Exhibit 10.1


 





AMENDMENT
No. 10 TO


SECOND
AMENDED AND RESTATED CREDIT AGREEMENT


 


THIS AMENDMENT NO.
10 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of November 21, 2018, among
ORCHIDS PAPER PRODUCTS COMPANY, a Delaware corporation (“Borrower”), the Guarantors party hereto, the lenders
party hereto (“Lenders”) and U.S. BANK NATIONAL ASSOCIATION, as a Lender and as LC Issuer, Swing Line Lender
and Administrative Agent for the Lenders (in such capacity, “Administrative Agent”).


 


BACKGROUND


 


A.       Borrower,
Administrative Agent and Lenders are parties to that certain Second Amended and Restated Credit Agreement dated as of June 25,
2015 (as amended, supplemented and modified from time to time, the “Credit Agreement”).


 


B.       Borrower
has requested that Administrative Agent and Lenders increase the Revolving Credit Commitment and amend certain provisions of the
Credit Agreement as set forth herein.


 


C.       Administrative
Agent and Lenders are willing to increase the Revolving Credit Commitment and amend certain provisions of the Credit Agreement
upon the terms and conditions set forth below.


 


D.       NOW
THEREFORE, in consideration of the matters set forth in the recitals and the covenants and provisions herein set forth, and other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


 


AGREEMENT


 


Section 1.               
Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto
in the Credit Agreement.


 


Section 2.               
Amendments to the Credit Agreement. As of the Effective Date (as defined below), the Credit Agreement is hereby amended
as follows:


 


(a)              
Article I of the Credit Agreement is hereby amended to delete the definition of Eligible Assignee and insert in substitution
therefor the following:


 


“Eligible
Assignee” means any Person except a natural Person, the Borrower, any of the Borrower’s Affiliates or Subsidiaries
or any Defaulting Lender or any of its Subsidiaries.


 


(b)              
Article I of the Credit Agreement is hereby amended to add the following defined term:


 






     


     


    

 


“Tenth
Amendment” shall mean Amendment No. 10 to Second Amended and Restated Credit Agreement dated as of November 21, 2018
among Borrower, Guarantors, Administrative Agent and Lenders.”


 


(c)              
Section 6.1(j) of the Credit Agreement is hereby amended to provide that the Cash-Flow Forecast for the period starting
the week ending November 9, 2018 to and including December 14, 2018, tendered by Borrower to and accepted by Administrative Agent
prior to the Effective Date shall replace the Cash Flow Forecast in existence on the date of this Agreement. On or before the third
Business Day of each week, commencing November 14, 2018, Borrower shall provide to Administrative Agent (A) a line-by-line
reconciliation of (1) the amounts of budgeted expenditures and receipts for the immediately preceding week as set forth in the
Cash-Flow Forecast most recently delivered to and approved by Administrative Agent for such week and (2) the actual expenditures
and receipts for such week (together with an explanation, in reasonable detail, of any material differences between the budgeted
and actual amounts) and (B) a certification by the CSO, that such person has no reason to believe that such reconciliation
is incorrect or misleading in any material respect, and on or before the second Business Day of each week commencing November 13,
2018, Borrower shall provide to Administrative Agent, a report on the prior weekly sales by customer, together with a comparison
to budgeted sales for such period and a certification by the CEO or CSO that such person has no reason to believe that such reconciliation
is incorrect or misleading in any material respect.


 


(d)              
Notwithstanding anything contained in the Credit Agreement to the contrary, (i) payments of principal, interest and the
Commitment Fee due and payable on the Term Loans and Draw Loans and payment of interest on the Revolving Loans otherwise due and
payable on October 31, 2018, November 1, 2018 and December 1, 2018 or at the end of the applicable Interest Period if not falling
on such dates, shall instead be due and payable on the earlier of the occurrence of an Event of Default or December 31, 2018, (ii)
Borrower shall not be entitled to request and Lenders shall have no obligation to make Revolving Loans from and after the Effective
Date of this Agreement in excess of the lesser of $7,250,000 (“Cap Amount”) or the amount of Draws on the Revolver
set forth in the Cash-Flow Forecast for such period, (iii) the actual ending Revolving Loan balance for each week shall not exceed
the projected amount of the ending Revolving Loan balance for such week set forth in the Cash-Flow Forecast, and (iv) Borrower
shall use the proceeds of such Revolving Loans solely for the Borrower’s operating and other expenses set forth in the Cash-Flow
Forecast.


 


(e)              
Notwithstanding anything contained in the Credit Agreement to the contrary, Borrower agrees to, by not later than December
14, 2018, either provide Administrative Agent with a signed purchase agreement in form and content acceptable to Administrative
Agent for the purchase of the equity or assets of Borrower in an amount sufficient to repay the outstanding Obligations in full
or a fully executed firm binding commitment from an institutional lender, in form and substance acceptable to Administrative Agent,
for replacement financing in an amount sufficient to repay all of Borrower’s Obligations to Administrative Agent and Lenders
in full. By not later than December 31, 2018, Borrower shall have closed on the sale of its equity or assets or refinancing and
repaid the Obligations in full.


 






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(f)               
To the extent Borrower has cash on deposit in its domestic operating accounts (other than the account ending in 9314) in
excess of (i) $2,500,000 as measured as of the end of any given week ending prior to December 14, 2018 and (ii) $1,500,000 as of
the end of any given week ending on or after December 14, 2018, Borrower shall promptly pay such excess to Administrative Agent
for application to the Obligations under the Revolving Loans. Such excess payments shall increase the maximum total amount of permitted
Draws on the Revolver under Section 2(c)(ii) hereof; provided, that for the avoidance of doubt, in no event shall the aggregate
amount of Revolving Loans after the Effective Date of this Agreement exceed the Cap Amount.


 


(f) Section
6.21(f) of the Credit Agreement is hereby deleted in its entirety and the following is inserted in substitution therefor:


 


“(f) [Reserved].


 


(g)The Revolving
Commitment is increased by $5,900,000 and the Revolving Commitment Column to Schedule 1 to the Credit Agreement is hereby amended
to read as follows:


 





	Lender	Revolving Commitment
	 	 
	U.S. Bank National Association	$21,282,516.67
	 	 
	JPMorgan Chase Bank, N.A.	$16,072,733.94
	 	 
	SunTrust Bank	$10,668,969.96
	 	 
	First Tennessee Bank	$3,879,625.43
	 	 
	Total Commitments	$51,903,846.00







 


(h)Borrower
covenants and agrees with Administrative Agent and Lenders, to endorse and deposit with Administrative Agent, the check in the
approximate amount of $2,200,000 to be received by Borrower from FM Global related to an insurance damage claim by Borrower by
not later than November 26, 2018. Such proceeds shall be applied to the outstanding Revolving Loans, but shall not increase the
Cap Amount.


 


(i)Section
10.12 of the Credit Agreement is hereby amended to delete the following sentence where it appears therein:


 


“Any successor
Administrative Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000.”


 






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(j)Notwithstanding
anything contained in Section 12.3 to the contrary, the Borrower’s consent shall not be required for any assignment by a
Lender to be effective.


 


Section 3.               
Representations and Warranties. To induce Administrative Agent and Lenders to execute this Agreement, Borrower hereby
represents and warrants to Administrative Agent and Lenders as follows:


 


(a)              
Authorization; No Conflict. Borrower is duly authorized to execute and deliver this Agreement. The execution, delivery
and performance by Borrowers of this Agreement, do not and will not (a) require any consent or approval of any governmental agency
or authority (other than any consent or approval which has been obtained and is in full force and effect), (b) conflict with (i)
any provision of applicable law, (ii) the charter, by-laws or other organizational documents of Borrower or (iii) any agreement,
indenture, instrument or other document, or any judgment, order or decree, which is binding upon Borrower or any of its properties
or (c) require, or result in, the creation or imposition of any Lien on any asset of Borrower or any other Loan Party (other than
Liens in favor of Administrative Agent created pursuant to the Loan Documents).


 


(b)              
Binding Effect. This Agreement constitutes the legal, valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’
rights generally and to general principles of equity (whether enforcement is sought by proceeding in equity or at law).


 


(c)              
Continuation of Representations and Warranties. After giving effect to this Agreement, each of the representations
and warranties of Borrower in the Credit Agreement and the other Loan Documents are true and correct in all material respects with
the same effect as though made on and as of the date hereof (except to the extent such representations and warranties expressly
relate to a specific earlier date, in which case such representations and warranties shall be true and correct in material respects
as of such earlier date).


 


(d)              
No Event of Default. After giving effect to this Agreement, no Event of Default exists.


 


Section 4.               
Conditions Precedent. This Agreement shall be effective as of the date first set forth above, subject to the satisfaction
of the following conditions precedent (the date of such satisfaction being the “Effective Date”):


 


4.1             
Execution and Delivery. Borrower, Administrative Agent and Lenders shall have executed and delivered this Agreement.


 


4.2             
No Events of Default. No Event of Default under the Credit Agreement (other than the Existing Events of Default)
shall have occurred and be continuing or will result from the consummation of the transactions contemplated by this Agreement.


 






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4.3             
Representations and Warranties. The representations and warranties set forth in Section 3 hereof are true
and correct.


 


4.4             
Organizational Documents. Administrative Agent shall have received such customary documents and certificates as Administrative
Agent may reasonably request relating to the organization, existence and good standing of Borrower and the authorization of the
transactions contemplated by this Agreement.


 


4.5             
Payment of Fees and Attorney Costs. Borrower shall have paid to Administrative Agent all reasonable out-of-pocket
costs and expenses of Administrative Agent (including legal fees, auditor fees, and consultant fees) in connection with the negotiation,
documentation and closing of this Agreement.


 


4.6             
Investment Banker. Borrower shall have retained Houlihan Lokey as its replacement Investment Banker to assist Borrower
in the sale of the equity or assets of Borrower on terms reasonably acceptable to Administrative Agent


 


4.7             
CSO Contract. Borrower shall have entered into a revised contract with its CSO on terms reasonably acceptable to
Administrative Agent.


 


Section 5.               
Fees. In consideration for Administrative Agent and Lenders entering into this Agreement, Borrower agrees to pay
to Administrative Agent, (i) for its own benefit, a fee in the amount of $25,000, and (ii) the pro rata benefit of Lenders executing
this Agreement, an amendment fee in the amount of $250,000, which fees shall be non-refundable and fully earned on the Effective
Date of this Agreement, and shall be due and payable, along with the Amendment Fee (as defined in the Eighth Amendment) and Amendment
Commitment Fee (as defined in the Ninth Amendment) on the earliest of (i) December 31, 2018, (ii) occurrence of an Event of Default,
or (iii) sale of all or substantially all of Borrower’s Assets or equity interests or refinancing of the Obligations.


 


Section 6.               
Miscellaneous.


 


6.1             
Effect of Agreement. The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of
any right, power or remedy of Administrative Agent or Lenders under the Credit Agreement or any other Loan Document, or constitute
a waiver of any provision of the Credit Agreement or any other Loan Document, except as specifically set forth herein, and Borrower
and each Guarantor hereby fully confirms, affirms and ratifies each Loan Document to which it is a party. Except as specifically
modified hereby, the Credit Agreement and the other Loan Documents remain in full force and effect.


 


6.2             
Counterparts. This Agreement may be executed in any number of counterparts and by the different parties on separate
counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument. Delivery of the executed counterpart of this Agreement by telecopy or electronic mail shall be
as effective as delivery of a manually executed counterpart to this Agreement.


 






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6.3             
Costs and Expenses. Borrower shall pay all invoices of Administrative Agent’s auditors, financial consultants
and any legal counsel of Agent within five days of written request.


 


6.4             
Severability. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement
or any instrument or agreement required hereunder.


 


6.5             
Captions. Section captions used in this Agreement are for convenience only, and shall not affect the construction
of this Agreement.


 


6.6             
Entire Agreement. This Agreement embodies the entire agreement and understanding among the parties hereto and supersedes
all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof.


 


6.7             
References. Any reference to the Credit Agreement contained in any notice, request, certificate, or other document
executed concurrently with or after the execution and delivery of this Agreement shall be deemed to include this Agreement unless
the context shall otherwise require. Reference in any of this Agreement, the Credit Agreement or any other Loan Document to the
Credit Agreement shall be a reference to the Credit Agreement as amended hereby and as further amended, modified, restated, supplemented
or extended from time to time.


 






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6.8             
Waiver of Claims and Defenses. By execution of this Agreement, Borrower and each Guarantor acknowledges and confirms
that it does not have any offsets, defenses or claims arising out of or relating to this Agreement, the Credit Agreement or the
other Loan Documents against Administrative Agent, any Lender, or any of their subsidiaries, affiliates, officers, directors, employees,
agents, attorneys, predecessors, successors or assigns whether asserted or unasserted. The Borrower and Guarantors, for and on
behalf of themselves and their legal representatives, successors and assigns, do waive, release, relinquish and forever discharge
the Administrative Agent and each Lender, its parents, subsidiaries, and affiliates, its and their respective past, present and
future directors, officers, managers, agents, employees, insurers, attorneys, representatives and all of their respective heirs,
successors and assigns (collectively, the “Released Parties”), of and from any and all manner of action or causes
of action, suits, claims, demands, judgments, damages, levies and executions of whatsoever kind, nature or description arising
on or before the date hereof, including, without limitation, any claims, losses, costs or damages, including compensatory and punitive
damages, in each case whether known or unknown, asserted or unasserted, liquidated or unliquidated, fixed or contingent, direct
or indirect, which the Borrower or the Guarantors, or their legal representatives, successors or assigns, ever had or now have
or may claim to have against any of the Released Parties, with respect to any matter whatsoever, including, without limitation,
the Loan Documents, the administration of the Loan Documents, the negotiations relating to this Agreement and the other Loan Documents
executed in connection with this Agreement and any other instruments and agreements executed by the Borrower or any Guarantor in
connection with the Loan Documents or this Agreement, arising on or before the date hereof (collectively, “Claims”). 
The Borrower and each Guarantor acknowledges that they are aware that they may discover facts different from or in addition to
those they now know or believe to be true with respect to the Claims, and agree that the release contained in this Agreement is
and will remain in effect in all respects as a complete and general release as to all matters released in this Agreement, notwithstanding
any such different or additional facts.  The Borrower and each Guarantor agrees not to sue any Released Party or in any way
assist any other person or entity in suing a Released Party with respect to any claim released in this Section. Borrower and each
Guarantor acknowledges and agrees that Administrative Agent and the Lenders have fully and timely performed all of their respective
obligations and duties in compliance with the Loan Documents and applicable law, and has acted reasonably, in good faith, and appropriately
under the circumstances.


 


6.9             
Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF OKLAHOMA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.


 


[signature page follows]


 




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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date
first set forth above.


 


 





	 	BORROWER:	 
	 	 	 	 
	 	ORCHIDS PAPER PRODUCTS COMPANY	 
	 	 	 	 
	 	By:	/s/ Jeffrey S. Schoen	 
	 	Name:	Jeffrey S. Schoen	 
	 	Title:	President and CEO	 
	 	 	 	 
	 	 	 	 
	 	GUARANTORS:	 
	 	 	 
	 	ORCHIDS MEXICO (DE) HOLDINGS, LLC	 
	 	 	 	 
	 	By:	/s/ Jeffrey S. Schoen	 
	 	 Name:	Jeffrey S. Schoen	 
	 	Title:	President and CEO	 
	 	 	 	 
	 	 	 	 
	 	ORCHIDS MEXICO (DE) MEMBER, LLC	 
	 	 	 	 
	 	By:	/s/ Jeffrey S. Schoen	 
	 	Name:	Jeffrey S. Schoen	 
	 	Title:	President and CEO	 
	 	 	 	 
	 	 	 	 
	 	ORCHID PAPER PRODUCTS COMPANY OF SOUTH CAROLINA
	 	 	 	 
	 	By:	/s/ Jeffrey S. Schoen	 
	 	Name:	Jeffrey S. Schoen	 
	 	Title:	President and CEO	 
	 	 	 	 
	 	 	 	 
	 	OPP ACQUISITION MEXICO, S. de. R.L.de C.V.
	 	 	 	 
	 	By:	/s/ Jeffrey S. Schoen	 
	 	Name:	Jeffrey S. Schoen	 
	 	Title:	President and CEO	 
	 	 	 	 



 






     


     


    

 


	 	 	 	 
	 	ADMINISTRATIVE AGENT:
	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as a Lender, LC Issuer, Swing Line Lender and Administrative Agent
	 	 	 	 
	 	By:	/s/ Mike Warren	 
	 	Name:	Mike Warren	 
	 	Title:	Sr. V.P.	 
	 	 	 	 
	 	 	 	 
	 	LENDERS:	 
	 	 	 	 
	 	 JPMORGAN CHASE BANK, N.A., as a Lender
	 	 	 	 
	 	By:	/s/ Kevin Kemp	 
	 	Name:	Kevin Kemp	 
	 	Title:	VP	 
	 	 	 	 
	 	 	 	 
	 	SUNTRUST BANK, as a Lender	 
	 	 	 	 
	 	By:	/s/ Samuel M. Ballesteros	 
	 	Name:	Samuel M. Ballesteros	 
	 	Title:	Senior Vice President	 
	 	 	 	 
	 	 	 	 
	 	FIRST TENNESSEE BANK, as a Lender
	 	 	 	 
	 	By:	/s/ Jim Hennigan	 
	 	Name:	Jim Hennigan	 
	 	Title:	SVP