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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
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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
