Exhibit 10.1

 

 

 

 

 

 

AMENDMENT NO. 5 to Second Amended and Restated Credit Agreement

 

DATED AS OF JUNE 30, 2017

 

AMONG

 

ORCHIDS PAPER PRODUCTS COMPANY,

 

THE LENDERS,

 

AND

 

U.S. BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT

 

 

 

 

 

 

Amendment NO. 5 to Second Amended and Restated Credit Agreement

 

THIS AMENDMENT NO. 5 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment") is dated as of June 30, 2017, among Orchids Paper Products Company, a Delaware corporation, the undersigned Lenders and U.S. Bank National Association, a national banking association, as LC Issuer, Swing Line Lender and as Administrative Agent. Capitalized terms used and not otherwise defined in this Amendment (including Exhibit A attached hereto) shall have the meanings assigned thereto in the Credit Agreement.

 

RECITALS

 

A.       The Borrower, the Lenders and the Administrative Agent are parties to a Second Amended and Restated Credit Agreement dated as of June 25, 2015, as amended by (i) that certain Amendment No. 1 to Second Amended and Restated Credit Agreement dated as of November 6, 2015 among Borrower, the Lenders and the Administrative Agent, (ii) that certain Amendment No. 2 to Second Amended and Restated Credit Agreement dated as of December 29, 2015 among Borrower, the Lenders and the Administrative Agent (iii) that certain Amendment No. 3 to Second Amended and Restated Credit Agreement dated as of January 19, 2017 among Borrower, the Lenders and the Administrative Agent and (iv) that certain Amendment No. 4 to Second Amended and Restated Credit Agreement dated as of March 31, 2017 among Borrower, the Lenders and the Administrative Agent (collectively, the "Credit Agreement").

 

B.       The parties enter into this Amendment to (i) amend the Fixed Charge Coverage Ratio covenant, and (ii) amend certain terms and conditions regarding payment of Restricted Payments.

 

AGREEMENT

 

The undersigned Lenders constituting the Required Lenders, the Administrative Agent and the Borrower for good, sufficient and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, agree as follows:

 

1.       Amendment to the Credit Agreement. The Credit Agreement is hereby amended as follows:

 

(a)       Section 6.20 of the Credit Agreement is deleted and replaced with the following:

 

6.20.       Restricted Payments. The Borrower will not, nor will it permit any Subsidiary to, make any Restricted Payment, except that (i) any Subsidiary may declare and pay dividends or make distributions to the Borrower or to a Wholly-Owned Subsidiary, and (ii) the Borrower may declare and pay dividends on its capital stock provided that (A) no Default or Event of Default shall exist before or after giving effect to such dividends or be created as a result thereof, and (B) Borrower has achieved a Leverage Ratio (determined as of the end of each of its fiscal quarters for the then most-recently ended four (4) fiscal quarters) of less than 4.0 to 1.0 for two consecutive fiscal quarters, as determined by Administrative Agent in its sole discretion.

 

(b)       Section 6.21(a) of the Credit Agreement is deleted and replaced with the following:

 

6.21       Financial Covenants.

 

 

(a)       Fixed Charge Coverage Ratio. Commencing with the fiscal quarter ending on September 30, 2017, the Borrower will not permit the ratio, determined as of the end of each of its fiscal quarters for the then most-recently ended four (4) fiscal quarters, of (i) Consolidated EBITDA, plus Consolidated Rentals, plus, an amount equal to the net cash proceeds received by Borrower from the issuance of its equity interests during the period commencing on April 1, 2017 and ending on September 30, 2017, plus such other adjustments as approved by Required Lenders, minus Maintenance Capital Expenditures, minus Restricted Payments, minus cash taxes, minus the Cash Flow Reserve, to (ii) Consolidated Interest Expense, plus Consolidated Rentals, plus Consolidated Principal Payments over the four (4) fiscal quarters then ending, all calculated for the Borrower and its Subsidiaries on a consolidated basis, to be less than the ratio indicated for each determination date specified below:

 

Determination Date	Ratio
On September 30, 2017	1.05:1.00
On December 31, 2017 and on the last
day of each calendar quarter thereafter	1.20:1.00

 

2.       No Other Amendments. Except as expressly set forth herein, or necessary to incorporate the modifications and amendments herein, all the terms and conditions of the Credit Agreement, the Collateral Documents and the other Loan Documents shall remain unmodified and in full force and effect.

 

3.       Representations and Warranties. The Borrower hereby represents and warrants to Administrative Agent and Lenders that:

(a)       The execution, delivery and performance by the Borrower of this Amendment and all other Loan Documents required to be delivered in connection with this Amendment have each been duly authorized by all necessary action, and does not contravene (i) any provision of the organizational documents of the Borrower, (ii) any law, rule, or regulation applicable to the Borrower or its properties, or (iii) any agreement or instrument to which the Borrower is a party or by which the Borrower is bound or to which it is subject.

 

(b)       No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the due execution, delivery and performance by the Borrower of this Amendment and each other Loan Document required to be delivered in connection with this Amendment, except as has been duly obtained or made and are in full force and effect.

 

(c)       This Amendment and all other Loan Documents required to be delivered in connection with this Amendment have been duly executed and delivered by the Borrower and each constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms.

 

(d)       All representations and warranties made by the Borrower in Article V of the Credit Agreement are true and correct as of the date of this Amendment.

 

(e)       The Borrower is in compliance with all covenants and agreements contained in Article VI of the Credit Agreement, as amended by this Amendment.

 

(f)       There have been no amendments or modifications to the Borrower's organizational documents since such documents were certified and delivered to Administrative Agent on the Effective Date.

 

 

(g)       The resolutions of the Borrower certified and delivered to Administrative Agent on the Effective Date have not been amended, modified or rescinded and remain in full force and effect as of the date hereof.

 

(h)       To the best of the Borrower's knowledge, no Default or Event of Default currently exists under the Loan Documents, as amended by this Amendment.

 

4.       Conditions Precedent. It shall be a condition precedent to the effectiveness of this Amendment that (a) all accrued but unpaid interest on the Loans as of the date hereof shall have been paid by the Loan Parties, (b) no Default or Event of Default shall exist under the Credit Agreement or any other Loan Document, as amended by this Amendment, (c) each of the Borrower and Guarantors shall have delivered evidence of its authority to enter into this Amendment as well as the capacity of the individuals executing this Amendment on its behalf, (d) each Guarantor has executed and delivered the Consent of Guarantors attached hereto to Administrative Agent, (e) Borrower has paid to Administrative Agent for the benefit of the Administrative Agent and Lenders the fees as set forth in that certain Fee Letter dated as of June 23, 2017 between Borrower and Administrative Agent, (f) this Amendment has been executed by the Borrower and Lenders constituting the Required Lenders, and (g) the Administrative Agent shall have received such other items as it may reasonably request.

 

5.       Ratification and Affirmation; Conflicts. The Borrower hereby acknowledges the terms of this Amendment and ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect. To the extent that any provision of this Amendment conflicts with any term or condition set forth in the Credit Agreement or the other Loan Documents, the provisions of this Amendment shall supersede and control.

 

6.       Waiver of Claims and Defenses. Borrower hereby releases, remises, acquits and forever discharges Administrative Agent and each Lender and each of their respective employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, predecessors, successors and assigns, subsidiary corporations, parent corporations, and related corporate divisions (all of the foregoing hereinafter called the "Released Parties"), from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter arising, for or because of any matter or things done, omitted or suffered to be done by any of the Released Parties prior to and including the date of execution hereof, and in any way directly or indirectly arising out of or in any way connected to this Amendment, the Credit Agreement or the other Loan Documents (all of the foregoing hereinafter called the "Released Matters"). Borrower acknowledges that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters, may be pleaded as a full and complete defense to any action by Borrower against any or all of the Released Parties, and may be used as the basis for a permanent injunction against any action by Borrower against any or all of the Released Parties. Borrower represents and warrants to Administrative Agent and Lenders that it has not purported to transfer, assign or otherwise convey any right, title or interest of Borrower in any Released Matter to any other Person and that the foregoing constitutes a full and complete release of all Released Matters.

 

7.       No Impairment. Nothing in this Amendment shall be deemed to or shall in any manner prejudice or impair the Loan Documents, the Collateral Documents or any security granted or held by the Administrative Agent for the Obligations.

 

 

8.       Binding Agreement. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

9.       APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF OKLAHOMA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

10.       Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same instrument.

 

11.       Waiver of Jury Trial. Any controversy or claim between or among the parties hereto arising out of or relating to this Amendment shall be controlled by the provisions with respect to waiver of trial by jury contained in the Loan Documents previously delivered by such parties.

 

 

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the Administrative Agent have executed this Amendment as of the date first above written.

 

	BORROWER:   ORCHIDS PAPER PRODUCTS COMPANY, a Delaware corporation
	By:	/s/Rod Gloss
		Rod Gloss, Chief Financial Officer

 

ACKNOWLEDGED AND AGREED:

 

ORCHIDS PAPER PRODUCTS COMPANY

OF SOUTH CAROLINA, a Delaware corporation

 

 

By:	/s/Rod Gloss
	Rod Gloss, Chief Financial Officer

 

 

 

 

 

 

Signature Page - Amendment No. 5

 

	U.S. BANK NATIONAL ASSOCIATION,
	as a Lender, as LC Issuer, as Swing Line Lender and as Administrative Agent
	By:	/s/ Jason Henrie
		Jason Henrie, Vice President

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page - Amendment No. 5

 

	JPMORGAN CHASE BANK, N.A., as a Lender
	By:	/s/Kristin Bohanan
	Name:	Kristin Bohanan
	Title:	Vice President

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page - Amendment No. 5

 

	SUNTRUST BANK, as a Lender
	By:	/s/Justin Lien
	Name:	Justin Lien
	Title:	Director

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page - Amendment No. 5

 

	FIRST TENNESSEE BANK, as a Lender
	By:	/s/Bob Nieman
	Name:	Bob Nieman
	Title:	Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page - Amendment No. 5

 

CONSENT OF GUARANTORS

 

This Consent of Guarantors is being delivered pursuant to the terms of that certain Amendment No. 5 to Second Amended and Restated Credit Agreement dated of even date herewith (the "Amendment") among Orchids Paper Products Company, a Delaware corporation ("Borrower"), the Lenders named therein and U.S. Bank National Association, as Administrative Agent (the "Administrative Agent"), LC Issuer and Swingline Lender.

 

The Amendment amends and modifies the terms of that certain Second Amended and Restated Credit Agreement dated as of June 25, 2015 between Borrower and U.S. Bank National Association, as Administrative Agent, LC Issuer and Swingline Lender, as amended by that certain (a) Amendment No. 1 to Second Amended and Restated Credit Agreement dated as of November 6, 2015, (b) Amendment No. 2 to Second Amended and Restated Credit Agreement dated as of December 29, 2015, (c) Amendment No. 3 to Second Amended and Restated Credit Agreement dated as of January 19, 2017, and (d) Amendment No. 4 to Second Amended and Restated Credit Agreement dated as of March 31, 2017 (collectively, the "Credit Agreement").

 

Each of the undersigned (individually, a "Guarantor" and collectively, the "Guarantors") is a guarantor of, and pledgor of collateral for, the indebtedness and obligations of Borrower to the Holders of the Secured Obligations under the Credit Agreement, pursuant to the terms of certain Loan Documents, which include, without limitation, the guaranty agreements and other collateral documents described on Schedule 1 attached hereto (collectively, the "Guarantor Documents").

 

Borrower has requested that U.S. Bank National Association, as Administrative Agent, LC Issuer and Swingline Lender and the Lenders agree to amend and modify the terms of the Credit Agreement in the manner set forth in the Amendment, and U.S. Bank National Association, as Administrative Agent, LC Issuer and Swingline Lender and the Lenders are willing to agree to the terms of the Amendment, but only if the Guarantors execute and deliver this Consent of Guarantors to the Administrative Agent for the benefit of the Lenders.

 

To induce the Administrative Agent, LC Issuer, Swingline Lender and the Lenders to amend and modify the Credit Agreement pursuant to the terms of the Amendment and the other Loan Documents (as defined in the Credit Agreement) to be executed and/or delivered to Administrative Agent in connection therewith, the undersigned Guarantors jointly and severally:

 

(a)        represent and warrant to the Administrative Agent and Lenders that they have been provided copies of the Amendment and the other Loan Documents and are familiar with their terms;

 

(b)        consent to Borrower's execution and delivery of the Amendment and the other Loan Documents to the Administrative Agent and Lenders;

 

(c)        agree that the execution, delivery and performance of the Amendment and the other Loan Documents shall not discharge, limit or otherwise impair the obligations of any Guarantor under the Guarantor Documents;

 

(d)        agree that the Guarantor Documents remain in full force and effect and are enforceable against the Guarantors party thereto in accordance with their respective terms;

 

(e)        agree that the Guarantor Documents shall act to guarantee or secure, as applicable, the payment and performance of all Secured Obligations (as defined in the Credit Agreement) as modified in connection with the Amendment; and

 

 

(f)        agree that no Guarantor has any defenses, set-offs, counterclaims or other claims to or against the enforcement of the Administrative Agent's and/or Lenders' rights and remedies under the Guarantor Documents and to the extent any such Guarantor may have such defenses, set-offs, counterclaims or other claims, each Guarantor hereby waives and releases any and all such defenses, set-offs, counterclaims or other claims.

 

Each Guarantor ratifies and reaffirms such Guarantor’s obligations under the Guarantor Documents to which such Guarantor is a party. Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Credit Agreement. This Consent of Guarantors may be validly executed and delivered by fax or other electronic means and by use of multiple counterpart signature pages.

 

IN WITNESS WHEREOF, each of the undersigned have executed and delivered this Consent of Guarantors as of June 30, 2017.

 

 

	GUARANTORS:
	ORCHIDS PAPER PRODUCTS COMPANY
	OF SOUTH CAROLINA
	By:	/s/ Rod Gloss
		Rod Gloss, Chief Financial Officer
	ORCHIDS MEXICO (DE) HOLDINGS, LLC
	By:	/s/ Rod Gloss
		Rod Gloss, Manager
	ORCHIDS MEXICO (DE) MEMBER, LLC
	By:	/s/ Rod Gloss
		Rod Gloss, Manager
	OPP ACQUISITION MEXICO, S. DE R.L. DE C.V.
	By:	/s/ Rod Gloss
		Rod Gloss
		Manager and Legal Representative

 

 

 

 

 

 

 

SCHEDULE 1

 

List of Guaranty and Pledge Agreements

 

1.

Guaranty dated as of June 3, 2014, executed by Orchids Mexico (DE) Holdings, LLC, a Delaware limited liability company ("Holdings"), and Orchids Mexico (DE) Member, LLC, a Delaware limited liability company ("Member")

 

2.

Guarantee Agreement dated as of June 3, 2014, between OPP Acquisition Mexico, S. de. R.L. de. C.V. ("Mexico Subsidiary") and Administrative Agent

 

3.

Security Agreement dated as of June 3, 2014, executed by Borrower, Holdings and Member

 

4.

Assignment of Agreements dated as of July 31, 2014, executed by Borrower and Mexico Subsidiary

 

5.

Contrato de Prenda (Asset Pledge Agreement) dated as of July 31, 2014, executed by Mexico Subsidiary

 

6.

Contrato de Prenda Sobre Partes Sociales (Share Pledge Agreement) dated as of July 31, 2014, executed by Holdings

 

7.

Supplement to Guaranty dated as of April 28, 2015, executed by Orchids Paper Products Company of South Carolina, a Delaware limited liability company ("Orchids South Carolina")

 

8.

Security Agreement Supplement dated as of April 28, 2015, executed by Orchids South Carolina

 

9.

Mortgage, Security Agreement, Financing Statement and Assignment of Rents and Leases dated as of May 12, 2015, executed by Orchids South Carolina