EXHIBIT 4.6
AMENDMENT FOUR TO AGENTED REVOLVING
CREDIT AND TERM LOAN AGREEMENT
This Amendment Four to Agented Revolving Credit and Term Loan Agreement
("Amendment") is dated effective July 19, 2004, among ORCHIDS PAPER PRODUCTS
COMPANY, a Delaware corporation ("Orchids"), ORCHIDS ACQUISITION GROUP, INC., a
Delaware corporation ("OAG") ("Orchids" and "OAG" are referred to herein,
separately and collectively, as "Borrower"), and BANK OF OKLAHOMA, N.A. ("BOK")
and INTERNATIONAL BANK OF COMMERCE (F/K/A LOCAL OKLAHOMA BANK) ("IBC") (BOK and
IBC are referred to herein individually as a "Bank" and collectively as the
"Banks"), and BANK OF OKLAHOMA, N.A., as agent for the Banks hereunder (in such
capacity, "Agent").
RECITALS
A. Reference is made to the Agented Revolving Credit and Term Loan
Agreement by and among Orchids, Banks and Agent, dated October 15, 2002 and
amended October 14, 2003, January 14,2004, and March 1,2004, among Borrower and
Banks ("Credit Agreement"), pursuant to which currently exists: (i) a
$13,500,000 term loan; and (ii) a $5,000,000 revolving line of credit. Terms
used herein shall have the meanings given in the Credit Agreement, unless
otherwise defined herein.
B. Borrower has requested that Banks amend the Credit Agreement to
reflect that (i) the $13,500,000 term loan is being reduced to $11,764,819.37,
and new payment amounts will go into effect under the Term Notes, (ii) the new
$3,898,851.98 equipment loan from BOK to Borrower does not violate any covenants
or provisions of the Credit Agreement; and (ii) the required ratio of Funded
Debt to EBITDA shall be temporarily increased; and Banks have agreed to
accommodate Borrower's request, subject to the terms and conditions of this
Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the representations and warranties
contained herein and for valuable consideration received, the parties agree to
the following:
1. Acknowledgment of Equipment Loan. The Banks hereby acknowledge that
on July 8,2004, Borrower executed a Loan Agreement, Promissory Note, Security
Agreement and certain other related documents in favor of BOK, under which BOK
advanced funds to Borrower in the amount of $3,898,851.98 ("Equipment Loan") for
the purpose of refinancing the lease with Banc One Leasing Corporation
("Lease"), the terms of which are contained in Lease Agreement #1000110724 dated
August 31, 2000. The Banks hereby acknowledge and agree that the Equipment Loan
is a refinance of the Lease previously disclosed to Banks by inclusion on
Schedule "7.4" of the Credit Agreement, and that Borrower's entering into the
Equipment Loan shall not be construed as a violation of any covenants contained
in the Credit Agreement, including, without limitation, Section 7.2 (Debt). In
addition, the Banks hereby acknowledge and agree that BOK shall be the sole
lender under the Equipment Loan, not the Agent for the Banks, and that the
Equipment Loan shall not be subject to any agency provisions contained in the
Credit Agreement, including, without limitation, those contained in Section 10
(Agency Provisions).
2. No Violation of Capital Expenditures Covenant. The Banks hereby
acknowledge and agree that the Equipment Loan shall not be considered an
expenditure for a fixed or capital asset for
purposes of computation of Section 8.5 (Capital Expenditures), and Borrower's
entering into the Equipment Loan shall not trigger an Event of Default
thereunder.
3. Intercreditor Provisions. IBC hereby specifically acknowledges and
agrees, as follows:
a. Any security interest IBC may have in the collateral listed on
Schedule "3(a)" hereto ("BOk Collateral") shall be and is hereby made
inferior and subordinate in priority to the security interest of BOk
therein. The subordination and priorities herein specified are applicable
irrespective of the time or order of attachment or perfection of security
interests; the time or order of filing or recording financing statements;
or the time of giving or failure to give notice of the acquisition or
expected acquisition of purchase money or other security interests.
b. Until BOk has notified IBC that the Equipment Loan has finally
been paid in full, except to the extent necessary to preserve IBC's
subordinated claim in the BOk Collateral, IBC hereby agrees not to enforce
its security interest in any of the BOk Collateral, nor to attach, levy
upon, execute against, exercise any rights to, assert any claim on or
interest in, take any action against, or institute any proceedings with
respect to any of the BOk Collateral.
c. IBC hereby agrees that if at any time it should receive or
otherwise be in possession of any of the BOk Collateral or any money,
property, or proceeds at any time and from time to time through
foreclosure and bankruptcy or insolvency proceedings or otherwise under or
with respect to any of its liens and security interests in property
constituting BOk Collateral, the BOk Collateral and such money, property,
and proceeds relating thereto shall, until the Equipment Loan is finally
paid in full, be received or held by IBC or its agent as bailee in trust
for BOk, segregated from all other properties it owns or holds, and IBC or
its agent shall turn over to BOk the identical remittances as promptly as
possible with all necessary endorsements thereon to be applied by BOk, for
application as BOk may from time to time elect, to the payment of all
costs and expenses including reasonable attorney fees and legal expenses
incurred by BOk in seeking to collect or enforce any rights under any of
the BOk Collateral and in seeking to collect the Equipment Loan and to
enforce rights under any agreement or instrument relating to the Equipment
Loan or any of the BOk Collateral, and to the payment of the remainder of
the Equipment Loan.
4. Amendments to the Credit Agreement.
4.1. Section 1.2 (Adjusted LIBOR Rate) is hereby deleted and
replaced with the following:
"1.2. "Adjusted LIBOR Rate" shall mean the LIBOR Rate plus the
LIBOR Rate Margin. The Adjusted LIBOR Rate shall be recalculated by
Agent (which determination shall be conclusive subject to manifest
error) on not less than a quarterly basis, upon Agent's receipt of
Borrower's quarterly financial statements."
From the date of this Amendment to the first recalculation, the Adjusted
LIBOR Rate shall be set at the LIBOR Rate on the date of this Amendment
plus four and one quarter of one percent (4.25%) percent per annum, with
the first recalculation to be effected upon Agent's receipt of Borrower's
September 30, 2004, consolidated, quarterly financial statement.
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4.2. Section 1.3 (Adjusted Prime Rate) is hereby deleted and
replaced with the following:
"1.3. "Adjusted Prime Rate" shall mean the Prime Rate plus the
Prime Rate Margin. The Adjusted Prime Rate shall be recalculated by
Agent (which determination shall be conclusive subject to manifest
error) on not less than a quarterly basis, upon Agent's receipt of
Borrower's quarterly financial statements."
From the date of this Amendment to the first recalculation, the Adjusted
Prime Rate shall be set at the Prime Rate on the date of this Amendment
plus one and one-half of one percent (1.5%) per annum, with the first
recalculation to be effected upon Agent's receipt of Borrower's September
30, 2004, consolidated, quarterly financial statement.
4.3. Section 8.1 (Funded Debt to EBITDA) of the Credit Agreement is
hereby deleted and replaced with the following:
"8.1. Funded Debt to EBITDA. Maintain, tested on the last day
of each fiscal quarter, a ratio of Funded Debt for the preceding
four consecutive fiscal quarters of Borrower to EBITDA for the
preceding four consecutive fiscal quarters of Borrower of not
greater than 4.0 to 1 until December 31, 2005, and 3.5 to 1
thereafter."
4.4. The Term Notes, attached to the Credit Agreement as Schedules
"1.75(a)" and "1.75(b)" are hereby replaced with the promissory notes
attached hereto as Schedules )"4.4(a)" and "4.4(b)" (the "Replacement
Notes").
5. Conditions Precedent. This Amendment and each Bank's commitments
hereunder are conditioned upon satisfaction of the following at or before
closing.
5.1. Borrower shall execute and deliver to Banks this Amendment.
5.2. Borrower shall execute and deliver to Banks the Replacement
Notes.
5.3. Borrower shall provide any and all documents, agreements and
instruments related to this transaction, reasonably requested by the
Banks.
6. Borrower Ratification. Each Borrower hereby ratifies and confirms
the Credit Agreement, and all instruments, documents and/or agreements executed
and/or delivered by Borrower to Bank in connection therewith, and each Borrower
represents to Banks that: (i) they remain in full force and effect; (ii) all
representations and warranties made thereunder are true and correct as of the
date hereof; (iii) no Subsidiary of Borrower has been created or acquired which
would be subject to Section 6.12 of the Credit Agreement; and (iv) no Event of
Default exists or will result from the execution of this Amendment.
7. Governing Law and Binding Effect. This Amendment shall be governed
by and construed in accordance with the laws of the State of Oklahoma, and shall
inure to the benefit of and be binding upon the parties hereto, their successors
and assigns.
8. Costs, Expenses and Fees. Borrower agrees to pay all costs, expenses
and fees incurred by the Banks or otherwise in connection herewith, including,
without limitation, all reasonable attorney fees, costs and expenses of Riggs,
Abney, Neal, Turpen, Orbison & Xxxxx.
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9. Multiple Counterparts. This Amendment may be executed in any number
of counterparts, and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
10. Further Assurances. Borrower will immediately execute and deliver to
the Banks upon request all such other and further instruments as may be required
or desired by the Banks from time to time in compliance with or in
accomplishment of the covenants and agreements of Borrower made in this
Amendment and such other instruments and documents referred to or mentioned
herein, all as may be necessary or appropriate in connection therewith.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed.
"Borrower"
ORCHIDS PAPER PRODUCTS COMPANY
By /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, Chief Financial Officer
ORCHIDS ACQUISITION GROUP, INC.
By /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, Executive Vice President
BANK OF OKLAHOMA, N.A., as Bank and Agent
By /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Senior Vice President
INTERNATIONAL BANK OF COMMERCE (F/K/A LOCAL
OKLAHOMA BANK), as Bank
By /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, SVP
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