EXHIBIT 10.30
DB Draft 1/11/98
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.
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 December 31, 1997
THIRD AMENDED AND RESTATED FINANCING AGREEMENT AND GUARANTY dated as
of December 31, 1997, among FiberMark, Inc. ("FiberMark"), a Vermont
corporation, FiberMark Specialties, Inc. ("FiberMark Durable") a
___________________ corporation, FiberMark Filter and Technical Products, Inc.
("FiberMark Filter"), a ____________________ corporation, and FiberMark Office
Products, LLC, ("FiberMark Office"), a _________________ limited liability
company, The CIT Group/Business Credit, Inc., a New York corporation ("CITBC")
with offices located at 1211 Avenue of the Americas, New York, New York, the
other lenders that may, subsequent to the date hereof, purchase from CITBC a
portion of its rights and obligations under this Third Amended and Restated
Financing Agreement and Guaranty pursuant to, and in accordance with, Section
14.07 hereof (CITBC 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-▇▇▇▇▇▇ ▇▇▇▇ Inc., Custom Papers Group Inc., Arcon Holdings
Corp., Arcon Coating ▇▇▇▇▇ 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:
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, 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.
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 the date occurring one (1) year from
April 30, 1996 and the same date in every year thereafter.
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%).
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 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 ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code Annotated
Section 3727 and all amendments and supplements thereto and all rules and
regulations promulgated thereof.
Availability shall mean the excess of
(a) the sum of
(i) eighty-five percent (85%) of the Eligible Accounts
Receivable of the Obligors, plus
(ii) fifty percent (50%) of the aggregate value of
Eligible Inventory of the Obligors,
over
(b) the sum of
(i) the outstanding aggregate amount of all outstanding
Obligations of all the Borrowers taken together, and
(ii) the Availability Reserve, if any, with respect to
the Borrowers.
Availability Reserve shall mean (a) $5,000,000 until such time as
FiberMark shall furnish to the Agent audited financial statements of the
Borrower for the Fiscal Year ending on December 31, 1997, such financials
indicate that no Default or Event of Default shall have occurred or be
continuing under this Financing Agreement and (b) any reserve which the Agent
and/or the Lenders may require from time to time pursuant to this Financing
Agreement if applicable.
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) eighty-five
percent (85%) of the Eligible Accounts Receivable, plus (b) fifty percent (50%)
of the aggregate value of Eligible Inventory.
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.
Brattleboro Collateral shall mean all of FiberMark Office's present
and future Equipment and Real Estate of FiberMark Office whether now or
hereafter owned by FiberMark Office and located on the Brattleboro, Vermont
property owned by FiberMark Office; and to the extent not otherwise included,
all proceeds and products of any and all of the foregoing.
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 the Borrower has elected to use the Chase
Manhattan Bank Rate for interest rate calculations.
CITEF means The CIT Group/Equipment Financing, Inc.
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 with respect to an Obligor all of each
Obligor's present and future Accounts and Inventory of such Obligor whether now
or hereafter owned by such Obligor, and wherever located; and to the extent not
otherwise included, all proceeds and products of any and all of the foregoing,
including all rights under all permits granted in favor of the Borrower relating
to its facility in Brattleboro, Vermont. For purposes of this Agreement,
Collateral shall also include the Brattleboro Collateral.
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 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
Consolidated EBITDA during the four full fiscal quarters (the "Four Quarter
Period") ending 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") to Consolidated Fixed Charges for the Four Quarter Period. In addition to
and without limitation of the foregoing, for purposes of this definition,
"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
(i) 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 (ii) 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
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 determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio", (1) 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; (2) 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; and (3) notwithstanding clause (1) 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.
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 (as defined in the Indenture) 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.
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 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).
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.
Corporate Obligors means each of FiberMark, FiberMark Durable and
FiberMark Filter.
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 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 the Borrower on all
Obligations due the Lenders and not paid by the 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 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) ▇▇▇▇ 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.
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 work-in-process, supplies (other than raw material),
goods not present in the United States of America, goods returned or rejected by
the customers of such Obligor and other than goods that are undamaged and
resalable in the normal course of business, goods to be returned to the
suppliers of such Obligor, goods in transit to third parties (other than the
agents or warehouses of such Obligor) and less any reserves required by the
Agent in its reasonable discretion for special order goods, market value
declines and ▇▇▇▇ and hold (deferred shipment) or consignment sales.
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
(a) relating to the Borrower'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 present and hereafter acquired machinery,
equipment, furnishings and fixtures, and all additions, substitutions and
replacements thereof, located at the Brattleboro, Vermont property owned by
FiberMark Office, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto and all proceeds 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.
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.
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 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 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.
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;
(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.
Indenture means the Indenture dated as of October 15, 1996 among
FiberMark, the Guarantors (as defined therein) and the Trustee (as defined
therein) pursuant to which the Senior Notes are issued.
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 present and
hereafter acquired 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 thereof 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, as amended and
supplemented by that certain First Amendment to Lease Agreement dated as of
September 29, 1995. [AS ASSIGNED.]
Lender(s) shall mean CITBC, 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
Revolving Credit Loans under this Financing Agreement up to the aggregate
principal amount outstanding at any time set forth below:
================================================================================
Pro Rata
Share of Amount of Pro Rata Amount of
Revolving Revolving Share of Discretionary
Credit Credit Overadvance Overadvance
Lender Facility Commitment Availability Availability
=============================================================================
CITBC 100% $20,000,000 100% $3,000,000
=============================================================================
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 the
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 all or an portion of the Revolving
Credit Loans for which the 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 Borrower shall pay such amount within five (5) business days of
presentation by CITBC to the Borrower of a statement setting forth the
amount and CITBC's calculation thereof pursuant hereto, which statement
shall be conclusive on the Borrower absent manifest error.
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.
Loan Facility 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. [ADJUSTED?]
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 ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto which provides credit ratings.
Non-Brattleboro Equipment shall mean all present and hereafter
acquired machinery, equipment, furnishings and fixtures owned by any Obligor,
and all additions, substitutions and replacements thereof, wherever located
(other than at the Brattleboro, Vermont property owned by FiberMark Office),
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto and all proceeds of whatever sort.
Non-Brattleboro Real Estate shall mean the fee and/or leasehold
interests in the real property of any Obligor (other than those interests in the
Brattleboro, Vermont property).
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. [ACQUIRED ENTITY?]
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
the Borrower by its 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.
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 3.18 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 the Borrower or a Guarantor;
(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 FiberMark Office to CITEF securing its
obligations under the Lease Agreement and Liens granted by FiberMark, FiberMark
Durable and FiberMark Filter securing such Person's guaranty of such
obligations; and
(h) 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.
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.
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
Obligations, Five Hundred Thousand Dollars ($500,000) in any Fiscal Year.
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 which has been
encumbered, mortgaged, pledged or assigned to the Agent or to the Agent's
designee for the ratable benefit of the Lenders, pursuant to the Mortgage
(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 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.
Revolving Credit Commitment has the meaning specified in Section
3.01.
Revolving Credit Commitment Termination Date shall mean April 30,
2001; 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 means Twenty Million Dollars
($20,000,000).
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
▇▇▇▇▇▇-▇▇▇▇, Inc. or any successor thereto which provides credit ratings.
Security Agreement means the Security Agreement in substantially the
form of Exhibit I hereto, to be delivered by each Obligor under the terms of
this Agreement.
Security Documents means the Security Agreement, the Mortgage
(Brattleboro, Vermont) and any other security agreement granting a Lien on any
assets of an Obligor to secure such Obligor's Obligations.
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 Commitments. 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. [STATUS?]
Specialty Japan shall mean Specialty Paperboard Kabushiki Kaisha, a
Japanese corporation. [STATUS?]
Subsidiary shall mean, as to any Person, a corporation of which
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the time owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person. [REVISE TO INCLUDE
OTHER ENTITIES?]
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
Revolving Line of Credit and (b) be determined by multiplying the difference
between such Revolving Line of Credit and the average daily Revolving Credit
Loans of the Borrower 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 words "to" and "until" each means "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:
(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, 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
Filter. A certificate of the Manager of FiberMark Filter, dated the Closing
Date, attesting to the certificate of formation and operating of agreement
FiberMark Filter and all amendments thereto and to all actions taken by
FiberMark Filter, including resolutions of its managers and members, taken by
FiberMark Filter, 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 Filter. A
certificate of the Manager of FiberMark Filter, 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 Filter. A certificate,
dated reasonably near the Closing Date, from the Secretary of State (or other
appropriate official) of the jurisdiction of incorporation 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.
(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,
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. Borrower 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). The Agent shall have received from each
landlord of any premises occupied by any Obligor a landlord's waiver waiving any
Lien such landlord has on any of the Inventory of any Obligor pursuant to an
agreement in form and substance satisfactory to the Lenders.
(p) Warehouse Documents. The Agent shall have received from each
public warehouse in which Inventory of any Obligor 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. 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 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 opinion 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
interviews with key customers and any other Persons material to the operation of
each Obligor's business and 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.
[WILL INCLUDE A REFERENCE TO THE ASSIGNMENT AND ASSUMPTION FOR THE
LEASE.]
(u) Officer's Certificate. The following statements shall be true
and Agent shall have received certificates signed by duly authorized officers of
the Borrower stating that:
(i) The representations and warranties contained in this 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) Brattleboro, Vermont Mortgage Modification. The Borrower shall
have executed and delivered to the Agent for the benefit of the Agent and the
Lenders, the Mortgage Modification Agreement (Brattleboro, Vermont) dated
December 31, 1996 by and between the Borrower and CITBC, and such Mortgage
Modification Agreement (Brattleboro, Vermont) shall have been delivered to a
title company for recording. [DOES THIS NEED TO BE UPDATED?]
(w) 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 Agreement,
including, but not limited to, disbursement authorizations in form acceptable to
the Agent.
(x) Security Agreement. The Security Agreement duly executed by the
Borrower together with (a) duly executed financing statements (UCC-1) to be
filed under the Uniform Commercial Code of all jurisdictions necessary or, in
the opinion of the Agent, desirable to perfect the security interest created by
the Security Agreement; (b) duly executed copies of the financing statements
(UCC-3) to be filed under the Uniform Commercial Code of all jurisdictions
necessary, or in the opinion of the Agent, desirable to terminate any Liens in
favor of any party other than the Agent; and (c) Uniform Commercial Code
searches identifying all of the financing statements on file with respect to
such party in all jurisdictions referred to under (a), including the financing
statements filed by the Agent against such party, indicating that no party other
than the Agent claims an interest in any of the Collateral.
(y) Additional Documentation. Such other approvals, opinions or
documents as the Agent or any Lender shall reasonably request.
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 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;
(b) The Agent shall have received such other approvals, opinions
or documents as the Agent or any Lender may reasonably
request.
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 through the Revolving Credit Commitment Termination
Date, provided that (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 Commitment"). Within the limits of the Revolving Credit
Commitment, 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 Pro Rata Share of the Revolving Credit 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 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 Borrower's authorized officers
or agents.
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 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
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 the first day the Lenders make
Revolving Credit Loans to such Obligor and (i) the Availability is $5,000,000 or
greater and (ii) there is then no 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. Upon the occurrence of 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. [STILL ACCURATE?]
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' Account. 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 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) [AMOUNTS?]; 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. Notwithstanding
anything to the contrary in this Financing Agreement, no Borrower may cancel
Revolving Credit Commitment prior to the payment in full of all outstanding
Obligations owed to CITEF under the Lease Agreement or any loan agreements.
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 Revolving Credit Loans in whole with accrued interest to the date of
such cancellation and in addition, the Borrowers shall pay to the Agent, for the
account of each Lender, a fee ("Prepayment Fee"), in the following amounts:
--------------------------------------------------------------------------------
Period Amount
--------------------------------------------------------------------------------
Twelve (12) month period from 1.0% of the average principal amount of
December 31, 1997 to December 31, 1998 all Revolving Credit Loans outstanding
at any time for the six month period
prior to such cancellation
--------------------------------------------------------------------------------
Twelve (12) month period from 0.5% of the average principal
December 31, 1998 to December 31, 1999 amount of all Revolving Credit Loans
outstanding at any time for the six
month period prior to such cancellation
--------------------------------------------------------------------------------
To the extent the outstanding principal amount of all the Revolving
Credit Loans taken together exceed 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 CITBC.
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 Lenders shall have its Pro Rata
Share of all outstanding Revolving Credit Loans in accordance with its Revolving
Credit Commitments.
The Agent shall forward to each Lender, at the end of each month, a
copy of the account statement rendered by the Agent to the 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 Commitment
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, increase, unilaterally, its portion of the Revolving Credit
Loans in which event the Borrower shall be so obligated to such other Lender.
Nothing contained herein shall be deemed to obligate the Agent to
make available to the Borrower 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 CITBC.
Unless the Agent shall have been notified in writing by any Lender
prior to any advance to the 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 the Borrower for the benefit of the 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 each Revolving Credit
Loan borrowed on any given day and the aggregate amount of each Revolving Credit
Loan with the same interest rate after giving effect to the conversions and
continuations provided for in Section 5.01 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). [AMOUNTS?] There shall be no minimum amount of
principal applicable to a conversion or continuation of a Chase Manhattan Bank
Rate Loan.
Section 3.15. Use of Proceeds. The proceeds of the Revolving Credit
Loans shall be used by the applicable Borrower for its working capital and
general corporate purposes [and may be used by such Borrower to make loans to
any Obligor for working capital purposes]; [STILL TRUE?] provided, however, that
an amount not to exceed $15,000,000 of the proceeds of all the Revolving Credit
Loans may be used by all Borrowers taken together to pay all or a portion of the
consideration for the acquisition of stock or assets of
another Person. 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 G, 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 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.
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 the Borrower 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 Borrower
hereunder) and upon request of the Borrower to provide to such Person 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 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 any Revolving Credit Commitment of such Lender; or
(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 3.18
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 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 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.
Section 3.19. Illegality. Notwithstanding any other provision of
this 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.
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 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 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 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 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.
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 FiberMark Durable Obligations made by any Lender
Party may be rescinded by such Lender Party and any of 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 4.3, 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 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 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 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 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 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 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 FiberMark Filter Obligations made by any Lender Party may be rescinded by
such Lender Party and any of 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 4.3, 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.
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 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 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 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 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 FiberMark Office Obligations made by any Lender Party may be rescinded by
such Lender Party and any of FiberMark Office Obligations continued after such
rescission.
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 4.3, 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 FiberMark 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 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 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 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 FiberMark
Obligations made by any Lender Party may be rescinded by such Lender Party and
any of 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 obligations of FiberMark or any FiberMark
Guarantor hereunder, the omission of or delay in which, but for the provisions
of this Section 4.3, 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:
(1) present and hereafter acquired Inventory;
(2) present and future Accounts; and
(3) the Brattleboro Collateral.
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 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;
(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; and
(iii) All proceeds of any and all of the foregoing.
(b) Grant of a Security Interest by FIberMark. As security for the
prompt payment and performance in full of all of the FiberMark Obligations,
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:
(1) present and hereafter acquired Inventory; and
(2) present and future Accounts.
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 others for its account;
(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; and
(iii) All proceeds of any and all of the foregoing.
(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:
(1) present and hereafter acquired Inventory; and
(2) present and future Accounts.
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 others for its account;
(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; and
(iii) All proceeds of any and all of the foregoing.
(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:
(1) present and hereafter acquired Inventory; and
(2) present and future Accounts.
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;
(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; and
(iii) All proceeds of any and all of the foregoing.
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 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, 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. 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 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 Two Hundred Fifty Thousand Dollars
($250,000) 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) permit
any of the Inventory or Equipment owned by it to be kept at a location other
than those listed on Schedule 5.04 hereto or (c) change its name (including the
adoption of any new trade name), identity or corporate structure unless it shall
have provided at least thirty (30) days prior written notice to the Agent of any
such change. 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. 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. Covenants Regarding Lease Agreement. FiberMark Office
will not amend or modify any of the terms or provisions of the Lease Agreement,
as in effect on the date hereof.
Section 5.07. 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 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 5.08. 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 5.09. 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 the 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 a
Mortgage (Brattleboro, Vermont) on the Real Estate. FiberMark Office shall give
to the Agent for the ratable benefit of the 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 5.10. 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 5.11. 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 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. [WILL ALL LOANS BE AGGREGATED FOR SUCH
PURPOSES?]
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 the 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
(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. During the period from the Closing Date to the
Revolving Credit Commitment Termination Date, [FiberMark] agrees to pay to the
Agent for the account of each Lender the Unused Line Fee relating to the
Revolving Credit Commitment to the Borrowers. 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 April 30, 1997 and each anniversary thereof, [FiberMark] 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 shall not be payable until the occurrence
of an Event of Default if [FiberMark] is 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 the 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 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;
(1) 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;
(2) 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;
(3) 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
Oblibor's account; and
(4) 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 (b), (d) and (e) 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.
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]; (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 ______________ or ______________; (c) violate any provision of,
or require any filing (other than the filing of the financing statements
contemplated 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 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.
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, 1995 and December 31, 1996,
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
____, 1997, of Coopers & ▇▇▇▇▇▇▇ 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, 1996 . 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 September 30, 1997, the related statements of income,
statements of stockholders' equity (deficit) and statements of cash flows of
such entities for the nine-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 September 30, 1997. 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, 1996 there has
been no Material Adverse Change with respect to any Obligor.
Section 8.06. Ownership and Liens. 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 (Brattleboro, Vermont). 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 5.05 (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.
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 and FiberMark Filter. FiberMark Durable has no Subsidiaries.
FiberMark Filter has not Subsidiaries other than FiberMark Office. [STATUS OF
SPECIALTY HONG KONG AND SPECIALTY JAPAN.]
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.
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,
(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.
Section 8.18. Intellectual Property. Except as set forth on Schedule
8.20 hereto, 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 8.21 hereto, no Obligor holds or has it entered into any agreement
for the use of any license for any trademark, patent, copyright or other
intellectual property rights.
ARTICLE IX. AFFIRMATIVE COVENANTS.
So long as any Revolving Credit Loans are outstanding or the Lenders
have any Revolving Credit Commitments 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, 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 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;
(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: within twenty-five (25) days after
the last day of each month or such lesser period of time as the Agent may
require in its sole discretion, a Borrowing Base Certificate.
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 material adverse effect on the value of the Collateral or the
Liens created pursuant to this 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;
(g) on each January ____, a report describing 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;
(h) 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 Pension Benefit Guaranty Corporation; (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 Pension Benefit Guaranty
Corporation 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;
(i) 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 and action, if any, which such Obligor or other ERISA Affiliate
is required or proposes to take;
(j) written notice of any change in the location of any Collateral,
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;
(k) 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 Durables) 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 Borrower
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.
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, ▇▇▇▇▇▇▇'▇
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 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 Obligor and (b) insuring the Inventory of such 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 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
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 Obligor will maintain
Business Interruption and Comprehensive Boiler and Machinery Insurance in form
and amounts and with insurers acceptable to the Agent. In addition, ▇▇▇▇▇▇▇'▇
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 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 either pay the balance 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, the Brattleboro Collateral Borrower 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 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 the Borrower 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 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 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 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 (Brattleboro, Vermont).
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 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. In addition, within the same time
period each Obligor shall request from the applicable Multiemployer Plans an
estimate, in writing, of the amount of any withdrawal liability to be assessed
in connection with the stock purchase transactions contemplated by the Arcon
Purchase Documents and the merger contemplated by the CPG Merger Documents and
shall provide a copy of such written 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 Borrower with respect to each Acquired Entity acquired
on or after the date hereof:
(a) the Acquired Entity shall have executed all documentation and
take all steps required pursuant to which such Acquired Entity shall
become a Guarantor under this Agreement and shall agree to be bound by the
terms of this Agreement applicable to a Guarantor; [FOR DISCUSSION.]
(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;
(c) the Agent shall have received a certificate of the Secretary or
Assistant Secretary of such Acquired Entity attesting to the Certificate
of Incorporation and Bylaws 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 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. (a) Each Obligor
(i) 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;
(ii) obtain and renew all Approvals and Permits required pursuant to
Environmental Laws;
(iii) 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
(iv) notify the Agent of any of the following that is likely to have
a Material Adverse Change:
(A) 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
(B) 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.
(b) Without limitation of the foregoing, within one year of the date
hereof, each Obligor shall have substantially addressed all matters identified
as non-compliance with Environmental Laws and shall have 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. [STATUS?]
(c) The Borrower will complete or undertake all transactions
pursuant to Section 6.6 of the CPG Merger Agreement and will agree in writing on
an amount to be deposited 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. [STATUS?]
ARTICLE X. NEGATIVE COVENANTS
So long as any Revolving Credit Loans are outstanding, or any Lender
has any Revolving Credit Commitment hereunder or any other amount is owing to
the Lenders hereunder or under any other Loan Documents, no Obligor 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. Guaranties. Assume, guarantee, endorse, or otherwise
be or become directly or contingently responsible or liable (including, but not
limited to an agreement to purchase any obligation, stock, assets, goods or
services or to supply or advance any funds, assets, goods or services, or an
agreement to maintain or cause any such Person to maintain a minimum working
capital or net worth or otherwise to assure the creditors of such Person against
loss) for the obligations, stock or dividends of any Person, except guarantees
by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business and the guaranties of Borrower
Obligations pursuant to Article 4 of this Financing Agreement.
Section 10.04. 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 10.05. 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 purchase (whether in one
transaction or in a series of related transactions) all or substantially all of
the assets of any Person.
Section 10.06. 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 in, 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 9.10 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, FiberMark shall be permitted to make loans, advances or capital
contributions to each of Specialty Hong Kong and Specialty Japan to fund their
respective operations, provided (A) the operations of each such entity are
conducted on a basis substantially similar in size, scope and nature to those
conducted by such entity in the twelve-month period ended on the date hereof,
and (B) the aggregate amount of such loans, advances and capital contributions
from FiberMark to all such entities, net of repayments and dividends from such
entities to the Borrower shall not exceed the following amounts for the
indicated periods:
(1) For calendar year 1996, $5,000,000; and
(2) For each calendar year thereafter, the applicable amount for
the preceding calendar year plus $250,000. [DOES THIS NEED TO
BE UPDATED?]
Section 10.07. 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 10.07 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 9.10 of this Financing Agreement.
Section 10.08. 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 10.09. 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 Borrower, 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 (i) dividend payments by FiberMark Durable and FiberMark Filter to
FiberMark and distributions by FiberMark Office to FiberMark Filter or (ii)
during any Fiscal Year ending on or after December 31, 1995 FiberMark may
declare and pay dividends on its capital stock or purchase or redeem its capital
stock in an aggregate amount not to exceed thirty-three and one third percent
(33 1/3%) of the total of Consolidated Net Income minus consolidated
Amortization of Deferred Book Gain of FiberMark and its Subsidiaries for the
prior Fiscal Year of FiberMark, provided that at the time of such declaration
and distribution and after giving effect to such dividend (a) there is aggregate
Availability of at least Two Million Five Hundred Thousand Dollars ($2,500,000),
and (b) no Default or Event of Default is outstanding or will occur as a result
thereof.
Section 10.10. Leases. Except for the Lease Agreement, enter into
any Operating Lease if after giving effect thereto the aggregate obligations
with respect to all of the Operating Leases of the Obligors during any Fiscal
Year would exceed Five Hundred Thousand Dollars ($500,000).
Section 10.11. 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.
Section 10.12. Fiscal Year. Change its Fiscal Year from a period of
January 1 to December 31.
Section 10.13. 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. Intentionally Omitted.
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 an 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 an 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 an 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 an 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 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 an 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 an Obligor and the
Lenders and/or the Agent or delivered by an 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 an 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,
8.19, 8.20, 9.01(g), 9.03, 9.07 or Article 10 (other than Section 10.11);
(e) if an 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 an 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
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 an 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) an 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 an
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 an
Obligor or any ERISA Affiliate: (i) an 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 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 an Obligor to any tax, penalty, or other
liability to an Employee Benefit Plan, the Pension Benefit Guaranty
Corporation, 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
(Brattleboro, Vermont);
(m) if any time the Agent for the benefit of the Lenders no longer
has a Lien on any of the Collateral; or
(n) FiberMark Office shall fail to pay any amount owing under the
Lease Agreement when due, and such failure shall continue unremedied for a
period of ten (10) days from the date such amount was due.
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 this Agreement to the
contrary notwithstanding, equal to the full outstanding principal amounts of the
Revolving Credit Loans being accelerated multiplied by three percent (3%);
provided, however, that the lost transaction fee shall be paid by the Borrowers
on Chase Manhattan Bank Rate Loans and Libor Rate Loans only if such loans are
accelerated on or prior to the first Anniversary Date; [STILL APPLY?] (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 Borrower'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, 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 (Brattleboro, Vermont) 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 the 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 the 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 the 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 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 the 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 an Obligor or
any officer thereof contained in the 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, the
Financing Agreement and all ancillary documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Financing
Agreement and all ancillary documents or for any failure of an 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, the Financing Agreement or
any ancillary document or to inspect the properties, books or records of an
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 the 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 the 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 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 the 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 the 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 an Obligor, and
without limiting the obligation of an 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 the 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 an 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 the
Financing Agreement as any Lender and may exercise the same as though it were
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 the Financing Agreement to (a) increase the Revolving Credit Commitments;
(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 the Financing Agreement or (b) waive any Event of Default
under the 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 the 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 Revolving Credit Commitment
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 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 Revolving Credit Commitments. 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 an 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 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 the 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 Revolving Credit
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 Revolving
Credit Commitment hereunder) shall remain 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 an Obligor pursuant to this Financing Agreement or which has
been delivered to such Lender by or on behalf of an
Obligor in connection with such Lender's credit
evaluation of an 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 portion of the
Revolving Credit Commitments 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 an
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 an 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 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 Revolving
Credit Commitments 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 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 an Obligor or the
performance or observance by an 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, 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 Revolving Credit Commitment and/or Revolving Credit Loans assumed
by it pursuant to such Assignment and Acceptance and, if such Lender has
retained a Revolving Credit Commitment and/or Revolving Credit Loan hereunder,
new Revolving Credit Notes to the order of such Lender in amounts equal to the
applicable Revolving Credit 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 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 Revolving Credit 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.
Section 14.09. Termination of Financing Agreement. The Agent, at the
direction of all of the Lenders, may terminate the Revolving Credit Commitments
and this Financing Agreement on April 30, 2000 or any Anniversary Date of the
Closing Date subsequent to April 30, 2000 by giving the Borrowers at least sixty
(60) days' prior written notice of termination. Notwithstanding the foregoing,
the Agent may terminate the 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 April
30, 2000 or any Anniversary Date of the Closing Date subsequent to April 30,
2000 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 Revolving Credit Commitment 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 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
Revolving Credit Commitment, in whole, only on or after all of the obligations
owing to CITEF by FiberMark Office under the Lease Agreement or any loan
agreement shall have been paid in full, and then 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 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. Usury. In no event shall an 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 15.04. 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 Costs and
Expenses of Agent and Lenders, including, without limitation, the fees and
disbursements of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 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 Agreement or relating to the
transactions contemplated hereby including, without limitation, ongoing review
of environmental matters; [(d) all cost associated with the Title Insurance
Policy;] (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; and (4) the Unused Line Fee.
Section 15.05. 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 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 15.06. 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 15.07. 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 15.08. 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:
(a) if to CITBC or the Agent at:
The CIT Group/Business Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Regional Manager
Fax (▇▇▇) ▇▇▇-▇▇▇▇
(b) 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 Paragraph 10
of Section 13 of this Financing Agreement.
(c) if to FiberMark at:
FiberMark, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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):
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Rock & Fields
First Security Building
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(d) if to FiberMark Durable, FiberMark Filter or FiberMark Office at:
c/o FiberMark, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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):
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Rock & Fields
Field Security Building
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or to such other address as any party may designate for itself by like
notice.
Section 15.09. Governing Law. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS FINANCING AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
Section 15.10. 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.
[INTENTIONALLY LEFT BLANK]
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:
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FIBERMARK DURABLE SPECIALTIES, INC., as Borrower
and Guarantor
By________________________________________________
Name:
Title:
Address for Notices:
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FIBERMARK FILTER AND TECHNICAL PRODUCTS, INC.,
as Borrower and Guarantor
By________________________________________________
Name:
Title:
Address for Notices:
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FIBERMARK OFFICE PRODUCTS, LLC, as Borrower and
Guarantor
By________________________________________________
Name:
Title:
Address for Notices:
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Agent
By________________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Applicable Lending Office:
New York
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By________________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Applicable Lending Office:
New York
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
REVOLVING CREDIT NOTE
_________________, 1996
EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 1996
Reference is hereby made to the Second Amended and Restated
Financing Agreement and Guaranty, dated as of December 31, 1996 (the "Financing
Agreement"), by and among Specialty Paperboard, Inc., a Delaware corporation
(the "Borrower"), Specialty Paperboard/Endura, Inc., a Delaware corporation
("Endura") CPG Investors, Inc., a Delaware corporation ("CPG Investors"), CPG
Holdings, Inc., a Delaware corporation ("CPG Holdings"), CPG-▇▇▇▇▇▇ ▇▇▇▇ Inc., a
Virginia corporation ("CPG-▇▇▇▇▇▇"), Custom Papers Group Inc., a Virginia
corporation ("Custom"), Arcon Holdings Corp., a Delaware corporation ("Arcon
Holdings"), Arcon Coating ▇▇▇▇▇ Inc., a Delaware corporation ("Arcon Coating"),
the Lenders signatory thereto (collectively, the "Lenders") and The CIT
Group/Business Credit, Inc. in its capacity as agent for the Lenders (in such
capacity, the "Agent"). Capitalized terms used herein that are defined in the
Financing Agreement that are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Financing Agreement.
The CIT Group/Business Credit, Inc., a New York corporation (the
"Assignor") and __________________________ a _____________ corporation, (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a ______________
percent (___%) interest in and to all of the Assignor's rights and obligations
under the Financing Agreement as of the Effective Date (as defined below)
(including, without limitation, such percentage interest in the Assignor's
Revolving Credit Commitments as in effect on the Effective Date, as evidenced by
the Revolving Credit Note held by the Assignor, and the Obligations owing to the
Assignor on the Effective Date.
2. The Assignor: (i) represents and warrants that as of the date
hereof, its Revolving Credit Commitments (without giving effect to assignments
thereof that have not yet become effective) are $____________, (ii) represents
and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder, and that such interest is free and clear of any
adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Financing Agreement or any other instrument or
document furnished pursuant thereto; and (iv) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
Obligations under the Financing Agreement or any other instrument or document
furnished pursuant thereto; and (v) attaches the Revolving Credit Note referred
to in Paragraph 1 above and requests that the Agent exchange such note for a new
note as follows: a Revolving Credit Note of the Borrower dated the Effective
Date in the principal amount of $_______________, such Revolving Credit Note
payable to the order of the Assignee; and a Revolving Credit Note of the
Borrower dated the Effective Date in the principal amount of $________ such
Revolving Credit Note payable to the order of the Assignor.
3. The Assignee: (i) confirms that it has received a copy of the
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 this Assignment and Acceptance; (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor 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 the Financing Agreement; (iii) appoints and
authorizes the Agent to take such action as its agent on its behalf and to
exercise such powers under the Financing Agreement as are delegated to the Agent
1
by the terms thereof, together with such powers as are reasonably incidental
thereto; (iv) agrees that it will perform in accordance with their terms all of
the obligation which by the terms of the Financing Agreement are required to be
performed by it as a Lender; and (vi) specifies as its address(es) and telephone
numbers for notice the office(s) set forth beneath its name on the signature
pages hereof.
4. The effective date for this Assignment and Acceptance shall be
__________ (the "Effective Date"). Following the execution of this Assignment
and Acceptance, it will be delivered to the Agent for acceptance by the Agent.
5. Upon such acceptance, as of the Effective Date: (i) the Assignee
shall be a party to the Financing Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provide in this Assignment
and Acceptance, relinquish its rights and be released from its obligations under
the Financing Agreement.
6. Upon such acceptance from and after the Effective Date, the Agent
shall make (except as otherwise agreed to by the Agent, the Assignor and the
Assignee) all payments under the Financing Agreement and the Revolving Credit
Note in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate adjustments in
payments under the Financing Agreement and the notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
THE CIT GROUP/BUSINESS CREDIT, INC.
By
Title
[NAME OF ASSIGNEE]
By
Title
Address for Notices:
Attention:
Telephone No.:
Telex No.:
Accepted this ___day
of __________, 199
THE CIT GROUP/BUSINESS CREDIT, INC, as Agent
2
By
Title
3
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS, ACCOUNTING TERMS AND RULES OF.................... 1
CONSTRUCTION 1
SECTION 1.01. DEFINED TERMS............................................... 1
SECTION 1.02. COMPUTATION OF TIME PERIODS................................ 17
SECTION 1.03. ACCOUNTING PRINCIPLES AND TERMS............................ 17
SECTION 1.04. RULES OF CONSTRUCTION...................................... 17
ARTICLE II. CONDITIONS PRECEDENT......................................... 17
SECTION 2.01. CONDITIONS PRECEDENT TO INITIAL REVOLVING CREDIT LOAN...... 17
SECTION 2.02. CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT LOAN......... 19
SECTION 2.03. DEEMED REPRESENTATION...................................... 20
ARTICLE III. AMOUNT AND TERMS OF THE REVOLVING CREDIT LOANS............... 20
SECTION 3.01. REVOLVING CREDIT LOANS..................................... 20
SECTION 3.02. REVOLVING CREDIT NOTE...................................... 20
SECTION 3.03. OVERADVANCES............................................... 20
SECTION 3.04. INFORMATION RELATING TO ACCOUNTS........................... 21
SECTION 3.05. REPRESENTATIONS RELATING TO ACCOUNTS....................... 21
SECTION 3.06. COLLECTION OF ACCOUNTS..................................... 21
SECTION 3.07. NOTICE REGARDING ACCOUNTS.................................. 22
SECTION 3.08. BORROWERS' ACCOUNT......................................... 22
SECTION 3.09. APPLICATION OF PAYMENTS.................................... 22
SECTION 3.10. PREPAYMENTS................................................ 23
SECTION 3.11. FUNDING OF REVOLVING CREDIT LOANS.......................... 23
SECTION 3.12. NOTICE AND MANNER OF BORROWING............................. 23
SECTION 3.13. OBLIGATIONS OF AGENT AND LENDERS........................... 24
SECTION 3.14. MINIMUM AMOUNTS............................................ 24
SECTION 3.15. USE OF PROCEEDS............................................ 24
SECTION 3.16. TAXES...................................................... 25
SECTION 3.17. ADDITIONAL COSTS........................................... 25
SECTION 3.18. LIMITATION ON TYPES OF REVOLVING CREDIT LOANS.............. 26
SECTION 3.19. ILLEGALITY................................................. 26
SECTION 3.20. TREATMENT OF AFFECTED LOANS................................ 27
SECTION 3.21. ADEQUACY................................................... 27
ARTICLE IV. GUARANTY..................................................... 27
SECTION 4.01. FIBERMARK DURABLE GUARANTY................................. 27
SECTION 4.02. FIBERMARK DURABLE GUARANTORS' GUARANTY OBLIGATIONS
UNCONDITIONAL............................................ 27
SECTION 4.03. WAIVERS.................................................... 28
4
SECTION 4.04. SUBROGATION................................................ 28
SECTION 4.05. FIBERMARK FILTER GUARANTY.................................. 28
SECTION 4.06. FIBERMARK FILTER GUARANTORS' GUARANTY OBLIGATIONS
UNCONDITIONAL. 28
SECTION 4.07. WAIVERS.................................................... 29
SECTION 4.08. SUBROGATION................................................ 29
SECTION 4.09. FIBERMARK OFFICE GUARANTY.................................. 30
SECTION 4.10. FIBERMARK OFFICE GUARANTORS' GUARANTY OBLIGATIONS
UNCONDITIONAL............................................ 30
SECTION 4.11. WAIVERS.................................................... 30
SECTION 4.12. SUBROGATION................................................ 31
SECTION 4.13. FIBERMARK GUARANTY......................................... 31
SECTION 4.14. FIBERMARK GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL... 31
SECTION 4.15. WAIVERS.................................................... 32
SECTION 4.16. SUBROGATION................................................ 32
ARTICLE V. COLLATERAL................................................... 32
SECTION 5.01. (A) GRANT OF A SECURITY INTEREST BY FIBERMARK OFFICE....... 32
SECTION 5.02. COVENANTS REGARDING INVENTORY.............................. 34
SECTION 5.03. COVENANTS REGARDING EQUIPMENT.............................. 34
SECTION 5.04. COLLATERAL COVENANT........................................ 35
SECTION 5.05. COVENANTS REGARDING ACCOUNTS............................... 35
SECTION 5.06. COVENANTS REGARDING LEASE AGREEMENT........................ 36
SECTION 5.07. CONTINUING SECURITY INTEREST............................... 36
SECTION 5.08. ACTIONS BY AGENT........................................... 36
SECTION 5.09. ADDITIONAL COLLATERAL AND FURTHER ASSURANCES............... 36
SECTION 5.10. ADDITIONAL INFORMATION..................................... 36
SECTION 5.11. COMPLIANCE WITH FAIR LABOR STANDARDS ACT................... 37
ARTICLE VI. INTEREST, FEES AND EXPENSES.................................. 37
SECTION 6.01. METHOD OF ELECTING INTEREST RATES.......................... 37
SECTION 6.02. INTEREST................................................... 38
SECTION 6.03. FEES....................................................... 38
SECTION 6.04. PAYMENTS AND COMPUTATIONS.................................. 39
SECTION 6.05. CERTAIN COMPENSATION....................................... 39
ARTICLE VII. POWERS....................................................... 39
SECTION 7.01. POWERS..................................................... 39
ARTICLE VIII. REPRESENTATIONS AND WARRANTIES................................ 40
SECTION 8.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION......... 40
SECTION 8.02. CORPORATE POWER AND AUTHORITY; NO CONFLICTS................ 40
SECTION 8.03. LEGALLY ENFORCEABLE AGREEMENTS............................. 40
SECTION 8.04. LITIGATION................................................. 40
SECTION 8.05. FINANCIAL STATEMENTS....................................... 41
SECTION 8.06. OWNERSHIP AND LIENS........................................ 41
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SECTION 8.07. TAXES...................................................... 41
SECTION 8.08. ERISA...................................................... 41
SECTION 8.09. SUBSIDIARIES............................................... 42
SECTION 8.10. OPERATION OF BUSINESS...................................... 42
SECTION 8.11. NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS.............. 42
SECTION 8.12. NO DEFAULTS ON OTHER AGREEMENTS............................ 42
SECTION 8.13. LABOR DISPUTES AND ACTS OF GOD............................. 42
SECTION 8.14. GOVERNMENTAL REGULATION.................................... 42
SECTION 8.15. PARTNERSHIPS............................................... 42
SECTION 8.16. ENVIRONMENTAL PROTECTION................................... 42
SECTION 8.17. SOLVENCY................................................... 43
SECTION 8.18. INTELLECTUAL PROPERTY...................................... 43
SECTION 8.19. LICENSE OF INTELLECTUAL PROPERTY........................... 43
ARTICLE IX. AFFIRMATIVE COVENANTS........................................ 43
SECTION 9.01. REPORTING REQUIREMENTS..................................... 43
SECTION 9.02. NOTICES.................................................... 45
SECTION 9.03. PAYMENT OF TAXES AND CLAIMS................................ 46
SECTION 9.04. MAINTENANCE OF EXISTENCE................................... 46
SECTION 9.05. CONDUCT OF BUSINESS........................................ 46
SECTION 9.06. COMPLIANCE WITH LAWS....................................... 46
SECTION 9.07. INSURANCE.................................................. 46
SECTION 9.08. BOOKS AND RECORDS; INSPECTION.............................. 49
SECTION 9.09. ERISA COVENANT............................................. 49
SECTION 9.10. INTERCOMPANY TRANSFER OF FUNDS............................. 49
SECTION 9.11. INVENTORY AND ACCOUNTS RECEIVABLE ANALYSIS OF ACQUIRED
ENTITY................................................... 49
SECTION 9.12. ACQUIRED ENTITIES.......................................... 49
SECTION 9.13. COMPLIANCE WITH ENVIRONMENTAL LAWS......................... 50
ARTICLE X. NEGATIVE COVENANTS........................................... 50
SECTION 10.01. DEBT....................................................... 50
SECTION 10.02. LIENS...................................................... 51
SECTION 10.03. GUARANTIES................................................. 51
SECTION 10.04. SALE OF ASSETS............................................. 51
SECTION 10.05. PROHIBITION OF FUNDAMENTAL CHANGES......................... 51
SECTION 10.06. INVESTMENTS................................................ 51
SECTION 10.07. TRANSACTION WITH AFFILIATES................................ 51
SECTION 10.08. NATURE OF BUSINESS......................................... 51
SECTION 10.09. DIVIDENDS.................................................. 52
SECTION 10.10. LEASES..................................................... 52
SECTION 10.11. ENVIRONMENTAL COMPLIANCE................................... 52
SECTION 10.12. FISCAL YEAR................................................ 52
SECTION 10.13. SUBSIDIARY STOCK ISSUANCE.................................. 52
ARTICLE XI. INTENTIONALLY OMITTED........................................ 52
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ARTICLE XII. EVENTS OF DEFAULT............................................ 52
SECTION 12.01. EVENTS OF DEFAULT.......................................... 52
SECTION 12.02. ACCELERATION OF OBLIGATIONS................................ 54
SECTION 12.03. OTHER REMEDIES............................................. 55
ARTICLE XIII. AGENCY........................................................ 56
SECTION 13.01. THE AGENT.................................................. 56
SECTION 13.02. DELEGATION OF DUTIES....................................... 56
SECTION 13.03. EXCULPATORY PROVISIONS..................................... 56
SECTION 13.04. RELIANCE BY AGENT.......................................... 56
SECTION 13.05. NOTICE OF DEFAULT.......................................... 57
SECTION 13.06. NON-RELIANCE ON AGENT AND OTHER LENDERS.................... 57
SECTION 13.07. INDEMNIFICATION............................................ 57
SECTION 13.08. THE AGENT IN ITS INDIVIDUAL CAPACITY....................... 57
SECTION 13.09. SUCCESSOR AGENT............................................ 57
SECTION 13.10. ARRANGEMENTS REQUIRING CONSENT OF LENDERS.................. 58
SECTION 13.11. RECAPTURE OF PAYMENTS...................................... 58
ARTICLE XIV. RIGHTS AND OBLIGATIONS OF THE LENDERS AND THE AGENT........... 59
SECTION 14.01. ADJUSTMENTS AMONG LENDERS.................................. 59
SECTION 14.02. SHARING OF PAYMENTS........................................ 59
SECTION 14.03. SALE OF PARTICIPATIONS..................................... 59
SECTION 14.04. NATURE OF REVOLVING CREDIT COMMITMENTS..................... 60
SECTION 14.05. SHARING OF COSTS AND EXPENSES.............................. 60
SECTION 14.06. SHARING OF PAYMENTS........................................ 60
SECTION 14.07. ASSIGNMENTS................................................ 60
SECTION 14.08. ACKNOWLEDGEMENTS BY AGENT.................................. 61
SECTION 14.09. TERMINATION OF FINANCING AGREEMENT......................... 62
ARTICLE XV. MISCELLANEOUS................................................ 62
SECTION 15.01. WAIVERS.................................................... 62
SECTION 15.02. ENTIRE AGREEMENT........................................... 62
SECTION 15.03. USURY...................................................... 62
SECTION 15.04. PAYMENT OF EXPENSES........................................ 63
SECTION 15.05. INDEMNITY.................................................. 63
SECTION 15.06. SEVERABILITY............................................... 63
SECTION 15.07. WAIVER OF JURY TRIAL....................................... 63
SECTION 15.08. NOTICES.................................................... 63
SECTION 15.09. GOVERNING LAW.............................................. 64
SECTION 15.10. CONFIDENTIALITY............................................ 64
Exhibits
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Revolving Credit Notice of Borrowing
Exhibit C - Form of Notice of Interest Rate Selection
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Exhibit D - Form of Mortgage, Assignment of Leases and Rents and Security
Agreement (Brattleboro)
Exhibit E - Form of Solvency Certificate
Exhibit F - Form of Opinion of Counsel to Obligors
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Borrowing Base Certificate
Exhibit I - Form of Security Agreement
Schedules
Schedule 5.04 - List of Inventory and Equipment Locations
Schedule 5.04A - Real Estate
Schedule 8.04 - Litigation
Schedule 9.06 - Environmental Matters
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