SIXTH AMENDMENT TO

REVOLVING CREDIT AND SECURITY AGREEMENT  



        THIS
SIXTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (“Amendment”),
dated as of April 30, 2004, is by and between BADGER PAPER MILLS, INC., a corporation
organized under the laws of the State of Wisconsin (“Borrower”) and PNC
BANK, NATIONAL ASSOCIATION (“PNC”) as sole Lender and as Agent under the
Credit Agreement referred to below. 



W I T N E S E T H : 



        WHEREAS,
PNC and Borrower entered into a certain Revolving Credit and Security Agreement, dated as
of November 30, 2001, as amended by a First Amendment to Revolving Credit and
Security Agreement, dated as of April 30, 2002, as further amended by a Second
Amendment to Revolving Credit and Security Agreement, dated as of September, 2002, as
further amended by a Third Amendment to Revolving Credit and Security Agreement, dated as
of August 13, 2003, as further amended by a Fourth Amendment to Revolving Credit and
Security Agreement, dated as of November 14, 2003 and as further amended by a Fifth
Amendment to Revolving Credit and Security Agreement dated as of March 23, 2004 (the
“Credit Agreement”); 



        WHEREAS,
Borrower has requested that the Credit Agreement be amended as set forth herein; 



        NOW,
THEREFORE, in consideration of the terms and conditions contained herein, the parties
hereto agree as follows: 



        1.    DEFINITIONS.
All capitalized terms used herein and not           otherwise defined shall have the
meanings provided for in the Credit Agreement.  




        2.    AMENDMENT.
The Credit Agreement is hereby amended as           follows:  




	 	        2.1    The
definition of “Maximum Revolving Advance Amount” appearing in Section 1.2
of the Credit Agreement is hereby restated in its entirety to read as follows:  







	 	        ““Maximum
Revolving Advance Amount” shall mean $12,000,000.” 







        3.    EXPENSES.
Borrower shall pay, upon demand, all reasonable           attorneys’ fees and
out-of-pocket costs of Agent and Lender in connection           with this Amendment and
the agreements, documents and other items contemplated           hereunder.  




        4.    REAFFIRMATION
OF GRANT OF SECURITY INTEREST. Borrower           expressly acknowledges
and agrees that all collateral, security interests,           liens, pledges and
mortgages heretofore, under this Amendment or hereafter           granted to Agent
including, without limitation, such collateral, security           interests, liens,
pledges and mortgages granted under the Credit Agreement and           the Other
Documents and all supplements thereto, extend to and secure all of the
          obligations of Borrower to Agent and Lenders, now existing or hereafter arising
          including, without limitation, those arising in connection with the Credit
          Agreement, as amended by this Amendment, upon the terms set forth in such
          agreements, all of which security interests, liens, pledges and mortgages are
          hereby ratified, reaffirmed, confirmed and approved.  












        5.    MISCELLANEOUS.  




	 	        5.1    Limited
Nature of Amendment. The parties hereto acknowledge and agree that the
terms and provisions of this Amendment amend, add to and constitute a part of the Credit
Agreement. Except as expressly waived or modified and amended by the terms of this
Amendment, all of the other terms and conditions of the Credit Agreement and all
documents executed in connection therewith or referred to or incorporated therein remain
in full force and effect and are hereby ratified, reaffirmed, confirmed and approved.  







	 	        5.2    Conflict.
If there is an express conflict between the terms of this Amendment and the terms of the
Credit Agreement, or any of the other agreements or documents executed in connection
therewith or referred to or incorporated therein, the terms of this Amendment shall
govern and control.  







	 	        5.3    
     Counterparts.  This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original. 







	 	        5.4    Representations
and Warranties. Borrower represents and warrants to Agent and Lenders as
follows: (A) Borrower has all necessary corporate power and authority to execute and
deliver this Amendment and perform its obligations hereunder; (B) this Amendment and
the Credit Agreement, as amended hereby, constitute the legal, valid and binding
obligations of Borrower and are enforceable against Borrower in accordance with their
terms; and (C) all representations and warranties of Borrower contained in the
Credit Agreement and all other agreements, instruments and other writings relating
thereto are true and complete as of the date hereof.  







	 	        5.5    
     Governing  Law.  This  Amendment  was executed and  delivered in Chicago,  Illinois
and shall be governed by and  construed in          accordance with the internal laws (as
opposed to conflicts of law provisions) of the State of Illinois. 




















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        IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year
first above written. 


		BADGER PAPER MILLS, INC.
	

 	By:  /s/ William H. Peters
		Name:  William H. Peters
		Title:  Vice President and CFO
	

 	PNC BANK, NATIONAL ASSOCIATION, 
as Agent and Lender
	

 	By:  /s/ Sherry Winick
		Name:  Sherry Winick
		Title:  Vice President




























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