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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT #2
(Mark One)
/X/ Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1999 or
----------------------
/ / Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission file number 0-20231
-----------
FIBERMARK, INC.
(Exact name of registrant as specified in its charter)
Delaware 82-0429330
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
161 WELLINGTON ROAD
P.O. BOX 498
BRATTLEBORO, VERMONT 05302
(802) 257-0365
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, $.001 PAR VALUE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
Class Outstanding
Common Stock September 30, 1999
$.001 par value 7,745,083
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ITEM #6 IS AMENDED TO INCLUDE EXHIBIT 10.5:
Exhibit No. Description
----------- -----------
10.5 Third Amended and Restated Financing Agreement and Guaranty
dated September 30, 1999 among FiberMark, Inc.; FiberMark
Durable Specialties, Inc.; FiberMark Filter and Technical
Products, Inc. and FiberMark Office Products, LLC (as
"Borrowers and Guarantors") and The CIT Group/Business
Credit, Inc., The CIT Group/Equipment Financing, Inc.
(as "Lenders")
This exhibit is re-submitted in its entirety, as pages 29
through 102 were omitted in the 10Q/A Amendment #1 filing.
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EXHIBIT 10.5
THIRD AMENDED AND RESTATED
FINANCING AGREEMENT AND GUARANTY
AMONG
FIBERMARK, INC.
(as Guarantor)
FIBERMARK DURABLE SPECIALTIES, INC.,
FIBERMARK FILTER AND TECHNICAL PRODUCTS, INC.
AND
FIBERMARK OFFICE PRODUCTS, LLC
(as Borrowers and Guarantors)
THE CIT GROUP/BUSINESS CREDIT, INC.
THE CIT GROUP/EQUIPMENT FINANCING, INC.
SUCH OTHER LENDERS THAT MAY BECOME
SIGNATORY HERETO
(as Lenders)
and
THE CIT GROUP/BUSINESS CREDIT, INC.
(as Agent for the Lenders)
Dated as of September 30, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS, ACCOUNTING TERMS AND RULES OF CONSTRUCTION.................6
SECTION 1.01. DEFINED TERMS...........................................................6
SECTION 1.02. COMPUTATION OF TIME PERIODS............................................31
SECTION 1.03. ACCOUNTING PRINCIPLES AND TERMS........................................31
SECTION 1.04. RULES OF CONSTRUCTION..................................................32
ARTICLE II. CONDITIONS PRECEDENT...................................................32
SECTION 2.01. CONDITIONS PRECEDENT TO INITIAL REVOLVING CREDIT LOAN..................32
SECTION 2.02. CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT LOAN.....................35
SECTION 2.03. DEEMED REPRESENTATION..................................................36
ARTICLE III. AMOUNT AND TERMS OF THE REVOLVING CREDIT LOANS.........................36
SECTION 3.01. REVOLVING CREDIT LOANS.................................................36
SECTION 3.02. REVOLVING CREDIT NOTE..................................................37
SECTION 3.03. OVERADVANCES...........................................................37
SECTION 3.04. INFORMATION RELATING TO ACCOUNTS.......................................37
SECTION 3.05. REPRESENTATIONS RELATING TO ACCOUNTS...................................38
SECTION 3.06. COLLECTION OF ACCOUNTS.................................................38
SECTION 3.07. NOTICE REGARDING ACCOUNTS..............................................39
SECTION 3.08. BORROWERS'ACCOUNTS.....................................................40
SECTION 3.09. APPLICATION OF PAYMENTS................................................40
SECTION 3.10. PREPAYMENTS............................................................40
SECTION 3.11. FUNDING OF REVOLVING CREDIT LOANS......................................41
SECTION 3.12. NOTICE AND MANNER OF BORROWING.........................................41
SECTION 3.13. OBLIGATIONS OF AGENT AND LENDERS.......................................42
SECTION 3.14. MINIMUM AMOUNTS........................................................43
SECTION 3.15. USE OF PROCEEDS........................................................43
SECTION 3.16. TAXES..................................................................43
SECTION 3.17. ADDITIONAL COSTS.......................................................44
SECTION 3.18. LIMITATION ON TYPES OF REVOLVING CREDIT LOANS..........................45
SECTION 3.19. ILLEGALITY.............................................................46
SECTION 3.20. TREATMENT OF AFFECTED LOANS............................................46
SECTION 3.21. ADEQUACY...............................................................46
ARTICLE IV. GUARANTY...............................................................47
SECTION 4.01. FIBERMARK DURABLE GUARANTY.............................................47
SECTION 4.02. FIBERMARK DURABLE GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL.......47
SECTION 4.03. WAIVERS................................................................48
SECTION 4.04. SUBROGATION............................................................48
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SECTION 4.05. FIBERMARK FILTER GUARANTY..............................................49
SECTION 4.06. FIBERMARK FILTER GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL........49
SECTION 4.07. WAIVERS................................................................50
SECTION 4.08. SUBROGATION............................................................50
SECTION 4.09. FIBERMARK OFFICE GUARANTY..............................................50
SECTION 4.10. FIBERMARK OFFICE GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL........51
SECTION 4.11. WAIVERS................................................................52
SECTION 4.12. SUBROGATION............................................................52
SECTION 4.13. FIBERMARK GUARANTY.....................................................52
SECTION 4.14. FIBERMARK GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL...............52
SECTION 4.15. WAIVERS................................................................53
SECTION 4.16. SUBROGATION............................................................54
ARTICLE V. COLLATERAL.............................................................54
SECTION 5.01. (A) GRANT OF A SECURITY INTEREST BY FIBERMARK OFFICE..................54
SECTION 5.02. COVENANTS REGARDING INVENTORY..........................................56
SECTION 5.03. COVENANTS REGARDING EQUIPMENT..........................................57
SECTION 5.04. COLLATERAL COVENANT....................................................58
SECTION 5.05. COVENANTS REGARDING ACCOUNTS...........................................59
SECTION 5.06. CONTINUING SECURITY INTEREST...........................................59
SECTION 5.07. ACTIONS BY AGENT.......................................................60
SECTION 5.08. ADDITIONAL COLLATERAL AND FURTHER ASSURANCES...........................60
SECTION 5.09. ADDITIONAL INFORMATION.................................................61
SECTION 5.10. COMPLIANCE WITH FAIR LABOR STANDARDS ACT...............................61
ARTICLE VI. INTEREST, FEES AND EXPENSES............................................61
SECTION 6.01. METHOD OF ELECTING INTEREST RATES......................................61
SECTION 6.02. INTEREST...............................................................62
SECTION 6.03. FEES...................................................................63
SECTION 6.04. PAYMENTS AND COMPUTATIONS..............................................64
SECTION 6.05. CERTAIN COMPENSATION...................................................64
ARTICLE VII. POWERS.................................................................65
SECTION 7.01. POWERS.................................................................65
ARTICLE VIII. REPRESENTATIONS AND WARRANTIES.........................................65
SECTION 8.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION.....................66
SECTION 8.02. CORPORATE POWER AND AUTHORITY; NO CONFLICTS............................66
SECTION 8.03. LEGALLY ENFORCEABLE AGREEMENTS.........................................66
SECTION 8.04. LITIGATION.............................................................66
SECTION 8.05. FINANCIAL STATEMENTS...................................................67
SECTION 8.06. OWNERSHIP AND LIENS; LOCATION OF INVENTORY AND EQUIPMENT...............67
SECTION 8.07. TAXES..................................................................68
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SECTION 8.08. ERISA..................................................................68
SECTION 8.09. SUBSIDIARIES...........................................................68
SECTION 8.10. OPERATION OF BUSINESS..................................................68
SECTION 8.11. NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS..........................69
SECTION 8.12. NO DEFAULTS ON OTHER AGREEMENTS........................................69
SECTION 8.13. LABOR DISPUTES AND ACTS OF GOD.........................................69
SECTION 8.14. GOVERNMENTAL REGULATION................................................69
SECTION 8.15. PARTNERSHIPS...........................................................69
SECTION 8.16. ENVIRONMENTAL PROTECTION...............................................69
SECTION 8.17. SOLVENCY...............................................................70
SECTION 8.18. INTELLECTUAL PROPERTY..................................................70
SECTION 8.19. LICENSE OF INTELLECTUAL PROPERTY.......................................71
SECTION 8.20. ENVIRONMENTAL COMPLIANCE...............................................71
SECTION 8.21. CPG MERGER AGREEMENT...................................................71
ARTICLE IX. AFFIRMATIVE COVENANTS..................................................71
SECTION 9.01. REPORTING REQUIREMENTS.................................................71
SECTION 9.02. NOTICES................................................................73
SECTION 9.03. PAYMENT OF TAXES AND CLAIMS............................................75
SECTION 9.04. MAINTENANCE OF EXISTENCE...............................................75
SECTION 9.05. CONDUCT OF BUSINESS....................................................75
SECTION 9.06. COMPLIANCE WITH LAWS...................................................75
SECTION 9.07. INSURANCE..............................................................75
SECTION 9.08. BOOKS AND RECORDS; INSPECTION..........................................79
SECTION 9.09. ERISA COVENANT.........................................................79
SECTION 9.10. INTERCOMPANY TRANSFER OF FUNDS.........................................80
SECTION 9.11. INVENTORY AND ACCOUNTS RECEIVABLE ANALYSIS OF ACQUIRED ENTITY..........80
SECTION 9.12. ACQUIRED ENTITIES......................................................80
SECTION 9.13. COMPLIANCE WITH ENVIRONMENTAL LAWS.....................................80
SECTION 9.14. APPRAISAL..............................................................81
ARTICLE X. NEGATIVE COVENANTS.....................................................81
SECTION 10.01. DEBT..................................................................81
SECTION 10.02. LIENS.................................................................81
SECTION 10.03. SALE OF ASSETS........................................................81
SECTION 10.04. PROHIBITION OF FUNDAMENTAL CHANGES....................................82
SECTION 10.05. INVESTMENTS...........................................................82
SECTION 10.06. TRANSACTION WITH AFFILIATES...........................................82
SECTION 10.07. NATURE OF BUSINESS....................................................82
SECTION 10.08. DIVIDENDS.............................................................82
SECTION 10.09. LEASES................................................................83
SECTION 10.10. ENVIRONMENTAL COMPLIANCE..............................................83
SECTION 10.11. FISCAL YEAR...........................................................83
SECTION 10.12. SUBSIDIARY STOCK ISSUANCE.............................................83
ARTICLE XI. FINANCIAL COVENANTS...................................................83
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SECTION 11.01. CONSOLIDATED NET WORTH................................................83
SECTION 11.02. CONSOLIDATED FIXED CHARGE COVERAGE RATIO..............................84
ARTICLE XII. EVENTS OF DEFAULT.....................................................84
SECTION 12.01. EVENTS OF DEFAULT.....................................................84
SECTION 12.02. ACCELERATION OF OBLIGATIONS...........................................87
SECTION 12.03. OTHER REMEDIES........................................................87
ARTICLE XIII. AGENCY................................................................89
SECTION 13.01. THE AGENT.............................................................89
SECTION 13.02. DELEGATION OF DUTIES..................................................89
SECTION 13.03. EXCULPATORY PROVISIONS................................................89
SECTION 13.04. RELIANCE BY AGENT.....................................................90
SECTION 13.05. NOTICE OF DEFAULT.....................................................90
SECTION 13.06. NON-RELIANCE ON AGENT AND OTHER LENDERS...............................90
SECTION 13.07. INDEMNIFICATION.......................................................91
SECTION 13.08. THE AGENT IN ITS INDIVIDUAL CAPACITY..................................91
SECTION 13.09. SUCCESSOR AGENT.......................................................91
SECTION 13.10. ARRANGEMENTS REQUIRING CONSENT OF LENDERS.............................91
SECTION 13.11. RECAPTURE OF PAYMENTS.................................................93
ARTICLE XIV. RIGHTS AND OBLIGATIONS OF THE LENDERS AND THE AGENT...................93
SECTION 14.01. ADJUSTMENTS AMONG LENDERS.............................................93
SECTION 14.02. SHARING OF PAYMENTS...................................................94
SECTION 14.03. SALE OF PARTICIPATIONS................................................94
SECTION 14.04. NATURE OF REVOLVING CREDIT COMMITMENTS................................94
SECTION 14.05. SHARING OF COSTS AND EXPENSES.........................................95
SECTION 14.06. SHARING OF PAYMENTS...................................................95
SECTION 14.07. ASSIGNMENTS...........................................................96
SECTION 14.08. ACKNOWLEDGEMENTS BY AGENT.............................................97
SECTION 14.09. TERMINATION OF FINANCING AGREEMENT....................................97
ARTICLE XV. MISCELLANEOUS.........................................................98
SECTION 15.01. WAIVERS...............................................................98
SECTION 15.02. ENTIRE AGREEMENT......................................................98
SECTION 15.03. WAIVER OF COVENANTS IN PREDECESSOR AGREEMENT..........................99
SECTION 15.04. USURY.................................................................99
SECTION 15.05. PAYMENT OF EXPENSES...................................................99
SECTION 15.06. INDEMNITY............................................................100
SECTION 15.07. SEVERABILITY.........................................................100
SECTION 15.08. WAIVER OF JURY TRIAL.................................................100
SECTION 15.09. NOTICES..............................................................101
SECTION 15.10. GOVERNING LAW........................................................102
SECTION 15.11. CONFIDENTIALITY......................................................103
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THIRD AMENDED AND RESTATED FINANCING AGREEMENT AND GUARANTY DATED AS OF
SEPTEMBER 30, 1999, AMONG FiberMark, Inc. ("FiberMark"), a Delaware corporation,
FiberMark Durable Specialties, Inc. ("FiberMark Durable"), a Delaware
corporation, FiberMark Filter and Technical Products, Inc. ("FiberMark Filter"),
a Delaware corporation, and FiberMark Office Products, LLC ("FiberMark Office"),
a Vermont limited liability company, The CIT Group/Business Credit, Inc.
("CITBC"), a New York corporation, with offices located at 1211 Avenue of the
Americas, New York, New York, The CIT Group/Equipment Financing, Inc. ("CITEF,"
and together with CITBC, the "Initial Lenders"), a New York Corporation, with
offices located at 900 Ashwood Parkway, Atlanta, Georgia 30338, the other
lenders that may, subsequent to the date hereof, purchase from the Initial
Lenders a portion of their rights and obligations under this Third Amended and
Restated Financing Agreement and Guaranty pursuant to, and in accordance with,
Section 14.07 hereof (CITBC, CITEF and such other lenders each individually a
"Lender" and collectively the "Lenders"), and CITBC as agent for the Lenders (in
such capacity, together with its successors or assigns in such capacity, the
"Agent"). FiberMark Durable, FiberMark Filter and FiberMark Office are referred
to as a "Borrower" and collectively as the "Borrowers". FiberMark, FiberMark
Durable, FiberMark Filter and FiberMark Office and each Acquired Entity are
referred to herein as a "Guarantor" and collectively as the "Guarantors". The
Guarantors and the Borrowers are referred to herein collectively as the
"Obligors".
PRELIMINARY STATEMENTS
1. REFERENCE. Reference is made to the Second Amended and
Restated Financing Agreement and Guaranty dated December 31, 1996 among
Specialty Paperboard, Inc., Specialty Paperboard/Endura, Inc., CPG Investors,
Inc., CPG Holdings, Inc., CPG-Warren Glen Inc., Custom Papers Group Inc., Arcon
Holdings Corp., Arcon Coating Mills Inc., CITBC, each of the other Lenders
signatory thereto and CITBC, as Agent for the Lenders (the "December 1996
Agreement").
2. AMENDMENT AND RESTATEMENT. To the extent this Third Amended
and Restated Financing Agreement and Guaranty amends the December 1996
Agreement, the December 1996 Agreement is amended, and to the extent this Third
Amended and Restated Financing Agreement and Guaranty restates the December 1996
Agreement, the December 1996 Agreement is restated.
The Borrowers desire that the Lenders extend credit as
provided herein and the Lenders are prepared to extend such credit. Accordingly,
the Borrowers, the Guarantors, the Lenders and the Agent agree as follows:
5
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ARTICLE I. DEFINITIONS, ACCOUNTING TERMS AND RULES OF
CONSTRUCTION
Section 1.01. DEFINED TERMS. As used in this Third Amended and
Restated Financing Agreement and Guaranty the following terms have the following
meanings (terms defined in the singular to have the same meanings when used in
the plural and vice versa):
ACCOUNT DEBTOR means each Person obligated to pay on an
Account Receivable.
ACCOUNTS shall mean all of an Obligor's now existing and
future: (a) Accounts Receivable (whether or not specifically listed on schedules
furnished to the Agent), and any and all instruments, documents, contract
rights, chattel paper, investment property, rights to proceeds of letters of
credit, money and general intangibles, including, without limitation, all
accounts created by or arising from all of the Obligor's sales of goods or
rendition of services to its customers, (b) unpaid seller's rights (including
rescission, replevin, reclamation and stoppage in transit) relating to the
foregoing or arising therefrom; (c) rights to any goods represented by any of
the foregoing, including rights to returned or repossessed goods; (d) reserves
and credit balances arising hereunder; (e) guarantees or collateral for any of
the foregoing; (f) insurance policies or rights relating to any of the
foregoing; and (g) cash and non-cash proceeds of any and all the foregoing.
ACCOUNTS RECEIVABLE means any right to payment for goods sold
by or services rendered by an Obligor, including all accounts arising from sales
or rendition of services made under any of the Obligor's trade names or styles,
or through any of the Obligor's divisions; regardless of how such right is
evidenced, whether secured or unsecured, or now existing or hereafter arising.
ACQUIRED ENTITY shall mean (x) any Person acquired by any
Obligor hereunder by way of (i) the purchase of stock or assets of such Person
and all or a portion of the consideration paid for such stock or assets is paid
directly or indirectly with the proceeds of the Revolving Credit Loans or (ii)
consolidation or merger of such Person with or into any Obligor or (y) any
entity formed to acquire the assets or stock of another Person and all or a
portion of the consideration paid for such stock or assets is paid directly or
indirectly with the proceeds of the Revolving Credit Loans.
ACQUIRED INDEBTEDNESS means Indebtedness of a Person or any of
its Subsidiaries existing at the time such Person becomes a Subsidiary or at the
time it merges or consolidates with any Obligor or assumed in connection with
the acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Subsidiary or such acquisition, merger or consolidation.
ADDITIONAL COSTS shall have the meaning specified in Section
3.17.
6
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ADJUSTED TERMINATION DATE shall mean the date determined by
adding to the Closing Date the number of months calculated by multiplying (i)
the number of months elapsing from the Closing Date to September 30, 2002
(rounded downward to the nearest whole number of months) times (ii) a percentage
derived by dividing (x) the appraised value assigned in the Appraisal to the
Equipment by (y) Thirty Five Million Dollars (rounded downward to the nearest
whole number of months); PROVIDED that if such percentage is 100% or greater,
the Adjusted Termination Date shall be September 30, 2002.
AFFECTED LOANS shall have the meaning specified in Section
3.20.
AFFILIATE means with respect to any designated Person, any
Person which, directly or indirectly, controls or is controlled by or is under
common control with such designated Person. For purposes of this definition,
"control", "controlled by" and "under common control with", as used with respect
to any Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
AGENT means The CIT Group/Business Credit, Inc., or any
successor thereof, acting as agent for Lenders pursuant to this Financing
Agreement.
ANNIVERSARY DATE shall mean each September 30, commencing
September 30, 2000.
APPLICABLE LENDING OFFICE means, for each of the Lenders, the
lending office of such Lender (or of an Affiliate of such Lender) designated as
such for such Type of Loan on the signature page hereto or in the applicable
Assignment and Acceptance Agreement or such other office of such Lender (or of
an Affiliate of such Lender) as such Lender may from time to time specify to
Agent and the Borrower as the office by which its Revolving Credit Loans of such
Type are to be made and maintained.
APPLICABLE MARGIN means (a) with respect to the Chase
Manhattan Bank Rate one half percent (0.50%); and (b) with respect to the Libor
Rate two percent (2.00%).
APPRAISAL shall mean the appraisal, in form and substance
satisfactory to the Agent, conducted by an appraiser satisfactory to the Agent
and at Agent's expense, and appraising the Equipment on a "market value, in
place, in use" basis if sold in one year.
APPROVALS AND PERMITS means any permits, variance, permission,
authorization, consent, approval, license, franchise, ruling, permit, tariff,
rate, certification, exemption, or registration issued by any Governmental
Authority which
7
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is required to be obtained in accordance with applicable Law in connection with
the ownership, operation, construction, or maintenance of its property.
ASSIGNMENT AND ACCEPTANCE shall have the meaning ascribed to
such term in Section 14.07.
ASSIGNMENT OF CLAIMS ACT shall mean 31 United States Code
Annotated Section 3727 and all amendments and supplements thereto and all rules
and regulations promulgated thereunder.
AVAILABILITY shall mean the excess of
(a) the sum of
(i) ninety percent (90%) of the Eligible
Accounts Receivable of the Obligors, plus
(ii) sixty percent (60%) of the aggregate
value of Eligible Inventory of the Obligors, plus
(iii) Twenty Five Million Dollars
($25,000,000), over
(b) the outstanding aggregate amount of all outstanding
Obligations of all the Borrowers taken together.
BOARD OF DIRECTORS shall mean, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
BOARD OF GOVERNORS means the Board of Governors of the Federal
Reserve Bank or any entity succeeding to any or all of its functions.
BOARD RESOLUTION shall mean, with respect to any Person, a
copy of a resolution certified by the Secretary or an Assistant Secretary of
such Person to have been duly adopted by the Board of Directors of such Person
and to be in full force and effect on the date of such certification, and
delivered to the Agent.
BORROWING BASE means an amount equal to the sum of (a) ninety
percent (90%) of the Eligible Accounts Receivable, plus (b) sixty percent (60%)
of the aggregate value of Eligible Inventory, plus (c) Twenty Five Million
Dollars ($25,000,000).
BORROWING BASE CERTIFICATE means a Certificate substantially
in the form of Exhibit H, certified by an officer of FiberMark, with respect to
the Borrowing Base.
8
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BRATTLEBORO COLLATERAL shall mean all of FiberMark Office's
present and future right, title and interest in and to the Equipment and the
Real Estate, whether now owned or hereafter acquired; and, to the extent not
otherwise included, all proceeds and products of any and all of the foregoing,
in whatever form.
BUSINESS DAY shall mean (a) for all purposes other than those
covered by clause (b) below, any day that CITBC and The Chase Manhattan Bank are
open for business excluding Saturday, Sunday and any day that either is a legal
holiday under the laws of the State of New York or is a day on which banking
institutions located in such state are closed and (b) with respect to all
notices, determinations, fundings and payments in connection with the Libor
Rate, any date that is a Business Day as described in clause (a) above that is
also a day for trading by and between banks in dollar deposits in the applicable
interbank Libor market.
CAPITAL LEASE means any lease of property (real or personal or
mixed) which, in accordance with GAAP, would be required to be capitalized on a
balance sheet of the lessee.
CAPITALIZED LEASE OBLIGATIONS shall mean, as to any Person,
the obligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes of
this definition, the amount of such obligation at any date shall be capitalized
amount of such obligations at such date, determined in accordance with GAAP.
CHASE MANHATTAN BANK RATE shall mean the rate of interest from
time to time announced by The Chase Manhattan Bank at its principal office in
the City of New York. (The prime rate is not intended to be the lowest rate of
interest charged by The Chase Manhattan Bank to its borrowers).
CHASE MANHATTAN BANK RATE LOANS shall mean all or any portion
of the Revolving Credit Loans for which any Borrower has elected to use the
Chase Manhattan Bank Rate for interest rate calculations.
CLOSING DATE means the date upon which the conditions set
forth in Section 2.01 shall have been fulfilled to the satisfaction of the
Agent.
CODE means The Internal Revenue Code of 1986, as thereafter
amended.
COLLATERAL shall mean, collectively, (i) all of each Obligor's
right, title and interest, whether now owned or hereafter acquired, in and to
all present and future Accounts and Inventory, wherever located, including all
rights under all permits granted in favor of FiberMark Office relating to its
facility in Brattleboro, Vermont; and, to the extent not otherwise included, all
proceeds and products of any and all of the foregoing, in whatever form; and
(ii) the Brattleboro Collateral.
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COLLATERAL MANAGEMENT FEE shall mean the sum of Thirty-Five
Thousand Dollars ($35,000) which shall be paid to the Agent for its own account
in accordance with Section 6.03 of this Financing Agreement to offset the
expenses and costs of the Agent in connection with record keeping, periodic
examinations, analyzing and evaluating the Collateral.
CONSOLIDATED AMORTIZATION OF DEFERRED BOOK GAIN shall mean the
amortization of the book gain realized from the sale of certain fixed assets to
CITEF in connection with the Lease Agreement, as recorded on the consolidated
financial statements of FiberMark and its Subsidiaries in accordance with GAAP.
CONSOLIDATED EBITDA shall mean, for any period, the sum
(without duplication) of (i) Consolidated Net Income and (ii) to the extent
Consolidated Net Income has been reduced thereby, (A) all income taxes of
FiberMark and its Subsidiaries paid or accrued in accordance with GAAP for such
period (other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses or taxes attributable to sales or dispositions
outside the ordinary course of business), (B) Consolidated Interest Expense and
(C) Consolidated Non-cash Charges less any non-cash items increasing
Consolidated Net Income for such period, all as determined on a consolidated
basis for FiberMark and its Subsidiaries in accordance with GAAP.
CONSOLIDATED FIXED CHARGE COVERAGE RATIO shall mean the ratio
of (i) Consolidated EBITDA during the four full fiscal quarters (the "Four
Quarter Period") ending (A) for the purposes of Section 10.01, on or prior to
the date of the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio (the "Transaction Date"), or (B) for
purposes of Section 11.02, on any date during the term of this Financing
Agreement, to (ii) Consolidated Fixed Charges for the Four Quarter Period. In
addition to and without limitation of the foregoing, in determining the
Consolidated Fixed Charge Coverage Ratio for purposes of Section 10.01,
"Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma (including any pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Securities Act of 1933, as amended) basis for the period of such calculation to
(1) the incurrence or repayment of any Indebtedness of FiberMark or any of its
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (2) any Asset
Sales (as defined in the Indenture) or Asset Acquisitions (as defined in the
Indenture) (including, without limitation, any Asset Acquisition giving rise to
the need to make such calculation as a result of FiberMark or one of its
Subsidiaries (including any Person who becomes an Acquired Entity as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also including any Consolidated EBITDA attributable to
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the assets which are the subject of the Asset Acquisition or Asset Sale during
the Four Quarter Period) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Acquired Indebtedness) occurred
on the first day of the Four Quarter Period. If FiberMark or any of its
Subsidiaries directly or indirectly guarantee Indebtedness of a third Person,
the preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if FiberMark or any such Subsidiary had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of Section 10.01, in determining the
denominator (but not the numerator) of the "Consolidated Fixed Charge Coverage
Ratio", (I) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest in such Indebtedness in effect on the Transaction Date;
(II) if interest on any Indebtedness actually incurred on the Transaction Date
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, an eurocurrency interbank offered rate, or other rates, then
the interest rate in effect on the Transaction Date will be deemed to have been
in effect during the Four Quarter Period; (III) notwithstanding clause (I)
above, interest on Indebtedness determined on a fluctuating basis, to the extent
such interest is covered by agreements relating to Interest Swap Obligations,
shall be deemed to accrue at the rate per annum resulting after giving effect to
the operation of such agreements, and (IV) there shall be added an amount equal
to the aggregate obligations with respect to all Operating Leases of the
Obligors in effect as of the Transaction Date (and, if applicable, after giving
effect to the Operating Lease being entered into) that are scheduled to become
due and payable within the twelve-month period commencing on the Transaction
Date.
CONSOLIDATED FIXED CHARGES shall mean, with respect to
FiberMark for any period, the sum, without duplication, of (i) Consolidated
Interest Expense, plus (ii) the product of (x) the amount of all dividend
payments on any series of Preferred Stock (as defined in the Indenture) of
FiberMark (other than dividends paid in Qualified Capital Stock paid, accrued or
scheduled to be paid or accrued during such period times (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local tax rate of such Person,
expressed as a decimal.
CONSOLIDATED INTEREST EXPENSE shall mean, with respect to
FiberMark for any period, the sum of, without duplication: (i) the aggregate of
the interest expense of FiberMark and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including without
limitation, (a) any amortization of debt discount, (b) the net costs under
Interest Swap Obligations, (c) the capitalized interest and (d) the interest
portion of any deferred payment obligation; and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by FiberMark and its Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
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CONSOLIDATED NET INCOME shall mean, with respect to FiberMark,
for any period, the aggregate net income (or loss) of FiberMark and its
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom (a) after-tax gains
or losses from Asset Sales or abandonments or reserves relating thereto, (b)
after-tax items classified as extraordinary or nonrecurring gains or losses, (c)
the net income (or loss) of any Person acquired in a "pooling of interests"
transaction accrued prior to the date it becomes a Subsidiary or is merged or
consolidated with FiberMark or any Subsidiary, (d) the net income (but not loss)
of any Subsidiary to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income is restricted by a contract,
operation of law or otherwise, (e) the net income of any Person, other than a
Subsidiary, except to the extent of cash dividends or distributions paid to
FiberMark or to a Subsidiary by such Person, (f) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period whether or not such operations were classified as
discontinued) and (g) in the case of a successor to FiberMark by consolidation
or merger or as a transferee of FiberMark's assets, any net income of the
successor corporation prior to such consolidation, merger or transfer of assets.
CONSOLIDATED NET WORTH shall mean, at any time, the excess of
Consolidated Total Assets over Consolidated Total Liabilities.
CONSOLIDATED NON-CASH CHARGES shall mean, with respect to
FiberMark, for any period, the aggregate depreciation, amortization and other
non-cash expenses of FiberMark and its Subsidiaries reducing Consolidated Net
Income of FiberMark for such period, determined on a consolidated basis in
accordance with GAAP (excluding any such charges constituting an extraordinary
item or loss or any such charge which requires an accrual of or a reserve for
cash charges for any future period).
CONSOLIDATED TOTAL ASSETS shall mean, at any time, the total
assets of FiberMark and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
CONSOLIDATED TOTAL LIABILITIES shall mean, at any time, the
total liabilities of FiberMark and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP.
CONTINUE, CONTINUATION AND CONTINUED shall refer to the
continuation pursuant to Section 6.01 hereof of a Libor Rate Loan as a Libor
Rate Loan from one Libor Rate Period to the next Libor Rate Period.
CONVERT, CONVERSION AND CONVERTED shall refer to a conversion
pursuant to Section 6.01 hereof of Chase Manhattan Bank Rate Loans into Libor
Rate Loans or Libor Rate Loans into Chase Manhattan Bank Rate Loans, each of
which may be accompanied by the transfer by a Lender (at its sole discretion) of
a Loan from one Applicable Lending Office to another.
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CORPORATE OBLIGORS means each of FiberMark, FiberMark Durable
and FiberMark Filter.
CORPORATE REORGANIZATION shall mean the corporate
reorganization consummated in December, 1997 pursuant to which:
(a) the corporation formerly known as Specialty
Paperboard/Endura, Inc. and the corporation formerly known as Arcon Coating
Mills, Inc., a Delaware corporation, merged into the corporation formerly known
as Arcon Holdings, Inc, a Delaware corporation;
(b) the name of Arcon Holdings, Inc. was changed to FiberMark
Durable Specialties, Inc.;
(d) the corporation formerly known as Custom Papers Group,
Inc., a Virginia corporation, and the corporation formerly known as CPG
Warren-Glen, Inc., a Virginia corporation, merged into the corporation formerly
known as CPG Holdings, Inc., a Delaware corporation;
(e) subsequent to the mergers described in paragraph (d) of
this definition, CPG Holdings, Inc. was merged into the corporation formerly
known as CPG Investors, Inc., a Delaware corporation;
(f) the name of CPG Investors, Inc. was changed to FiberMark
Filter and Technical Products, Inc.; and
(g) FiberMark Office was formed as a Vermont limited liability
company with FiberMark as the sole member.
CUSTOMARILY PERMITTED LIENS shall mean:
(a) Liens of local, provincial, or state authorities for
franchise or other like taxes provided the aggregate amounts secured by such
Liens shall not exceed One Hundred Thousand Dollars ($100,000) in the aggregate
outstanding at any one time;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other like Liens imposed by Law,
created in the ordinary course of business and for amounts not yet due or which
are the subject of a Good Faith Contest;
(c) deposits made (and the Liens thereon) in the ordinary
course of business (including, without limitation, security deposits for leases,
surety bonds and appeal bonds) in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to secure
the performance of tenders, bids, contracts (other than for the repayment or
guarantee of Indebtedness), statutory
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obligations and other similar obligations arising as a result of progress
payments under government contracts; and
(d) easements (including, without limitation, reciprocal
easement agreements and utility agreements), encroachments, minor defects or
irregularities in title, variation and other restrictions, charges or
encumbrances (whether or not recorded) affecting the Real Estate and which are
listed in Schedule B of the title insurance policy delivered to the Agent
herewith; PROVIDED, HOWEVER, that in no event shall any Environmental Lien be
deemed to be a Customarily Permitted Lien.
DEFAULT shall mean any event specified in Section 12.01
hereof, whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition, event or act, has been satisfied.
DEFAULT RATE OF INTEREST shall mean a rate of interest per
annum equal to the sum of: (a) four percent (4%) plus (b) the Chase Manhattan
Bank Rate, which the Agent shall be entitled to charge each Borrower on all
Obligations of such Borrower due the Lenders and not paid by such Borrower.
DEPOSITORY ACCOUNTS shall mean those accounts owned by, and in
the name of, the Agent and designated by the Agent for the deposit of proceeds
of Collateral.
DOCUMENTATION FEE shall mean (a) the sum intended to
compensate the Agent (for its own account) for the use of the Agent's internal
or outside counsel and facilities in documenting, in whole or in part, the
initial transaction solely on behalf of the Lenders, exclusive of Out-Of-Pocket
Expenses, which sum shall be included as part of the Loan Facility Fee due and
payable in accordance with Section 6.03 of this Financing Agreement, and (b) the
Agent's standard fees relating to any and all modifications, waivers, releases,
amendments or additional collateral with respect to this Financing Agreement,
the Collateral and/or the Obligations.
DOLLARS AND $ means lawful money of the United States of
America.
ELIGIBLE ACCOUNTS RECEIVABLE shall mean the gross amount of
each Obligor's Accounts Receivable that conform to the warranties contained
herein and at all times continue to be acceptable to the Agent in the exercise
of its reasonable business judgment, less, without duplication, the sum of:
(a) any returns, discounts, claims, credits and allowances of
any nature (whether issued, owing, granted or outstanding); and
(b) reserves for:
(i) sales to the United States of America or to any
agency, department or division thereof except where assignment
of all resulting accounts receivable due or to become due
under a particular contract is
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made by any Obligor to the Agent and the Agent is satisfied
that all requirements for compliance with the Assignment of
Claims Act and/or other applicable statutes, rules, or
regulations have been fulfilled;
(ii) foreign sales other than sales (A) secured by
stand-by letters of credit (in form and substance satisfactory
to the Agent) issued or confirmed by, and payable at, banks
having a place of business in the United States of America and
payable in United States currency, (B) covered by policies of
foreign credit insurance that are in form and substance
satisfactory to the Agent and are issued by one or more
insurance carriers that are fully acceptable to the Agent, and
are assigned to the Agent with the Agent named as loss payee
thereunder or (C) to customers residing in Canada provided
such sales otherwise comply with all of the other criteria for
eligibility hereunder, are payable in U.S. Dollars and all
such sales do not exceed Seven Hundred Fifty Thousand Dollars
($750,000) in the aggregate at any one time;
(iii) accounts that remain unpaid more than ninety
(90) days from invoice date;
(iv) contras;
(v) sales to any Affiliate of an Obligor;
(vi) bill and hold (deferred shipment) or
consignment sales;
(vii) sales to any customer which is (w) insolvent,
(x) the debtor in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any
federal or state law, (y) negotiating, or has called a meeting
of its creditors for purposes of negotiating, a compromise of
its debts or (z) in the Agent's reasonable business judgment,
financially unacceptable to the Agent or has a credit rating
unacceptable to the Agent;
(viii) all sales to any customer if fifty percent
(50%) or more of either (x) all outstanding invoices or (y)
the aggregate dollar amount of all outstanding invoices, are
unpaid more than ninety (90) days from invoice date;
(ix) any other reasons deemed necessary by the Agent
in its reasonable business judgment and which are customary
either in the commercial finance industry or in the lending
practices of the Agent or the Lenders; and
(x) an amount representing, historically, returns,
discounts, claims, credits and allowances.
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ELIGIBLE INVENTORY shall mean the gross amount of each
Obligor's Inventory that conforms to the warranties contained herein and which
at all times continues to be acceptable to the Agent in the exercise of its
reasonable business judgment, less any (i) work-in-process, (ii) supplies (other
than raw material), (ii) goods not present in the United States of America,
(iii) goods returned or rejected by the customers of such Obligor (other than
goods that are undamaged and resalable in the normal course of business), (iv)
goods to be returned to the suppliers of such Obligor, (v) goods in transit to
third parties (other than the agents or warehouses of such Obligor), (vi) goods
that are obsolescent, and (vii) goods, located at a place identified on Schedule
5.04 that is not one of the Excluded Premises, that are moved to one or more of
the Excluded Premises (unless they are returned to a place identified on
Schedule 5.04 that is not one of the Excluded Premises), and less any reserves
required by the Agent in its reasonable discretion for special order goods,
market value declines and bill and hold (deferred shipment) or consignment
sales; PROVIDED, HOWEVER, that (without limiting the requirement that Inventory,
to qualify as "Eligible Inventory", must satisfy each of the other components of
this definition) no Inventory located at premises that are subject to a
Warehouse Lease identified on Schedule 5.04 that is not included on Schedule
2.01 as of the Closing Date shall constitute "Eligible Inventory" until such
time as an appropriate landlord's waiver or warehouse acknowledgment is received
by Agent with respect to such premises.
EMPLOYEE BENEFIT PLAN means any plan, agreement, arrangement
or commitment which is an employee benefit plan, as defined in Section 3(3) of
ERISA, maintained by any Obligor, or any ERISA Affiliate or with respect to
which such Obligor, or any ERISA Affiliate at any relevant time has any
liability or obligation to contribute.
ENVIRONMENTAL DISCHARGE means any spill, emission, leaking,
pumping, injection, deposit, dispersal, leaching, migration, disposal, discharge
or release or threatened release of Hazardous Materials into the indoor or
outdoor environment or into or out of any property, including, without
limitation, the movement of Hazardous Materials through or in the air, soil,
surface water or groundwater.
ENVIRONMENTAL LAW means any applicable Law relating to human
health or safety or the environment and any terms and conditions of any
Approvals or Permits issued thereunder, including, without limitation, Laws
relating to noise or to Environmental Discharges or to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, handling or remediation of Hazardous Materials or to the transfer of
industrial or manufacturing facilities or property.
ENVIRONMENTAL LIEN means any Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by, such Governmental Authority in response to, an
Environmental Discharge.
ENVIRONMENTAL NOTICE means any written complaint, order,
claim, citation, letter, inquiry, notice or other written communication from any
Person
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(a) relating to any Obligor's compliance with or liability or potential
liability under any Environmental Law, (b) relating to the occurrence or
presence of or exposure to or possible or threatened or alleged occurrence or
presence of or exposure to Environmental Discharges or Hazardous Materials at,
to, or from any of Obligor's past, present or future locations or facilities or
Real Estate or at, to or from any other location or facility including, without
limitation: (i) the existence of any contamination or possible or threatened
contamination at any such location or facility or the Real Estate; and (ii)
Remedial Action in connection with any Environmental Discharge or Hazardous
Materials at any such location or facility or Real Estate or any part thereof;
or (c) relating to any violation or alleged violation of any Environmental Law
by any Obligor, the Real Estate, or any prior owner of operator of the Real
Estate.
EQUIPMENT shall mean all currently owned or hereafter acquired
interest of FiberMark Office in all machinery, equipment, furnishings and
fixtures, and all additions, substitutions and replacements thereof, now or at
any time hereafter located at the Real Estate (all of which shall continue to
constitute "Equipment", regardless of its removal from the Real Estate, unless
the Agent expressly releases its security interest therein), together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto and all proceeds and products of the foregoing, of whatever
sort.
ERISA means the Employee Retirement Income Security Act of
1974, as thereafter amended.
ERISA AFFILIATE means any entity required to be aggregated
with any Obligor under Section 414(b), (c), (m) or (o) of the Code.
EVENT(S) OF DEFAULT shall have the meaning provided for in
Section 12.01 of this Financing Agreement.
EXCLUDED PREMISES shall mean those premises (including
warehouses) (i) owned or leased by any Obligor, or occupied by any third-party
processor of Inventory of any Obligor, that are set forth on Schedule 2.01, as
amended by Agent from time to time to reflect Agent's receipt or non-receipt, or
the lapse or termination, of any landlord's waiver, warehouse acknowledgment,
third party processor acknowledgment or filing or other measure required to
create or maintain a first perfected security interest and Lien in favor of
Agent in the Collateral kept, stored or processed at the relevant location or
otherwise to protect Agent's and Lenders' interest therein; PROVIDED THAT any
location that is identified on Schedule 5.04 as a Warehouse Lease but is not
included on Schedule 2.01 as of the Closing Date will become an "Excluded
Premise" effective November 16, 1999, unless, on or before November 15, 1999,
Agent has received an appropriate landlord's waiver or warehouse acknowledgment
with respect to such location.
EXECUTIVE OFFICERS shall mean the Chairman, President, Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Executive
Vice President(s), Senior Vice President(s), and Secretary of FiberMark.
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FACILITY FEE shall mean the fee payable by the Borrowers to
the Initial Lenders in the amount of One Hundred Twenty-Five Thousand Dollars
($125,000), which fee shall be deemed fully earned, nonrefundable and due on the
Closing Date.
FIBERMARK DURABLE GUARANTORS means each of FiberMark,
FiberMark Filter, FiberMark Office and each Acquired Entity.
FIBERMARK FILTER GUARANTORS means each of FiberMark, FiberMark
Durable, FiberMark Office and each Acquired Entity.
FIBERMARK GUARANTORS means each of FiberMark Durable,
FiberMark Filter and FiberMark Office.
FIBERMARK OFFICE GUARANTORS means each of FiberMark, FiberMark
Durable, FiberMark Filter and each Acquired Entity.
FIBERMARK DURABLE OBLIGATIONS shall mean all loans and
advances made or to be made by the Lenders or by the Agent on behalf of the
Lenders to FiberMark Durable or to others for FiberMark Durable's account; any
and all indebtedness and obligations which may at any time be owing by FiberMark
Durable to the Agent or the Lenders howsoever arising, whether now in existence
or incurred by FiberMark Durable from time to time hereafter; whether secured by
pledge, Lien upon or security interest in any of FiberMark Durable's assets or
property or the assets or property of any other person, firm, entity or
corporation; whether such indebtedness is absolute or contingent, joint or
several, matured or unmatured, direct or indirect and whether FiberMark Durable
is liable to the Lenders and/or the Agent for such indebtedness as principal,
surety, endorser, guarantor or otherwise. FiberMark Durable Obligations shall
also include indebtedness owing to the Lenders and/or the Agent by FiberMark
Durable under this Financing Agreement or under any other agreement or
arrangement now or hereafter entered into between FiberMark Durable and the
Lenders; indebtedness or obligations incurred by, or imposed on, the Lenders
and/or the Agent, as a result of environmental claims (other than as a result of
actions of the Lenders or the Agent) arising out of any FiberMark Durable's
operation, premises or waste disposal practices or sites; FiberMark Durable's
liability to the Lenders and/or the Agent as maker or endorser on any promissory
note or other instrument for the payment of money; FiberMark Durable's liability
to the Lenders and/or the Agent under any instrument of guaranty or indemnity,
or arising under any guaranty, endorsement or undertaking which the Lenders
and/or the Agent may make or issue to others for FiberMark Durable's account,
including any accommodation extended with respect to applications for letters of
credit, the Lenders' and/or the Agent's acceptance of drafts or the Lenders'
and/or the Agent's endorsement of notes or other instruments for FiberMark
Durable's account and benefit.
FIBERMARK FILTER OBLIGATIONS shall mean all loans and advances
made or to be made by the Lenders or by the Agent on behalf of the Lenders to
FiberMark Filter or to others for FiberMark Filter's account; any and all
indebtedness and
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obligations which may at any time be owing by FiberMark Filter to the Agent or
the Lenders howsoever arising, whether now in existence or incurred by FiberMark
Filter from time to time hereafter; whether secured by pledge, Lien upon or
security interest in any of FiberMark Filter's assets or property or the assets
or property of any other person, firm, entity or corporation; whether such
indebtedness is absolute or contingent, joint or several, matured or unmatured,
direct or indirect and whether FiberMark Filter is liable to the Lenders and/or
the Agent for such indebtedness as principal, surety, endorser, guarantor or
otherwise. FiberMark Filter Obligations shall also include indebtedness owing to
the Lenders and/or the Agent by FiberMark Filter under this Financing Agreement
or under any other agreement or arrangement now or hereafter entered into
between FiberMark Filter and the Lenders; indebtedness or obligations incurred
by, or imposed on, the Lenders and/or the Agent, as a result of environmental
claims (other than as a result of actions of the Lenders or the Agent) arising
out of any FiberMark Filter's operation, premises or waste disposal practices or
sites; FiberMark Filter's liability to the Lenders and/or the Agent as maker or
endorser on any promissory note or other instrument for the payment of money;
FiberMark Filter's liability to the Lenders and/or the Agent under any
instrument of guaranty or indemnity, or arising under any guaranty, endorsement
or undertaking which the Lenders and/or the Agent may make or issue to others
for FiberMark Filter's account, including any accommodation extended with
respect to applications for letters of credit, the Lenders' and/or the Agent's
acceptance of drafts or the Lenders' and/or the Agent's endorsement of notes or
other instruments for FiberMark Filter's account and benefit.
FIBERMARK OBLIGATIONS shall mean all loans and advances made
or to be made by the Lenders or by the Agent on behalf of the Lenders to
FiberMark or to others for FiberMark's account; any and all indebtedness and
obligations which may at any time be owing by FiberMark to the Agent or the
Lenders howsoever arising, whether now in existence or incurred by FiberMark
from time to time hereafter; whether secured by pledge, Lien upon or security
interest in any of FiberMark's assets or property or the assets or property of
any other person, firm, entity or corporation; whether such indebtedness is
absolute or contingent, joint or several, matured or unmatured, direct or
indirect and whether FiberMark is liable to the Lenders and/or the Agent for
such indebtedness as principal, surety, endorser, guarantor or otherwise.
FiberMark Obligations shall also include indebtedness owing to the Lenders
and/or the Agent by FiberMark under this Financing Agreement or under any other
agreement or arrangement now or hereafter entered into between FiberMark and the
Lenders; indebtedness or obligations incurred by, or imposed on, the Lenders
and/or the Agent, as a result of environmental claims (other than as a result of
actions of the Lenders or the Agent) arising out of any FiberMark's operation,
premises or waste disposal practices or sites; FiberMark's liability to the
Lenders and/or the Agent as maker or endorser on any promissory note or other
instrument for the payment of money; FiberMark's liability to the Lenders and/or
the Agent under any instrument of guaranty or indemnity, or arising under any
guaranty, endorsement or undertaking which the Lenders and/or the Agent may make
or issue to others for FiberMark's account, including any accommodation extended
with respect to applications for letters of credit, the Lenders' and/or the
Agent's acceptance of drafts or the Lenders' and/or the
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Agent's endorsement of notes or other instruments for FiberMark's account and
benefit.
FIBERMARK OFFICE OBLIGATIONS shall mean all loans and advances
made or to be made by the Lenders or by the Agent on behalf of the Lenders to
FiberMark Office or to others for FiberMark Office's account; any and all
indebtedness and obligations which may at any time be owing by FiberMark Office
to the Agent or the Lenders howsoever arising, whether now in existence or
incurred by FiberMark Office from time to time hereafter; whether secured by
pledge, Lien upon or security interest in any of FiberMark Office's assets or
property or the assets or property of any other person, firm, entity or
corporation; whether such indebtedness is absolute or contingent, joint or
several, matured or unmatured, direct or indirect and whether FiberMark Office
is liable to the Lenders and/or the Agent for such indebtedness as principal,
surety, endorser, guarantor or otherwise. FiberMark Office Obligations shall
also include indebtedness owing to the Lenders and/or the Agent by FiberMark
Office under this Financing Agreement or under any other agreement or
arrangement now or hereafter entered into between FiberMark Office and the
Lenders; indebtedness or obligations incurred by, or imposed on, the Lenders
and/or the Agent, as a result of environmental claims (other than as a result of
actions of the Lenders or the Agent) arising out of any FiberMark Office's
operation, premises or waste disposal practices or sites; FiberMark Office's
liability to the Lenders and/or the Agent as maker or endorser on any promissory
note or other instrument for the payment of money; FiberMark Office's liability
to the Lenders and/or the Agent under any instrument of guaranty or indemnity,
or arising under any guaranty, endorsement or undertaking which the Lenders
and/or the Agent may make or issue to others for FiberMark Office's account,
including any accommodation extended with respect to applications for letters of
credit, the Lenders' and/or the Agent's acceptance of drafts or the Lenders'
and/or the Agent's endorsement of notes or other instruments for FiberMark
Office's account and benefit.
FINANCING AGREEMENT means this Third Amended and Restated
Financing Agreement and Guaranty.
FISCAL YEAR shall mean each period from January 1 to December
31.
GAAP shall mean generally accepted accounting principles in
the United States of America as in effect from time to time and for the period
as to which such accounting principles are to apply.
GOOD FAITH CONTEST means the contest of an item if: (a) the
item is diligently contested in good faith by appropriate proceedings timely
instituted; (b) adequate reserves are established with respect to the contested
item; (c) during the period of such contest, the enforcement of the contested
item is effectively stayed; and (d) the failure to pay or comply with the
contested item during the period of such contest could not result in a Material
Adverse Change.
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GOVERNMENTAL AUTHORITY means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
GUARANTORS means all of FiberMark, FiberMark Durable,
FiberMark Filter, FiberMark Office and each Acquired Entity.
GUARANTY OBLIGATIONS shall mean, all obligations of any
Guarantor as guarantor of the obligations of a Borrower or other Guarantor under
this Financing Agreement. Guarantor Obligations shall also include indebtedness
owing to the Lenders and/or the Agent by any Guarantor under this Financing
Agreement or under any other agreement or arrangement now or hereafter entered
into between such Guarantor and the Lenders.
HAZARDOUS MATERIALS means any pollutants, contaminants, toxic
or hazardous substances or wastes, chemicals, radioactive material, medical
wastes or special waste, including, without limitation, asbestos fibers and
friable asbestos, polychlorinated biphenyls, and petroleum or hydrocarbon-based
products, derivatives wastes, or breakdown, constituent or decomposition
products thereof.
INDEBTEDNESS shall mean at any date:
(a) indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services (including trade obligations);
(b) obligations as lessee under Capital Leases (and, for
purposes of determining whether any Obligor may enter into an Operating Lease,
obligations as lessee under Operating Leases);
(c) reimbursement obligations under letters of credit issued
for the account of any Person;
(d) all reimbursement obligations arising under bankers' or
trade acceptances;
(e) all guarantees, endorsements (other than for collection or
deposit in the ordinary course of business), and other contingent obligations to
purchase any of the items included in this definition, to provide funds for
payment, to supply funds to invest in any Person, or otherwise to assure a
creditor against loss;
(f) all obligations secured by any Lien on property owned by
such Person, whether or not the obligations have been assumed; and
(g) all obligations under any agreement providing for a swap,
ceiling rates, ceiling and floor rates, contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described in this definition.
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INDENTURE means the Indenture dated as of October 15, 1996
among FiberMark, Inc. (formerly known as Specialty Paperboard, Inc.), the
Guarantors (as defined therein) and the Trustee (as defined therein) pursuant to
which the Senior Notes are issued, as amended, modified or supplemented from
time to time.
INITIAL LENDERS means CITBC and CITEF.
INSOLVENCY means, at any particular time, a Multiemployer Plan
is insolvent within the meaning of Section 4245 of ERISA.
INTEREST SWAP OBLIGATIONS means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
INVENTORY of an Obligor shall mean all of such Obligor's
currently owned or hereafter acquired interests in all merchandise, inventory
and goods held for sale or lease or to be furnished under contracts of service,
and all additions, substitutions and replacements thereof, wherever located,
together with all goods and materials used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production- from raw
materials through work-in-process to finished goods - and all proceeds and
products of the foregoing, of whatever sort.
LAW means any treaty, foreign, federal, state or local
statute, law, rule, regulation, ordinance, order, code, policy, or rule of
common law, now or hereafter in effect, and in each case as amended, and any
judicial or administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
LEASE AGREEMENT shall mean that certain Lease Agreement by and
between Specialty Paperboard, Inc., as lessee and the CIT Group/Equipment
Financing, Inc., as lessor, dated as of April 29, 1994, and as further amended
and supplemented by that certain First Amendment to Lease Agreement dated as of
September 29, 1995, as further amended and supplemented by that certain Second
Amendment to Lease Agreement dated as of December 29, 1995, as otherwise
amended, modified and supplemented from time to time, and as assigned and
assumed pursuant to the Assignment and Assumption Agreement - NY, dated as of
December 31, 1997, by and between FiberMark and FiberMark Office.
LENDER(S) shall mean CITBC, CITEF each Assignee which becomes
a Lender pursuant to Section 14.07 hereof, and their respective successors.
LENDER LOAN COMMITMENT shall mean, with respect to each
Lender's making of the Revolving Credit Loans, the obligation of such Lender to
make
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Revolving Credit Loans under this Financing Agreement up to the aggregate
principal amount outstanding at any time equal to the sum of its Revolving
Credit Commitment and its Pro Rata Share of the Overadvance Availability.
LENDER PARTY shall mean the Agent and each of the Lenders.
LIBOR PERIOD shall mean a thirty (30) day, sixty (60) day, or
ninety (90) day interest period with respect to Libor Rate Loans, as selected by
a Borrower.
LIBOR RATE shall mean, at any time of determination, the then
highest prevailing London Interbank Offered Rate paid in London on thirty (30)
day, sixty (60) day, or ninety (90) day dollar deposits from other banks as
published two (2) days prior to the commencement of the applicable interest
period, under "Money Rate," in the New York City edition of The Wall Street
Journal or if there is no such publication or statement therein as to a Libor
Rate, then in any publication used in the New York City financial community
which was published two (2) days prior to the commencement of the applicable
interest period.
LIBOR RATE LOANS shall mean that portion of the Revolving
Credit Loans with respect to which a Borrower has elected to use the Libor Rate
for the interest rate calculations.
LIBOR RATE PREPAYMENT PREMIUM shall mean, for any payment of
principal of any Libor Rate Loan prior to the end of an applicable interest
period, an amount computed pursuant to the following formula:
(R - T) x P x D
---------------
360
R = interest rate applicable to the Libor Rate Loan
T = effective interest rate per annum at which any readily
marketable bonds or other obligations of the United States,
selected at the Agent's sole discretion, maturing on or near
the last day of the then applicable interest period for such
Libor Rate Loan and in approximately the same principal amount
as such Libor Rate Loan, can be purchased by the Agent on the
day of such prepayment of principal
P = the amount of principal prepaid
D = the number of days remaining in the Libor Period as of the
date of such prepayment
The applicable Borrower shall pay such amount within five (5) business
days of presentation by the Agent to such Borrower of a statement
setting forth the amount and the Agent's calculation thereof pursuant
hereto, which statement shall be conclusive on such Borrower absent
manifest error.
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LIEN means any mortgage, pledge, hypothecation, security
interest, collateral assignment, Lien (statutory or other), or other security
interest or encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction (except any such filing
that is expired or that relates to an operating lease)).
LOAN DOCUMENTS shall mean each of this Financing Agreement,
the Revolving Credit Notes, and the Security Documents.
MATERIAL ADVERSE CHANGE means (a) a material adverse change in
the status of the business, results of operations, condition (financial or
otherwise), prospects, profitability, assets, operations, or property of an
Obligor, or (b) any event or occurrence of whatever nature which could have a
material adverse effect on an Obligor's ability to perform its obligations under
the Loan Documents.
MOODY'S means Moody's Investors Service, Inc. and any
successor thereto which provides credit ratings.
MORTGAGE shall mean, collectively, the Mortgage Agreement(s),
in form and substance satisfactory to the Agent, between FiberMark Office and
the Agent pursuant to which FiberMark Office grants to the Agent or to the
Agent's designee for the ratable benefit of the Lenders, a first mortgage in the
Real Estate to secure the Obligations.
NON-EXCLUDED TAXES shall have the meaning specified in Section
3.16.
NOTICE OF BORROWING shall mean a Revolving Credit Notice of
Borrowing.
OBLIGATIONS shall mean collectively the FiberMark Obligations,
FiberMark Durable Obligations, FiberMark Filter Obligations and FiberMark Office
Obligations.
OBLIGORS means all of FiberMark, FiberMark Durable, FiberMark
Filter, FiberMark Office and each Acquired Entity.
OFFICER'S CERTIFICATE shall mean a certificate signed in the
name of each Obligor by (i) with respect to FiberMark, FiberMark Filter and
FiberMark Durable, its President, Vice President, Controller or Treasurer and
(ii) with respect to FiberMark Office, FiberMark (by FiberMark's President, Vice
President, Controller or Treasurer).
OPERATING LEASES shall mean all leases of property (whether
real, personal or mixed) other than Capital Leases.
OTHER TAXES shall have the meaning specified in Section 3.16.
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OUT-OF-POCKET EXPENSES shall mean all of the Lenders' and the
Agent's present and future expenses incurred relative to this Financing
Agreement, whether incurred heretofore or hereafter, which expenses shall
include, without being limited to, the cost of record searches, all costs and
expenses incurred by the Agent in opening bank accounts, depositing checks,
receiving and transferring funds, and any charges imposed on the Agent due to
"insufficient funds" of deposited checks and the Agent's standard fee relating
thereto, local counsel fees, title insurance premiums, real estate survey costs,
fees and taxes relative to the filing of financing statements, costs of
preparing and recording mortgages/deeds of trust against the Real Estate and all
expenses, costs and fees set forth in Section 3.17 of this Financing Agreement.
OVERADVANCE shall have the meaning specified in Section 3.03.
OVERADVANCE AVAILABILITY has the meaning specified in Section
3.03.
PBGC means Pension Benefit Guaranty Corporation.
PENSION PLAN means any Employee Benefit Plan which is an
employee pension benefit plan as defined in Section 3(2) of ERISA.
PERMITTED ENCUMBRANCES shall mean:
(a) Liens expressly permitted, or consented to, by the Agent;
(b) Purchase Money Liens;
(c) Customarily Permitted Liens;
(d) Liens granted the Agent by an Obligor;
(e) Liens of judgment creditors provided such Liens do not
exceed, in the aggregate, at any time, Two Hundred Fifty Thousand Dollars
($250,000) (other than Liens bonded or insured to the reasonable satisfaction of
the Agent);
(f) Liens for taxes not yet due and payable or which are the
subject of a Good Faith Contest and which Liens are not x) other than with
respect to Real Estate, senior to the Liens of the Agent or y) for taxes due the
United States of America; PROVIDED, HOWEVER, that in no event shall any
Environmental Lien be deemed to be a Permitted Encumbrance;
(g) Liens granted by any Obligor on any of its assets other
than (i) the Brattleboro Collateral, (ii) each Obligor's Accounts and (iii) each
Obligor's Inventory.
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PERMITTED INDEBTEDNESS shall mean:
(a) Indebtedness incurred in the ordinary course of business
for raw materials, supplies, property, equipment, services, taxes or labor or
otherwise;
(b) Indebtedness secured by Purchase Money Liens;
(c) Indebtedness of FiberMark which is subordinated to the
prior payment and satisfaction of FiberMark's Obligations to the Lenders by
means of a subordination agreement or similar instrument, in each case in form
and substance satisfactory to the Lenders;
(d) deferred taxes and other expenses incurred in the ordinary
course of business;
(e) Indebtedness existing on the date of execution of this
Financing Agreement and listed in the most recent financial statement delivered
to the Lenders or otherwise disclosed to the Lenders in writing on or prior to
the date of execution of this Financing Agreement; and
(f) the Senior Notes.
PERMITTED INVESTMENTS means:
(a) direct obligations of the United States of America or any
agency thereof backed by the full faith and credit of the United States of
America with maturities of one (1) year or less from the date of acquisition;
(b) commercial paper with maturities of two hundred seventy
(270) days or less of (a) a Lender or any parent of a Lender, or (b) a domestic
issuer rated at least "P-1" by Moody's or "A-1" by S&P; and
(c) certificates of deposit with maturities of one (1) year or
less from the date of acquisition issued by (i) any Lender, or (ii) any
commercial bank operating within the United States of America whose outstanding
long-term debt is rated at least "A" by Moody's or "A" by S&P.
PERSON means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
PREDECESSOR AGREEMENT means the Second Amended and Restated
Financing Agreement and Guaranty, dated as of December 31, 1996, among Specialty
Paperboard, Inc., as borrower, Specialty Paperboard/Endura, Inc., CPG Investors
Inc., CPG Holdings, Inc., CPG-Warren Glen Inc., Custom Papers Group Inc., Arcon
Holdings Corp., and Arcon Coating Mills Inc., CITBC, the other lenders, if any,
that
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<PAGE>
subsequent to the date thereof, purchased from CITBC a portion of its rights and
obligations thereunder pursuant to, and in accordance with, Section 14.07
thereof, and CITBC as agent for the lenders.
PREPAYMENT FEE shall mean the fee payable to the Agent for the
ratable benefit of the Lenders in accordance with, and pursuant to, the
provisions of Section 6.03 of this Financing Agreement.
PRO RATA SHARE means, for purposes of this Financing Agreement
and with respect to each Lender, in the case of the Revolving Credit Loans and
the Unused Line Fees and the Overadvances, a fraction, the numerator of which is
such Lender's Revolving Credit Commitment and the denominator of which is the
total of all the Lenders' Revolving Credit Commitments.
PURCHASE MONEY LIENS shall mean Liens on any item of equipment
acquired by an Obligor after the Closing Date, PROVIDED that (a) each such Lien
shall attach only to the property to be acquired, (b) a description of the
property so acquired is furnished to the Agent, and (c) the debt incurred in
connection with such acquisitions shall not exceed, in the aggregate for all
Obligors, Five Hundred Thousand Dollars ($500,000) in any Fiscal Year.
QUALIFIED CAPITAL STOCK shall mean capital stock other than
any capital stock that, by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable), or upon the happening of any
event, (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or (ii) is redeemable at the sole option of the holder
thereof on or prior to the later of (A) the final maturity date of the
Securities (as defined in the Indenture) or (b) the Revolving Credit Commitment
Termination Date then in effect.
QUARTERLY PAYMENT DATE means each March 31, June 30, September
30 and December 31.
REAL ESTATE shall mean the fee and/or leasehold interests in
the real property of FiberMark Office located at Brattleboro, Vermont.
REGULATORY CHANGE means, with respect to any Lender, any
change after December 31, 1996 in United States federal, state, municipal or
foreign Laws (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class of banks
including such Lender of or under any United States, federal, state, municipal
or foreign Laws or regulations (whether or not having the force of Law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
REMEDIAL ACTION means action required to (a) clean up, remove,
treat or in any other way address Hazardous Materials in the indoor or outdoor
environment; (b) prevent an Environmental Discharge or minimize any further
Environmental Discharge; or (c) investigate and determine if a remedial response
is needed, design
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<PAGE>
such a response or conduct post-remedial investigation, monitoring operation,
maintenance or care.
REORGANIZATION means with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
REPORTABLE EVENT means an event described in Section 4043(b)
of ERISA or in the regulations thereunder (other than those events as to which
the thirty (30) day notice period is waived under Subsections .13, .14, .15,
.18, .19 or .20 of PBGC Regulation Section 2615).
REQUIRED LENDERS shall mean, on the date calculation of
Required Lenders is made, the Lenders having Revolving Credit Commitments to
lend at least sixty six and two thirds percent (66 2/3%) of the Revolving Credit
Loans hereunder; PROVIDED that for so long as there are only two Lenders (each
of them an Initial Lender or an assignee of the entire Pro Rata Share of the
Revolving Credit Facility initially owned by one of the Initial Lenders), each
of which has a 50% Pro Rata Share, REQUIRED LENDERS shall mean CITBC and any
assignee of CITBC's entire Pro Rata Share of the Revolving Credit Facility.
RESTRICTED PAYMENT shall mean (a) any dividend or distribution
(other than dividends or distributions payable in Qualified Capital Stock of
FiberMark or to an Obligor) on or in respect of shares of an Obligor's capital
stock to holders of such capital stock, (b) purchase, redemption, or other
acquisition or retirement for value of any capital stock of an Obligor or any
warrants, rights or options to purchase or acquire shares of any class of such
capital stock (other than from another Obligor), or (c) loan or advance to any
Person or purchase or other acquisition of any capital stock, assets,
obligations or other securities of, or any capital contribution to, or other
investment, or acquisition of any interest, in, any Person (other than Permitted
Investments or investments effected pursuant to Section 9.10).
RESTRICTED PAYMENT CONDITIONS shall mean, with respect to any
proposed Restricted Payment, that (a) both at the time of such Restricted
Payment and immediately after giving effect thereto, (i) no Default or Event of
Default shall have occurred and be continuing; (ii) the Company is able to incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 10.01, and (iii) the aggregate amount of Restricted
Payments (including such proposed Restricted Payment) made subsequent to October
15, 1996 (the amount expended for such purposes, if other than in cash, being
the fair market value of such property as determined reasonably and in good
faith by the Board of Directors of the FiberMark) does not exceed the sum of:
(A) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated
Net Income shall be a loss, minus 100% of such loss) of FiberMark subsequent to
October 15, 1996 and on or prior to the date the Restricted Payment occurs (the
"Reference Date") (treating such period as a single accounting period); plus (B)
100% of the aggregate net cash proceeds received by FiberMark from any Person
(other than a Subsidiary of
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FiberMark) from the issuance and sale subsequent to October 15, 1996 and on or
prior to the Reference Date of Qualified Capital Stock of FiberMark; plus (C)
without duplication of any amounts included in clause (iii)(B) above, 100% of
the aggregate net cash proceeds of any equity contribution received by FiberMark
from a holder of FiberMark's capital stock (excluding, in the case of clauses
(iii)(B) and (C), any net cash proceeds from a Public Equity Offering (as
defined in the Indenture) to the extent used to redeem the Securities (as
defined in the Indenture); and (b) after giving effect to such proposed
Restricted Payment, there remains at least $10,000,000 of Availability.
REVOLVING CREDIT COMMITMENT shall mean, subject to the effect
of any assignment pursuant to Section 14.07, for each Lender, the amount set
forth opposite its name below:
<TABLE>
<CAPTION>
===================== ==================== ======================
Pro Rata Share of
Revolving Credit Amount of Revolving
Lender Facility Credit Commitment
- --------------------- -------------------- ----------------------
<S> <C> <C>
CITBC 50% $25,000,000
CITEF 50% $25,000,000
===================== ==================== ======================
</TABLE>
REVOLVING CREDIT COMMITMENT TERMINATION DATE shall mean the
earlier of (i) September 30, 2002 and (ii) the Adjusted Termination Date;
PROVIDED, HOWEVER, the Borrowers and the Lenders agree that such date shall be
automatically extended for an additional year on such date or on each subsequent
anniversary date thereof unless and until at least sixty (60) days prior to any
such date Borrowers or the Lenders shall have given the other notice in writing
that such date shall not be so extended.
REVOLVING CREDIT FACILITY shall mean Fifty Million Dollars
($50,000,000).
REVOLVING CREDIT LIMIT has the meaning specified in Section
3.01.
REVOLVING CREDIT LOANS shall have the meaning specified in
Section 3.01.
REVOLVING CREDIT NOTE shall have the meaning specified in
Section 3.02.
REVOLVING CREDIT NOTICE OF BORROWING shall have the meaning
specified in Section 3.12.
S&P means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc. or any successor thereto which provides credit ratings.
SECURITY DOCUMENTS means the Mortgage and any other security
agreement granting a Lien on any assets of an Obligor to secure such Obligor's
Obligations.
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SECURITY INTEREST shall have the meaning specified in Section
5.03.
SENIOR NOTES means the $100,000,000 9.375% Senior Notes of
Borrower due October 15, 2006 issued pursuant to the terms and provisions of the
Indenture.
SETTLEMENT DATE shall mean the date each week on which the
Agent and the Lenders shall settle amongst themselves so that the Agent shall
not have, as Agent, any money at risk and on such Settlement Date each of the
Lenders shall have its Pro Rata Share of all outstanding Revolving Credit Loans,
based upon its Revolving Credit Commitment. Notwithstanding the previous
sentence, upon the occurrence of an Event of Default or a continuing decline or
increase of the Revolving Credit Loans or other Obligations, the Agent may, at
its discretion, elect to settle its and the Lenders' accounts more often than
weekly.
SOLVENCY CERTIFICATE means a certificate in substantially the
form of Exhibit E, to be delivered by each Obligor pursuant to the terms of this
Financing Agreement.
SOLVENT means, when used with respect to any Person, that (a)
the fair value of the property of such Person, on a going concern basis, is
greater than the total amount of liabilities (including, without limitation,
contingent liabilities) of such Person, (b) the present fair salable value of
the assets of such Person, on a going concern basis, is not less than the amount
that will be required to pay the probable liabilities of such Person on its
debts as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. Contingent liabilities
will be computed at the amount that, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
SPECIALTY HONG KONG shall mean Specialty Paperboard (Hong
Kong) Limited, a Hong Kong corporation.
SPECIALTY JAPAN shall mean Specialty Paperboard Kabushiki
Kaisha, a Japanese corporation.
SUBSIDIARY shall mean, as to any Person, a corporation or
other entity of which securities or other ownership interest having ordinary
voting power (other than stock or such interest having such power only by reason
of the happening of a contingency) to elect a majority of the board of directors
or other persons performing similar functions for such corporation or other
entity are at the time owned, or the
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management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by such Person.
TRANSFEREE shall have the meaning specified in Section 14.03.
TYPE of any Loan shall mean a Chase Manhattan Bank Rate Loan
or a Libor Rate Loan or both or either of the foregoing, all as the context may
require.
UNUSED LINE FEE shall (a) mean the aggregate fee due to the
Agent for the ratable benefit of the Lenders at the end of each quarter for each
Lender Loan Commitment and (b) be determined by multiplying the difference
between the Revolving Credit Facility and the average daily amount of the
outstanding Revolving Credit Loans for said quarter by three-eighths of one
percent (.375%) per annum for the number of days in said quarter.
Section 1.02. COMPUTATION OF TIME PERIODS. In this Financing
Agreement unless otherwise specified, in the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".
Section 1.03. ACCOUNTING PRINCIPLES AND TERMS. Except as
otherwise provided in this Financing Agreement, (a) all computations and
determinations as to financial matters, and all financial statements to be
delivered under this Financing Agreement, shall be made or prepared in
accordance with GAAP and (b) all accounting terms used in this Financing
Agreement shall have the meaning ascribed to such terms by such principles.
Section 1.04. RULES OF CONSTRUCTION. When used in this
Financing Agreement: (a) "or" is not exclusive; (b) a reference to a Law
includes any amendment or modification to such Law; (c) a reference to a Person
includes its permitted successors and permitted assigns; and (d) unless
otherwise provided for in this Financing Agreement, a reference to an agreement,
instrument or document shall include such agreement, instrument or document as
the same may be amended, modified or supplemented from time to time in
accordance with its terms and as permitted by the Loan Documents.
Article II. CONDITIONS PRECEDENT
Section 2.01. CONDITIONS PRECEDENT TO INITIAL REVOLVING CREDIT
LOAN. The obligation of the Lenders to make an initial Revolving Credit Loan is
subject to the condition precedent that (1) the Agent shall have received each
of the following documents, in form and substance satisfactory to the Agent and
its counsel, and (2) each of the following other requirements shall have been
fulfilled:
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(a) EVIDENCE OF DUE ORGANIZATION AND ALL CORPORATE ACTIONS BY
THE CORPORATE OBLIGORS. A certificate of the Secretary or Assistant Secretary of
each Corporate Obligor, dated the Closing Date, attesting to the certificate of
incorporation and bylaws of such Corporate Obligor and all amendments thereto
and to all corporate actions taken by such Corporate Obligor, including
resolutions of its board of directors authorizing the execution, delivery and
performance of the Loan Documents and each other document to be delivered
pursuant to the Loan Documents.
(b) INCUMBENCY AND SIGNATURE CERTIFICATE OF EACH CORPORATE
OBLIGOR. A certificate of the Secretary or Assistant Secretary of each Corporate
Obligor, dated as of the Closing Date, certifying the names and true signatures
of the officers of such Corporate Obligor authorized to sign the Loan Documents,
and the other documents to be delivered pursuant to the Loan Documents.
(c) GOOD STANDING CERTIFICATES OF EACH CORPORATE OBLIGOR. A
certificate, dated reasonably near the Closing Date, from the Secretary of State
(or other appropriate official) of the jurisdiction of incorporation of such
Corporate Obligor certifying as to the due incorporation and good standing of
such Corporate Obligor and certificates, dated reasonably near the Closing Date,
from the Secretary of State (or other appropriate official) of each other
jurisdiction where such Corporate Obligor is required to be qualified to conduct
business, certifying that such Corporate Obligor is duly qualified to do such
business and is in good standing in such state.
(d) EVIDENCE OF DUE ORGANIZATION AND ALL ACTIONS BY FIBERMARK
OFFICE. A certificate of the Manager of FiberMark Office, dated the Closing
Date, attesting to the certificate of formation and operating agreement of
FiberMark Office and all amendments thereto and to all actions taken by
FiberMark Office, including resolutions of its managers and members, taken by
FiberMark Office, including resolutions of its managers and members, authorizing
the execution, delivery and performance of the Loan Documents and each other
document to be delivered pursuant to the Loan Documents.
(e) INCUMBENCY AND SIGNATURE CERTIFICATE OF FIBERMARK OFFICE.
A certificate of the Manager of FiberMark Office, dated as of the Closing Date,
certifying the names and true signatures of the Persons authorized to sign the
Loan Documents for FiberMark Office, and the other documents to be delivered
pursuant to the Loan Documents.
(f) GOOD STANDING CERTIFICATES OF FIBERMARK OFFICE. A
certificate, dated reasonably near the Closing Date, from the Secretary of State
(or other appropriate official) of the jurisdiction of formation of FiberMark
Office certifying as to the due formation and good standing of FiberMark Office
and certificates, dated reasonably near the Closing Date, from the Secretary of
State (or other appropriate official) of each other jurisdiction where FiberMark
Office is required to be qualified to conduct business, certifying that
FiberMark Office is duly qualified to do such business and is in good standing
in such state.
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(g) REVOLVING CREDIT NOTES. A Revolving Credit Note duly
executed by each Borrower.
(h) DEPOSITORY ACCOUNTS. Each Obligor shall have established a
system of lock box accounts (satisfactory to the Agent) for the collection of
such Obligor's Accounts and shall have taken all steps necessary to insure that
all Accounts Receivable such Obligor shall have established are delivered to
such Depository Account of such Obligor.
(i) LIEN SEARCHES. The Agent shall have received tax,
judgment, and Uniform Commercial Code searches satisfactory to the Agent for all
locations presently occupied or used by each Obligor.
(j) UCC FILINGS. Any documents (including without limitation,
financing statements) required to be filed in order to create, in favor of the
Agent for the ratable benefit of the Lenders, a first and exclusive perfected
security interest (except for Permitted Encumbrances) in the Collateral with
respect to which a security interest may be perfected by a filing under the
Uniform Commercial Code shall have been properly filed in each office in each
jurisdiction required in order to create in favor of the Agent for the ratable
benefit of the Lenders a perfected Lien on the Collateral. The Agent shall have
received acknowledgement copies of all such filings (or, in lieu thereof, the
Agent shall have received other evidence satisfactory to the Agent that all such
filings have been made); and the Agent shall have received evidence that all
necessary filing fees and all taxes or other expenses related to such filings
have been paid in full.
(k) CASUALTY INSURANCE. FiberMark shall have delivered to the
Agent evidence satisfactory to the Lenders that casualty insurance policies
listing the Agent as loss payee or mortgagee, as the case may be, for the
Brattleboro, Vermont property and for the Inventory of each Obligor, are in full
force and effect, all as set forth in Section 9.07 of this Financing Agreement.
(l) EXAMINATION AND VERIFICATION. The Agent shall have
completed to the satisfaction of the Lenders an examination and verification of
the Accounts, Inventory, books and records of each Obligor.
(m) APPROVALS AND PERMITS. Evidence satisfactory to the Agent
that all Approvals and Permits required for the operation of the business of
each Obligor are in effect.
(n) SOLVENCY CERTIFICATES. Solvency Certificates duly executed
by each Obligor.
(o) LANDLORD'S WAIVER(S). From each landlord of any premises
occupied by any Obligor, other than Excluded Premises or premises at which no
Eligible Inventory is located, a landlord's waiver waiving any Lien such
landlord has on any of
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the Inventory of any Obligor pursuant to an agreement in form and substance
satisfactory to the Lenders.
(p) WAREHOUSE DOCUMENTS. From each public warehouse in which
Inventory of any Obligor is stored, other than Excluded Premises or a warehouse
at which no Eligible Inventory is stored, an acknowledgement in form and
substance acceptable to the Lenders concerning the Lenders' security interest in
such Inventory.
(q) THIRD PARTY PROCESSOR LETTERS. Except as set forth on
Schedule 2.01, the Agent shall have received, from each third party processor of
Inventory of any Obligor, an acknowledgement in form and substance acceptable to
the Lenders concerning the Lenders' security interest in such Inventory.
(r) FEES AND EXPENSES. Payment in full to the Agent and the
Lenders of all fees and Out-of-Pocket Expenses (to the extent requested by the
Agent) required to be paid to the Agent pursuant to the terms and conditions of
this Financing Agreement; and payment in full of all other fees required to be
paid in accordance with the terms of the Loan Documents.
(s) OPINIONS OF COUNSEL. Favorable opinions of counsel to the
Obligors acceptable to the Required Lenders in form and substance satisfactory
to the Required Lenders.
(t) DUE DILIGENCE. Satisfactory completion of all reasonable
due diligence items the Agent deems necessary, including but not limited to (1)
interviews with key customers and any other Persons material to the operation of
each Obligor's business; and (2) review of actual and potential liabilities of
each Obligor under Environmental Laws or in connection with Environmental
Discharges relating to all past and present real estate, properties and
operations of each Obligor and their respective predecessors.
(u) OFFICER'S CERTIFICATE. The following statements shall be
true and Agent shall have received an Officer's Certificate stating that:
(i) The representations and warranties contained in this
Financing Agreement and in each of the other Loan Documents are correct
on and as of the date of this Financing Agreement, as though made on
and as of such date; and
(ii) No Default or Event of Default has occurred and is
continuing.
(v) MORTGAGE. FiberMark Office shall have executed and
delivered the Mortgage and caused the Mortgage to be recorded in the real
property records of Brattleboro, Vermont.
(w) TITLE INSURANCE. There shall have been delivered to the
Agent an ALTA lender's title insurance policy, in the amount of Fifteen Million
Dollars
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($15,000,000) (with respect to the Mortgage Agreement indicating that it
secures that portion of the Obligations), without an exclusion from coverage for
creditors' rights and with "last dollar," "revolving credit" and "comprehensive"
endorsements and such other endorsements as the Agent deems appropriate, issued
by a title insurance company approved by the Agent and containing no exception
to coverage based on matters an accurate survey would show and no other
exceptions to coverage that are not approved by the Agent.
(x) DISBURSEMENT AUTHORIZATIONS. Each Borrower shall have
delivered to the Agent all information necessary for the Agent to issue wire
transfer instructions on behalf of such Borrower for the initial Revolving
Credit Loan and subsequent Revolving Credit Loans to be made to it under this
Financing Agreement, including, but not limited to, disbursement authorizations
in form acceptable to the Agent.
(y) ADDITIONAL DOCUMENTATION. Such other approvals, opinions
or documents as the Agent or any Lender shall reasonably request.
(z) TERMINATION OF LEASE TRANSACTION. The Agent shall have
received evidence satisfactory to it that the transaction evidenced by the Lease
Agreement, and all related transactions, shall have been terminated and the
property subject thereto effectively transferred to FiberMark Office; all Liens
securing any obligation of any Obligor arising in connection with such
transactions shall have been terminated and released; and FiberMark Office shall
have delivered to CITEF, in form and substance satisfactory to CITEF, a
certification to the effect that the transfer to FiberMark Office of the
property subject to the Lease Agreement is not subject to sales tax under the
laws of Vermont or any subdivision thereof.
Section 2.02. CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT
LOAN. The obligations of the Lenders to make each Revolving Credit Loan
(including the initial Revolving Credit Loans under this Financing Agreement),
shall be subject to the further conditions precedent that on the date of
providing such Revolving Credit Loan:
(a) The following statements shall be true:
(i) all of the representations and warranties
contained in this Financing Agreement and in
each of the other Loan Documents are correct
on and as of the date of providing such
Revolving Credit Loan as though made on and
as of such date; and
(ii) no Default or Event of Default has occurred
and is continuing, or could result from
providing such Revolving Credit Loan; and
(b) The Agent shall have received such other approvals,
opinions or documents as the Agent or any Lender may
reasonably request;
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PROVIDED, HOWEVER, that each Revolving Credit Loan to be funded on or after
October 30, 1999, shall be subject to the satisfaction of the further condition
precedent that the Obligors shall have delivered to the Agent, on or after the
Closing Date, (x) revised Schedules 8.16, 8.18 and 8.19, updated as of the date
of delivery thereof to make the representations and warranties set forth in
Schedules 8.16, 8.18 and 8.19, respectively, true and correct without reference
to the qualifications set forth therein with respect to immaterial matters, and
(y) a revised Schedule 5.04 that identifies individually, for each Obligor, (i)
the location of its chief executive office, (ii) the location at which its books
and records are kept and whether such location is owned or leased, (iii) the
location of each of its places of business other than its chief executive office
and whether each such location is owned or leased, and (iv) each location at
which it keeps any Inventory and stating whether the location is owned or leased
by such Obligor, whether it is a warehouse operated by a third party at which
Collateral is stored, whether it is a processor of Inventory or whether it is a
customer holding goods on consignment.
Section 2.03. DEEMED REPRESENTATION. Each delivery of a Notice
of Borrowing requesting a Revolving Credit Loan shall constitute a
representation and warranty that the statements contained in Section 2.02 are
true and correct both on the date of such delivery of the Notice of Borrowing
and as of the date of the providing of such Revolving Credit Loan.
ARTICLE III. AMOUNT AND TERMS OF THE REVOLVING CREDIT LOANS.
Section 3.01. REVOLVING CREDIT LOANS. Subject to the terms and
conditions of this Financing Agreement, each Lender severally agrees to make
loans ("Revolving Credit Loans") to each Borrower from time to time during the
period from the Closing Date to the Revolving Credit Commitment Termination
Date, PROVIDED that, subject to Section 3.03, (a) the amount of each Revolving
Credit Loan does not exceed the then effective Availability, and (b) the
aggregate principal amount of all Revolving Credit Loans outstanding at any time
does not exceed the lesser of: (i) the Revolving Credit Facility or (ii) the
then effective Borrowing Base ("Revolving Credit Limit"). Within the limits of
the Revolving Credit Limit, each Borrower may borrow, make a payment pursuant to
Section 3.10, and reborrow under this Section 3.01. The Revolving Credit Loans
may be outstanding as Chase Manhattan Bank Rate Loans or Libor Loans. Each Type
of Revolving Credit Loan of each Lender shall be made and maintained at such
Lender's Applicable Lending Office for such Type of Loan.
Section 3.02. REVOLVING CREDIT NOTE. All Revolving Credit
Loans made by each Lender under this Financing Agreement shall be evidenced by,
and repaid with interest in accordance with, a promissory note of the applicable
Borrower in substantially the form of Exhibit A hereto, in the principal amount
equal to such Lender's Lender Loan Commitment, payable to such Lender for the
account of its Applicable Lending Office and maturing as to principal on the
Revolving Credit Commitment Termination Date (the "Revolving Credit Note"). Each
Lender is
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hereby authorized by each Borrower to endorse on the schedule attached to the
Revolving Credit Note of such Borrower held by it the date of making each
Revolving Credit Loan, the amount of each Revolving Credit Loan, the type of the
Revolving Credit Loan and each Conversion, Continuation and payment of principal
amount received by such Lender for the account of its Applicable Lending Office
of its Revolving Credit Loans, which endorsement shall, in the absence of
manifest error, be conclusive as to the outstanding balance of the Revolving
Credit Loans made by such Lender; PROVIDED, HOWEVER, that the failure to make
such notation with respect to any Revolving Credit Loan or Conversion,
Continuation or payment shall not limit or otherwise affect the Obligations of
the applicable Borrower under this Financing Agreement or the Revolving Credit
Note of such Borrower held by such Lender. Each Lender agrees that prior to any
assignment of any of such Revolving Credit Notes it will endorse the schedule
attached to its Revolving Credit Note. All outstanding principal on the
Revolving Credit Loans shall be due and payable on the Revolving Credit
Commitment Termination Date.
Section 3.03. OVERADVANCES. The Agent may, on behalf of the
Lenders, make a Revolving Credit Loan in excess of the Availability or the
Revolving Credit Facility ("Overadvances") in either case, up to an aggregate
amount outstanding at any time of Three Million Dollars ($3,000,000)
("Overadvance Availability"); PROVIDED that the Agent and the Lenders shall not
be obligated to make any Overadvances hereunder and any Overadvance made by the
Agent in excess of Availability or the Revolving Credit Facility shall be in the
sole and absolute discretion of the Agent subject to payment in the amount of
such Overadvances or to any additional terms the Agent deems necessary. In the
event that the Agent makes Overadvances on behalf of the Lenders, each Lender
severally agrees to make a Revolving Credit Loan equal to its Pro Rata Share of
all Overadvances.
Section 3.04. INFORMATION RELATING TO ACCOUNTS. In furtherance
of the continuing assignment and security interest in each Obligor's Accounts,
each Obligor will, upon the creation of Accounts, execute and deliver to the
Agent in such form and manner as the Agent may reasonably require, solely for
the Agent's convenience in maintaining records of collateral, such confirmatory
schedules of Accounts as the Agent may reasonably request, and such other
appropriate reports designating, identifying and describing the Accounts as the
Agent may reasonably require. In addition, upon the Agent's request, such
Obligor shall provide the Agent and each of the Lenders with copies of
agreements with, or purchase orders from, the Obligor's customers, and copies of
invoices to customers, proof of shipment or delivery and such other
documentation and information relating to said Accounts and other collateral as
the Agent may reasonably require. Failure to provide the Agents or any of the
Lenders with any of the foregoing shall in no way affect, diminish, modify or
otherwise limit the security interests granted herein. Each Obligor hereby
authorizes the Agent to regard its printed name or rubber stamp signature on
assignment schedules or invoices as the equivalent of a manual signature by one
of such Obligor's authorized officers or agents.
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Section 3.05. REPRESENTATIONS RELATING TO ACCOUNTS. Each
Obligor hereby represents and warrants that (a) each Account of such Obligor is
based on an actual and bona fide sale and delivery of goods or rendition of
services to customers, made by such Obligor in the ordinary course of its
business; (b) the goods and inventory being sold and the Accounts created are
the exclusive property of such Obligor and are not and shall not be subject to
any Lien, consignment arrangement, encumbrance, security interest or financing
statement whatsoever, other than the Permitted Encumbrances; (c) the invoices
evidencing such Accounts are in the name of such Obligor; and (d) the customers
of such Obligor have accepted the goods or services, owe and are obligated to
pay the full amounts stated in the invoices according to their terms, without
dispute, offset, defense, counterclaim or contra, except for disputes and other
matters arising in the ordinary course of business of which such Obligor has
advised the Agent pursuant to Section 3.07. Each Obligor confirms to the Lenders
that any and all taxes or fees relating to its business, its sales, the Accounts
of such Obligor or goods relating thereto, are its sole responsibility and that
same will be paid by such Obligor or when due and that none of said taxes or
fees represent a lien on or claim against the Accounts. Each Obligor also
warrants and represents that it is a duly and validly existing corporation or
limited liability company and is qualified in all states and provinces where the
failure to so qualify would have an adverse effect on the business of such
Obligor or the ability of such Obligor to enforce collection of Accounts due
from customers residing in such locations. Each Obligor agrees to maintain such
books and records regarding Accounts as the Agent may reasonably require and
agrees that the books and records of such Obligor will reflect the Lenders'
interest in the Accounts of such Obligor. All of the books and records of such
Obligor will be available to the Agent and the Lenders at normal business hours,
including any records handled or maintained for such Obligor by any other
company or entity.
Section 3.06. COLLECTION OF ACCOUNTS. Until the Agent has
advised an Obligor to the contrary after the occurrence of an Event of Default,
such Obligor may and will enforce, collect and receive all amounts owing on the
Accounts of such Obligor for the Lenders' benefit and on the Lenders' behalf,
but at such Obligor's expense; such privilege shall terminate automatically upon
the institution by or against such Obligor of any proceeding under any
bankruptcy or insolvency law or, at the election of the Agent, upon the
occurrence of any other Event of Default and until such Event of Default is
waived. Any checks, cash, notes or other instruments or property received by
such Obligor with respect to any Accounts of such Obligor shall be held by such
Obligor in trust for the Lenders, separate from such Obligor's own property and
funds, and immediately turned over to the Agent for the ratable benefit of the
Lenders with proper assignments or endorsements by deposit to the Depository
Accounts. All amounts received by the Agent in payment of Accounts of an Obligor
will be credited to such Obligor's accounts upon the Agent's receipt of
"collected funds" at the Agent's bank account in New York, New York on the
Business Day of receipt if received no later than 1:00 p.m. (New York time) or
on the next succeeding Business Day if received after 1:00 p.m. (New York time).
No checks, drafts or other instrument received by the Agent shall constitute
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final payment to the Agent or the Lenders unless and until such instruments have
actually been collected.
Pursuant to separate arrangements between the Agent and each
institution at which a Depository Account is maintained (herein the "Depository
Banks"), each such Depository Bank has agreed, or will agree, if instructed by
the Agent as permitted hereunder, to remit funds collected and to be collected
in the Depository Account to an account specified by the Agent. It is hereby
agreed between the Agent and each Obligor that until either (i) the Availability
is Five Million Dollars ($5,000,000) or less or (ii) there is then a Default or
Event of Default, the Agent shall permit such Obligor to instruct the Depository
Banks to transfer any funds in the Depository Accounts to their respective
operating accounts or such other accounts located in the United States (other
than payroll accounts) as such Obligor may designate. If either (i) Availability
is Five Million Dollars ($5,000,000) or less or (ii) there is then a Default or
an Event of Default, the Agent shall have the right to immediately, without
notice to an Obligor, instruct such Depository Banks to remit funds collected
and to be collected in the Depository Accounts to an account specified by the
Agent and with respect to the disposition of any and all funds collected or to
be collected in such Depository Accounts.
Section 3.07. NOTICE REGARDING ACCOUNTS. Each Obligor agrees
to notify each of the Lenders promptly of any matters materially affecting the
value, enforceability or collectibility of any Account of such Obligor and of
all material customer disputes, offsets, defenses, counterclaims, returns,
rejections and all reclaimed or repossessed merchandise or goods. Each Obligor
agrees that it shall issue credit memoranda promptly (with duplicates to the
Agent upon request after the occurrence of an Event of Default) upon accepting
returns or granting allowances, and may continue to do so until the Agent has
notified such Obligor that an Event of Default has occurred and that all future
credits or allowances are to be made only after the Agent's prior written
approval. Upon the occurrence of an Event of Default and until such time as such
Event of Default is waived and on notice from the Agent, each Obligor agrees
that all returned, reclaimed or repossessed merchandise or goods shall be set
aside by such Obligor, marked with the Agent's name and held by such Obligor for
the Agent's account as owner and assignee for the ratable benefit of the
Lenders.
Section 3.08. BORROWERS' ACCOUNTS. The Agent shall maintain a
separate account on its books in each Borrower's name in which each Borrower
will be charged with Revolving Credit Loans made by the Agent on behalf of the
Lenders to it or for such Borrower's account, and with any other Obligations of
each such Borrower, including any and all costs, expenses and reasonable
attorney's fees which the Lenders and/or the Agent may incur in connection with
the exercise by or for the Agent or the Lenders of any of the rights or powers
herein conferred upon the Agent or in the prosecution or defense of any action
or proceeding to enforce or protect any rights of the Agent or the Lenders in
connection with this Financing Agreement or the Collateral assigned hereunder,
or any Obligations owing to the Lenders and/or the Agent by such Borrower. The
applicable Borrower will be
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credited with all amounts received by the Agent from such Person or from others
for such Person's account, including, as above set forth, all amounts received
by the Agent in payment of assigned Accounts and such amounts will be applied to
payment of the Obligations. In no event shall prior recourse to any Accounts or
other security granted to or by any Borrower be a prerequisite to the Agent's
right to demand payment of any Obligation. Further, it is understood that the
Lenders and the Agent shall have no obligation whatsoever to perform in any
respect any of such Obligor's contracts or obligations relating to its Accounts.
After the end of each month, the Agent shall promptly send
each Borrower a statement showing the accounting for the charges, Revolving
Credit Loans and other transactions occurring between the Agent and such
Borrower during that month. The monthly statements shall be deemed correct and
binding upon such Borrower and shall constitute an account stated among such
Borrower, the Lenders and the Agent unless the Agent receives a written
statement of the exceptions within thirty (30) days of the date of the monthly
statement.
Section 3.09. APPLICATION OF PAYMENTS. Notwithstanding
anything to the contrary contained in this Article 3 or elsewhere in this
Financing Agreement, the Agent shall apply all amounts received by it in payment
of Accounts or Obligations of the applicable Borrower to Chase Manhattan Bank
Rate Revolving Credit Loans of such Borrower prior to any application to other
Types of Revolving Credit Loans of such Borrower; PROVIDED, HOWEVER, (a) upon
the occurrence of an Event of Default or (b) in the event the aggregate amount
of outstanding Revolving Credit Loans of the Borrowers which are Libor Rate
Loans exceeds the Borrowing Base, the Agent may apply all such amounts received
by it to the payment of Obligations in such manner and in such order as the
Agent may elect in its reasonable business discretion. In the event that any
such amounts are applied to Revolving Credit Loans of any Borrower which are
Libor Rate Loans, such application shall be treated as a prepayment of such
loans of such Borrower and the Agent shall be entitled to the Libor Rate
Prepayment Premium with respect thereto.
Section 3.10. PREPAYMENTS. Subject to the limitation noted
below, any Borrower may prepay its Revolving Credit Loans upon at least one (1)
Business Day's notice to Agent in the case of Chase Manhattan Bank Rate Loans,
and at least three (3) Business Day's notice to Agent in the case of Libor Rate
Loans, in whole or in part with accrued interest to the date of such prepayment
on the amount prepaid, PROVIDED that (a) each partial prepayment shall be in the
case of a Libor Rate Loan, in a principal amount of not less than One Million
Dollars ($1,000,000) and integral multiples of One Hundred Thousand Dollars
($100,000); and (b) Libor Rate Loans prepaid on any Business Day other than the
last day of the Libor Rate Period applicable for such Loan shall require such
Borrower to pay the Libor Rate Prepayment Premiums.
In the event that the Borrowers shall cause the Revolving
Credit Facility to be cancelled and FiberMark or any Borrower shall obtain an
alternative commitment from another lender for financing, all Borrowers shall
prepay all
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Revolving Credit Loans in whole with accrued interest to the date of such
cancellation and in addition, unless such cancellation is in connection with (i)
an offering of senior notes registered under the Securities Exchange Act of
1934, as amended, or (ii) an Asset Acquisition (as defined in the Indenture),
the Borrowers shall pay to the Agent, for the ratable account of each Lender, a
fee ("Prepayment Fee") in the amount of 1% of the Revolving Credit Facility.
To the extent the outstanding principal amount of all the
Revolving Credit Loans taken together exceeds the Borrowing Base, the Borrower
shall prepay such Revolving Credit Loans in an amount equal to the excess of the
aggregate outstanding principal amount of Revolving Credit Loans over the then
effective Borrowing Base.
Section 3.11. FUNDING OF REVOLVING CREDIT LOANS. The Agent,
for the account of the Lenders, shall disburse all Revolving Credit Loans and
shall handle all collections of Collateral and repayment of Obligations. It is
understood that for purposes of Revolving Credit Loans and for purposes of this
Section 3.11, the Agent is using the funds of the Initial Lenders.
On each Settlement Date, the Agent and the Lenders shall each
remit to the other, in immediately available funds, all amounts necessary so as
to ensure that, as of such Settlement Date, each Lender shall have its Pro Rata
Share of all outstanding Revolving Credit Loans in accordance with its Lender
Loan Commitment.
The Agent shall forward to each Lender, at the end of each
month, a copy of the account statement rendered by the Agent to each Borrower.
Section 3.12. NOTICE AND MANNER OF BORROWING. With regard to
each Revolving Credit Loan, the applicable Borrower shall deliver to the Agent
and, if required by the Agent, with a copy to each Lender, a written or
telegraphic or facsimile notice substantially in the form of Exhibit B hereto
(effective upon receipt) ("Revolving Credit Notice of Borrowing") not later than
12:00 noon (New York time) on the day of making each Chase Manhattan Bank Rate
Revolving Credit Loan and at least three (3) Business Days prior to the date of
any Libor Rate Revolving Credit Loan. Each Revolving Credit Notice of Borrowing
must specify: (a) the date of such Revolving Credit Loan; (b) the amount of such
Revolving Credit Loan; (c) the initial Type or Types which will comprise the
requested Revolving Credit Loan and (d) in the case of a Libor Rate Revolving
Credit Loan, the initial Libor Rate Period applicable thereto. The Agent will
promptly notify each Lender of receipt by the Agent of a Revolving Credit Notice
of Borrowing and of the contents thereof.
Section 3.13. OBLIGATIONS OF AGENT AND LENDERS. Each Lender is
solely responsible for its Pro Rata Share of each Revolving Credit Loan and
neither Agent nor any Lender shall be responsible for, nor assume any
obligations for, the failure of any Lender to make available its Pro Rata Share
of any such Revolving Credit Loans. Should any Lender refuse to make available
its Revolving Credit Loans, then each of the other Lenders may, but without
obligation to do so,
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increase, unilaterally, its portion of the Revolving Credit Loans in which event
the applicable Borrower shall be so obligated to such other Lender.
Nothing contained herein shall be deemed to obligate the Agent
to make available to the Borrowers the full amount of a requested Revolving
Credit Loan when the Agent has not received any Lender's Pro Rata Share of such
Revolving Credit Loan or if the Agent otherwise has any notice that any of the
Lenders will not advance its Pro Rata Share thereof. The Agent, for the account
of the Lenders, shall disburse all Revolving Credit Loans and shall handle all
collections of Collateral and repayment of Obligations. It is understood that
for purposes of Revolving Credit Loans and for purposes of this Article 3 and
prior to settlement among the Lenders on any Settlement Date the Agent is using
the funds of the Initial Lenders.
Unless the Agent shall have been notified in writing by any
Lender prior to any advance to a Borrower that such Lender will not make the
amount which would constitute its share of the borrowing on such date available
to the Agent, the Agent may assume that such Lender shall make such amount
available to the Agent on a Settlement Date, and the Agent may, in reliance upon
such assumption, make available to such Borrower for the benefit of such
Borrower a corresponding amount. Absent such notice each Lender's commitment
shall be absolute and unconditional and such Lender shall reimburse the Agent
its Pro Rata Share of such borrowing upon demand. A certificate of the Agent
submitted to any Lender with respect to any amount owing under this subsection
shall be conclusive, absent manifest error. If such Lender's Pro Rata Share of
such borrowing is not in fact made available to the Agent by such Lender on the
Settlement Date, the Agent shall be entitled to charge the applicable Borrower's
account with any such amount with interest thereon at the rate per annum
applicable to Revolving Credit Loans hereunder, on demand, from the applicable
Borrower without prejudice to any rights which the Agent may have against such
Lender hereunder. Nothing contained in this subsection shall relieve any Lender
which has failed to make available its Pro Rata Share of any borrowing hereunder
from its obligation to do so in accordance with the terms hereof. Nothing
contained herein shall be deemed to obligate the Agent to make available to the
applicable Borrower the full amount of a requested advance when the Agent has
not received any Lender's Pro Rata Share of such Revolving Credit Loan or if the
Agent has any notice that any of the Lenders will not advance its Pro Rata Share
thereof.
Section 3.14. MINIMUM AMOUNTS. The amount of all Revolving
Credit Loans borrowed on any given day and the aggregate amount of all Revolving
Credit Loans with the same interest rate after giving effect to the conversions
and continuations provided for in Section 6.01 shall, in the case of Libor Rate
Loans, be in an amount at least equal to One Million Dollars ($1,000,000) or a
greater amount which is an integral multiple of One Hundred Thousand Dollars
($100,000) (Libor Rate Loans having different Libor Rate Periods outstanding at
the same time shall be deemed separate Loans for purposes of the foregoing, one
for each Libor Rate Period). There shall be no minimum amount of principal
applicable to a conversion or continuation of a Chase Manhattan Bank Rate Loan.
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Section 3.15. USE OF PROCEEDS. The proceeds of the Revolving
Credit Loans shall be used by the applicable Borrower (i) for its working
capital and general corporate purposes, (ii) to make loans to any Obligor for
working capital purposes and (iii) to refinance the Lease Agreement; PROVIDED,
HOWEVER, that proceeds of Revolving Credit Loans may be used to pay all or a
portion of the consideration for the acquisition of stock or assets of another
Person only if each of the Restricted Payment Conditions is satisfied with
respect to such acquisition. No Borrower will, directly or indirectly, use any
Revolving Credit Loan proceeds for the purpose of purchasing or carrying any
margin stock within the meaning of Regulations T, U or X of the Board of
Governors or to extend credit to any Person for the purpose of purchasing or
carrying any such margin stock.
Section 3.16. TAXES. Any and all payments by each Borrower
made hereunder shall be made free and clear of and without deduction for any and
all taxes, levies, imposts, deductions, charges or withholdings imposed by any
Governmental Authority, and all liabilities with respect thereto, excluding
taxes imposed on or measured by the net income of any of the Lenders on the
receipt or accrual of stated principal and interest payments by the jurisdiction
under the laws of which such Lender is organized or any political subdivision
thereof or in which such Lender maintains an office or conducts business (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Non-Excluded Taxes"). If any
Borrower shall be required by Law to withhold or deduct any Non-Excluded Taxes
from or in respect of any sum payable hereunder, (a) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.16) Lender receives an amount equal to the sum it would have received had no
such deductions been made, (b) such Borrower shall make such deductions, and (c)
such Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable Law.
In addition, each Borrower jointly and severally agrees to pay
any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise under the laws of the United States
of America or the State of New York or any other taxing authority from any
payment made hereunder or from the execution or delivery or otherwise with
respect to this Financing Agreement or any other Loan Document (hereinafter
referred to an "Other Taxes").
Each Borrower shall jointly and severally indemnify each
Lender for the full amount of Non-Excluded Taxes and Other Taxes (including,
without limitation, any Non-Excluded Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 3.16) paid by such Lender or
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally asserted. Payments by a Borrower pursuant to this
indemnification shall be made within thirty (30) days from the date a Lender
makes written demand therefor.
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Within thirty (30) days after the date of any payment of
Non-Excluded Taxes or Other Taxes by a Borrower, such Borrower shall furnish to
the applicable Lender the original or a certified copy of a receipt evidencing
payment thereof. The applicable Borrower shall compensate the applicable Lender
for all losses and expenses sustained by such Lender as a result of any failure
by such Borrower to so furnish such copy of such receipt.
Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 3.16 shall survive the payment in full of the
Revolving Credit Loans.
Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees, if eligible, to furnish to
FiberMark and the Agent, prior to the first Quarterly Payment Date, two copies
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 or any successor forms thereto (wherein such Lender claims
entitlement to complete exemption from U.S. federal withholding tax on all
payments made by the Obligors hereunder) and upon request of FiberMark to
provide to FiberMark and the Agent a new Form 4224 or Form 1001 or any successor
form thereto (claiming a complete exemption from U.S. federal withholding tax on
all payments made by such Person hereunder) if any previously delivered form is
found to be incomplete or incorrect in any material respect or upon the
obsolescence of any previously delivered form.
Section 3.17. ADDITIONAL COSTS. The applicable Borrower shall
pay directly to the applicable Lender from time to time on demand such amounts
as such Lender may determine to be necessary to compensate it for any increased
costs which such Lender determines are attributable to its making or maintaining
any Libor Rate Loan to such Borrower, or its obligation to convert any Chase
Manhattan Bank Rate Loan to a Libor Rate Loan hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of such Libor Rate
Loans or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which:
(a) changes the basis of taxation of any amounts payable to
such Lender under this Financing Agreement or the Revolving Credit Loans or the
Revolving Credit Note in respect of any of such Libor Rate Loans (other than
changes in the rate of net income tax imposed on such Lender); or
(b) imposes or modifies any reserve, special deposit, deposit
insurance or assessment, minimum capital, capital ratio or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender (including any Libor Rate Loans or any
deposits referred to in the definition of "Libor Rate" in Section 1.01 hereof),
or the Lender Loan Commitment of such Lender; or
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(c) imposes any other condition affecting this Financing
Agreement or the Revolving Credit Loans or the Revolving Credit Note (or any of
such extensions of credit or liabilities).
Without limiting the effect of the provisions of the first
paragraph of this Section 3.17, in the event that, by reason of any Regulatory
Change, a Lender either (1) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits of other
liabilities of such Lender which includes deposits by reference to which the
Libor Rate is determined as provided in this Financing Agreement or a category
of extensions of credit or other assets of such Lender which includes Revolving
Credit Loans based on the Libor Rate or (2) becomes subject to restrictions on
the amount of such a category of liabilities or assets which it may hold, then,
if such Lender so elects by notice to the Borrowers and the Agent, the
obligation of such Lender to make or continue, or to convert Chase Manhattan
Bank Rate Loans into Libor Rate Loans shall be suspended until such Regulatory
Change ceases to be in effect (in which case the provisions of Section 3.20
hereof shall be applicable).
A certificate of any Lender claiming compensation under this
Section, setting forth the additional amount or amounts to be paid to it
hereunder, shall be conclusive in the absence of manifest error.
Section 3.18. LIMITATION ON TYPES OF REVOLVING CREDIT LOANS.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of a Libor Rate for any Libor Rate Period:
(a) The Agent or any of the Lenders determines (which
determination shall be conclusive) that quotations of interest rates for the
relevant deposits referred to in the definition of "Libor Rate" in Section 1.01
hereof are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for Libor Rate Loans as
provided in this Financing Agreement; or
(b) Any Lender determines (which determination shall be
conclusive) that the relevant rates of interest referred to in the definition of
"Libor Rate" in Section 1.01 hereof upon the basis of which the rate of interest
for Libor Rate Loans for such Libor Rate Period are to be determined do not
adequately cover the cost to such Lender of making or maintaining such Libor
Rate Loans for such Libor Rate Period;
then Agent shall give the applicable Borrower prompt notice thereof, and so long
as such condition remains in effect, such Lenders shall be under no obligation
to make such Libor Rate Loans, convert Chase Manhattan Bank Rate Loans into such
Libor Rate Loans or continue such Libor Rate Loans and if the applicable
Borrower has outstanding Libor Rate Loans shall, on the last day(s) of the then
current Libor Rate Period(s) for such outstanding Libor Rate Loans, either
prepay such Libor Rate Loans or convert such Libor Rate Loans into a Chase
Manhattan Bank Rate Loan in accordance with Section 6.01.
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Section 3.19. ILLEGALITY. Notwithstanding any other provision
of this Financing Agreement, in the event that it becomes unlawful for any
Lender to honor its obligation to make or maintain Libor Rate Loans hereunder or
convert Chase Manhattan Bank Rate Loans into Libor Rate Loans, then such Lender
shall promptly notify the Borrowers thereof and such Lender's obligation to make
or continue, or to convert a Chase Manhattan Bank Rate Loan into the affected
Libor Rate Loan shall be suspended until such time as such Lender may again make
and maintain such Libor Rate Loans (in which case the provisions of Section 3.20
hereof shall be applicable).
Section 3.20. TREATMENT OF AFFECTED LOANS. If the obligations
of a Lender to make or continue a Libor Rate Loan, or to convert Chase Manhattan
Bank Rate Loans into Libor Rate Loans are suspended pursuant to Section 3.17 or
3.19 hereof (Libor Rate Loans so affected being herein called "Affected Loans"),
such Lender's Affected Loans shall be automatically converted into Chase
Manhattan Bank Rate Loans on the last day(s) of the then current Libor Rate
Period(s) for the Affected Loans (or, in the case of a conversion required by
Section 3.17 or 3.19, on such earlier date as such Lender may specify to the
Borrowers).
To the extent that such Lender's Affected Loans have been so
converted, all payments and prepayments of principal which would otherwise be
applied to such Lender's Affected Loans shall be applied instead to its Chase
Manhattan Bank Rate Loans. All Revolving Credit Loans which would otherwise be
made or continued by Lenders as Libor Rate Loans shall be made or continued
instead as Chase Manhattan Bank Rate Loans and all Chase Manhattan Bank Rate
Loans of Lenders which would otherwise be converted into Libor Rate Loans shall
remain as Chase Manhattan Bank Rate Loans.
Section 3.21. ADEQUACY. If any of the Lenders shall have
determined that, after the date hereof, the adoption of any applicable Law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of Law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Lender (or its Parent) as a consequence of
such Lender's obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the applicable
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. A certificate of a Lender claiming
compensation under this Section 3.21, shall be conclusive in the absence of
manifest error.
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Article IV. GUARANTY
Section 4.01. FIBERMARK DURABLE GUARANTY. Each FiberMark
Durable Guarantor, jointly and severally, hereby irrevocably, absolutely and
unconditionally guarantees to each Lender Party and their successors, endorsees,
transferees and assigns the prompt and complete payment by FiberMark Durable as
and when due and payable (whether at stated maturity or by required prepayment,
acceleration, demand or otherwise), of all FiberMark Durable Obligations now
existing or hereafter incurred by FiberMark Durable, and agrees to pay on demand
any and all expenses (including counsel fees and expenses) which may be paid or
incurred by any Lender Party in collecting any or all of FiberMark Durable
Obligations and/or enforcing any rights under this guaranty or under FiberMark
Durable Obligations.
Section 4.02. FIBERMARK DURABLE GUARANTORS' GUARANTY
OBLIGATIONS UNCONDITIONAL. Each FiberMark Durable Guarantor hereby jointly and
severally guarantees that the FiberMark Durable Obligations will be paid
strictly in accordance with the terms of the Loan Documents and other agreements
to which FiberMark Durable is a party, regardless of any Law now or hereafter in
effect in any jurisdiction affecting any such terms or the rights of any Lender
Party with respect thereto. The obligations and liabilities of each FiberMark
Durable Guarantor under this guaranty shall be absolute and unconditional
irrespective of: (1) any lack of validity or enforceability of any of the
FiberMark Durable Obligations, any Loan Document, or any agreement or instrument
relating thereto; (2) any change in the time, manner or place of payment of, or
in any other term in respect of, all or any of the FiberMark Durable
Obligations, or any other amendment or waiver of or consent to any departure
from any Loan Document or any other documents or instruments executed in
connection with or related to FiberMark Durable Obligations; (3) any exchange or
release of, or non-perfection of any Lien on or in, any Collateral, or any
release or amendment or waiver of or consent to any departure from any other
guaranty, for all or any of the FiberMark Durable Obligations; or (4) any other
circumstances which might otherwise constitute a defense available to, or a
discharge of, FiberMark Durable or any guarantor in respect of FiberMark Durable
Obligations or the FiberMark Durable Guarantors in respect of this guaranty.
This FiberMark Durable Guaranty is a continuing guaranty and
shall remain in full force and effect until: (1) the payment in full and
indefeasible satisfaction of all FiberMark Durable Obligations (after the
Revolving Credit Termination Date), and (2) the payment of the other expenses to
be paid by FiberMark Durable pursuant hereto. This FiberMark Durable Guaranty
shall continue to be effective or shall be reinstated, as the case may be, if at
any time any payment, or any part thereof, of any of the FiberMark Durable
Obligations is rescinded or must otherwise be returned by any Lender Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of
FiberMark Durable or any Guarantor or otherwise, all as though such payment had
not been made.
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The obligations and liabilities of FiberMark Durable and each
FiberMark Durable Guarantor under this FiberMark Durable Guaranty shall not be
conditioned or contingent upon the pursuit by any Lender or any other Person at
any time of any right or remedy against FiberMark Durable or any FiberMark
Durable Guarantor or any other Person which may be or become liable in respect
of all or any part of FiberMark Durable Obligations or against any Collateral or
security or guarantee therefor or right of setoff with respect thereto.
FiberMark Durable and each FiberMark Durable Guarantor hereby
consents that, without the necessity of any reservation of rights against
FiberMark Durable or any FiberMark Durable Guarantor and without notice to or
further assent by FiberMark Durable or any FiberMark Durable Guarantor any
demand for payment of any of the FiberMark Durable Obligations made by any
Lender Party may be rescinded by such Lender Party and any of the FiberMark
Durable Obligations continued after such rescission.
Section 4.03. WAIVERS. To the extent permitted by applicable
law, FiberMark Durable and each FiberMark Durable Guarantor hereby waives: (1)
promptness and diligence; (2) notice of or proof of reliance by any Lender Party
upon this FiberMark Durable Guaranty or acceptance of this FiberMark Durable
Guaranty; (3) notice of the incurrence of any FiberMark Durable Obligations by
FiberMark Durable or FiberMark Durable Guaranty Obligation by any FiberMark
Durable Guarantor or the renewal, extension or accrual of any FiberMark Durable
Obligation or FiberMark Durable Guaranty Obligation; (4) notice of any actions
taken by any Lender Party, FiberMark Durable, any FiberMark Durable Guarantor or
any other party under any Loan Document, or any other agreement or instrument
relating to FiberMark Durable Obligations; (5) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of FiberMark Durable Obligations or of the obligations of FiberMark
Durable or any FiberMark Durable Guarantor hereunder, the omission of or delay
in which, but for the provisions of this Section 4.03, might constitute grounds
for relieving FiberMark Durable or any FiberMark Durable Guarantor of its
obligations hereunder; and (6) any requirement that any Lender Party protect,
secure, perfect or insure any Lien on any property subject thereto or exhaust
any right or take any action against FiberMark Durable or any FiberMark Durable
Guarantor or any other Person or any Collateral.
Section 4.04. SUBROGATION. FiberMark Durable and each
FiberMark Durable Guarantor agrees that it hereby waives and releases any rights
which it may acquire by way of subrogation under this FiberMark Durable
Guaranty, whether acquired by any payment made hereunder, by any setoff or
application of funds of FiberMark Durable or any FiberMark Durable Guarantor by
any Lender Party or otherwise.
Section 4.05. FIBERMARK FILTER GUARANTY. Each FiberMark Filter
Guarantor, jointly and severally, hereby irrevocably, absolutely and
unconditionally
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guarantees to each Lender Party and their successors, endorsees, transferees and
assigns the prompt and complete payment by FiberMark Filter as and when due and
payable (whether at stated maturity or by required prepayment, acceleration,
demand or otherwise), of all FiberMark Filter Obligations now existing or
hereafter incurred by FiberMark Filter, and agrees to pay on demand any and all
expenses (including counsel fees and expenses) which may be paid or incurred by
any Lender Party in collecting any or all of FiberMark Filter Obligations and/or
enforcing any rights under this guaranty or under FiberMark Filter Obligations.
Section 4.06. FIBERMARK FILTER GUARANTORS' GUARANTY
OBLIGATIONS UNCONDITIONAL. Each FiberMark Filter Guarantor hereby jointly and
severally guarantees that the FiberMark Filter Obligations will be paid strictly
in accordance with the terms of the Loan Documents and other agreements to which
FiberMark Filter is a party, regardless of any Law now or hereafter in effect in
any jurisdiction affecting any such terms or the rights of any Lender Party with
respect thereto. The obligations and liabilities of each FiberMark Filter
Guarantor under this guaranty shall be absolute and unconditional irrespective
of: (1) any lack of validity or enforceability of any of the FiberMark Filter
Obligations, any Loan Document, or any agreement or instrument relating thereto;
(2) any change in the time, manner or place of payment of, or in any other term
in respect of, all or any of the FiberMark Filter Obligations, or any other
amendment or waiver of or consent to any departure from any Loan Document or any
other documents or instruments executed in connection with or related to
FiberMark Filter Obligations; (3) any exchange or release of, or non-perfection
of any Lien on or in, any Collateral, or any release or amendment or waiver of
or consent to any departure from any other guaranty, for all or any of the
FiberMark Filter Obligations; or (4) any other circumstances which might
otherwise constitute a defense available to, or a discharge of, FiberMark Filter
or any guarantor in respect of FiberMark Filter Obligations or the FiberMark
Filter Guarantors in respect of this guaranty.
This FiberMark Filter Guaranty is a continuing guaranty and
shall remain in full force and effect until: (1) the payment in full and
indefeasible satisfaction of all FiberMark Filter Obligations (after the
Revolving Credit Termination Date), and (2) the payment of the other expenses to
be paid by FiberMark Filter pursuant hereto. This FiberMark Filter Guaranty
shall continue to be effective or shall be reinstated, as the case may be, if at
any time any payment, or any part thereof, of any of the FiberMark Filter
Obligations is rescinded or must otherwise be returned by any Lender Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of
FiberMark Filter or any Guarantor or otherwise, all as though such payment had
not been made.
The obligations and liabilities of FiberMark Filter and each
FiberMark Filter Guarantor under this FiberMark Filter Guaranty shall not be
conditioned or contingent upon the pursuit by any Lender or any other Person at
any time of any right or remedy against FiberMark Filter or any FiberMark Filter
Guarantor or any other Person which may be or become liable in respect of all or
any part of FiberMark Filter
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Obligations or against any Collateral or security or guarantee therefor or right
of setoff with respect thereto.
FiberMark Filter and each FiberMark Filter Guarantor hereby
consents that, without the necessity of any reservation of rights against
FiberMark Filter or any FiberMark Filter Guarantor and without notice to or
further assent by FiberMark Filter or any FiberMark Filter Guarantor any demand
for payment of any of the FiberMark Filter Obligations made by any Lender Party
may be rescinded by such Lender Party and any of the FiberMark Filter
Obligations continued after such rescission.
Section 4.07. WAIVERS. To the extent permitted by applicable
law, FiberMark Filter and each FiberMark Filter Guarantor hereby waives: (1)
promptness and diligence; (2) notice of or proof of reliance by any Lender Party
upon this FiberMark Filter Guaranty or acceptance of this FiberMark Filter
Guaranty; (3) notice of the incurrence of any FiberMark Filter Obligations by
FiberMark Filter or FiberMark Filter Guaranty Obligation by any FiberMark Filter
Guarantor or the renewal, extension or accrual of any FiberMark Filter
Obligation or FiberMark Filter Guaranty Obligation; (4) notice of any actions
taken by any Lender Party, FiberMark Filter, any FiberMark Filter Guarantor or
any other party under any Loan Document, or any other agreement or instrument
relating to FiberMark Filter Obligations; (5) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of FiberMark Filter Obligations or of the obligations of FiberMark
Filter or any FiberMark Filter Guarantor hereunder, the omission of or delay in
which, but for the provisions of this Section 4.07, might constitute grounds for
relieving FiberMark Filter or any FiberMark Filter Guarantor of its obligations
hereunder; and (6) any requirement that any Lender Party protect, secure,
perfect or insure any Lien on any property subject thereto or exhaust any right
or take any action against FiberMark Filter or any FiberMark Filter Guarantor or
any other Person or any Collateral.
Section 4.08. SUBROGATION. FiberMark Filter and each FiberMark
Filter Guarantor agrees that it hereby waives and releases any rights which it
may acquire by way of subrogation under this FiberMark Filter Guaranty, whether
acquired by any payment made hereunder, by any setoff or application of funds of
FiberMark Filter or any FiberMark Filter Guarantor by any Lender Party or
otherwise.
Section 4.09. FIBERMARK OFFICE GUARANTY. Each FiberMark Office
Guarantor, jointly and severally, hereby irrevocably, absolutely and
unconditionally guarantees to each Lender Party and their successors, endorsees,
transferees and assigns the prompt and complete payment by FiberMark Office as
and when due and payable (whether at stated maturity or by required prepayment,
acceleration, demand or otherwise), of all FiberMark Office Obligations now
existing or hereafter incurred by FiberMark Office, and agrees to pay on demand
any and all expenses (including counsel fees and expenses) which may be paid or
incurred by any Lender Party in collecting any or all of FiberMark Office
Obligations and/or enforcing any rights under this guaranty or under FiberMark
Office Obligations.
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Section 4.10. FIBERMARK OFFICE GUARANTORS' GUARANTY
OBLIGATIONS UNCONDITIONAL. Each FiberMark Office Guarantor hereby jointly and
severally guarantees that the FiberMark Office Obligations will be paid strictly
in accordance with the terms of the Loan Documents and other agreements to which
FiberMark Office is a party, regardless of any Law now or hereafter in effect in
any jurisdiction affecting any such terms or the rights of any Lender Party with
respect thereto. The obligations and liabilities of each FiberMark Office
Guarantor under this guaranty shall be absolute and unconditional irrespective
of: (1) any lack of validity or enforceability of any of the FiberMark Office
Obligations, any Loan Document, or any agreement or instrument relating thereto;
(2) any change in the time, manner or place of payment of, or in any other term
in respect of, all or any of the FiberMark Office Obligations, or any other
amendment or waiver of or consent to any departure from any Loan Document or any
other documents or instruments executed in connection with or related to
FiberMark Office Obligations; (3) any exchange or release of, or non-perfection
of any Lien on or in, any Collateral, or any release or amendment or waiver of
or consent to any departure from any other guaranty, for all or any of the
FiberMark Office Obligations; or (4) any other circumstances which might
otherwise constitute a defense available to, or a discharge of, FiberMark Office
or any guarantor in respect of FiberMark Office Obligations or the FiberMark
Office Guarantors in respect of this guaranty.
This FiberMark Office Guaranty is a continuing guaranty and
shall remain in full force and effect until: (1) the payment in full and
indefeasible satisfaction of all FiberMark Office Obligations (after the
Revolving Credit Termination Date), and (2) the payment of the other expenses to
be paid by FiberMark Office pursuant hereto. This FiberMark Office Guaranty
shall continue to be effective or shall be reinstated, as the case may be, if at
any time any payment, or any part thereof, of any of the FiberMark Office
Obligations is rescinded or must otherwise be returned by any Lender Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of
FiberMark Office or any Guarantor or otherwise, all as though such payment had
not been made.
The obligations and liabilities of FiberMark Office and each
FiberMark Office Guarantor under this FiberMark Office Guaranty shall not be
conditioned or contingent upon the pursuit by any Lender or any other Person at
any time of any right or remedy against FiberMark Office or any FiberMark Office
Guarantor or any other Person which may be or become liable in respect of all or
any part of FiberMark Office Obligations or against any Collateral or security
or guarantee therefor or right of setoff with respect thereto.
FiberMark Office and each FiberMark Office Guarantor hereby
consents that, without the necessity of any reservation of rights against
FiberMark Office or any FiberMark Office Guarantor and without notice to or
further assent by FiberMark Office or any FiberMark Office Guarantor any demand
for payment of any of the FiberMark Office Obligations made by any Lender Party
may be rescinded by such Lender Party and any of the FiberMark Office
Obligations continued after such rescission.
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Section 4.11. WAIVERS. To the extent permitted by applicable
law, FiberMark Office and each FiberMark Office Guarantor hereby waives: (1)
promptness and diligence; (2) notice of or proof of reliance by any Lender Party
upon this FiberMark Office Guaranty or acceptance of this FiberMark Office
Guaranty; (3) notice of the incurrence of any FiberMark Office Obligations by
FiberMark Office or FiberMark Office Guaranty Obligation by any FiberMark Office
Guarantor or the renewal, extension or accrual of any FiberMark Office
Obligation or FiberMark Office Guaranty Obligation; (4) notice of any actions
taken by any Lender Party, FiberMark Office, any FiberMark Office Guarantor or
any other party under any Loan Document, or any other agreement or instrument
relating to FiberMark Office Obligations; (5) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of FiberMark Office Obligations or of the obligations of FiberMark
Office or any FiberMark Office Guarantor hereunder, the omission of or delay in
which, but for the provisions of this Section 4.11, might constitute grounds for
relieving FiberMark Office or any FiberMark Office Guarantor of its obligations
hereunder; and (6) any requirement that any Lender Party protect, secure,
perfect or insure any Lien on any property subject thereto or exhaust any right
or take any action against FiberMark Office or any FiberMark Office Guarantor or
any other Person or any Collateral.
Section 4.12. SUBROGATION. FiberMark Office and each FiberMark
Office Guarantor agrees that it hereby waives and releases any rights which it
may acquire by way of subrogation under this FiberMark Office Guaranty, whether
acquired by any payment made hereunder, by any setoff or application of funds of
FiberMark Office or any FiberMark Office Guarantor by any Lender Party or
otherwise.
Section 4.13. FIBERMARK GUARANTY. Each FiberMark Guarantor,
jointly and severally, hereby irrevocably, absolutely and unconditionally
guarantees to each Lender Party and their successors, endorsees, transferees and
assigns the prompt and complete payment by FiberMark as and when due and payable
(whether at stated maturity or by required prepayment, acceleration, demand or
otherwise), of all FiberMark Obligations now existing or hereafter incurred by
FiberMark, and agrees to pay on demand any and all expenses (including counsel
fees and expenses) which may be paid or incurred by any Lender Party in
collecting any or all of FiberMark Obligations and/or enforcing any rights under
this guaranty or under FiberMark Obligations.
Section 4.14. FIBERMARK GUARANTORS' GUARANTY OBLIGATIONS
UNCONDITIONAL. Each FiberMark Guarantor hereby jointly and severally guarantees
that the FiberMark Obligations will be paid strictly in accordance with the
terms of the Loan Documents and other agreements to which FiberMark is a party,
regardless of any Law now or hereafter in effect in any jurisdiction affecting
any such terms or the rights of any Lender Party with respect thereto. The
obligations and liabilities of each FiberMark Guarantor under this guaranty
shall be absolute and unconditional irrespective of: (1) any lack of validity or
enforceability of any of the FiberMark
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Obligations, any Loan Document, or any agreement or instrument relating thereto;
(2) any change in the time, manner or place of payment of, or in any other term
in respect of, all or any of the FiberMark Obligations, or any other amendment
or waiver of or consent to any departure from any Loan Document or any other
documents or instruments executed in connection with or related to FiberMark
Obligations; (3) any exchange or release of, or non-perfection of any Lien on or
in, any Collateral, or any release or amendment or waiver of or consent to any
departure from any other guaranty, for all or any of the FiberMark Obligations;
or (4) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, FiberMark or any guarantor in respect of
FiberMark Obligations or the FiberMark Guarantors in respect of this guaranty.
This FiberMark Guaranty is a continuing guaranty and shall
remain in full force and effect until: (1) the payment in full and indefeasible
satisfaction of all FiberMark Obligations (after the Revolving Credit
Termination Date), and (2) the payment of the other expenses to be paid by
FiberMark pursuant hereto. This FiberMark Guaranty shall continue to be
effective or shall be reinstated, as the case may be, if at any time any
payment, or any part thereof, of any of the FiberMark Obligations is rescinded
or must otherwise be returned by any Lender Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of FiberMark or any
Guarantor or otherwise, all as though such payment had not been made.
The obligations and liabilities of FiberMark and each
FiberMark Guarantor under this FiberMark Guaranty shall not be conditioned or
contingent upon the pursuit by any Lender or any other Person at any time of any
right or remedy against FiberMark or any FiberMark Guarantor or any other Person
which may be or become liable in respect of all or any part of FiberMark
Obligations or against any Collateral or security or guarantee therefor or right
of setoff with respect thereto.
FiberMark and each FiberMark Guarantor hereby consents that,
without the necessity of any reservation of rights against FiberMark or any
FiberMark Guarantor and without notice to or further assent by FiberMark or any
FiberMark Guarantor any demand for payment of any of the FiberMark Obligations
made by any Lender Party may be rescinded by such Lender Party and any of the
FiberMark Obligations continued after such rescission.
Section 4.15. WAIVERS. To the extent permitted by applicable
law, FiberMark and each FiberMark Guarantor hereby waives: (1) promptness and
diligence; (2) notice of or proof of reliance by any Lender Party upon this
FiberMark Guaranty or acceptance of this FiberMark Guaranty; (3) notice of the
incurrence of any FiberMark Obligations by FiberMark or FiberMark Guaranty
Obligation by any FiberMark Guarantor or the renewal, extension or accrual of
any FiberMark Obligation or FiberMark Guaranty Obligation; (4) notice of any
actions taken by any Lender Party, FiberMark , any FiberMark Guarantor or any
other party under any Loan Document, or any other agreement or instrument
relating to FiberMark Obligations; (5) all other notices, demands and protests,
and all other formalities of every kind in connection with the enforcement of
FiberMark Obligations or of the
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obligations of FiberMark or any FiberMark Guarantor hereunder, the omission of
or delay in which, but for the provisions of this Section 4.15, might constitute
grounds for relieving FiberMark or any FiberMark Guarantor of its obligations
hereunder; and (6) any requirement that any Lender Party protect, secure,
perfect or insure any Lien on any property subject thereto or exhaust any right
or take any action against FiberMark or any FiberMark Guarantor or any other
Person or any Collateral.
Section 4.16. SUBROGATION. FiberMark and each FiberMark
Guarantor agrees that it hereby waives and releases any rights which it may
acquire by way of subrogation under this FiberMark Guaranty, whether acquired by
any payment made hereunder, by any setoff or application of funds of FiberMark
or any FiberMark Guarantor by any Lender Party or otherwise.
Article V. COLLATERAL
Section 5.01. (a) GRANT OF A SECURITY INTEREST BY FIBERMARK
OFFICE. As security for the prompt payment in full of all FiberMark Office
Obligations, FiberMark Office hereby pledges and grants to the Agent for the
ratable benefit of the Lenders a continuing general Lien upon and security
interest in all of its right, title and interest in and to each of the
following, whether now owned or hereafter acquired, and in all proceeds of any
and all of the following, in whatever form:
(1) Inventory;
(2) Accounts; and
(3) the Brattleboro Collateral.
Without limiting the generality of the foregoing, the security
interests granted hereunder shall extend and attach to:
(i) All Collateral which is presently in existence and which
is owned by FiberMark Office or in which FiberMark Office has any interest,
whether held by FiberMark Office or by others for its account, and, if any
Brattleboro Collateral is Equipment, whether FiberMark Office's interest in such
Equipment is as owner or lessee or conditional vendee; and
(ii) All Inventory and any portion thereof which may be
returned, rejected, reclaimed or repossessed by either the Agent or FiberMark
Office from FiberMark Office's customers, as well as to all supplies, goods,
incidentals, packaging materials, labels and any other items which contribute to
the finished goods or products manufactured or processed by FiberMark Office or
to the sale, promotion or shipment thereof.
(b) GRANT OF A SECURITY INTEREST BY FIBERMARK. As security
for the prompt payment and performance in full of all of the FiberMark
Obligations,
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FiberMark hereby pledges and grants to the Agent for the ratable benefit of the
Lenders a continuing general Lien upon and security interest in all of its
right, title and interest in and to each of the following, whether now owned or
hereafter acquired, and in all proceeds of any and all of the following, in
whatever form:
(1) Inventory; and
(2) Accounts.
Without limiting the generality of the foregoing, the security
interests granted hereunder shall extend and attach to:
(i) All Collateral which is presently in existence and which
is owned by FiberMark or in which FiberMark has any interest, whether held by
FiberMark or by others for its account; and
(ii) All Inventory and any portion thereof which may be
returned, rejected, reclaimed or repossessed by either the Agent or FiberMark
from FiberMark's customers, as well as to all supplies, goods, incidentals,
packaging materials, labels and any other items which contribute to the finished
goods or products manufactured or processed by FiberMark or to the sale,
promotion or shipment thereof.
(c) GRANT OF A SECURITY INTEREST BY FIBERMARK DURABLE. As
security for the prompt payment and performance in full of all of the FiberMark
Durable Obligations, FiberMark Durable hereby pledges and grants to the Agent
for the ratable benefit of the Lenders a continuing general Lien upon and
security interest in all of its right, title and interest in and to each of the
following, whether now owned or hereafter acquired, and in all proceeds of any
and all of the following, in whatever form:
(1) Inventory; and
(2) Accounts.
Without limiting the generality of the foregoing, the security
interests granted hereunder shall extend and attach to:
(i) All Collateral which is presently in existence and which
is owned by FiberMark Durable or in which FiberMark Durable has any interest,
whether held by FiberMark Durable or by others for its account; and
(ii) All Inventory and any portion thereof which may be
returned, rejected, reclaimed or repossessed by either the Agent or FiberMark
Durable from FiberMark Durable's customers, as well as to all supplies, goods,
incidentals, packaging materials, labels and any other items which contribute to
the finished goods or products manufactured or processed by FiberMark Durable or
to the sale, promotion or shipment thereof.
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(d) GRANT OF A SECURITY INTEREST BY FIBERMARK FILTER. As
security for the prompt payment and performance in full of all of the FiberMark
Filter Obligations, FiberMark Filter hereby pledges and grants to the Agent for
the ratable benefit of the Lenders a continuing general Lien upon and security
interest in all of its right, title and interest in and to each of the
following, whether now owned or hereafter acquired, and in all proceeds of any
and all of the following, in whatever form:
(1) Inventory; and
(2) Accounts.
Without limiting the generality of the foregoing, the security
interests granted hereunder shall extend and attach to:
(i) All Collateral which is presently in existence and which
is owned by FiberMark Filter or in which FiberMark Filter has any interest,
whether held by FiberMark Filter or others for its account; and
(ii) All Inventory and any portion thereof which may be
returned, rejected, reclaimed or repossessed by either the Agent or FiberMark
Filter from FiberMark Filter's customers, as well as to all supplies, goods,
incidentals, packaging materials, labels and any other items which contribute to
the finished goods or products manufactured or processed by FiberMark Filter or
to the sale, promotion or shipment thereof.
Section 5.02. COVENANTS REGARDING INVENTORY. Each Obligor
agrees to safeguard, protect and hold all Inventory for the Lenders' account and
make no disposition thereof except in the regular course of the business of such
Obligor as herein provided. Until the Agent has given such Obligor notice to the
contrary, as provided for below, any Inventory may be sold and shipped by such
Obligor to its customers in the ordinary course of such Obligor's business, on
open account and on terms currently being extended by such Obligor to its
customers, PROVIDED that all proceeds of all sales (including cash, accounts
receivable, checks, notes, instruments for the payment of money and similar
proceeds) are forthwith transferred, endorsed, and turned over and delivered to
the Agent for the ratable benefit of the Lenders in accordance with Section 3.06
of this Financing Agreement. The Agent shall have the right to withdraw this
permission at any time upon the occurrence of an Event of Default and until such
time as such Event of Default is waived, in which event no further disposition
shall be made of the Inventory by such Obligor without the Agent's prior written
approval. Cash sales or sales of Inventory in which a Lien upon, or security
interest in, Inventory is retained by such Obligor shall be made by such Obligor
only with the approval of the Agent, and the proceeds of such sales or sales of
Inventory for cash shall not be commingled with such Obligor's other property,
but shall be segregated, held by such Obligor in trust for the Lenders as the
Lenders' exclusive property, and shall be delivered immediately by such Obligor
to the Agent in the identical form received by such
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Obligor by deposit to the Depository Accounts. Upon the sale, exchange, or other
disposition of Inventory, as herein provided, the security interest in such
Obligor's Inventory provided for herein shall, without break in continuity and
without further formality or act, continue in, and attach to, all proceeds,
including any instruments for the payment of money, accounts receivable,
contract rights, documents of title, shipping documents, chattel paper and all
other cash and non-cash proceeds of such sale, exchange or disposition. As to
any such sale, exchange or other disposition, the Agent shall have all of the
rights of an unpaid seller, including stoppage in transit, replevin, rescission
and reclamation.
Section 5.03. COVENANTS REGARDING EQUIPMENT. The Equipment is
and will only be used by FiberMark Office in its business and will not be held
for sale or lease, or removed from its premises, or otherwise disposed of by
FiberMark Office without the prior written approval of the Agent. FiberMark
Office will not sell, transfer, lease or otherwise dispose of any of the
Equipment constituting a part of the Brattleboro Collateral, or attempt, offer
or contract to do so, except for sales of assets permitted by this Financing
Agreement. Concurrently with any such permitted disposition, the property
acquired by a transferee in such disposition shall automatically be released
from the security interest created by this Financing Agreement (the "Security
Interest"). It is acknowledged and agreed that notwithstanding any release of
property from the Security Interest in accordance with the foregoing provisions
of this Section 5.03, the Security Interest shall in any event continue in the
proceeds of the Brattleboro Collateral. The Agent shall promptly execute and
deliver (and, when appropriate, shall cause any separate agent, co-agent or
trustee to execute and deliver) any releases, instruments or documents
reasonably requested by FiberMark Office to accomplish or confirm the release of
the Equipment constituting a part of the Brattleboro Collateral provided by this
Section 5.03. Any such release of the Equipment constituting a part of the
Brattleboro Collateral provided by the Agent shall specifically describe that
portion of the Brattleboro Collateral to be released, shall be expressed to be
unconditional and shall be without recourse or warranty (other than a warranty
that the Agent has not assigned its rights and interests to any other Person).
FiberMark Office shall pay all of the Agent's out-of-pocket expenses in
connection with any release of the Brattleboro Collateral.
FiberMark Office agrees at its own cost and expense to keep
the Equipment in as good and substantial repair and condition as the same is now
or at the time the Lien and security interest granted herein shall attach
thereto, reasonable wear and tear excepted, making any and all repairs and
replacements when and where necessary. FiberMark Office also agrees to
safeguard, protect and hold all Equipment for the Lenders' account and make no
disposition thereof unless FiberMark Office first obtains the prior written
approval of the Agent. Any sale, exchange or other disposition of any Equipment
shall only be made by FiberMark Office with the prior written approval of the
Agent, and the proceeds of any such sales shall not be commingled with FiberMark
Office's other property, but shall be segregated, held by FiberMark Office in
trust for the Lenders as the Lenders' exclusive property, and shall be delivered
immediately by FiberMark Office to the Agent in the identical form
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received by FiberMark Office by deposit to the Depository Accounts. Upon the
sale, exchange, or other disposition of the Equipment, as herein provided, the
security interest provided for herein shall, without break in continuity and
without further formality or act, continue in, and attach to, all proceeds,
including any instruments for the payment of money, accounts receivable,
contract rights, documents of title, shipping documents, chattel paper and all
other cash and non-cash proceeds of such sales, exchange or disposition. As to
any such sale, exchange or other disposition, the Agent shall have all of the
rights of an unpaid seller, including stoppage in transit, replevin, rescission
and reclamation. Notwithstanding anything hereinabove contained to the contrary,
FiberMark Office may sell, exchange or otherwise dispose of obsolete Equipment
or Equipment no longer needed in FiberMark Office's operations, PROVIDED,
HOWEVER, that (a) the then book value of the Equipment so disposed of does not
exceed Five Hundred Thousand Dollars ($500,000) in the aggregate in any Fiscal
Year and (b) the proceeds of such sales or dispositions are delivered to the
Agent for the ratable benefit of the Lenders in accordance with the foregoing
provisions of this paragraph, except that FiberMark Office may retain and use
such proceeds to purchase forthwith replacement Equipment which FiberMark Office
determines in its reasonable business judgment to have a collateral value at
least equal to the Equipment so disposed of or sold, PROVIDED, HOWEVER, that the
aforesaid right shall automatically cease upon the occurrence of an Event of
Default which is not waived.
Section 5.04. COLLATERAL COVENANT. Each Obligor hereby
covenants that, except for the Permitted Encumbrances, such Obligor is or will
be at the time additional Collateral is acquired by it, the absolute owner of
the Collateral with full right to pledge, sell, consign, transfer and create a
security interest therein, free and clear of any and all claims or Liens in
favor of others; that such Obligor will at its expense forever warrant and, at
the Lenders' and/or the Agent's request, defend the same from any and all claims
and demands of any other person other than the Permitted Encumbrances. Such
Obligor will not grant, create or permit to exist, any Lien upon or security
interest in the Collateral, or any proceeds thereof, in favor of any other
Person other than the holders of the Permitted Encumbrances.
No Obligor will (a) change the location of its chief executive
office/chief place of business from that specified in Schedule 5.04 or remove
its books and records from the location specified in Schedule 5.04, (b) move the
Equipment from the Real Estate, or (c) change its name (including the adoption
of any new trade name), identity or corporate structure, unless, in any of the
circumstances described in the immediately preceding clauses (a) through (c), it
shall have provided at least thirty (30) days prior written notice to the Agent
of any such change in location of its chief executive office/chief place of
business, change in name or change in location of Inventory or Equipment. Each
Obligor will from time to time notify the Agent of each location at which any
amount of the Collateral or such books and records are to be kept, including for
temporary processing, storage or similar purposes. The Obligors shall not permit
more than $1,000,000 in aggregate book value of Inventory, regardless of by whom
owned, to be kept at a location (or locations) other than a location that is (A)
listed under the name of the Obligor that owns such Inventory on
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Schedule 5.04 hereto, as amended by Agent from time to time to reflect the
addition or deletion of locations at which Collateral is kept, stored or
processed (as notified to Agent by the Obligors from time to time pursuant to
this Section 5.04), and (B) not one of the Excluded Premises. Except as
permitted by the preceding sentence, no Obligor shall remove any amount of
Collateral or such books or record to a location not set forth on Schedule 5.04
or otherwise keep any amount of Collateral (other than Real Estate, to the
extent described in Schedule 5.04A hereto) at a location not set forth on
Schedule 5.04 unless, not less than thirty (30) days prior to the day such
removal or other change occurs such Obligor shall give written notice to the
Agent of such removal or other change and the new location of such Collateral or
such books and records. No action requiring notice to the Agent under this
paragraph shall be effected until such filings and other measures required under
applicable Law to continue uninterrupted the first perfected security interest
and Lien of the Agent in the Collateral affected thereby shall have been taken,
and until the Agent shall have received such opinions of counsel with respect
thereto as it shall have reasonably requested. Each Obligor also agrees to
advise the Agent promptly, in sufficient detail, of any material adverse change
relating to the type, quantity or quality of the Collateral or to the security
interests granted to the Lenders or the Agent therein. Each Obligor as to
itself, hereby authorizes the Agent to regard its printed name or rubber stamp
signature on assignment schedules or invoices as the equivalent of a manual
signature by one of its authorized officers or agents.
Section 5.05. COVENANTS REGARDING ACCOUNTS. No Obligor will
(a) amend, modify, terminate or waive any provision of any contract, license or
agreement giving rise to an Account of such Obligor in any manner which could
reasonably be expected to materially adversely affect the value of such
contract, license or Account as Collateral, (b) fail to exercise promptly and
diligently each and every material right which it may have under each material
contract, license or agreement giving rise to an Account of such Obligor (other
than any right of termination), except in a manner consistent with the ordinary
and customary conduct of its business or (c) fail to deliver to the Agent upon
its reasonable request a copy of each material demand, notice or document
received by it relating in any way to any material contract, license or
agreement giving rise to an Account of such Obligor.
Other than in the ordinary course of business as generally
conducted by such Obligor over a period of time, no Obligor will grant any
extension of the time of payment of any of the Accounts, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partially, any Person liable for the payment thereof, or allow any credit or
discount whatsoever thereon.
Section 5.06. CONTINUING SECURITY INTEREST. The rights and
security interests granted to the Agent for the ratable benefit of the Lenders
hereunder are to continue in full force and effect, notwithstanding the
termination of this Financing Agreement or the fact that the account maintained
in any Borrower's name on the books of the Agent may from time to time be
temporarily in a credit position, until the final payment in full to the Agent
and the Lenders of all Obligations and the
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termination of this Financing Agreement. Any delay, or omission by the Agent to
exercise any right hereunder, shall not be deemed a waiver thereof, or be deemed
a waiver of any other right, unless such waiver be in writing and signed by the
Agent. A waiver on any one occasion shall not be construed as a bar to or waiver
of any right or remedy on any future occasion.
Section 5.07. ACTIONS BY AGENT. To the extent that the
Obligations are now or hereafter secured by any assets or property other than
the Collateral or by the guarantee, endorsement, assets or property of any other
Person, then the Agent shall have the right in its sole discretion to determine
which rights, security, Liens, security interests or remedies the Agent shall at
any time pursue, foreclose upon, relinquish, subordinate, modify or take any
other action with respect to, without in any way modifying or affecting any of
them, or any of the Agent's or the Lenders' rights hereunder.
Section 5.08. ADDITIONAL COLLATERAL AND FURTHER ASSURANCES.
Upon the request of the Agent, each Obligor will, at the sole expense of such
Obligor, promptly and duly execute and deliver such further instruments and
documents and take such further action as the Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Financing
Agreement, the Security Documents and of the rights and powers herein and
therein granted for the benefit of the Agent and the Lenders.
Each Obligor will comply with the requirements of all state
and federal Laws in order to grant to the Agent for the benefit of the Lenders
valid and perfected first security interests and Liens in the Collateral,
subject only to the Permitted Encumbrances. The Agent is hereby authorized by
each Obligor to file any financing statements covering the Collateral whether or
not the Obligor's signature appears thereon. Each Obligor agrees to do whatever
the Agent may request, from time to time, by way of: filing notices of Liens,
financing statements, amendments, renewals and continuations thereof;
cooperating with the Agent; keeping stock records; and performing such further
acts as the Lenders may reasonably require in order to perfect the Liens
contemplated by this Financing Agreement in favor of the Lenders for the benefit
of the Lenders.
Any reserves or balances to the credit of any Borrower and any
other property or assets of an Obligor in the possession of the Agent or any of
the Lenders may be held by such holder as security for any Obligations and
applied in whole or partial satisfaction of such Obligations when due. The Liens
and security interests granted herein and any other Lien or security interest
the Agent or any Lender may have in any other assets of an Obligor shall secure
payment and performance of all now existing and future Obligations. The Agent
may in its discretion charge any or all of the Obligations to the account of an
Obligor when due.
This Financing Agreement and the obligation of FiberMark
Office to perform all of its covenants and obligations hereunder are further
secured by the Mortgage. FiberMark Office shall give to the Agent for the
ratable benefit of the
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Lenders from time to time such mortgage on the Real Estate as the Agent shall
require to obtain a valid first Lien thereon subject only to those exceptions of
title as set forth in future title insurance policies that are satisfactory to
the Lenders.
Section 5.09. ADDITIONAL INFORMATION. Each Obligor will
execute and deliver to the Agent, from time to time, such written statements and
schedules as the Agent may reasonably require, designating, identifying or
describing the Collateral pledged to the Lenders or the Agent hereunder,
including, without limitation, such schedules of Accounts as the Agent may
reasonably request to support or confirm any information previously given, and
such other appropriate reports designating, identifying and describing the
Accounts as the Agent may reasonably require, and changes after the date hereof
in the descriptions of the specific properties constituting its owned and leased
properties. An Obligor's failure, however, to promptly give the Agent such
statements or schedules shall not affect, diminish, modify or otherwise limit
the Lenders' or the Agent's security interests in the Collateral.
Section 5.10. COMPLIANCE WITH FAIR LABOR STANDARDS ACT. Each
Obligor shall comply in all material respects with all provisions of the Fair
Labor Standards Act as set forth in Sections 201 through 219 of Title 29 of the
United States Code.
Article VI. INTEREST, FEES AND EXPENSES.
Section 6.01. Method of Electing Interest Rates. The Revolving
Credit Loans made to the Borrowers shall bear interest at either the Chase
Manhattan Bank Rate or the Libor Rate. Thereafter, the applicable Borrower may
from time to time elect to change or continue the Type borne by each Revolving
Credit Loan, as follows:
(a) if such Revolving Credit Loans are Chase Manhattan Bank
Rate Loans, the applicable Borrower may elect to convert such Revolving Credit
Loans to Libor Rate Loans as of any Business Day;
(b) if such Revolving Credit Loans are Libor Rate Loans, the
applicable Borrower may elect to convert such Revolving Credit Loans to Chase
Manhattan Bank Rate Loans or, or elect to continue such Libor Rate Loans as
Libor Rate Loans for an additional Libor Rate Period, in each case effective on
the last day of the then current Libor Rate Period applicable to such Revolving
Credit Loans.
Each such election shall be made by delivering a notice substantially in the
form of Exhibit C hereto (a "Notice of Interest Rate Selection") to Agent by (1)
12:00 Noon (New York City time) at least one (1) Business Day before the
conversion of a Libor Rate Loan into a Chase Manhattan Bank Rate Loan, or (2)
12:00 Noon (New York City time) at least three (3) Business Days before the
conversion of a Chase Manhattan Bank Rate Loan into a Libor Rate Loan or the
continuation of a Libor Rate Loan as a Libor
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Rate Loan. A Notice of Loan Interest Rate Selection may, if it so specifies,
apply to only a portion of the aggregate principal amount of the relevant
Revolving Credit Loan; PROVIDED that the portion to which such notice applies,
and the remaining portion to which it does not apply, each are sufficient to
meet the minimum amount specified in Section 3.14.
Each Notice of Interest Rate Selection relating to a Chase
Manhattan Bank Rate Loan or Libor Rate Loan shall specify:
(i) the Revolving Credit Loan (or portion thereof) to which
such notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of the first paragraph of this Section 6.01;
(iii) if the Revolving Credit Loans are to be converted, and
if such new Revolving Credit Loans are Libor Rate Loans, the duration
of the initial Libor Rate Period applicable thereto; and
(iv) if such Revolving Credit Loans are to be continued as
Libor Rate Loans for an additional Libor Rate Period, the duration of
such additional Libor Rate Period.
Each Libor Rate Period specified in a Notice of Interest Rate
Selection shall comply with the provisions of the definition of Libor Rate
Period. No conversion into a Libor Rate Loan and no continuation of a Libor Rate
Loan shall be permitted when a Default or Event of Default has occurred and is
continuing. If the applicable Borrower fails to deliver a timely Notice of
Interest Rate Selection to the Agent for any Libor Rate Loans to such Borrower
such Revolving Credit Loans shall be converted into Chase Manhattan Bank Rate
Loans on the last day of the then current Libor Rate Period applicable thereto.
Anything herein to the contrary notwithstanding, at no time
shall there be outstanding more than three (3) different Libor Rate Periods
relating to Libor Rate Loans in the aggregate for all Borrowers.
Section 6.02. INTEREST. Each applicable Borrower shall pay
interest on the outstanding unpaid principal amount of its Revolving Credit
Loans for each day from and including the date such Revolving Credit Loan is
made until but excluding the date such Revolving Credit Loan is paid in full, at
one of the following rates per annum:
(1) CHASE MANHATTAN BANK RATE LOAN. For a Chase Manhattan Bank
Rate Loan, a rate per annum equal at all times to the sum of the Chase Manhattan
Bank Rate in effect for such day plus the Applicable Margin; and
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(2) LIBOR RATE LOAN. For a Libor Rate Loan, a rate per annum
equal at all times during each Libor Rate Period of such Revolving Credit Loan
to the sum of the Libor Rate for such Libor Rate Period plus the Applicable
Margin.
All accrued and unpaid interest on the Revolving Credit Loans
will be payable in arrears on each Quarterly Date, regardless of interest rate,
and shall be calculated based on a 360 day year. The Agent shall be entitled to
charge the applicable Borrower's account with the applicable interest rate(s)
until all such Obligations have been paid in full.
The interest rate on Chase Manhattan Bank Rate Loans shall
change when the Chase Manhattan Bank Rate changes. Interest on the Chase
Manhattan Bank Rate Loans and the Libor Rate Loans shall not exceed the maximum
amount permitted under applicable Law. Upon the occurrence of an Event of
Default interest will accrue at the Default Rate of Interest as provided in
Section 12.02.
Agent shall determine each interest rate applicable to the
Revolving Credit Loans hereunder. Agent shall give prompt notice to the
applicable Borrower and each Lender of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
Section 6.03. FEES. On the Closing Date, the Borrowers shall
pay the Facility Fee to the Initial Lenders.
During the period from the Closing Date to the Revolving
Credit Commitment Termination Date, the Obligors jointly and severally agree to
pay to the Agent for the account of each Lender the Unused Line Fee. All Unused
Line Fees are payable in arrears on each Quarterly Payment Date. Upon receipt of
any such Unused Line Fee, the Agent will promptly thereafter cause to be
distributed to each Lender its Pro Rata Share of such Fee.
The Borrowers jointly and severally shall reimburse or pay the
Agent, as the case may be, for (i) all Out-of-Pocket Expenses of the Agent
and/or the Lenders, and (ii) any applicable Documentation Fee.
On September 30, 1999 and each anniversary thereof, the
Borrowers shall pay to the Agent a Collateral Management Fee (for its own
account) in the amount of Thirty-Five Thousand Dollars ($35,000). All the fees
under this paragraph are "Collateral Management Fees" and shall be fully earned
when paid and shall not be refundable or rebateable by reason of prepayment,
acceleration upon an Event of Default, or any other circumstance and shall
survive any termination of this Financing Agreement.
Each Obligor shall pay the Agent's standard charges for, and
the fees and expenses of, the Agent's personnel used by the Agent for reviewing
the books and records of such Obligor and for verifying, testing, protecting,
safeguarding, preserving or disposing of all or any part of the Collateral,
PROVIDED, HOWEVER, that the foregoing
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shall not be payable until the occurrence of an Event of Default if the
Borrowers are paying a Collateral Management Fee.
Each Borrower hereby authorizes the Agent to charge such
Borrower's accounts with the Agent with the amount of all payments due hereunder
as such payments become due. Each Borrower confirms that any charges which the
Agent may so make to its account as herein provided will be made as an
accommodation to such Borrower and solely at the Agent's discretion.
Section 6.04. PAYMENTS AND COMPUTATIONS. Each Borrower shall
make each principal and interest payment and pay all fees not later than 12:00
Noon (New York time) on the day when due in Dollars in immediately available
funds in New York City to Agent at its principal office.
All computations of interest on Libor Rate Loans, Chase
Manhattan Bank Rate Loans and fees, shall be made by Agent on the basis of a
year of three hundred sixty (360) days and paid, in each case, for the actual
number of days elapsed (including the first day but excluding the last day).
Each determination by Agent of an interest rate or fees hereunder shall be
conclusive and binding for all purposes absent manifest error.
Calculation of all amounts payable to the Agent for the
ratable benefit of the Lenders under this Financing Agreement with regard to
Libor Rate Loans shall be made as though the Lenders had actually funded the
Libor Rate Loans through the purchase of deposits in the relevant market and
currency, as the case may be, bearing interest at the rate applicable to such
Libor Rate Loans and having a maturity comparable to the relevant Libor Period,
PROVIDED, HOWEVER, that the Lenders may fund each of the Libor Rate Loans in any
manner as the Agent sees fit and the foregoing assumption shall be used only for
calculation of amounts payable under this Financing Agreement.
Whenever any payment of principal or interest (except on Libor
Rate Loans) or of fees shall be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day. Whenever any payment
of principal or interest on a Libor Rate Loan shall be due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Business Day. If the date for
any payment of principal is extended by operation of Law or otherwise, interest
thereon shall be payable for such extended time.
Section 6.05. CERTAIN COMPENSATION. Each Borrower hereby
agrees to indemnify the Agent and each Lender and hold the Agent and each Lender
harmless from any loss, cost or expense they may sustain or incur as a
consequence of the failure by such Borrower to complete any borrowing hereunder
of a Libor Rate after notice thereof has been given by such Borrower to the
Agent, including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or
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re-employment of deposits or other funds acquired by the Agent to fund such
borrowing when the applicable amount of the Revolving Credit Loan, as a result
of such failure, is not made subject to such interest rates on such date. The
Agent shall certify the amount of its and/or the Lenders' loss, cost or expense
to the applicable Borrower, and such certification shall be final and conclusive
absent manifest error.
Without limiting the foregoing, such compensation shall
include the Libor Rate Prepayment Premium.
Article VII. POWERS.
Section 7.01. POWERS. Each Obligor hereby constitutes the
Agent or any person or agent the Agent may designate as its attorney-in-fact, at
such Obligor's cost and expense, to exercise all of the following powers, which
being coupled with an interest, shall be irrevocable until all of the
Obligations to the Agent and the Lenders have been paid in full after the
termination of this Financing Agreement:
(1) To receive, take, endorse, sign, assign and deliver, all
in the name of the Agent, the Lenders, or such Obligor, any and all checks,
notes, drafts, and other documents or instruments relating to the Collateral;
(2) To receive, open and dispose of all mail addressed to such
Obligor and to notify postal authorities to change the address for delivery
thereof to such address as the Agent may designate;
(3) To request from customers indebted on Accounts at any
time, in the name of the Agent or such Obligor or that of the Agent's designee,
information concerning the amounts owing on the Accounts;
(4) To transmit to customers indebted on Accounts notice of
the Agent's and the Lenders' interest therein and to notify customers indebted
on Accounts of such Obligor to make payment directly to the Agent for such
Obligor's account; and
(5) To take or bring, in the name of the Agent, the Lenders or
such Obligor, all steps, actions, suits or proceedings deemed by the Agent
necessary or desirable to enforce or effect collection of the Accounts.
Notwithstanding anything hereinabove contained to the
contrary, the powers set forth in (2), (4) and (5) above may only be exercised
after the occurrence of an Event of Default and until such time as such Event of
Default is waived in writing.
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Article VIII. REPRESENTATIONS AND WARRANTIES
Each of the Obligors, individually and jointly, represents and
warrants that:
Section 8.01. INCORPORATION, GOOD STANDING AND DUE
QUALIFICATION. Each Corporate Obligor is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its assets and to transact the business
in which it is now engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required except to the extent that
its failure to be so qualified could not result in a Material Adverse Change.
FiberMark Office is duly formed, validly existing and in good standing under the
laws of the jurisdiction of its formation, has the limited liability company
power and authority to own its assets and to transact the business in which it
is now engaged or proposed to be engaged, and is duly qualified as a foreign
entity and in good standing under the laws of each other jurisdiction in which
such qualification is required except to the extent that its failure to be so
qualified could not result in a Material Adverse Change.
Section 8.02. CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The
execution, delivery and performance by such Obligor of the Loan Documents have
been duly authorized by all necessary corporate action and do not and will not:
(a) in the case of each Corporate Obligor require any consent or approval of its
stockholders and in the case of FiberMark Office require any consent or approval
of its members-managers, which consent or approval has not already been
obtained; (b) in the case of each Corporate Obligor contravene its certificate
of incorporation or by-laws and in the case of FiberMark Office contravene its
Articles of Organization or Operating Agreement; (c) violate any provision of,
or require any filing (other than the filing of the financing statements
contemplated hereby or by the Security Documents), registration, consent or
approval under any Law (including, without limitation, Regulation U), order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicability to such Obligor; (d) result in a breach of or constitute a
default under or require any consent under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which such Obligor is a
party or by which it or its properties may be bound or affected; (e) result in,
or require, the creation or imposition of any Lien (other than as created
hereunder or under the Security Documents), upon or with respect to any of the
properties now owned or hereafter acquired by such Person.
Section 8.03. LEGALLY ENFORCEABLE AGREEMENTS. Each Loan
Document is a legal, valid and binding obligation of such Obligor, enforceable
against such Obligor in accordance with its terms, except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally.
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Section 8.04. LITIGATION. Except as disclosed in Schedule 8.04
hereto, there are no actions, suits or proceedings pending or, to the knowledge
of any of the Obligors, as the case may be, threatened, against or affecting
such Obligor before any court, governmental agency or arbitrator, which could,
in any one case or in the aggregate, result in a Material Adverse Change.
Section 8.05. FINANCIAL STATEMENTS. The consolidated balance
sheet of FiberMark and its Subsidiaries as of December 31, 1997 and December 31,
1998, the related statements of income, statements of stockholders' equity
(deficit) and statements of cash flows of FiberMark for the Fiscal Years then
ended, and the accompanying footnotes, together with the opinion thereon, dated
February 5, 1999, of KPMG LLP, independent certified public accountants, copies
of which have been furnished to the Lenders, are complete and correct and fairly
present the financial condition of FiberMark and its Subsidiaries as at such
dates and the results of the operations of FiberMark and its Subsidiaries for
the periods covered by such statements, all in accordance with GAAP consistently
applied. There are no liabilities of FiberMark and its Subsidiaries, fixed or
contingent, which are material but are not reflected in the financial statements
or in the notes thereto, other than liabilities arising in the ordinary course
of business since December 31, 1998 . No information, exhibit, or report
furnished by FiberMark and its Subsidiaries to the Agent or any Lender in
connection with the negotiation of this Financing Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not materially misleading.
The consolidated unaudited balance sheet of FiberMark and its
Subsidiaries as of June 30, 1999, the related statements of income, statements
of stockholders' equity (deficit) and statements of cash flows of such entities
for the six-month periods then ended, and the accompanying footnotes, copies of
which have been furnished to the Lenders, are complete and correct and fairly
present the financial condition of FiberMark and its Subsidiaries, as at such
dates and the results of the operations of FiberMark and its Subsidiaries for
the periods covered by such statements, all in accordance with GAAP consistently
applied. There are no liabilities of FiberMark and its Subsidiaries, fixed or
contingent, which are material but not reflected in the financial statements or
in the notes thereto, other than liabilities arising in the ordinary course of
business since June 30, 1999. No information, exhibit, or report furnished by
FiberMark and its Subsidiaries to the Agent or any Lender in connection with the
negotiation of this Financing Agreement contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make the
statements contained therein not materially misleading.
(c) NO MATERIAL ADVERSE CHANGE. Since December 31, 1999, there
has been no Material Adverse Change with respect to any Obligor.
Section 8.06. OWNERSHIP AND LIENS; LOCATION OF INVENTORY AND
EQUIPMENT. No Obligor has any fee interests in any real property or leasehold
interests in real property having an unexpired term (including any option or
renewal periods) in excess of 20 years other than the interest encumbered by the
Mortgage.
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Each Obligor has title to, or valid leasehold interests in, all of its
properties and assets, real and personal, including the properties and assets,
and leasehold interests reflected in the financial statements referred to in
Section 8.05 (other than any properties or assets disposed of in the ordinary
course of business), and none of the properties and assets owned by such Obligor
and none of its leasehold interests is subject to any Lien, except Permitted
Encumbrances. The Inventory and Equipment owned or leased by each Obligor is
located at the respective facilities set forth under the name of such Obligor on
Schedule 5.04.
Section 8.07. TAXES. Each Obligor has filed all tax returns
(federal, state and local) required to be filed and has paid all taxes,
assessments and governmental charges and levies thereon to be due, including
interest and penalties, except to the extent they are the subject of a Good
Faith Contest.
Section 8.08. ERISA. Each Obligor is substantially in
compliance with all applicable provisions of ERISA and the Code. No Reportable
Event has occurred with respect to any Pension Plan; no notice of intent to
terminate a Pension Plan has been filed nor has any Pension Plan been
terminated; no Obligor nor any other Person, including any fiduciary, has
engaged in any prohibited transaction (as defined in Section 4975 of the Code or
Section 406 of ERISA) which could subject any Obligor, or any entity which any
Obligor has an obligation to indemnify, to any tax or penalty imposed under
Section 4975 of the Code or Section 502 of ERISA; there is no lien outstanding
pursuant to Section 4068 of ERISA or Section 412 of the Code or security
interest, within the meaning of Section 401(a)(29) of the Code, given in
connection with a Pension Plan; no circumstance exists which constitutes grounds
under Section 4042 of ERISA entitling the PBGC to institute proceedings to
terminate, or appoint a trustee to administer, a Pension Plan, nor has the PBGC
instituted any such proceedings; no Obligor, nor any ERISA Affiliate has
completely or partially withdrawn under Sections 4201 or 4204 of ERISA from a
Multiemployer Plan; the minimum funding requirements under ERISA and the Code
have been satisfied with respect to all Pension Plans and the aggregate unfunded
liabilities under all Pension Plans does not exceed Two Hundred Thousand Dollars
($200,000); no Multiemployer Plan is in Reorganization or is Insolvent; and no
Obligor, nor any ERISA Affiliate has received notice that indicates the
existence of potential or contingent withdrawal liability under a Multiemployer
Plan in excess of One Million Eight Hundred Thousand Dollars ($1,800,000). No
Obligor has any liability for retiree medical or life insurance benefits other
than liability with respect to active employees covered by the Owensboro,
Kentucky location and the total FASB liability for such group is not material to
any Obligor.
Section 8.09. SUBSIDIARIES. FiberMark has no Subsidiaries
other than FiberMark Durable, FiberMark Office and FiberMark Filter, Specialty
Paperboard FSC Inc., Specialty Paperboard (Hong Kong) Limited, Specialty
Paperboard Japan Co., Ltd., FiberMark GmbH, FiberMark Beteiligungs GmbH,
FiberMark Gessner, FiberMark Lahnstein and FiberMark SARL. FiberMark Durable has
no Subsidiaries. FiberMark Filter has no Subsidiaries. All of the outstanding
equity interests in
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FiberMark Gessner and FiberMark Lahnstein are owned by FiberMark Beteiligungs
GmbH and FiberMark GmbH.
Section 8.10. OPERATION OF BUSINESS. Each Obligor possesses
all licenses, permits, franchises, patents, copyrights, trademarks and trade
names, or rights thereto, to conduct its business substantially as now conducted
and as presently proposed to be conducted except where failure to so possess
could not result in a Material Adverse Change and no Obligor is in violation of
any valid rights of others with respect to any of the foregoing.
Section 8.11. NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS.
Each Obligor has satisfied all judgments and no Obligor is in default with
respect to any judgment, writ, injunction, decree, rule or regulation of any
court, arbitrator or federal, state, municipal or other Governmental Authority,
commission, board, bureau, agency or instrumentality, domestic or foreign.
Section 8.12. NO DEFAULTS ON OTHER AGREEMENTS. No Obligor is a
party to any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any certificate of incorporation or corporate
restriction which could result in a Material Adverse Change. No Obligor is in
default in any respect in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument.
Section 8.13. LABOR DISPUTES AND ACTS OF GOD. Neither the
business nor the properties of any Obligor are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance).
Section 8.14. GOVERNMENTAL REGULATION. No Obligor is subject
to regulation under the Public Utility Holding Company Act of 1935, the
Investment Company Act of 1940, the Interstate Commerce Act, the Federal Power
Act or any statute or regulation limiting its ability to incur indebtedness for
money borrowed as contemplated hereby.
Section 8.15. PARTNERSHIPS. No Obligor is a partner in any
partnership.
Section 8.16. ENVIRONMENTAL PROTECTION. Each Obligor has
obtained all Approvals and Permits required under all Environmental Laws and
such Approvals and Permits are in good standing. Each Obligor is in compliance
with all Environmental Laws and the terms and conditions of such Approvals and
Permits, and is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in those Laws.
No Environmental Lien has attached to the Brattleboro
Collateral.
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None of the Real Estate or any other property owned or leased
by any Obligor is listed or proposed for listing on the National Priorities List
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act, as amended, or listed on the Comprehensive Environmental Response,
Compensation and Liability Information System List or any similar state list of
sites, and FiberMark Office is not aware of any conditions at the Real Estate
which, if known to a Governmental Authority, would qualify such Real Estate for
inclusion on any such list.
Except as disclosed in Schedule 8.16 or for matters that,
either individually or in the aggregate, cannot reasonably be expected to
affect, except to an immaterial extent, any Obligor, or its business, results of
operations, condition (financial or otherwise), prospects, profitability,
assets, operations or property:
(a) No Obligor is subject to any plan, order, writ, decree,
judgment, settlement or injunction issued, entered into, promulgated or approved
under or in connection with any Environmental Laws or any Environmental
Discharges;
(b) No Obligor has received any Environmental Notice;
(c) There have been no Environmental Discharges at, to, or
from the Real Estate or any Obligors other property or facilities or operations,
except such Environmental Discharges as have occurred pursuant to and in full
compliance with all Environmental Laws and Approvals and Permits issued
thereunder;
(d) There are not and, to the knowledge of each Obligor, have
never been any Hazardous Materials present at the Real Property or other
properties, facilities or operations of any Obligor, except such Hazardous
Materials as are and were managed pursuant to and in full compliance with all
Environmental Laws and Approvals and Permits issued thereunder;
(e) No Obligor has any actual or contingent liability in
connection with any Environmental Discharges at any location, including, without
limitation, the Real Property, any site to which an Obligor has transported or
arranged for the transport of Hazardous Substances, or any site at which an
Obligor has disposed of Hazardous Substances; and
(f) No Obligor has any actual or contingent liability in
connection with any property, businesses, or operations previously owned or
operated by any such Obligor for (i) any violation of any Environmental Laws,
(ii) any Remedial Action, or (iii) any Environmental Discharges at any location,
including, without limitation, the Real Property, any property, facilities or
operations previously owned or operated by an Obligor, any site to which an
Obligor has transported or arranged for the transport of Hazardous Substances,
or any site at which an Obligor has disposed of Hazardous Substances.
Section 8.17. SOLVENCY. Each Obligor is Solvent.
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Section 8.18. INTELLECTUAL PROPERTY. Except as set forth on
Schedule 8.18 hereto or for any of the following that, either individually or in
the aggregate, cannot reasonably be expected to affect (either positively or
negatively), except to an immaterial extent, any Obligor, or its business,
results of operations, condition (financial or otherwise), prospects,
profitability, assets, operations or property, no Obligor has any trademarks,
patents or copyrights or any applications pending for any trademarks, patents or
copyrights.
Section 8.19. LICENSE OF INTELLECTUAL PROPERTY. Except as set
forth on Schedule 8.19 hereto or for any of the following that, either
individually or in the aggregate, cannot reasonably be expected to affect
(either positively or negatively), except to an immaterial extent, any Obligor,
or its business, results of operations, condition (financial or otherwise),
prospects, profitability, assets, operations or property, no Obligor holds or
has entered into any agreement for the use of any license for any trademark,
patent, copyright or other intellectual property rights.
Section 8.20. ENVIRONMENTAL COMPLIANCE. Each Obligor has
substantially addressed all matters identified as non-compliance with
Environmental Laws and has undertaken all Remedial Actions identified in the
August 1996 Environmental Due Diligence Report for Custom Papers Group Mill
Facilities prepared by ENSR Consulting and Engineering for the Borrower.
Section 8.21. CPG MERGER AGREEMENT. The Borrower has completed
or undertaken all transactions pursuant to Section 6.6 of the CPG Merger
Agreement and has deposited Seven Hundred Thousand Dollars ($700,000) into the
Rochester Environmental Escrow Account (as defined in the CPG Merger Agreement)
to provide the indemnification set forth in Section 10.2(b)(i)(B) of the CPG
Merger Agreement.
Section 8.22 EXCLUDED PREMISES. The aggregate book value of
all Collateral located on or in the Excluded Premises does not exceed
$1,000,000.
ARTICLE IX. AFFIRMATIVE COVENANTS.
So long as any Revolving Credit Loans are outstanding or any
Lenders has any Lender Loan Commitment hereunder or any other amount is owing to
any Lender hereunder or under any Loan Documents:
Section 9.01. REPORTING REQUIREMENTS. FiberMark will furnish
to each Lender:
(a) ANNUAL REPORTING REQUIREMENTS: as soon as practicable, and
in any event within one hundred twenty (120) days after the end of each Fiscal
Year of FiberMark, an audited consolidated balance sheet of FiberMark and its
Subsidiaries as at the end of such Year, and audited consolidated statements of
earnings, stockholders' equity (deficit), and cash flow of FiberMark and its
Subsidiaries for such Year, setting forth in each case, in comparative form the
figures for the previous Fiscal Year,
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certified without qualification arising out of the scope of the audit by a
nationally recognized firm of independent public accountants or other
independent public accountants satisfactory to the Required Lenders, and
unaudited consolidating balance sheets of FiberMark and its Subsidiaries as at
the end of such Year and unaudited consolidating statements of earnings,
stockholders' equity (deficit) and cash flow of FiberMark and its Subsidiaries
for such Year, setting forth in each case in comparative form the figures for
the previous Fiscal Year. FiberMark shall deliver to the Agent and each Required
Lender no later than thirty (30) days prior to the start of each new Fiscal
Year, annual consolidated and consolidating cash flow projections of FiberMark
and its Subsidiaries, including a projected consolidated and consolidating
balance sheet and statements of earnings, stockholders' equity (deficit), and
cash flow for such Fiscal Year in form satisfactory to the Required Lenders;
(b) QUARTERLY REPORTING REQUIREMENTS: as soon as practicable,
and in any event within sixty (60) days, after the end of the first, second and
third fiscal quarters of each Fiscal Year of FiberMark, the unaudited
consolidated and consolidating balance sheets of FiberMark and its Subsidiaries
as at the end of such fiscal quarter and the related unaudited consolidated and
consolidating statements of income, stockholders' equity (deficit), and cash
flows, setting forth in each case, in comparative form the figures of the
comparable period for the previous Fiscal Year, certified as to accuracy by
FiberMark (subject to normal year-end audit adjustments);
(c) OFFICER'S CERTIFICATE: each financial statement which
FiberMark is required to submit hereunder must be accompanied by an officer's
certificate signed by the chief financial officer of FiberMark certifying that:
(i) the financial statement(s) fairly and accurately represent(s) the
consolidated and consolidating financial condition of FiberMark and its
Subsidiaries at the end of the particular accounting period, as well as the
consolidated and consolidating operating results of FiberMark and its
Subsidiaries during such accounting period, subject to year-end audit
adjustments; and (ii) during the particular accounting period, (A) there has
been no default or condition which, with the passage of time or notice, or both,
would constitute a Default or Event of Default under this Financing Agreement
and such officer has obtained no knowledge of any Default; PROVIDED, HOWEVER,
that if any Executive Officer has knowledge that any Default or Event of Default
has occurred during such period, the existence of and a detailed description of
same shall be set forth in the Officer's Certificate; and (B) FiberMark has not
received any notice of cancellation with respect to its property insurance
policies that have not been replaced;
(d) MANAGEMENT LETTER: promptly after receipt thereof, a copy
of each report delivered to FiberMark by the independent public accountants
which certify FiberMark's financial statements in connection with any annual or
interim audit of its books, including any management reports or letters, if any,
addressed to FiberMark or any of their respective officers by such accountants;
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(e) OTHER INFORMATION: from time to time, with reasonable
promptness, such other information with respect to each Obligor as Agent or
Lender may from time to time reasonably request;
(f) ACCOUNTS RECEIVABLE AGING SUMMARIES: within thirty (30)
days after the end of each month, Accounts Receivable aging summaries with
respect to each Obligor and within thirty (30) days after the end of each
quarter of each Fiscal Year of such Obligor, detailed Accounts Receivable aging
schedules with respect to each Obligor, prepared in accordance with GAAP, and,
if so requested by the Agent, within sixty (60) days after the close of each
Fiscal Year, an audit of Accounts Receivable of each Obligor for such Fiscal
Year prepared by a nationally-recognized accounting firm acceptable to the
Agent;
(g) REPORTS: promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which FiberMark
sends to all its stockholders, and copies of all regular, periodic and special
reports, and all registration statements which FiberMark files with the
Securities and Exchange Commission or any agency which may be substituted
therefor, or with any national securities exchange; and
(h) BORROWING BASE CERTIFICATE: A Borrowing Base Certificate
(i) no later than the tenth (10th) day of each month, with respect to the last
day of the immediately preceding month, and (ii) no later than the twenty-fifth
(25th) day of each month, with respect to the fifteenth (15th) day of such
month; and (iii) at such other times as Agent may require in its sole
discretion.
Section 9.02. NOTICES. FiberMark will, promptly upon obtaining
knowledge of any of the following occurrences and promptly upon the giving or
receipt of any of the following notices, deliver to Agent:
(a) written notice of the occurrence of any Default or Event
of Default, specifically stating that a Default or Event of Default, as the case
may be, has occurred and describing such Default or Event of Default;
(b) written notice of the occurrence of any casualty, damage
or loss to or in respect of the Collateral, in an amount greater than Five
Hundred Thousand Dollars ($500,000), whether or not giving rise to a claim under
any insurance policy, together with copies of any document relating thereto
(including copies of any such claim) in possession or control of FiberMark or
any agent of FiberMark;
(c) written notice of any Material Adverse Change;
(d) written notice of any litigation or proceeding affecting
any Obligor which if adversely determined could result in a Material Adverse
Change;
(e) written notice of the assertion of any Lien (other than
Permitted Encumbrances) against the Collateral or the occurrence of any event
that could have a
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material adverse effect on the value of the Collateral or the Liens created
pursuant to this Financing Agreement or any Security Document;
(f) written notice of any cancellation of any insurance policy
required to be maintained by any Obligor pursuant to Section 9.07 hereof;
(g) written notice of (i) all expenditures (actual or
anticipated) in excess of Five Hundred Thousand Dollars ($500,000) for (A)
Remedial Action, (B) compliance with Environmental Laws or (C) environmental
testing and the impact of said expenses on any Obligor's working capital; and
(ii) any Environmental Notices advising an Obligor of any liability (real or
potential), which liability could result in a Material Adverse Change;
(h) on each Anniversary Date, a report describing material
issues (not previously disclosed to the Lenders under other provisions of this
Section 9.02) which have arisen during the prior year pertaining to
Environmental Laws, Environmental Discharges, Hazardous Materials, and Remedial
Action and the action which is proposed to be taken or being taken with respect
thereto;
(i) if and when an Obligor or any ERISA Affiliate (i) gives or
is required to give notice to the PBGC of any Reportable Event with respect to
any Pension Plan, a copy of any notice of such Reportable Event given or
required to be given to the PBGC; (ii) receives notice of a complete or partial
withdrawal liability under Title IV of ERISA or that any Multiemployer Plan is
in Reorganization, is Insolvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Pension Plan or
Multiemployer Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any Pension Plan under
Section 4041(c) of ERISA a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Pension Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
required payment or contribution to any Pension Plan or Multiemployer Plan or
makes any amendment to any Pension Plan which has resulted or is reasonably
likely to result in the imposition of a Lien, an accumulated funding deficiency
(as defined in Section 302 of ERISA or Section 412 of the Code), whether or not
waived, or the posting of a bond or other security, a certificate of the
appropriate financial officer setting forth details as to such occurrence and
action, if any which any Obligor or other ERISA Affiliate is required or
proposes to take;
(j) if and when (i) a transaction prohibited under Section
4975 of the Code or Section 406 of ERISA occurs resulting in liability to any
Obligor or any entity which any Obligor has an obligation to indemnify, (ii) a
Pension Plan intended to qualify under Section 401(a) or 401(k) of the Code
fails to so qualify or (c) liability is imposed to enforce Section 515 of ERISA
with respect to any Multiemployer Plan, a certificate of the appropriate
financial officer setting forth details as to such occurrence
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and action, if any, which such Obligor or other ERISA Affiliate is required or
proposes to take;
(k) written notice of any change in the location of Collateral
having a book value exceeding Five Hundred Thousand Dollars ($500,000) in the
aggregate with respect to all Collateral whose location has been changed since
the effectiveness of this Financing Agreement, other than to locations that, as
of the date hereof, are known to the Agent and for which the Agent has filed
financing statements and otherwise perfected its Liens thereon;
(l) written notice, in sufficient detail, of any material
adverse change relating to the type, quantity or quality of the Collateral or on
the security interests granted to the Agent for the ratable benefit of the
Lenders.
Each notice pursuant to this Section 9.02 shall be accompanied
by a statement of FiberMark furnishing such notice setting forth details of the
occurrence referred to therein and stating what action the applicable Obligor
proposes to take with respect thereto.
Section 9.03. PAYMENT OF TAXES AND CLAIMS. Each Obligor will
pay, when due, all taxes, assessments, claims and other charges (herein "taxes")
lawfully levied or assessed upon such Obligor or the Collateral and if such
taxes remain unpaid after such date fixed for the payment thereof unless such
taxes are the subject of a Good Faith Contest or if any Lien shall be claimed
thereunder (a) for taxes due the United States of America or (b) which in the
Lenders' reasonable opinion might create a valid obligation having priority over
the rights granted to the Lenders herein, the Agent may, on such Obligor's
behalf, pay such taxes, and the amount thereof shall at the Agent's option be
charged to such Obligor's Revolving Credit Loans (or in the case of FiberMark,
to the Revolving Credit Loans of FiberMark Durable) and shall be an Obligation
secured hereby. If the amount of taxes of the Obligors paid by the Agent
pursuant to this Section 9.03 is in excess of Availability, then the Borrowers
shall be deemed to be in default of this Section 9.03.
Section 9.04. MAINTENANCE OF EXISTENCE. Each Corporate Obligor
will preserve and maintain its corporate existence and good standing in the
jurisdiction of its incorporation, and qualify and remain qualified as a foreign
corporation in each jurisdiction in which such qualification is required, except
to the extent that its failure to do so qualify could not result in a material
adverse change. FiberMark Office will preserve and maintain its existence as a
limited liability company and its good standing in the jurisdiction of its
formation, and qualify and remain qualified as a foreign entity in each
jurisdiction in which such qualification is required, except to the extent that
its failure to do so qualify could not result in a material adverse change.
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Section 9.05. CONDUCT OF BUSINESS. Each Obligor will continue
to engage in an efficient and economical manner in a business similar to the
type of business as conducted by it as of the date hereof.
Section 9.06. COMPLIANCE WITH LAWS. Each Obligor will comply
with all Laws, except to the extent that failure to do so could not result in a
Material Adverse Change; PROVIDED that such Obligor may contest any acts, rules,
regulations, orders and directions of such bodies or officials in any reasonable
manner which will not, in the Lenders' reasonable opinion, materially and
adversely effect the Lenders' rights or priority in the Collateral.
Section 9.07. INSURANCE. (a) FiberMark Office will maintain,
with financially sound and reputable companies, acceptable to the Agent,
insurance policies (a) insuring FiberMark Office, the Agent and the Lenders
against Comprehensive General Liability and auto liability, liability for
personal injury and property damage relating to the Brattleboro Collateral and
Inventory and (b) insuring the Brattleboro Collateral and Inventory of FiberMark
Office against all risk of loss by fire, explosion, theft and auto
comprehensive/collision, and such other casualties as may be reasonably
satisfactory to the Agent, such policies to be in such amounts and on such terms
as the Agent shall reasonably require. All policies covering the Brattleboro
Collateral and Inventory are, subject to the rights of any holders of Permitted
Encumbrances holding claims senior to the Lenders, to be made payable to the
Agent for the benefit of the Lenders, in case of loss, under a standard
non-contributory "mortgage", "lender" or "secured party" clause and are to
contain such other provisions as the Lenders may require to fully protect the
Lenders' interest in the Real Estate and shall protect the Lenders' interest in
the Brattleboro Collateral and Inventory and any payments to be made under such
policies. All original certificates of Insurance, policies or true copies
thereof are to be delivered to the Agent, premium prepaid, with the loss payable
endorsement in the Agent's favor for the benefit of the Lenders, and shall
provide for not less than thirty (30) days prior written notice to the Agent of
the exercise of any right of cancellation.
In addition to the foregoing, FiberMark Office will maintain
Business Interruption and Comprehensive Boiler and Machinery Insurance in form
and amounts and with insurers acceptable to the Agent. In addition, Workman's
Compensation Insurance in amounts required by applicable law and in form
acceptable to the Agent shall be maintained in connection with the Brattleboro
Collateral and Inventory.
(b) Each Corporate Obligor will maintain, with financially
sound and reputable companies, acceptable to the Agent, insurance policies (a)
insuring such Corporate Obligor, the Agent and the Lenders against Comprehensive
General Liability and auto liability, liability for personal injury and property
damage relating to the Inventory of such Corporate Obligor and (b) insuring the
Inventory of such Corporate Obligor against all risk of loss by fire, explosion,
theft and auto comprehensive/collision, and such other casualties as may be
reasonably satisfactory to the Agent, such policies to be in such amounts and on
such terms as the Agent shall reasonably require. All policies covering the
Inventory of each such Corporate
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Obligor are, subject to the rights of any holders of Permitted Encumbrances
holding claims senior to the Lenders, to be made payable to the Agent for the
benefit of the Lenders, in case of loss, under a standard non-contributory
"lender" or "secured party" clause and are to contain such other provisions as
the Lenders may require to fully protect the Lenders' interest in the Inventory
of such Corporate Obligor and any payments to be made under such policies. All
original certificates of Insurance, policies or true copies thereof are to be
delivered to the Agent, premium prepaid, with the loss payable endorsement in
the Agent's favor for the benefit of the Lenders, and shall provide for not less
than thirty (30) days prior written notice to the Agent of the exercise of any
right of cancellation.
In addition to the foregoing, each such Corporate Obligor will
maintain Business Interruption and Comprehensive Boiler and Machinery Insurance
in form and amounts and with insurers acceptable to the Agent. In addition,
Workman's Compensation Insurance in amounts required by applicable law and in
form acceptable to the Agent shall be maintained in connection with the
Inventory of each such Corporate Obligor.
(c) At the request of FiberMark or if any Obligor fails to
maintain such insurance, the Agent may arrange for such insurance, but at the
applicable Obligor's expense and without any responsibility on the Lenders' part
for: obtaining the insurance, the solvency of the insurance companies, the
adequacy of the coverage, or the collection of claims. Upon the occurrence and
during the continuance of an Event of Default, the Agent shall, subject to the
rights of any holders of Permitted Encumbrances holding claims senior to the
Lenders, have the sole right, in the name of the Agent for the benefit of the
Lenders or the applicable Obligor, to file claims under any insurance policies,
to receive, receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
In the event of any loss or damage by fire or other casualty,
insurance proceeds relating to Inventory shall first reduce all the outstanding
Revolving Credit Loans and then be paid to the Agent to be held as cash
collateral pending repair, restoration or replacement of the insured property
pursuant to the provisions below.
In the event any part of the Brattleboro Collateral is damaged
by fire or other casualty and the insurance proceeds for such damage or other
casualty (the "Proceeds") is less than or equal to One Hundred Thousand Dollars
($100,000), the Agent shall promptly apply such Proceeds to reduce the
outstanding balances of all the Revolving Credit Loans.
As long as no Event of Default shall have occurred and be
continuing, FiberMark Office has sufficient business interruption insurance to
replace the lost profits of any of its facilities, and the Proceeds are in
excess of One Hundred Thousand Dollars ($100,000), FiberMark Office may elect
(by delivering written notice to the
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Agent) to repair or restore the Brattleboro Collateral to substantially the
equivalent condition prior to such fire or other casualty as set forth herein,
or to replace the same with substantially the equivalent or functionally
equivalent Real Estate or Equipment. If FiberMark Office does not, or cannot,
elect to use the Proceeds as set forth above, the Agent may, subject to the
rights of any holders of Permitted Encumbrances holding claims senior to the
Lenders and the Agent, apply the Proceeds to the payment of the Obligations in
such manner and in such order as the Agent may reasonably elect.
If FiberMark Office elects to use the Proceeds for the repair,
replacement or restoration of any Real Estate or Equipment, and there is then no
Event of Default, (a) proceeds on Equipment and Real Estate in excess of One
Hundred Thousand Dollars ($100,000) will be applied to the reduction of the
Revolving Credit Loans, and (b) the Agent may set up a reserve against
Availability for an amount equal to the amount of proceeds so allocated to the
Revolving Credit Loans. The reserves will collectively be reduced
dollar-for-dollar upon receipt of non-cancelable executed purchase orders,
delivery receipts or contracts for the replacement, repair or restoration of
Equipment or the Real Estate and disbursements in connection therewith, such
reduction to be allocated between FiberMark Office's reserve in such proportions
as the Agent shall determine. Prior to the commencement of any restoration,
repair or replacement of Real Estate, FiberMark Office shall provide the Agent
with a restoration plan and a total budget certified by the chief executive
officer and chief financial officer of FiberMark Office, and, if the total
budget exceeds One Million Dollars ($1,000,000), also certified by an
independent third party experienced in construction costing. If there are
insufficient proceeds to cover the cost of restoration as so determined,
FiberMark Office shall be responsible for the amount of any such insufficiency
prior to the commencement of restoration and shall demonstrate evidence of such
before the reserve will be reduced. Completion of restoration shall be evidenced
by a final, unqualified certification of the design architect employed, if any,
but only if the cost of restoration exceeded One Million Dollars ($1,000,000);
an unconditional certificate of occupancy, if applicable; such other
certification as may be required by law; or if none of the above is applicable,
a written good faith determination of completion by the chief executive officer
and chief financial officer of FiberMark Office as the case may be (herein
collectively the "Completion"). Upon Completion, any remaining reserves as
established hereunder will be automatically released.
All policies of insurance required under the provisions of
this Section 9.07 shall contain (a) an endorsement by the insurer that any loss
shall be payable in accordance with the terms of such policy notwithstanding any
act or negligence of any Obligor that might otherwise give rise to a defense by
the insurer to its payment of such loss, and (b) a waiver by the insured of all
rights of subrogation to any rights of the additional insureds against the
applicable Obligor, and (c) a disclaimer of all rights of setoff, counterclaim
or deduction against the insureds other than the applicable Obligor. The
applicable Obligor shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required by this Financing Agreement
unless the same shall contain a standard non-contributory lender's loss payable
endorsement in scope and form approved by the Required Lenders prior to
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the Closing Date with loss payable to the Agent for the benefit of the Lenders
as its interests may appear. All retentions and deductibles under policies where
the Agent is loss payee shall be the sole responsibility of the applicable
Obligor maintaining such policies subject to the Lenders' approval.
Without limiting any of the foregoing, each of the insurance
policies required by this Section 9.07 which is required to name the Agent in
its capacity as agent for each of the Lenders, as an additional insured
thereunder shall provide:
(a) that no cancellation, reduction in amount or material
change in coverage thereof shall be effective until at least thirty (30) days
after receipt by the Agent of written notice thereof;
(b) that the interests of Agent and each of the Lenders will
be insured regardless of any breach by any Obligor or any other Person of any
warranties, declarations or conditions contained therein;
(c) that neither Agent nor any of the Lenders shall have any
obligation or liability for premiums, commissions, assessments or calls in
connection with such insurance.
On or before the Closing Date and prior to each policy
expiration thereafter, each Obligor shall deliver to the Agent an original
certificate or binder signed by the insurer or its duly authorized
representative showing the insurance then maintained by such Obligor pursuant to
this Section 9.07, and stating that such insurance complies with the terms of
this Section 9.07, together with evidence that payment of the premiums on such
insurance is current. Each Obligor shall effect such changes in the form (but
not the amount or types) of the policies required pursuant to this Section 9.07,
as may be required by the Agent, PROVIDED such changes (a) are commercially
available at reasonable rates, which determination shall be made by Agent and
(b) the effect of such changes by FiberMark Office would not result in a
violation of the provisions of the Mortgage.
Section 9.08. BOOKS AND RECORDS; INSPECTION. Each Obligor will
maintain books and records pertaining to the Collateral owned by it in such
detail, form and scope as is consistent in all material respects with current
practices and agrees that the books and records of such Obligor will reflect the
Lenders' interest in such Collateral. Each Obligor agrees that all of its books
and records, including records handled or maintained for such Obligor by any
other company or entity, will be available to the Agent, the Lenders and that
the Agent, the Lenders or their respective agents, accountants and attorneys may
enter upon such Obligor's premises or any other properties on or in which any of
such Obligor's Collateral may be located at any time during normal business
hours upon reasonable notice (PROVIDED, that no such notice is required after
the occurrence and during the continuance of an Event of Default), and from time
to time, for the purpose of inspecting the Collateral, and any and all records
pertaining thereto, including, without limitation, copies of agreements with, or
purchase orders from, such
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Obligor's customers, and copies of invoices to customers, proof of shipment or
delivery and such other documentation and information relating to said Accounts
and other Collateral as the Agent may reasonably require. Each Obligor hereby
further agrees that the Lenders may, from and after the date hereof, request any
information from, and have access to such Obligor's officers and its independent
public accountant, and such Obligor will cause such officers and direct such
accountants to make available to the Lenders such information.
Section 9.09. ERISA COVENANT. Each Obligor will, and will
cause each of its ERISA Affiliates to, maintain all Employee Benefit Plans in
compliance in all material respects with all applicable law, including any
reporting requirements, and make all contributions due under the terms of each
Employee Benefit Plan or as required by law. As soon as possible following the
date hereof (but in no event more than thirty (30) days thereafter) each Obligor
contributing to a Multiemployer Plan shall request from each such Multiemployer
Plan an estimate, in writing, of withdrawal liability (contingent or otherwise)
under such Multiemployer Plan and shall provide a copy of such written
withdrawal liability estimate to the Agent.
Section 9.10. INTERCOMPANY TRANSFER OF FUNDS. Each Obligor
will take such actions as may be necessary in order to enable each other Obligor
to pay its respective Obligations, including but not limited to dividends on its
capital stock, from funds legally available therefor, or the purchase of shares
of capital stock or other equity interest, or the making of loans or advancing
of funds to the applicable Obligor.
Section 9.11. INVENTORY AND ACCOUNTS RECEIVABLE ANALYSIS OF
ACQUIRED ENTITY. In the event of an acquisition of an Acquired Entity by an
Obligor, such Obligor shall or shall cause the Acquired Entity to afford the
Agent the right to inspect and perform an analysis within thirty days of the
acquisition, satisfactory to the Agent, of the inventory, accounts receivables
and personal property of such Acquired Entity.
Section 9.12. ACQUIRED ENTITIES. Each of the following
conditions shall be satisfied by the Obligors with respect to each Acquired
Entity acquired on or after the date hereof:
(a) the Acquired Entity shall have executed all documentation
and taken all steps required pursuant to which such Acquired Entity shall become
a Guarantor under this Financing Agreement and shall agree to be bound by the
terms of this Financing Agreement applicable to a Guarantor;
(b) the Acquired Entity shall have executed all documentation
and take all steps required to give the Agent a first priority perfected Lien in
all of such Acquired Entity's Inventory and Accounts, which Lien shall not be
subject to any other financing arrangement;
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(c) the Agent shall have received a certificate of the
Secretary or Assistant Secretary of such Acquired Entity attesting to the
organization documents (e.g. Certificate of Incorporation, Bylaws, Articles of
Organization, Operating Agreement) of such Acquired Entity and all amendments
thereto and to all corporate action taken by such Acquired Entity, including
resolutions of its Board of Directors authorizing the execution, delivery and
performance of this Financing Agreement and any other documents executed in
connection therewith; and
(d) the Agent shall have received a favorable opinion of
counsel to such Acquired Entity covering all of the matters covered by (a), (b)
and (c) above, and as to such other matters as the Agent may reasonably request.
Section 9.13. COMPLIANCE WITH ENVIRONMENTAL LAWS. Each Obligor
(a) will comply with all Environmental Laws as presently
existing or as adopted or amended in the future, all Approvals and Permits
issued pursuant to such Environmental Laws, and all writs, decrees, judgments,
settlements and orders issued in connection with such Environmental Laws;
(b) obtain and renew all Approvals and Permits required
pursuant to Environmental Laws;
(c) conduct any Remedial Action in compliance with
Environmental Laws; PROVIDED, HOWEVER, that an Obligor shall not be required to
undertake any Remedial Action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings, will not result in any
non-compliance with Environmental Laws, and appropriate reserves are being
maintained with respect to such circumstances; and
(d) notify the Agent of any of the following that is likely to
have a Material Adverse Change:
(i) any Environmental Notice, including one to take
or pay for any Remedial Action with respect to any Hazardous
Material at, to, or from any of Obligor's past, present or
future locations or facilities or Real Estate or at, to or
from any other location or facility; and
(ii) any knowledge by any Obligor of an occurrence or
condition at, to or from any of Obligor's past, present or
future locations or facilities or Real Estate, or at, to or
from any other location or facility, that might reasonably
result in a violation of Environmental Law.
Section 9.14. APPRAISAL. The Borrower shall cooperate with the
Lenders in their efforts to obtain the Appraisal by December 31, 1999.
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ARTICLE X. NEGATIVE COVENANTS
So long as any Revolving Credit Loans are outstanding, or any
Lender has any Lender Loan Commitment hereunder or any other amount is owing to
the Lenders hereunder or under any other Loan Documents, neither any Obligor nor
any Subsidiary shall:
Section 10.01. DEBT. Create, incur or suffer to exist any
Indebtedness other than (i) Permitted Indebtedness or (ii) other Indebtedness,
so long as after giving effect to the incurrence thereof, the Consolidated Fixed
Charge Coverage Ratio is greater than 2.00 to 1.00.
Section 10.02. LIENS. Create or suffer to exist or permit any
Lien upon or with respect to any of its properties except for Permitted
Encumbrances.
Section 10.03. SALE OF ASSETS. Sell, lease, assign, transfer
or otherwise dispose of (a) its now or hereafter acquired Collateral, except as
otherwise specifically permitted by this Financing Agreement or any other
document relating to the transactions contemplated hereunder or (b) all or
substantially all of its assets, which do not constitute Collateral.
Section 10.04. PROHIBITION OF FUNDAMENTAL CHANGES. Enter into
any transaction of merger or consolidation, or change its form of organization
or business, or liquidate or dissolve (or suffer any liquidation or
dissolution), or sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person or, except
pursuant to a transaction effected in compliance with Section 10.05, purchase or
otherwise acquire (whether in one transaction or in a series of related
transactions) all or substantially all of the assets of any Person; PROVIDED,
HOWEVER, that Specialty Japan may be dissolved.
Section 10.05. INVESTMENTS. Make any loan or advance to any
Person or purchase or otherwise acquire any capital stock, assets, obligations
or other securities of, make any capital contribution to, or otherwise invest,
or acquire any interest, in any Person, except: (i) Permitted Investments, (ii)
loans, advances, capital contributions and share purchases permitted by Section
9.07 or Section 10.06 of this Financing Agreement, and (iii) loans, advances and
capital contributions made by any Obligor in another Obligor, including any
loan, advance or capital contribution made by an Obligor in a newly formed
Subsidiary which shall become an Obligor hereunder. Notwithstanding the
foregoing, the Obligors shall be permitted to (1) make loans, advances or
capital contributions to Subsidiaries (including newly formed Subsidiaries) that
are not Obligors, to fund their respective obligations, or (2) purchase or
otherwise acquire all or substantially all of the assets or stock of any Person,
if, in any such case, each of the Restricted Payment Conditions is satisfied
with respect to the relevant loan, advance, capital contribution, purchase or
acquisition.
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Section 10.06. TRANSACTION WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease, loan or
exchange of property with any Affiliate of such Obligor unless such transaction
shall be on terms no less favorable to such Obligor than would be obtainable at
the time in a comparable arm's length transaction with an unrelated third party;
PROVIDED, that this Section 10.06 shall not apply to (a) customary fees paid by
FiberMark to members of its Board of Directors, (b) any transaction between any
Obligor and any employee of such Person that is approved by such Person's Board
of Directors (PROVIDED that such approval shall not be required with respect to
normal compensation arrangements involving any such employee) and (c) loans,
advances, capital contributions and share purchases permitted by Section 9.07 or
Section 10.05 of this Financing Agreement.
Section 10.07. NATURE OF BUSINESS. Change its corporate name,
principal place of business or structure, or enter into or engage in any
operation or activity other than activities of the types conducted by each
Obligor on the date hereof or as of the date of the acquisition of an Acquired
Entity and operations and activities substantially similar thereto and logical
extensions thereof.
Section 10.08. DIVIDENDS. Declare or pay any dividends; or
purchase, redeem, retire, or otherwise acquire for value any of the capital
stock or securities convertible into capital stock of such Obligor now or
hereafter outstanding; or make any distribution of assets to its stockholders as
such, whether in cash, assets, or in obligations of the Obligors, or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption, or retirement of any shares of its capital
stock, except for (i) dividend payments and other distributions by any
Subsidiary to FiberMark or to another Obligor, and (ii) provided, in each case,
that each of the Restricted Payment Conditions is satisfied with respect
thereto: declarations and payments of dividends on its capital stock, or
purchases or redemptions of its capital stock, or open market purchases by
FiberMark of its outstanding common stock, $0.01 par value.
Section 10.09. LEASES. Enter into any Operating Lease except
to the extent permitted under Section 10.01, treating the obligations of the
lessee thereunder as Indebtedness for purposes thereof.
Section 10.10. ENVIRONMENTAL COMPLIANCE. Except in compliance
with applicable Environmental Laws, (a) use any of the Real Estate or other
property of any Obligor or any portion thereof for the handling, processing,
storage or disposal of Hazardous Materials, (b) cause or permit to be located on
any of the property of any Obligor any underground tank or other underground
storage receptacle for Hazardous Materials, (c) generate any Hazardous Materials
on any of the Real Estate or other property of any Obligor, (d) conduct any
activity on the Real Estate or other property of any Obligor or use any property
in any manner so as to cause an Environmental Discharge or (e) otherwise conduct
any activity on the Real Estate or any other property or use any property in any
manner that would lead to any claim under or violate any Environmental Law.
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Section 10.11. FISCAL YEAR. Change its Fiscal Year from a
period of January 1 to December 31.
Section 10.12. SUBSIDIARY STOCK ISSUANCE. Permit any
Subsidiary of any Obligor to issue or sell to any Person, other than such
Obligor, any of such Subsidiary's shares, interests, participation or other
equivalents (however designated including stock appreciation rights), warrants
or options to acquire capital stock.
ARTICLE XI. FINANCIAL COVENANTS
Section 11.01. CONSOLIDATED NET WORTH. FiberMark and its
Subsidiaries shall at all times have a Consolidated Net Worth of not less than
the sum of (i) Eighty Five Million Dollars ($85,000,000) plus (ii) 50% of
Consolidated Net Income (without deduction for any losses) earned after the
first fiscal quarter ending after the Closing Date.
Section 11.02. CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
FiberMark and its Subsidiaries shall at all times maintain a Consolidated Fixed
Charge Coverage Ratio of greater than 2.0 to 1.0.
ARTICLE XII. EVENTS OF DEFAULT
Section 12.01. EVENTS OF DEFAULT. Notwithstanding anything
hereinabove to the contrary, the Agent may, and if directed to do so by the
Required Lenders shall, terminate this Financing Agreement immediately upon the
occurrence of any of the following (herein "Events of Default"):
(a) failure of any Obligor to pay any of its Obligations
within five (5) business days of the due date thereof, PROVIDED that nothing
contained herein shall prohibit the Agent from charging such amounts to any
Obligor's account on the due date thereof (if the Agent so charges such
Obligor's account, no Event of Default relating to non-payment of Obligations
will be deemed to have occurred) and, PROVIDED FURTHER, that if the Agent
chooses not to charge such amounts to an Obligor's account on the due date
thereof, the Agent shall so notify the Obligor and the Obligor shall have five
(5) days from the date it receives such notice to pay such Obligations;
(b) any representation or warranty of any Obligor contained
herein or in any other Loan Document, or any representation, warranty, statement
in any certificate, financial statement or other document furnished to Agent or
any of the Lenders by or on behalf of any Obligor under any Loan Document shall,
as of the time made, confirmed or furnished, prove to have been (i) in the case
of such representations and
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warranties which are not subject to a Material Adverse Change exception,
incorrect in any material respect or (ii) in all cases where such
representations and warranty is subject to such an exception, incorrect;
(c) breach by any Obligor of any warranty, representation or
covenant contained herein (other than those referred to in subparagraph (d)
below) or in any other Loan Document or written agreement entered into in
connection with this Financing Agreement between any Obligor and the Lenders
and/or the Agent or delivered by such Obligor to any of the Lenders and/or the
Agent in connection herewith or the transactions contemplated hereby, if such
breach shall not have been remedied to the Required Lenders' satisfaction within
the earlier to occur of the applicable grace period in such written agreement or
thirty (30) days from the date of such breach;
(d) breach by any Obligor of any representation, warranty or
covenant contained in Sections 3.05, 3.06, 5.02, 5.03, 5.04, 5.10, 8.06, 8.17,
8.18, 9.01(g), 9.03, 9.07, Article 10 (other than Section 10.11) or Article 11;
(e) if any Obligor shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property, (ii)
admit in writing its inability, or be generally unable, to pay its debts as such
debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence any case, proceeding or other action seeking to have an
order for relief entered on its behalf as debtor or to adjudicate it a bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
readjustment of debts, (v) file an answer or other pleading in any such case,
proceeding or other action admitting the material allegations of any petition,
complaint or similar pleading filed or (vi) take any corporate or other action
for the purpose of effecting any of the foregoing;
(f) if a proceeding or case shall be commenced without the
application or consent of any Obligor in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, dissolution, winding-up, or the
composition or readjustment of debts of such Person, or (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like of such Person under any
law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, or a warrant of attachment, execution or
similar process shall be issued against property of such Person and such
proceeding, case, warrant or process shall continue undismissed, or any order,
judgment or decree
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approving or ordering any of the foregoing shall be entered, or any order for
relief against such Person shall be entered in an involuntary case under any law
relating to bankruptcy, insolvency, reorganization, winding up or composition or
readjustment of debts;
(g) cessation of the business of any Obligor or the calling of
a meeting of the creditors of such Person for purposes of compromising the debts
and obligations of such Person.
(h) any Obligor shall (a) fail to pay any Indebtedness in
excess of Two Hundred Fifty Thousand Dollars ($250,000) (other than with respect
to this Financing Agreement) of such Obligor, or any interest or premium
thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise); or (b) fail to perform or observe any term,
covenant, or condition on its part to be performed or observed under any
agreement or instrument relating to any such Indebtedness, when required to be
performed or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration after the giving of notice or passage
of time, or both, of the maturity of such Indebtedness, whether or not such
failure to perform or observe shall be waived by the holder of such
Indebtedness, or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(i) if a judgment or judgments for the payment of money in
excess of Two Hundred Fifty Thousand Dollars ($250,000) shall be rendered
against any Obligor and the same shall remain in effect and unstayed or bonded
pending appeal for a period of thirty (30) or more consecutive days;
(j) if any Loan Document shall cease, for any reason, to be in
full force and effect or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any party thereto, or any party
thereof shall deny it has any further liability or obligation under or shall
fail to perform its obligations under such Loan Document;
(k) if any of the following events occur or exist with respect
to any Obligor or any ERISA Affiliate: (i) any Obligor or any other Person
engages in a transaction in connection with which a Borrower, or any entity
which a Borrower has an obligation to indemnify, could be subject to liability
for either a civil penalty assessed pursuant to Section 502 of ERISA or a tax
imposed under Section 4975 of the Code; (ii) an accumulated funding deficiency
(as defined in Section 302 of ERISA or Section 412 of the Code), whether or not
waived, exists with respect to any Pension Plan; (iii) any Reportable Event, as
defined in ERISA, with respect to any Pension Plan; (iv) the giving under
Section 4041 of ERISA
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of a notice of intent to terminate any Pension Plan or the termination of any
Pension Plan; (v) any event or circumstance that might constitute grounds
entitling the PBGC to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Pension
Plan, or the institution by the PBGC of any such proceedings; (vi) the
imposition of liability to enforce Section 515 of ERISA; (vii) the failure of a
Pension Plan intended to qualify under Section 401(a) or 401(k) of the Code to
so qualify; (viii) complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan or the Reorganization, Insolvency, or
termination of any Multiemployer Plan; or (ix) the imposition of liability in
respect of any Pension Plan or Multiemployer Plan subject to Title IV of ERISA
(other than a liability to the PBGC for insurance premiums under Title IV of
ERISA, payment of which is not yet due); (x) pursuant to Section 4068 of ERISA
or Section 401(a)(29) or Section 412 of the Code, a lien arises or security
interest is granted with respect to any Pension Plan; PROVIDED, HOWEVER, that no
Event of Default shall be deemed to exist with respect to any event or condition
described in clause (i) through (ix) above unless such event or condition,
individually or together with all other such events or conditions, if any, could
subject any Obligor to any tax, penalty, or other liability to an Employee
Benefit Plan, the PBGC, or otherwise (or any combination thereof) which could
result in a Material Adverse Change;
(l) if there shall occur a default which is not cured or
waived within the applicable grace period, if any, under the Mortgage; or
(m) if any time the Agent for the benefit of the Lenders no
longer has a Lien on any of the Collateral.
Section 12.02. ACCELERATION OF OBLIGATIONS. Upon the
occurrence of a Default and/or an Event of Default, the Agent may (at its
option) and shall at the written direction of the Required Lenders declare that
all Revolving Credit Loans provided for in this Financing Agreement shall be
thereafter in the Agent's sole discretion and the obligation of the Lenders to
make Revolving Credit Loans shall cease unless such Default is cured to the
Required Lenders' satisfaction or such Event of Default is waived. If an Event
of Default shall occur and be continuing, the Agent may, and if directed to do
so by the Required Lenders shall, upon notice by the Agent to the Borrowers, (a)
declare the Revolving Credit Commitments terminated, whereupon such Revolving
Credit Commitments shall forthwith terminate immediately and any accrued fees
shall forthwith become due and payable and all Obligations, and, as liquidated
damages for loss of a bargain and not as a penalty, a lost transaction fee shall
be due and payable in addition to the accelerated amounts set forth herein and
all other amounts payable under this Financing Agreement and any other Loan
Documents to be, whereupon the same shall become, forthwith due and payable
without presentment, demand or protest of any kind, all of which are hereby
waived by the Borrowers, anything contained in
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this Financing Agreement to the contrary notwithstanding, equal to the full
outstanding principal amounts of the Revolving Credit Loans being accelerated
multiplied by three percent (3%); (b) charge the Borrowers the Default Rate of
Interest on all then outstanding or thereafter incurred Obligations , PROVIDED
(i) the Agent has given the Borrowers written notice of the Event of Default,
PROVIDED, HOWEVER, that no notice is required if the Event of Default is the
Event listed in paragraph (e), (f) or (g) of Section 12.01 hereof and (ii) the
Borrowers have failed to cure the Event of Default within ten (10) days after
(x) the Agent deposited such notice in the United States mail or (y) the
occurrence of the Event of Default listed in paragraph (e), (f) or (g) or
Section 12.01 hereof; and (c) immediately terminate this Financing Agreement
upon notice to the Borrowers; PROVIDED, HOWEVER, that no notice of termination
is required if the Event of Default is the Event listed in paragraph (e), (f) or
(g) of Section 12.01 hereof. The exercise by the Lenders of any option or remedy
hereunder is not exclusive of any other option or remedy, which may be exercised
at any time by the Lenders, acting through the Agent.
Section 12.03. OTHER REMEDIES. Immediately upon the occurrence
of any Event of Default and so long as such Event of Default is continuing, the
Agent may to the extent permitted by Law: (a) remove from any premises where
same may be located any and all documents, instruments, files and records, and
any receptacles or cabinets containing same, relating to the Accounts, or the
Agent may use, at the applicable Obligor's expense, such of the Obligor's
personnel, supplies or space at the Obligor's places of business or otherwise,
as may be necessary to properly administer and control the Accounts or the
handling of collections and realizations thereon; (b) bring suit, in the name of
the applicable Obligor, or the Lenders or the Agent, and generally shall have
all other rights respecting said Accounts, including without limitation the
right to accelerate or extend the time of payment, settle, compromise, release
in whole or in part any amounts owing on any Accounts and issue credits in the
name of the applicable Obligor, or the Agent; (c) sell, assign and deliver the
Collateral and any returned, reclaimed or repossessed merchandise, with or
without advertisement, at public or private sale, for cash, on credit or
otherwise, at the Agent's sole option and discretion, and any one or more of the
Lenders or the Agent may bid or become a purchaser at any such sale, free from
any right of redemption, which right is hereby expressly waived by each Obligor;
(d) foreclose the security interests created herein by any available judicial
procedure, or to take possession of any or all of the Inventory or the
Brattleboro Collateral without judicial process, and to enter any premises where
any Inventory and Equipment comprising part of the Brattleboro Collateral may be
located for the purpose of taking possession of or removing the same and (e)
exercise any other rights and remedies provided in Law, in equity, by contract
or otherwise. The Agent shall have the right, without notice or advertisement,
to sell, lease, or otherwise dispose of all or any part of the Collateral
whether in its then condition or after further preparation or processing, in the
name of any Obligor, any one or more of the Lenders or the Agent, or in the name
of such other party as the Agent may designate, either at public or private sale
or at any broker's board, in lots or in bulk, for cash or for credit, with or
without warranties or representations, and upon such other terms and conditions
as the Agent in its sole discretion may deem advisable,
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and the Agent and any one or more of the Lenders shall have the right to
purchase at any such sale. If any Inventory and Equipment comprising part of the
Brattleboro Collateral shall require rebuilding, repairing, maintenance or
preparation, the Agent shall have the right, at its option, to do such of the
aforesaid as is necessary, for the purpose of putting the Inventory and
Equipment comprising part of the Brattleboro Collateral in such saleable form as
the Agent shall deem appropriate. FiberMark Office agrees, at the request of the
Agent, to assemble the Inventory and Equipment comprising part of the
Brattleboro Collateral and to make it available to the Agent at premises of
FiberMark Office or elsewhere and to make available to the Agent the premises
and facilities of FiberMark Office for the purpose of the Agent's taking
possession of, removing or putting the Inventory and Equipment comprising part
of the Brattleboro Collateral in saleable form. However, if notice of intended
disposition of any Collateral is required by Law, it is agreed that ten (10)
days notice shall constitute reasonable notification and full compliance with
the law. The net cash proceeds resulting from the Agent's exercise of any of the
foregoing rights, (after deducting all charges, costs and expenses, including
reasonable attorneys' fees) shall be applied by the Agent to the payment of the
Obligor's Obligations, whether due or to become due, in such order as the Agent
may elect, and the Obligors shall remain liable to the Agent and the Lenders for
any deficiencies, and the Agent and the Lenders in turn agree to remit to the
Obligors or their respective successors or assigns, any surplus resulting
therefrom. The enumeration of the foregoing rights is not intended to be
exhaustive and the exercise of any right shall not preclude the exercise of any
other rights, all of which shall be cumulative. The Mortgage shall govern the
rights and remedies of the Agent and the Lenders thereto.
ARTICLE XIII. AGENCY
Section 13.01. THE AGENT. Each Lender hereby irrevocably
designates and appoints CITBC as the Agent for the Lenders under this Financing
Agreement and any modifications, supplements and amendments thereto and any
other Loan Documents executed in connection therewith and irrevocably authorizes
CITBC as Agent for such Lenders, to take such action on its behalf under the
provisions of this Financing Agreement and all such ancillary documents and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Financing Agreement and all such ancillary documents
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Financing
Agreement, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Financing Agreement and such ancillary
documents or otherwise exist against the Agent.
Section 13.02. DELEGATION OF DUTIES. The Agent may execute any
of its duties under this Financing Agreement and all ancillary documents by or
through
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agents or attorneys-in-fact and shall be entitled to the advice of counsel
concerning all matters pertaining to such duties.
Section 13.03. EXCULPATORY PROVISIONS. Neither the Agent nor
any of its officers, directors, employees, agents, or attorneys-in-fact shall be
(a) liable to any Lender for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Financing Agreement and all
ancillary documents (except for its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Obligor or
any officer thereof contained in this Financing Agreement and all ancillary
documents or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Financing Agreement and all ancillary documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Financing
Agreement and all ancillary documents or for any failure of any Obligor to
perform its obligations thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Financing Agreement
or any ancillary document or to inspect the properties, books or records of any
Obligor.
Section 13.04. RELIANCE BY AGENT. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, facsimile, message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Obligors),
independent accountants and other experts selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this
Financing Agreement and any ancillary document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by all of the Lenders against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Financing
Agreement and all ancillary documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
Section 13.05. NOTICE OF DEFAULT. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has received notice from a Lender or a
Borrower describing such Default or Event of Default. In the event that the
Agent receives such a notice, the Agent shall promptly give notice thereof to
the Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
PROVIDED that unless and until the Agent shall have received such direction, the
Agent may in the interim (but shall not
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be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable and in
the best interests of the Lenders.
Section 13.06. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of any Borrower shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Obligors and made its own decision to enter into this Financing Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Financing
Agreement and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition or
creditworthiness of the Obligors. The Agent, however, shall provide the Lenders
with copies of all financial statements, projections and business plans which
come into the possession of the Agent or any of its officers, employees, agents
or attorneys-in-fact.
Section 13.07. INDEMNIFICATION. The Lenders agree to indemnify
the Agent in its capacity as such (to the extent not reimbursed by any Obligor,
and without limiting the obligation of any Obligor to do so), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of this Financing Agreement on any ancillary
documents or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; PROVIDED that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence or willful
misconduct. The agreements in this paragraph shall survive the payment of the
Obligations.
Section 13.08. THE AGENT IN ITS INDIVIDUAL CAPACITY. The Agent
may make loans to, and generally engage in any kind of business with any Obligor
as though the Agent were not the Agent hereunder. With respect to its loans made
or renewed by it or Revolving Credit Loan obligations hereunder as a Lender, the
Agent shall have the same rights and powers, duties and liabilities under this
Financing Agreement as any Lender and may exercise the same as though it were
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not the Agent and the terms "Lender" and "Lenders" shall include the Agent in
its individual capacity.
Section 13.09. SUCCESSOR AGENT. The Agent may resign as Agent
upon thirty (30) days' prior notice to the Lenders and such resignation shall be
effective upon the appointment of a successor Agent. Upon receiving notice from
the Agent of the Agent's intention to resign as Agent, the Lenders shall appoint
a successor agent for the Lenders whereupon such successor agent shall succeed
to the rights, powers and duties of the Agent and the term "Agent" shall mean
such successor agent effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Financing Agreement. After any retiring Agent's resignation hereunder as
Agent the provisions of this Article 13 shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent.
Section 13.10. ARRANGEMENTS REQUIRING CONSENT OF LENDERS.
Notwithstanding anything contained in this Financing Agreement to the contrary,
the Agent will not, without the prior written consent of all of the Lenders:
amend this Financing Agreement to (a) increase the Revolving Credit Facility or
the Overadvance Availability; (b) reduce the interest rate; (c) reduce or waive
any fees or the repayment of any Obligations due the Lenders or the Agent; (d)
extend the maturity of the Obligations; or (e) alter or amend (i) this Section
13.10 or (ii) the definition of Eligible Accounts Receivable and/or Eligible
Inventory and the Agent's criteria for determining compliance therewith. Except
as otherwise hereinabove provided, the Agent will not, without the prior written
consent of the Required Lenders: (a) amend this Financing Agreement or (b) waive
any Event of Default under this Financing Agreement. In all other respects, the
Agent is authorized to take such actions or fail to take such actions if the
Agent, in its reasonable discretion, deems such to be advisable and in the best
interest of the Lenders, including, but not limited to, the making of an
Overadvance or the termination of the Revolving Credit Commitments and/or this
Financing Agreement upon the occurrence of an Event of Default unless it is
specifically instructed to the contrary by the written instructions of the
Required Lenders.
Notwithstanding the foregoing, the Agent may (in its sole
discretion) and shall at the written direction of the Required Lenders upon the
occurrence of an Event of Default and upon written notice to the Lenders and the
Borrower, accelerate the Revolving Credit Loans, and the other Obligations of
the Obligors hereunder. In such event, the Revolving Credit Loans shall be
immediately deemed due and payable and each Lender's interest in the Revolving
Credit Loans shall be settled in accordance with this Financing Agreement based
on the Revolving Credit Loans outstanding as of the date of such written
declaration. Thereafter, all collections received for application to the
Revolving Credit Loans as provided in this Financing Agreement shall be applied
first to the costs and expenses of collection and Out-of-Pocket Expenses, if
any, then to the payment of interest on the Revolving Credit Loans, then to the
principal balance of the Revolving Credit Loans. The Lenders acknowledge that an
orderly
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repayment of the Revolving Credit Loans and/or liquidation of Collateral may
necessitate the making of new Revolving Credit Loans after a declaration of
acceleration by the Agent and/or the Required Lenders and that all of the
Lenders shall participate in such Revolving Credit Loans based on their
respective Pro Rata Shares. Such new Revolving Credit Loans shall be in
accordance with a program of orderly liquidation and shall be treated as costs
of collection, Out-of-Pocket Expenses and/or liquidation with respect to the
priority of repayment as provided in this paragraph and as otherwise applicable.
Notwithstanding the foregoing, the Agent in its sole
discretion may:
(a) cure any ambiguity, defect or inconsistency in the terms
of this Financing Agreement;
(b) release collateral in bulk (i) as required pursuant to the
explicit terms of this Financing Agreement or any of the ancillary documents
thereto and (ii) in an amount not to exceed Two Million Dollars ($2,000,000) in
any Fiscal Year PROVIDED that at the election of the Agent there is a
corresponding reduction in the Obligations to the Lenders, as applicable and as
set forth in this Financing Agreement;
(c) within the criteria specified in the definition of
"Eligible Accounts Receivable" in Section 1.01 of this Financing Agreement, make
determinations of eligibility of Collateral with such non-material temporary
modification as the Agent may from time to time implement (PROVIDED that the
consent of the Lenders to any other modifications thereof shall be implied if
the Agent does not receive notice to the contrary within ten (10) business days
of sending notice of any proposed change to the Lenders); and
(d) establish reserves.
Section 13.11. RECAPTURE OF PAYMENTS. If the Agent is required
at any time to return to any Obligor or to a trustee, receiver, liquidator,
custodian or other similar official any portion of the payments made by such
Obligor to the Agent as a result of a bankruptcy with respect to such Obligor,
any guarantor or any other person or entity or otherwise, then each Lender
shall, on demand of the Agent, forthwith return to the Agent its Pro Rata Share
of any such payments made to such Lender by the Agent, together with its Pro
Rata Share of interest or penalties, if any, payable by the Lenders. This
provision shall survive the termination of this Financing Agreement.
ARTICLE XIV. RIGHTS AND OBLIGATIONS OF THE LENDERS AND THE AGENT
Section 14.01. ADJUSTMENTS AMONG LENDERS. Notwithstanding
anything herein to the contrary contained in this Financing Agreement, prior to
the occurrence of an Event of Default, in the event that any Lender shall obtain
payment in respect of a Revolving Credit Note, or interest thereon or upon or
following on
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Event of Default, in the event any Lender shall obtain payment in respect of a
Revolving Credit Note, or interest thereon, or receive any Collateral or
proceeds thereof with respect to any Revolving Credit Note, whether voluntarily
or involuntarily, and whether through the exercise of a right of banker's Lien,
set-off or counterclaim against the applicable Borrower or otherwise, in a
greater proportion than any such payment obtained by any other Lender in respect
of the corresponding Revolving Credit Note held by such Lender, then the Lender
so receiving such greater proportionate payment or such greater proportionate
amount of Collateral in the case of an occurrence of an Event of Default shall
purchase for cash from the other Lender or Lenders such portion of each such
other Lender or Lenders' Revolving Credit Loan as appropriate, as shall be
necessary to cause such Lender receiving the proportionate overpayment to share
the excess payment with each Lender or shall provide the other Lenders with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such Lender receiving the proportionate overpayment to share the excess
payment or benefits of such Collateral or proceeds ratably with each Lender in
the case of an occurrence of an Event of Default. Upon or following an Event of
Default payments on any Revolving Credit Note received by each Lender and
receipt of Collateral by each Lender shall be in the same proportion as the
proportion of: (a) the Obligations owing to such Lender in respect of all
Revolving Credit Notes held by such Lender; to (b) the Obligations owing to all
of the Lenders in respect of all of the Revolving Credit Notes; PROVIDED,
HOWEVER, that, with respect to the two paragraphs above, if all or any portion
of such excess payment or benefits is thereafter recovered from the Lender that
received the proportionate overpayment, such purchase of Obligations or payment
of benefits, as the case may be, shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
Section 14.02. SHARING OF PAYMENTS. The Agent shall, after
receipt of any interest and fees earned under this Financing Agreement, remit to
each Lender: (a) its Pro Rata Share of all fees, PROVIDED, HOWEVER, that no
Lender (other than CITBC in its role as Agent) shall share in (i) the Collateral
Management Fee or Documentation Fee or the fees provided for in Section 6.03 of
this Financing Agreement and (ii) applicable fees, costs, expenses and
Out-of-Pocket Expenses of the Agent which shall be remitted to and retained by
the Agent; and (b) interest computed at the rate and as provided for in Section
6.02 of this Financing Agreement on all outstanding amounts advanced by such
Lender on each Settlement Date, prior to adjustment, that were made subsequent
to the last remittance by the Agent to the Lender of such Borrower's interest.
Section 14.03. SALE OF PARTICIPATIONS. Each Borrower
acknowledges each Lender may sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Financing
Agreement (including, without limitation, all or a portion of its Lender Loan
Commitment, the Revolving Credit Loans owing to it, and the Revolving Credit
Note(s) held by it); PROVIDED, HOWEVER, that: (a) any such Lender's obligations
under this Financing Agreement (including, without limitation, its Lender Loan
Commitment hereunder) shall remain
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unchanged, and (b) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (c) such Lender shall
remain the holder of any such Revolving Credit Note(s) executed to its order
hereunder for all purposes of this Financing Agreement, and (d) each Borrower,
the Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Financing Agreement. Each Borrower further acknowledges that in doing so, the
Lenders may grant to such participants certain rights which would require the
participant's consent to certain waivers, amendments and other actions with
respect to the provisions of this Financing Agreement.
Each Obligor authorizes each Lender to disclose to any
participant or purchasing lender (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning such Obligor and their respective affiliates which has been delivered
to such Lender by or on behalf of any Obligor pursuant to this Financing
Agreement or which has been delivered to such Lender by or on behalf of any
Obligor in connection with such Lender's credit evaluation of any Obligor and
its affiliates prior to entering into this Financing Agreement.
Section 14.04. NATURE OF REVOLVING CREDIT COMMITMENTS. Each
Obligor hereby agrees that each Lender is solely responsible for its Lender Loan
Commitment and that neither the Agent nor any Lender shall be responsible for,
nor assume any obligations for the failure of any Lender to make available its
portion of the Revolving Credit Loans. Further, should any Lender refuse to make
available its portion of the Revolving Credit Loans, then any one or more of the
other Lenders may, but without obligation to do so, increase, unilaterally, its
portion of the Revolving Credit Loans in which event the applicable Borrower is
so obligated to that other Lender.
Section 14.05. SHARING OF COSTS AND EXPENSES. In the event
that the Agent, the Lenders or any one of them is sued or threatened with suit
by any Obligor or any one of them, or by any receiver, trustee, creditor or any
committee of creditors on account of any preference, voidable transfer or lender
liability issue, alleged to have occurred or been received as a result of, or
during the transactions contemplated under this Financing Agreement, then in
such event any money paid in satisfaction or compromise of such suit, action,
claim or demand and any expenses, costs and attorneys' fees paid or incurred in
connection therewith, whether by the Agent, the Lenders or any one of them,
shall be shared proportionately by the Lenders. In addition, any costs,
expenses, fees or disbursements incurred by outside agencies or attorneys
retained by the Agent to effect collection or enforcement of any rights in the
Collateral, including enforcing, preserving or maintaining rights under this
Financing Agreement shall be shared proportionately by the Lenders to the extent
not reimbursed by any Obligor or from the proceeds of Collateral. The provisions
of this paragraph shall not apply to any suits, actions, proceedings or claims
that (a) predate the date of this Financing
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Agreement or (b) are based on transactions, actions or omissions that predate
the date of this Financing Agreement.
Section 14.06. SHARING OF PAYMENTS. Each Borrower hereby
agrees that, in addition to (and without limitation of) any right of set-off,
banker's Lien or counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option, to offset balances held by it at any of its offices, as
the case may be, against any principal of or interest on its Revolving Credit
Loans payable to such Lender, that is not paid when due (regardless of whether
such balances are then due to the Borrower), in which case such Lender shall
promptly notify such Borrower and the Agent thereof, PROVIDED that such Lenders
failure to give such notice shall not affect the validity thereof or create any
liability on the part of such Lender whatsoever. If a Lender shall effect
payment of any principal of or interest on Revolving Credit Loans held by such
Lender under this Financing Agreement through the exercise of any right of
set-off, banker's Lien, counterclaim or similar right, such Lender shall
promptly purchase from the other Lenders participations in the loans and/or
advances held by the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such payment PRO RATA in accordance with the
unpaid principal and interest on the loans and/or advances held by each of them.
To such end, all of the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. Each Borrower agrees that any Lender
so purchasing a participation in the Revolving Credit Loans held by the other
Lenders may exercise all rights of set-off, banker's Lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of the Revolving Credit Loans in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of such Borrower.
Section 14.07. ASSIGNMENTS. Each Lender shall have the right
at any time to assign to one or more commercial banks, commercial finance
lenders or other financial institutions all or a portion of its rights and
obligations under this Financing Agreement including, without limitation, its
Lender Loan Commitment and Revolving Credit Loans. Upon such assignment and
provided such assignee assumes its portion of each Lender's obligations
hereunder, (a) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such assignment, have the rights and obligations of a Lender hereunder and
(b) each Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such assignment, relinquish their rights and be
released from their obligations under this Financing Agreement. Each Borrower
shall, if necessary, execute any documents reasonably required to effectuate the
assignments.
In the event any Lender makes any assignment, each such
assignment shall be of a constant, and not a varying, percentage of all of such
Lender's rights and
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obligations under this Financing Agreement. Upon the execution, delivery,
acceptance and recording, from and after the effective date specified in an
Assignment and Acceptance substantially in the form of Exhibit G hereto (the
"Assignment and Acceptance").
By executing and delivering an Assignment and Acceptance, the
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (a) other than as provided in such Assignment
and Acceptance, such Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Financing Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Financing Agreement or any other instrument or document furnished pursuant
hereto; (b) such Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Obligor or the
performance or observance by any Obligor of any of its obligations under this
Financing Agreement or any other instrument or document furnished pursuant
hereto; (c) such assignee confirms that it has received a copy of this Financing
Agreement, together with copies of such financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (d) such
assignee will, independently and without reliance upon the Agent, CITBC, CITEF
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Financing Agreement; (e) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Financing Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (f) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Financing Agreement are
required to be performed by it as a Lender.
Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender, together with all Revolving Credit Notes subject to such
assignment, the Agent shall: (a) accept such Assignment and Acceptance, and (b)
give prompt notice thereof to the Borrower. Within five (5) Business Days after
its receipt of such notice, each Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for each surrendered Revolving Credit Note a
new Revolving Credit Notes to the order of such assignee in an amount equal to
the applicable Lender Loan Commitment and/or Revolving Credit Loans assumed by
it pursuant to such Assignment and Acceptance and, if such Lender has retained a
Lender Loan Commitment and/or Revolving Credit Loan hereunder, new Revolving
Credit Notes to the order of such Lender in amounts equal to the applicable
Lender Loan Commitment retained by it hereunder. Such new Revolving Credit Notes
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A.
Section 14.08. ACKNOWLEDGEMENTS BY AGENT. The Lenders hereby
irrevocably authorize the Agent, at its option and in its discretion and without
the
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necessity of any notice from the Agent to the Lenders, (a) to acknowledge that
neither the Agent nor the Lenders have a Lien on any leased property of the
Borrower or any other property in which the Borrower does not own any interest;
(b) to (i) acknowledge a Purchase Money Lien that conforms to the criteria set
forth on the definition of said term in Section 1.01 of this Financing Agreement
and (ii) subordinate to any holder of such Purchase Money Lien any Lien on the
Equipment subject thereto that the Agent and the Lenders have as long as the
applicable Obligor owning such Equipment is indebted to such creditor; (iii) to
release any Lien granted to or held by the Agent upon any Collateral: (A) upon
termination of the Lender Loan Commitments and this Financing Agreement and the
payment and satisfaction of the Obligations; (B) constituting property sold or
to be sold or disposed of as part of or in connection with any disposition
permitted hereunder; (C) constituting property leased to the applicable Obligor
under a lease which has expired or been terminated in a transaction permitted
under this Financing Agreement or is about to expire and which has not been, and
is not intended by the applicable Obligor to be, renewed or extended; (D)
consisting of an instrument evidencing Indebtedness, which instrument has been
pledged to the Agent for the ratable benefit of the Lenders, if the Indebtedness
evidenced thereby has been paid in full; or (E) if approved, authorized or
ratified in writing by all the Lenders. Upon request by the Agent at any time,
the Lenders will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 14.08.
Section 14.09. TERMINATION OF FINANCING AGREEMENT. The Agent,
at the direction of all of the Lenders, may terminate the Lender Loan
Commitments and this Financing Agreement on September 30, 2002 or any
Anniversary Date thereafter by giving the Borrowers at least sixty (60) days'
prior written notice of termination. Notwithstanding the foregoing, the Agent
may terminate this Financing Agreement immediately upon the occurrence of an
Event of Default, PROVIDED, HOWEVER, that if the Event of Default is an event
listed in paragraph (e), (f) or (g) of Section 12.01 hereof, the Agent may
regard this Financing Agreement as terminated and notice to that effect is not
required.
Any of the Lenders may terminate this Financing Agreement on
September 30, 2002 or any Anniversary Date thereafter by giving the Agent and
the other Lenders at least ninety (90) days prior written notice of termination.
Within thirty (30) days of receipt of such notice from any such Lender(s), the
Agent shall either: (a) give notice to the Borrowers of termination of the
Lender Loan Commitments and this Financing Agreement in accordance with the
terms hereof, in which event the obligations of the Lenders hereunder shall
terminate as of the date on which termination of this Financing Agreement with
the Borrowers shall become operative and effective or (b) if the other Lenders
so elect, they shall have the right to purchase the terminating Lender's Pro
Rata Share of its interest hereunder for the full amount thereof, together with
any accrued interest. Termination of this Financing Agreement by any of the
Lenders as herein provided shall not affect the Lenders' respective rights and
obligations under this Financing Agreement incurred prior to the effective date
of
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termination as set forth in the preceding sentence. This Financing Agreement,
unless terminated as herein provided, shall continue.
The Borrowers may terminate this Financing Agreement and the
Lender Loan Commitments, in whole, only upon sixty (60) days' prior written
notice by the Borrowers to the Agent, PROVIDED that the Borrowers pay to the
Agent for the ratable benefit of the Lenders immediately on demand the Libor
Rate Prepayment Premium. All Obligations shall become due and payable as of any
termination hereunder or under Article 12 hereof and, pending a final
accounting, the Agent may withhold any balances in the Borrowers' accounts
(unless supplied with an indemnity satisfactory to the Agent) to cover all of
the Obligations, whether absolute or contingent. All of the Agent's and the
Lenders' rights, liens and security interests shall continue after any
termination until all Obligations have been paid and indefeasibly satisfied in
full.
ARTICLE XV. MISCELLANEOUS
Section 15.01. WAIVERS. Each Obligor hereby waives diligence,
demand, presentment and protest and any notices thereof as well as notice of
nonpayment. No delay or omission of the Agent or any of the Lenders or any
Obligor to exercise any right or remedy hereunder, whether before or after the
happening of any Event of Default, shall impair any such right or shall operate
as a waiver thereof or as a waiver of any such Event of Default. No single or
partial exercise by the Agent or any of the Lenders of any right or remedy
precludes any other or further exercise thereof, or precludes any other right or
remedy.
Section 15.02. ENTIRE AGREEMENT. This Financing Agreement and
the documents executed and delivered in connection therewith constitute the
entire agreement between the Obligors and the Agent and the Lenders; supersede
any prior agreements; subject to the provisions in Section 13.10, can be changed
only by a writing signed by the Obligors, the Agent and the Required Lenders;
and shall bind and benefit the Obligors, the Agent and the Lenders and their
respective successors and assigns.
Section 15.03. WAIVER OF COVENANTS IN PREDECESSOR AGREEMENT.
The Lenders hereby waive the Events of Default occurring under the Predecessor
Agreement as a result of the breach of Sections 10.05 and 10.08 of the
Predecessor Agreement resulting from (i) the Corporate Reorganization and (ii)
the acquisition by FiberMark of interests, direct or indirect, in FiberMark
GmbH, FiberMark Beteiligungs GmbH, FiberMark Gessner and FiberMark Lahnstein.
Lenders do not waive any other Events of Default that may have occurred under
the Predecessor Agreement and reserve all rights, and may exercise all remedies
at any time, relating to any other Event of Default that may have occurred under
the Predecessor Agreement (and, except as expressly waived by this Section
15.03, all terms and conditions of the Predecessor Agreement shall remain in
effect to the extent necessary to give effect to the preceding provisions of
this sentence).
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Section 15.04. USURY. In no event shall any Obligor, upon
demand by the Agent for payment of any indebtedness relating hereto, by
acceleration of the maturity thereof, or otherwise, be obligated to pay interest
and fees in excess of the amount permitted by Law. Regardless of any provision
herein or in any agreement made in connection herewith, the Lenders shall never
be entitled to receive, charge or apply, as interest on any indebtedness
relating hereto, any amount in excess of the maximum amount of interest
permissible under applicable Law. If the Agent or any one or more of the Lenders
ever receive, collect or apply any such excess, it shall be deemed a partial
repayment of principal and treated as such; and if principal is paid in full,
any remaining excess shall be refunded to the applicable Obligor. This paragraph
shall control every other provision hereof and of any other agreement made in
connection herewith.
Section 15.05. PAYMENT OF EXPENSES. All statements, reports,
certificates, opinions and other documents or information required to be
furnished by any Obligor to Agent or any Lender under this Financing Agreement
or any other Loan Document shall be supplied without cost to Agent or any
Lenders. FiberMark shall pay, on demand, (1) all Out-of-Pocket Expenses of Agent
and Lenders, including, without limitation, the fees and disbursements of Dewey
Ballantine LLP, counsel to Agent and Lenders, incurred in connection with (a)
the negotiation, preparation, execution and delivery of the Loan Documents, (b)
any waiver of amendment of, or supplement or modification to, the Loan Documents
and (c) the review of any of the other agreements, instruments or documents
referred to in this Financing Agreement or relating to the transactions
contemplated hereby including, without limitation, ongoing review of
environmental matters; (d) all cost associated with all policies of title
insurance; (e) all costs and expenses of the Agent and Lenders (including fees
and disbursements of legal counsel) incident to the successful enforcement,
collection, protection or preservation of any right or claim of Agent or Lenders
under the Loan Documents and (f) all fees and expenses incurred in connection
with the perfection of the Lenders' Liens, all recording fees, mortgage taxes,
serving costs, and all searches; (2) the Collateral Management Fee; (3) the
Documentation Fee; (4) the Facility Fee; and (5) the Unused Line Fee.
Section 15.06. INDEMNITY. Each Obligor hereby jointly and
severally agrees to indemnify the Lenders and the Agent and each of their
affiliates, officers, directors, employees, attorneys, consultants and agents
(collectively, "Indemnitees") and agrees to defend and hold the Indemnitees
harmless from and against any and all loss, damage, claim, liability, injury,
obligation, penalty, action, suit, cost, or expense of whatsoever kind or
nature, imposed on, incurred by or asserted against any Indemnitee by reason of
(a) any investigation, litigation or other proceedings (including any threatened
investigation, litigation or other proceedings) relating to or arising in
connection with this Financing Agreement, any other Loan Document or the
transactions contemplated hereby or thereby (but excluding any such losses,
liabilities, claims or damages incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified) and (b) any Environmental
Discharge; any handling, storage, use, disposal, manufacture, treatment,
recycling, remediation, removal, generation, release, discharge, refining or
dumping of any
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Hazardous Materials; any Remedial Action; or any violation or alleged violation
of Environmental Laws, arising from or in connection with the past, present or
future operations, properties or equipment of any Obligor or its predecessors in
interest. Each Obligor hereby jointly and severally also agrees to reimburse any
Indemnitee for all expenses incurred in connection with any such investigation,
litigation or other proceedings (whether actual or threatened), or such
Environmental Discharge; handling, storage, use, disposal, manufacture,
treatment, recycling, remediation, removal, generation, release, discharge,
refining or dumping of any Hazardous Materials; Remedial Action; or violation or
alleged violation of Environmental Laws including, without limitation, the fees
and disbursements of counsel incurred in connection with any of the foregoing.
Each Obligor further agrees that this indemnification shall survive termination
of this Financing Agreement as well as the payment of all Obligations or amounts
payable hereunder.
Section 15.07. SEVERABILITY. If any provision hereof or of any
other agreement made in connection herewith is held to be illegal or
unenforceable, such provision shall be fully severable, and the remaining
provisions of the applicable agreement shall remain in full force and effect and
shall not be affected by such provision's severance. Furthermore, in lieu of any
such provision, there shall be added automatically as a part of the applicable
agreement a legal and enforceable provision as similar in terms to the severed
provision as may be possible.
SECTION 15.08. WAIVER OF JURY TRIAL. EACH OBLIGOR, THE AGENT
AND EACH LENDER EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF THIS FINANCING AGREEMENT. EACH OBLIGOR HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF
PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.
Section 15.09. NOTICES. Except as otherwise herein provided,
any notice or other communication required hereunder shall be in writing, and
shall be deemed to have been validly served, given or delivered when hand
delivered or sent by telegram or facsimile, or three days after deposit in the
United State mails, with proper first class postage prepaid and addressed to the
party to be notified as follows:
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(a) if to CITBC or the Agent at:
The CIT Group/Business Credit, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attn: Regional Manager
Fax (212) 536-1294
(b) if to CITEF at:
The CIT Group/Equipment Financing, Inc.
784 State Street, Room 700
Boston, Massachusetts 02109
(c) if to any party which becomes a Lender subsequent to the date
hereof, such address as appears beneath such Lender's name on the signature page
of the Assignment and Acceptance such Lender executes in accordance with Section
14.07 of this Financing Agreement.
(d) if to FiberMark at:
FiberMark, Inc.
P.O. Box 498
Brudies Road
Brattleboro, VT 05302
Attn: Chief Financial Officer
Fax: (802) 257-5973
with a copy to (PROVIDED, HOWEVER, the failure to deliver such
copy will not invalidate any notices delivered to FiberMark
nor create any liability on the part of the Agent or any
Lender):
Moffatt, Thomas, Barrett, Rock & Fields
US Bank Plaza Building
101 South Capital
10th Floor
P.O. Box 829
Boise, Idaho 83701
(e) if to FiberMark Durable, FiberMark Filter or FiberMark Office at:
c/o FiberMark, Inc.
P.O. Box 498
Brudies Road
Brattleboro, VT 05302
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with a copy to (PROVIDED, HOWEVER, the failure to deliver such
copy will not invalidate any notices delivered to any Borrower
nor create any liability on the part of the Agent or any
Lender):
Moffatt, Thomas, Barrett, Rock & Fields
U.S. Bank Plaza Building
101 South Capitol
10th Floor
P.O. Box 829
Boise, Idaho 83701
or to such other address as any party may designate for itself by like notice.
SECTION 15.10. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS FINANCING AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
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Section 15.11. CONFIDENTIALITY. The Lenders shall maintain the
confidential nature of, and shall not use or disclose, any Obligor's financial
information, confidential information or trade secrets without first obtaining
such Obligors written consent. Nothing in this Section 15.10 shall require the
Agent or the Lenders to obtain the consent of any Obligor before exercising any
of their respective rights under the Loan Documents upon the occurrence of a
Default or Event of Default. The obligations of the Agent and the Lenders shall
in no event apply to: (a) providing information about any Obligor to any
financial institution contemplated in Section 14.03 or 14.07; (b) any situation
in which the Agent or any of the Lenders is required by Law or required by any
Governmental Authority or governmental, regulatory or supervisory authority or
official to disclose information; (c) providing information to counsel to the
Lenders in connection with the transactions contemplated by the Loan Documents;
(d) providing information to independent auditors retained by the Lenders; (e)
any information that is in or becomes part of the public domain otherwise than
through a wrongful act of the Agent or any of the Lenders or any employees or
agents thereof; (f) any information that is in the possession of the Agent or
any of the Lenders prior to receipt thereof from the applicable Obligor or any
other Person known to such Lender to be acting on behalf of such Obligor; (g)
any information that is independently developed by the Agent or any of the
Lenders; and (h) any information that is disclosed to the Agent or any of the
Lenders by a third party that has no obligation of confidentiality with respect
to the information disclosed.
Section 15.12 . EFFECTIVENESS. This Financing Agreement shall
become effective upon its execution and delivery by all parties to the Financing
Agreement.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Financing Agreement to be executed and delivered by their proper and duly
authorized officers as of the date set forth above. This Financing Agreement
shall take effect as of the date set forth above after being accepted below.
FIBERMARK, INC., AS GUARANTOR
By
------------------------------------
Name:
Title:
Address for Notices:
P.O. Box 498
Brudies Road
Brattleboro, VT 05302
Attn: Bruce Moore
Chief Financial Officer
Telecopy: (802) 257-5973
FIBERMARK DURABLE SPECIALTIES, INC.,
AS BORROWER AND GUARANTOR
By
------------------------------------
Name:
Title:
Address for Notices:
P.O. Box 498
Brudies Road
Brattleboro, VT 05302
Attn: Bruce Moore
Chief Financial Officer
Telecopy: (802) 257-5973
1
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FIBERMARK FILTER AND TECHNICAL PRODUCTS,
INC., AS BORROWER AND GUARANTOR
By
-------------------------------------
Name:
Title:
Address for Notices:
P.O. Box 498
Brudies Road
Brattleboro, VT 05302
Attn: Bruce Moore
Chief Financial Officer
Telecopy: (802) 257-5973
FIBERMARK OFFICE PRODUCTS, LLC,
AS BORROWER AND GUARANTOR
BY FIBERMARK, INC.,
ITS SOLE MEMBER
By
-------------------------------------
Name:
Title:
Address for Notices:
P.O. Box 498
Brudies Road
Brattleboro, VT 05302
Attn: Bruce Moore
Chief Financial Officer
Telecopy: (802) 257-5973
2
<PAGE>
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS AGENT
By
------------------------------------
Name:
Title:
Applicable Lending Office:
New York
Address for Notices:
1211 Avenue of the Americas
New York, New York 10036
Attn: Michelle Tawdeen
Telecopy: (212) 536-1295
3
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THE CIT GROUP/BUSINESS CREDIT, INC.,
AS A LENDER
By
------------------------------------
Name:
Title:
Applicable Lending Office:
New York
Address for Notices:
1211 Avenue of the Americas
New York, New York 10036
Attn: Michelle Tawdeen
Telecopy: (212) 536-1295
THE CIT GROUP/EQUIPMENT FINANCING, INC.,
AS A LENDER
By
-------------------------------------
Name:
Title:
Applicable Lending Office:
Atlanta
Address for Notices:
900 Ashwood Parkway
Atlanta, Georgia 30338
Attn: Fred R. Rucker
Telecopy: (770) 551-7868
4
