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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 to
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