and such judgments, decrees, or order shall continue unsatisfied and
in effect for a period of sixty (60) consecutive days without being
vacated, discharged, satisfied, or stayed or bonded pending appeal;
(7) The Collateral documents shall at any time after their
execution and delivery and for any reason cease (a) to create a
valid and perfected first priority security interest in and to the
property purported to be subject to such Collateral documents; or
(b) to be in full force and effect or shall be declared null and
void, or the validity or enforceability thereof shall be contested
by Borrower, or Borrower shall deny it has any further liability or
obligation under the Collateral documents, or Borrower shall fail to
perform any of its obligations under the Collateral documents; or
the validity or enforceability of the Guaranty Agreement of any
Guarantor shall be contested, or liability thereunder is denied;
(8) Any of the following events shall occur or exist with
respect to Borrower and any Commonly Controlled Entity under ERISA:
any Reportable Event shall occur; complete or partial withdrawal
from any Multiemployer Plans shall occur; any Prohibited Transaction
shall occur; a notice of intent to terminate a Plan shall be filed,
or a Plan shall be terminated; or circumstances shall exist which
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constitute grounds entitling the PBGC to institute proceedings to
terminate a Plan, or the PBGC shall institute such proceedings; and
in each case above, such event or condition, together with all other
events or conditions, if any, could subject Borrower to any tax,
penalty, or other liability which in the aggregate may exceed One
Hundred Thousand and no/100ths Dollars ($100,000.00);
(9) If the Agent receives its first notice of a hazardous
discharge or an environmental complaint from a source other than
Borrower, and the Agent does not receive notice (which may be given
in oral form, provided same is followed with all due dispatch by
written notice by Certified Mail, Return Receipt Requested) of such
hazardous discharge or environmental complaint from any Borrower
within twenty-four (24) hours of the time the Agent first receives
said notice from a source other than any Borrower; or if any
federal, state, or local agency asserts or creates a Lien upon any
or all of the assets, equipment, property, leaseholds, or other
facilities of the Borrower by reason of the occurrence of a
hazardous discharge or an environmental complaint; or if any
federal, state, or local agency asserts a claim against Borrower
and/or its assets, equipment, property, leaseholds, or other
facilities for damages or cleanup costs relating to a hazardous
discharge or an environmental complaint; provided, however, that
such claim shall not constitute a default if, within five (5)
Business Days of the occurrence giving rise to the claim, (a) the
Borrower can prove to the Agent's satisfaction that the Borrower has
commenced and is diligently pursuing either: (i) a cure or
correction of the event which constitutes the basis for the claim,
and continues diligently to pursue such cure or correction to
completion or (ii) proceedings for an injunction, a restraining
order, or other appropriate relief preventing such agency or
agencies from asserting such claim, which relief is granted within
ten (10) Business Days of the occurrence giving rise to the claim
and the injunction, order, or relief is not thereafter resolved or
reversed on appeal; and (b) in either of the foregoing events, the
Borrower has posted a bond, letter of credit, or other security
satisfactory in form, substance, and amount to both the Agent and
the agency or entity asserting the claim to secure the proper and
complete cure or correction of the event which constitutes the basis
for the claim; or
(10) Without the prior written consent of Agent, a change in
management should occur such that the managing officers of Borrower
on the date of this Agreement cease to be the managing officers of
Borrower. Notwithstanding the foregoing, a termination for cause
shall not be considered an Event of Default.
In any such event, Agent may, at the request of or with the consent
of the Banks, (a) declare the Banks' obligation to make Loans to be
terminated, whereupon the same shall forthwith terminate; and/or (b)
declare the outstanding Notes, all interest thereon, and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon
the Notes, all such interest, and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest, or
further notice of any kind, all of which are hereby expressly waived by
the Borrower. Additionally, such Bank is hereby authorized at any time
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and from time to time, without further notice to Borrower (any such notice
being expressly waived by the Borrower), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement
or the Notes or other Loan Documents, irrespective of whether or not such
Bank shall have made any demand under this Agreement or the Notes or such
other Loan document and although such obligations may be unmatured. The
rights of the Banks under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Banks may have, in this Agreement, any other Loan Document or at law or
equity, including without limitation the right to accelerate the Notes
upon the occurrence of a Matured Default.
10. AGENCY PROVISIONS.
10.1. Authorization and Action. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated
to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The duties of the Agent shall be mechanical
and administrative in nature and the Agent shall not by reason of this
Agreement be a trustee or fiduciary for any Bank. The Agent shall have no
duties or responsibilities except those expressly set forth herein. As to
any matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of the Notes), the Agent
shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or so refraining from acting) upon the instructions
of the Banks, and such instructions shall be binding upon all Banks and
all holders of Notes; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability
or which is contrary to this Agreement or applicable law.
10.2. Liability of Agent. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with
this Agreement in the absence of its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
the Agent (1) may treat the payee of any Note as the holder thereof until
the Agent receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent; (2) may
consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants, or experts;
(3) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties, or representations
made in or in connection with this Agreement; (4) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of
the terms, covenants, or conditions of this Agreement on the part of the
Borrower, or to inspect the property (including the books and records) of
the Borrower; (5) shall not be responsible to any Bank for the due
execution,
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legality, validity, enforceability, genuineness, perfection, sufficiency,
or value of this Agreement or any other instrument or document furnished
pursuant thereto; and (6) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate, or other
instrument or writing (which may be sent by telegram, telex, or facsimile
transmission) believed by it to be genuine and signed or sent by the
proper party or parties.
10.3. Rights of Agent as a Bank. With respect to its Commitment, the
Loans made by it and the Notes issued to it, the Agent shall have the same
rights and powers under this Agreement as any other Bank and may exercise
the same as though it were not the Agent; and the term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include the Agent in its
individual capacity. The Agent and its Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower, any of its Subsidiaries
and any Person who may do business with or own securities of the Borrower
or any Subsidiary, all as if the Agent were not the Agent and without any
duty to account therefor to the Banks.
10.4. Independent Credit Decisions. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank
and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent
shall have no duty or responsibility to provide any Bank with any credit
or other information concerning the affairs, financial condition or
business of the Borrower or any of its Subsidiaries (or any of their
Affiliates) which may come into the possession of the Agent or any of its
Affiliates.
10.5. Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrower), ratably according to the
respective amounts of their Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of this Agreement or any action taken
or omitted by the Agent under this Agreement, provided that no Bank shall
be liable for any portion of any of the foregoing resulting from the
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent (to the extent not
reimbursed by the Borrower) promptly upon demand for its ratable share of
any out-of-pocket expenses (including counsel fees) incurred by the Agent
in connection with the preparation, administration, or enforcement of, or
legal advice in respect of rights or responsibilities under, this
Agreement.
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10.6. Successor Agent. The Agent may resign at any time by giving at
least sixty (60) days' prior written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Banks shall have the right to
appoint a successor Agent. If no successor Agent shall have been so
appointed by the Banks, and shall have accepted such appointment, within
thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint
a successor Agent, which shall be a commercial bank organized under the
laws of the United States of America or of any State thereof. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under
this Agreement.
10.7. Sharing of Payments, Etc. If any Bank shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) on account of the Notes held by it in excess of its
ratable share of payments on account of the Notes obtained by all the
Banks, such Bank shall purchase from the other Banks such participations
in the Notes held by them as shall be necessary to cause such purchasing
Bank to share the excess payment ratably with each of the other Banks,
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase from each
Bank shall be rescinded and each Bank shall repay to the purchasing Bank
the purchase price to the extent of such recovery together with an amount
equal to such Bank's ratable share (according to the proportion of (1) the
amount of such Bank's required repayment to (2) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid
or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 10.7 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right
of setoff) with respect to such participation as fully as if such Bank
were the direct creditor of the Borrower in the amount of such
participation.
11. MISCELLANEOUS.
11.1. Amendments, Etc. No amendment, modification, termination, or
waiver of any provision of any Loan Document to which the Borrower is a
party, nor consent to any departure by the Borrower from any Loan Document
to which it is a party, shall in any event be effective unless the same
shall be in writing, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given, provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following:
(1) waive any of the conditions precedent specified in Section 4 hereof;
(2) increase the Commitments of the Banks or subject the Banks to any
additional obligations; (3) reduce the principal of, or interest on, the
Notes or any fees hereunder; (4) postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees hereunder; (5)
change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes or the number of Banks which shall be
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required for the Banks or any of them to take action hereunder; or amend,
modify or waive any provision of this Section 11.1, and provided further
that no amendment, waiver, or consent shall, unless in writing and signed
by the Agent in addition to the Banks required above to take such action,
affect the rights or duties of the Agent under any of the Loan Documents.
11.2. Notices, etc. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed
to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written
confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if
sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers
as a party may designate by notice to the other parties):
If to the Borrower:
ORCHIDS PAPER PRODUCTS COMPANY
Xx. 0, Xxx 00-0
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile No.: (000)000-0000
With a copy to:
Hall, Estill, Hardwick, Gable, Golden & Xxxxxx, P.C.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile No.: (000)000-0000
If to the Agent:
BANK OF OKLAHOMA, N.A.
X.X. Xxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000)000-0000
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With a copy to:
Riggs, Abney, Neal, Turpen, Orbison & Xxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: (000)000-0000
If to Local Oklahoma Bank, N.A.:
LOCAL OKLAHOMA BANK, N.A.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Blue
Facsimile No.: (000) 000-0000
or at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 11.2. Except as is otherwise provided in this Agreement, all such
notices and communications shall be effective when deposited in the mails
addressed as aforesaid, except that notices for advances to the Agent
pursuant to the provisions of Section 2.4 shall not be effective until
received by the Agent. Any notices due from Borrower need only be sent to
the Agent. The Agent shall provide copies of all notices from Borrower to
the Banks.
11.3. No Waiver. No failure or delay on the part of any Bank or the
Agent in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such
right, power, or remedy preclude any other or further exercise thereof or
the exercise of any other right, power, or remedy hereunder. The rights
and remedies provided herein are cumulative, and are not exclusive of any
other rights, powers, privileges, or remedies, now or hereafter existing,
at law or in equity or otherwise.
11.4. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Borrower, each Bank and the Agent, and
their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights under any Loan Document to which the
Borrower is a party without the prior written consent of all the Banks.
11.5. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all costs and expenses incurred by the Agent in connection with the
preparation, execution, delivery, filing, and initial administration of
the Loan Documents, including without limitation the reasonable fees of
Riggs, Abney, Neal, Turpen, Orbison & Xxxxx, and of any amendment,
modification, or supplement to the Loan Documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for
the Agent or any of the Banks, incurred in connection with advising the
Agent or any of the Banks as to their rights and
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responsibilities hereunder. The Borrower also agrees to pay all such
costs, expenses and reasonable fees, including court costs, incurred in
connection with enforcement of the Loan Documents, or any amendment,
modification, or supplement thereto, whether by negotiation, legal
proceedings, or otherwise. In addition, the Borrower shall pay any and all
stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, and recording of any of
the Loan Documents and the other documents to be delivered under any such
Loan Documents, and agrees to hold the Agent and the Banks harmless from
and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees. This provision
shall survive termination of this Agreement.
11.6. Integration. This Agreement and the Loan Documents contain the
entire agreement between the parties relating to the subject matter hereof
and supersede all prior and contemporaneous oral statements and writings
with respect thereto.
11.7. Indemnity. The Borrower hereby agrees to defend, indemnify,
and hold each Bank harmless from and against any and all claims, damages,
judgments, penalties, costs, and expenses (including reasonable attorneys'
fees and court costs now or hereafter arising from the aforesaid
enforcement of this clause) arising directly or indirectly from the
activities of the Borrower, its predecessors in interest, or third parties
with whom they have a contractual relationship, or arising directly or
indirectly from the violation of any environmental protection, health or
safety law, whether such claims are asserted by any governmental agency or
any other Person, except where such claim or expense arose from the gross
negligence or willful misconduct of Agent or any Bank. This indemnity
shall survive termination of this Agreement.
11.8. Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the State of Oklahoma.
11.9. Severability of Provisions. Any provision of any Loan
Documents which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of such
Loan Document or affecting the validity or enforceability of such
provision in any other jurisdiction.
11.10. Counterparts. This Agreement may be executed in any number of
counterparts, and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
11.11. Headings. Article and Section headings in the Loan Documents
are included in such Loan Documents for the convenience of reference only
and shall not constitute a part of the applicable Loan Documents for any
other purpose.
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11.12. Jury Trial Waiver. BORROWER AND EACH BANK HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN
CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY
RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS. BORROWER AND EACH BANK
ALSO SUBMITS ITSELF AND OTHERWISE CONSENTS TO THE JURISDICTION AND VENUE
OF THE XXXXX COUNTY DISTRICT COURT OR FEDERAL DISTRICT COURT (NORTHERN
DISTRICT OF OKLAHOMA), AS TO ANY DISPUTES OR OTHER MATTERS ARISING OUT OF
OR IN CONNECTION HEREWITH.
11.13. Conflicts. To the extent any conflict exists under any of the
Loan Documents, this Agreement shall be controlling.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
"Borrower"
ORCHIDS PAPER PRODUCTS COMPANY
By /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxxxx, Chief Financial Officer
and Secretary
"Banks"
BANK OF OKLAHOMA, N.A.
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx, Senior Vice President
Principal Office:
Bank of Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxx, Xxxxxxxx 00000
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LOCAL OKLAHOMA BANK, N.A.
By /s/ Xxxxxxxxx X. Blue
-----------------------------------------
Xxxxxxxxx X. Blue, Senior Vice President
Principal Office:
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
"Agent"
BANK OF OKLAHOMA, N.A.
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx, Senior Vide President
Principal Office:
Bank of Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxx, Xxxxxxxx 00000
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