Exhibit
10.1
AMENDMENT
FOUR TO SECOND AMENDED AND RESTATED
AGENTED
CREDIT AGREEMENT
This Amendment
Four to Second Amended and Restated Agented Credit Agreement (this
" Amendment ") is dated effective July 31, 2009 (the "
Effective Date "), among ORCHIDS PAPER PRODUCTS COMPANY, a
Delaware corporation (the " Borrower "), and BANK OF
OKLAHOMA, N.A. and COMMERCE BANK, N.A. (individually a "
Bank " and collectively, the " Banks "), and BANK OF
OKLAHOMA, N.A., as agent for the Banks (in such capacity, the "
Agent ").
RECITALS
A. Reference
is made to the Second Amended and Restated Agented Credit Agreement
dated April 9, 2007, by and among inter alia the Borrower, the
Banks and the Agent, as amended October 25, 2007, March 6, 2008,
and November 5, 2008 (as amended, the " Credit Agreement "),
pursuant to which the Banks and BANCFIRST established in favor of
the Borrower (i) an $8,000,000 revolving line of credit, (ii) a
term loan facility in the original principal amount of $10,000,000,
(iii) a term loan facility in the original principal amount of
$16,500,000, and (iv) an advancing construction loan in the maximum
principal amount of $4,000,000. Terms used herein shall have the
meanings given in the Credit Agreement, unless otherwise defined
herein.
B. The
Borrower has requested, among other things, that the Banks (i)
establish an additional advancing construction term loan in the
principal amount of $6,720,000, (ii) extend the availability and
maturity of the Revolving Line, and (iii) amend the annual
limitation on capital expenditures set forth in Section 10.4 of the
Credit Agreement.
C. The
Banks have agreed to the Borrower's requests, subject to the terms
and conditions set forth in this Amendment.
NOW, THEREFORE,
in consideration of the premises and the mutual covenants and
agreements herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1.
ADDITIONAL
ADVANCING CONSTRUCTION LOAN.
1.1
Agreement to Establish Additional Advancing Construction Loan
Facility . The Banks agree to establish a new advancing
construction loan facility (" Construction Loan #2 ”)
in the maximum principal amount of $6,720,000 to finance the
Borrower's construction of a new 270,000 square foot distribution
center (the " Distribution Facility ") on a 20-acre site
adjacent to the existing Mortgaged Property. Subject to the terms
and conditions set forth in this Amendment, and provided that no
Event of Default has occurred and is continuing of the date of any
requested Advance, each Bank agrees to make Advances under
Construction Loan #2 from time to time on or before August 15, 2010
(the " Construction Loan #2 Completion Date "), up to such
Bank's Pro Rata Share
of
the lowest of the following: (i) eighty percent (80%) of the costs
for construction of the Distribution Facility; (ii) eighty percent
(80%) of the post-construction appraised value of the Distribution
Facility (land and improvements); or (iii) the sum of $6,720,000.
Notwithstanding the foregoing, the Banks shall not make any
Advances under Construction Loan #2 until the Borrower has obtained
the final Advances under the Construction Loan, satisfied all
requirements of the Credit Agreement with respect to completion of
construction of the Improvements, and delivered to the Agent the
Certificate of Completion required by Section 5.5 of the Credit
Agreement.
1.2
Definitions .
1.2.1
Terms Used in This Amendment . When used in this Amendment
with respect to Construction Loan #2, the following terms have the
meanings indicated below:
"
Additional Land " means the real property described on
Schedule "1" attached hereto.
"
Additional Mortgage " means the Mortgage, Assignment of
Rents and Leases, Security Agreement and Financing Statement, in
substantially the form of Exhibit B attached hereto, to be
executed by the Borrower in favor of the Agent, for the benefit of
the Banks, covering the Additional Mortgaged Property.
"
Additional Mortgaged Property " means the Additional Land,
the Distribution Facility and all other improvements constructed on
the Additional Land.
"
Construction Contract " means the Standard Form of Agreement
Between Owner and Design-Builder (AIA Document A141-2004) to be
entered into between the Borrower and the Contractor regarding the
construction of the Distribution Facility pursuant to the
Plans.
"
Construction Notes #2 " means the promissory notes, each in
substantially the form of Exhibit A attached hereto to be
executed by the Borrower payable to the respective Banks to
evidence the Advances made by them under Construction Loan
#2.
"
Contractor " means Brewer Construction Company of Eastern
Oklahoma, Inc., or another contractor selected by the Borrower and
reasonably acceptable to the Agent.
"
Plans " means the final working drawings and specifications
for the construction of the Distribution Facility prepared by the
Contractor and approved by the Borrower, the Agent and any
necessary Governmental Authority.
"
Project Budget " means a budget or cost schedule prepared by
the Borrower, in form and content satisfactory to the Agent,
specifying the cost by item of: (a) all labor, materials and
services necessary for completion of the Improvements in accordance
with the Plans and all Governmental Requirements; and (b) all other
expenses anticipated by the Borrower incident to Construction Loan
#2 and construction of the Distribution Facility, and estimating
the dates on which the Borrower contemplates requesting Advances
hereunder for such costs and expenses.
1.2.2
Terms Defined in Credit Agreement . The definitions of the
following terms used in the Credit Agreement are hereby amended and
modified as follows:
(a) The
definition of the term "Advance" is amended to include any cash
advance made by the Banks under Construction Loan #2.
(b) The
definition of the term "Loan" is amended to include advances made
under Construction Loan #2.
(c) The
definition of the term "Notes" is amended to include the
Construction Notes #2.
(d) Unless
the context otherwise expressly requires, all references in the
Credit Agreement to the "Mortgage" shall be deemed to include a
reference to the Additional Mortgage, and all references to the
"Mortgaged Property" shall be deemed to include a reference to the
Additional Mortgaged Property.
(e) The
definition of the term "Obligations" is expanded to include all
indebtedness of the Borrower to the Banks and the Agent arising out
of or related to this Amendment, Construction Loan #2 and the
Construction Notes #2 (it being the intent of the parties that the
term "Obligations" will at all times include all liabilities,
obligations and indebtedness of the Borrower to the Banks or the
Agent, including future advances, whether or not specifically
mentioned in the definition of such term).
1.3
Use of Proceeds . Advances under Construction Loan #2 shall
be used solely for the purposes of paying the items specified in
the Project Budget, including payment for the acquisition of the
Additional Land, payments to the Contractor, subcontractors,
mechanics, materialmen and suppliers pursuant to the terms of the
Construction Contract and other contracts for construction of the
Distribution Facility, payments for services performed and
materials purchased for and either incorporated into the
Distribution Facility or stored on the Additional Land for later
incorporation, payments (or reimbursements) to the Agent for
expenses incurred pursuant to the
administration
of Construction Loan #2, and payment of other costs and expenses
(reasonably acceptable to the Agent) which are incidental or
related to the costs of completing the Distribution
Facility.
1.4
Disbursement Procedure . Advances under Construction Loan #2
will be made in accordance with the following disbursement
procedures (in addition to the conditions precedent set forth
elsewhere in this Amendment and in the Credit
Agreement):
1.4.1
Request for Advance . The Borrower shall deliver to the
Agent an Advance Request at least two (2) Business Days before the
requested date of disbursement. Advances under Construction Loan #2
may not be requested more often than monthly. No Advance may be
requested which would cause the aggregate amount of disbursements
made under the Construction Notes #2 to exceed eighty percent (80%)
of the aggregate amount expended for construction of the
Distribution Facility up to the date of such Advance. If requested
by the Agent, each Advance Request shall be accompanied by (i)
billing statements, vouchers and invoices, in form and content
satisfactory to the Agent, with regard to items that are the
subject of the Advance Request, and/or (ii) appropriate waivers of
lien rights, in form and content satisfactory to the Agent and its
legal counsel, executed and acknowledged by all contractors,
subcontractors, laborers and materialmen who have furnished labor
or materials relating to the Distribution Facility. The Agent shall
promptly notify each Bank of each such notice. Not later than 2:00
p.m. on the date such Advance is requested to be made (but subject
to the Borrower's satisfaction of all conditions precedent to the
making of such Advance), each Bank will make available to the
Agent, at the Agent's Principal Office in immediately available
funds, such Bank's Pro Rata Share of the amount of the requested
Advance. After the Agent's receipt of such funds, and upon
fulfillment of the applicable conditions, the Agent will make such
Advance available to the Borrower as set forth in Section 1.4.3
below.
1.4.2
Agent's Inspection . If for any reason the Agent deems it
necessary to cause the Distribution Facility to be examined by a
representative of the Agent prior to making any requested Advance,
the Agent shall have a reasonable time within which to do so, and
the Borrower shall reimburse the Agent for all out-of-pocket
expenses reasonably by the Agent in conducting such inspection. The
Banks shall not be required to make any Advance until such
inspection has been made and is satisfactory to the
Agent.
1.4.3
Disbursements . The Agent shall, on the date the requested
Advance is to be made or as soon thereafter as all conditions
precedent to such Advance have been satisfactorily met, credit the
amount of such Advance to the Borrower's primary operating account
maintained with the Agent. Notwithstanding the foregoing
disbursement procedure, if an Event of Default occurs hereunder or
under the terms of any of the Loan Documents, the Agent may, with
the approval of the Banks, until such Event of Default is cured or
for so
long as
required hereunder, make all disbursements to a title company
escrow account, and such title company will draw checks on such
account for payment of the items approved by the Agent. Any expense
incurred because of a disbursement through a controlled title
company escrow account shall be paid by the Borrower.
1.4.4
Compliance with Project Budget; Cost Overruns . All Advances
made under Construction Loan #2 shall be made in accordance with
the Project Budget. Any increase in the Project Budget or projected
cost of construction which, when added to all previous increases,
would cause the aggregate increases to exceed five (5%) of the
original cost of construction shown in the Project Budget, must be
approved by the Agent prior to implementation or incorporation into
construction of the Distribution Facility. In the event the Agent
determines at any time, in its reasonable judgment, that the total
cost of completing the Distribution Facility free of liens and
encumbrances, other than those in favor of the Agent contemplated
hereby, will exceed the undisbursed balance of Construction Loan
#2, the Agent may require further security for the payment of the
Construction Notes #2 by (i) requiring the Borrower to grant the
Agent additional collateral, satisfactory to the Agent, and/or (ii)
requiring the Borrower to make cash deposits with the Agent
sufficient in amount to cover such estimated excess cost of
completing the Distribution Facility, which cash deposits will be
disbursed on a first-out basis prior to further Advances by the
Banks under Construction Loan #2.
1.4.5
Waivers . If requested, partial lien waivers must be
delivered to the Agent within five (5) Business Days following each
Advance for the amount of work completed and paid for as of the
date of billing on which the latest Advance was based, and general
lien waivers must be delivered to the Agent upon the disbursement
of the final Advance and, if requested by the Agent, such waivers
shall be accompanied by an indemnity agreement or affidavit of
payment from the Borrower and the Contractor in favor of the Agent,
in form and content satisfactory to the Agent, regarding discharge
or prevention of any mechanics' or materialmen's
lien(s).
1.4.6
Construction Loan #2 Completion Date . Notwithstanding
anything contained herein to the contrary, the Banks shall have no
obligation to advance funds under Construction Loan #2 after the
Construction Loan #2 Completion Date.
1.5
Construction Notes #2 . The Borrower shall make, execute and
deliver the Construction Notes #2 payable to the order of the
respective Banks in order to evidence all Advances from time to
time made and outstanding under Construction Loan #2 and interest
accrued thereon. Notwithstanding the principal amount stated on the
face of each Construction Note #2, the actual principal amount due
from the Borrower on account of each Construction Note #2 will be
the sum of all amounts advanced against such Note, less all
principal payments actually received in collected funds.
Each
disbursement
made against a Construction Note #2 and each principal payment
thereon will be recorded by the applicable Bank in its books and
records, and the unpaid principal balance so recorded will be
deemed presumptive evidence of the principal amount owing
thereon.
1.5.
Interest . The unpaid principal amount from time to time
outstanding under each Construction Note #2 will bear interest at
the rate or rates and payable in the manner set forth
therein.
1.6
Required Payments; Maturity .
1.6.1
Interest Only Period . Interest only on the unpaid principal
balance of each Construction Note #2 shall be due and payable on
the last day of each calendar month commencing August 31, 2009, and
continuing through and including July 31, 2010.
1.6.2
Principal and Interest Installments Prior to Maturity .
Beginning August 31, 2010, and continuing on the last day of each
calendar month thereafter through and including June 30, 2016, the
Construction Notes #2 will be payable as to principal and interest
in seventy-one (71) consecutive equal (level) installments, with
each scheduled installment being an amount which would fully
amortize the aggregate principal balance of the Construction Notes
#2 outstanding as of the Construction Loan #2 Completion Date,
together with interest thereon at the initial Note Rate over an
assumed 15-year amortization period. The required monthly
installment amount on the Construction Notes #2 shall be
re-determined on an annual basis (effective with the installment
payment due on August 31 of each year) to an amount which would
fully amortize the remaining aggregate principal balances of the
Construction Notes #2, together with interest thereon, over the
remainder of the assumed amortization period at the Note Rate in
effect as of the re-determination date.
1.6.3
Maturity . The entire unpaid principal balance of each
Construction Note #2, together with all unpaid interest accrued
thereon, will be due and payable on July 31, 2016.
1.6.4
Application of
Payments . Each required
installment payment on the Construction Notes #2 shall be applied,
when received in good funds, first to the unpaid interest accrued
thereon and then to the principal balances thereof.
1.7
Prepayment . The Borrower may at any time and from time to
time prepay the outstanding principal balance of the Construction
Notes #2, in whole or in part, subject to Section 2.13 of the
Credit Agreement. Amounts voluntarily prepaid on the Construction
Notes #2 shall be applied to the unpaid principal installments
thereof in inverse order of maturity. Amounts prepaid on the
Construction Notes #2 may not be reborrowed.
1.8
Completion . The Borrower covenants and agrees that: (a) it
will complete construction of the Distribution Facility on or
before Construction Loan #2 Completion Date in accordance with the
Plans and within the Project Budget; (b) within fifteen (15) days
following completion of construction of the Distribution Facility,
it will deliver to the Agent a certificate of completion, in form
and content satisfactory to the Agent, signed by the Borrower and
the Contractor, certifying that the Distribution Facility has been
completed in accordance with the Plans; and (c) if the Agent
determines it to be reasonably necessary or advisable, it will
deliver a post-completion survey prepared by and certified to the
Banks by a licensed civil engineer or surveyor satisfactory to the
Agent, which survey shall show the loca
