Document:

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. 

-2- 

        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

-3-SEVENTH AMENDMENT TO

REVOLVING CREDIT AND SECURITY AGREEMENT  

        THIS
SEVENTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT
(“Amendment”), dated as of May 14, 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, as further amended by a Fifth
Amendment to Revolving Credit and Security Agreement, dated as of March 23, 2004 and
as further amended by a Sixth Amendment to Revolving Credit and Security Agreement dated
as of April 30, 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.
Subject to the satisfaction of the conditions           precedent set forth in Section 4
below, the Credit Agreement is hereby amended           as follows:  

	 	        2.1    The
definition of “Applicable Margin” set forth in Section 1.2 of the Loan
Agreement is hereby restated in its entirety to read as follows:  

	 	        “Applicable
Margin” shall mean the Applicable Margin per annum specified in the chart below
for a particular level and Fixed Charge Coverage ratio and a particular type of Loan for
the period set forth below, as the case may be. 

	

	Level	Fixed Charge Coverage
("FCC")	Revolving Advances
			 	
	

			Domeestic Rate
Loans	Eurodollar Rate
Loans
	

	Level 1	FCC<1.0	.75%	3.25%
	

	Level 2	FCC>1.0 (year to date)	.50%	3.00%
	

	Level 3	FCC>1.00	0%	2.50%
	

	 	
The
Applicable Margin shall at all times be that set forth for Level 1 above unless Borrower
achieves a Fixed Charge Coverage Ratio equal to or greater than 1.0 to 1.0 as of the end
of any calendar month for the year to date portion of the calendar year then ended, in
which case the Applicable Margin shall be adjusted to Level 2 for the next succeeding
calendar month. If Borrower achieves a Fixed Charge Coverage Ratio equal to or greater
than 1.0 to 1.0 as of the end of any calendar quarter measured on a trailing 12-month
basis, the Applicable Margin shall be adjusted to Level 3 for the next succeeding calendar
quarter. Any adjustment to the Applicable Margin shall be effective commencing on the
tenth (10th) Business Day after the delivery of the quarterly or monthly, as
the case may be, financial statements delivered in accordance with Section 9.8 or Section
9.9, as the case may be, and the related compliance certificate of Borrower; provided,
however, that in the event that Borrower shall fail at any time to furnish to Agent the
quarterly or monthly, as the case may be, financial statements and compliance certificate
required to be delivered pursuant to Section 9.8, or Section 9.9, as the case may be, the
Applicable Margin set forth in Level 1 above shall apply until the tenth (10th)
Business Day after the date that the quarterly financial statements and such compliance
certificate are so delivered to the Agent, to the extent any adjustment is required.” 

	 	        2.2    
     Section 6.5 of the Credit Agreement is hereby restated in its entirety to read as
follows: 

	 	        “6.5
Fixed Charge Coverage Ratio; Undrawn Availability. Cause to be
maintained (i) at the end of each calendar quarter commencing with the calendar quarter
ending March 31, 2002 (but excluding the calendar quarters ending September 30, 2003,
December 31, 2003, March 31, 2004, June 30, 2004 and September 30, 2004), a Fixed
Charge Coverage Ratio of not less than 1.0 to 1.0, calculated for the twelve immediately
preceding months ending as of the date of determination, (ii) at the end of each month
commencing with the month ending June 30, 2004 through and including the month ending
November 30, 2004, a Fixed Charge Coverage Ratio of not less than 1.0 to 1.0, and (iii)
daily Undrawn Availability for the calendar quarter ending December 31, 2003 of not less
than $3,500,000.” 

-2- 

        3.    WAIVER.  

	 	        3.1    PNC,
as Agent and sole Lender, hereby waives Borrower’s compliance with the EBITDAR
covenant, as set forth in Section 6.5 of the Loan Agreement, for the calendar month
ending March 31, 2004.  

        4.    CONDITIONS
PRECEDENT. This Amendment shall become effective           upon the
delivery to Agent of executed counterparts of this Amendment and the           following
additional items:  

	 	a.	          Payment
to Agent in immediately available funds of an amendment and waiver fee           in the
amount of $25,000; and 

	 	b.	          Such
other items as Agent may reasonably request. 

        5.    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.  

        6.    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.  

        7.    MISCELLANEOUS.  

	 	        7.1    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.  

	 	        7.2    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.  

	 	        7.3    
     Counterparts.  This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original. 

-3- 

	 	        7.4    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.  

	 	        7.5    
     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. 

-4- 

        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
	

 	PNC BANK, NATIONAL ASSOCIATION, 
as Agent and Lender
	

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

-5-

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