EXHIBIT 10.29
LOAN AGREEMENT
This Agreement is made as of November 24, 1997 between Steinbeis Holding
GmbH, a company with limited liability organized under the laws of the
Federal Republic of Germany, registered in the commercial register of the
municipal court of Traunstein under No. HRB 6018 and having its registered
office at Brannenburg (hereinafter referred to as "LENDER") and Steinbeis
Xxxxxxx GmbH, a company with limited liability organized under the laws of
the Federal Republic of Germany, registered in the commercial register of the
municipal court of Traunstein under No. HRB 112 and having its registered
office at Brannenburg (hereinafter referred to as "BORROWER").
WHEREAS, BORROWER requests additional funding, and LENDER is willing to grant
such funding.
WHEREAS, LENDER is the sole shareholder of BORROWER and intends to sell and
assign its shares in BORROWER to wholly owned subsidiaries of FiberMark,
Inc., a corporation under the laws of the State of Delaware, United States,
pursuant to the terms and conditions of a certain share purchase agreement
(hereinafter referred to as the "SHARE PURCHASE AGREEMENT") to be entered
into after conclusion or this Agreement.
WHEREAS, the loan to be granted to BORROWER by LENDER under this Agreement
shall also serve as collateral for any warranty claims of BORROWER or
assigned to BORROWER under the SHARE PURCHASE AGREEMENT.
THEREFORE, it is agreed as follows:
ARTICLE 1
THE LOAN
LENDER hereby grants to BORROWER a loan (Darlehen) within the meaning of
Section 607 BGB (German Civil Code) in the principal amount of DM 8,000,000
(eight million Deutsche Xxxx) and BORROWER hereby accepts such loan.
Payment of the principal amount of DM 8,000,000 shall be made by banker's
cheque (LZB-Xxxxxx) on the CLOSING DATE as defined in the SHARE PURCHASE
AGREEMENT in accordance with the provisions of Article 3.2 (a) of the said
SHARE PURCHASE AGREEMENT.
ARTICLE 2
TERM
The loan shall have a fixed term (feste Laufzeit) until March 31, 2001.
Subject to Article 7, any payment of principal or interest shall be made in
German currency .
ARTICLE 3
INTEREST
The principal amount of the loan or any outstanding remainder thereof
shall bear interest from the date following the day of payment of the
principal amount pursuant to Article 1 at a fixed rate per annum of 5% (five
percent). Such interest shall be due and payable on the dates set forth in
Article 4 hereof.
ARTICLE 4
REPAYMENT OF THE LOAN
The loan shall be due for repayment in three installments in the amounts and on
the dates set forth below:
(a) The first installment in the principal amount of DM 2,000,000 (two million
Deutsche Xxxx) plus accrued interest (aufgelaufene Zinsen) shall be paid on
March 31, 1999;
(b) The second installment in the principal amount of DM 2,000,000 (two million
Deutsche Xxxx) plus accrued interest shall be paid on March 31, 2000;
(c) The final installment in the principal amount of DM 4,000,000 (four million
Deutsche Xxxx) plus accrued interest shall be paid on March 31, 2001.
At any time, BORROWER shall have the right to prepay part or all of the
outstanding principal of the loan without any damage or compensation payments
whatsoever, in particular, but not limited to, any acceleration damages
(Vorfalligkeitsentschadigung).
ARTICLE 5
ASSIGNMENT, SET-OFF, RIGHT OF RETENTION
It is agreed between LENDER and BORROWER that LENDER shall not have the right
to assign or otherwise transfer the loan or any repayment claims under such
loan to any third party, including, but not limited to, any of its
affiliates.
To the extent Xxxxxxx 000x XXX (Xxxxxx Commercial Code) acknowledges an
assignment contrary to the aforementioned prohibition of assignment, LENDER
and BORROWER agree that, notwithstanding any other statutory rights, BORROWER
shall in particular have the rights pursuant to Section 354a second sentence
HGB, including but not limited to the right to set-off and charge against
(aufrechnen und verrechnen) any claims against LENDER which BORROWER may have
or which may have been assigned to BORROWER (in particular, but not limited
to, any claims under the SHARE PURCHASE AGREEMENT) against any repayment
claims under this Agreement disregarding when such claims of BORROWER have
arisen. To the extent permissible under mandatory statutory provisions, the
same shall apply with respect to any right of retention of BORROWER
(Zuruckbehaltungsrecht).
ARTICLE 6
AMENDMENTS, MODIFICATIONS, TERMINATION
It is agreed between LENDER and BORROWER that an amendment to, a
modification of or a termination of this Agreement shall be made in writing.
ARTICLE 7
EUROPEAN ECONOMIC AND MONETARY UNION
The European Union anticipates the introduction of a single currency and
substitution of the national currencies of the Member States participating in
a Monetary Union. On the date on which the Deutsche Xxxx is replaced by a
single currency, conversion into such currency shall take effect. Conversion
shall be based on the official fixed rate of conversion. The denomination of
the original currency shall, however, be retained for so long as this is
legally permissible.
Neither the introduction of the single currency nor the substitution of the
national currencies of the Member States participating in such Monetary Union
nor the fixing of the official rate of conversion nor any economic
consequences that arise from any of the aforementioned events or in
connection with such Monetary Union shall give rise to any right to terminate
prematurely, contest, cancel, rescind, modify, or renegotiate this Agreement
or any of its provisions or to raise any other objections and/or assert any
claims for compensation. This Agreement shall remain in full force and effect
in accordance with its terms; in particular, interest rates which have been
set for an interest period shall remain unchanged for such interest period,
subject to any mandatory provisions.
ARTICLE 8
SEVERABILITY
In the event that one or several provisions of this Agreement should be
invalid or unenforceable, or if this Agreement should be incomplete, the
validity of and enforceability of the other provisions of this Agreement
shall not be affected thereby. In such case, LENDER and BORROWER shall
replace the invalid provision by such valid and enforceable provision or by
such provision completing this Agreement which is or are commensurate with
the commercial intent of this Agreement as of the date hereof. In the event
that Article 5 of this Agreement, in whole or in part, is declared to be void
by an unappealable decision of a court due to its coverage, then a scope of
this provision shall be deemed to apply which comes closest to the void
provision which would be considered as being effective by the competent
court. This shall not affect the validity of the remaining provisions of this
Agreement.
ARTICLE 9
GOVERNING LAW, ARBITRATION
This Agreement shall be governed by and construed in accordance with the laws
of the Federal Republic of Germany. All disputes arising in connection with
this Agreement or related thereto shall be finally settled by arbitration
under the Rules of Conciliation and Arbitration of the International Chamber
of Commerce with a tribunal of three arbitrators with sufficient proficiency
in both the German and the English language, who shall be appointed in
accordance with the said Rules, and which arbitration shall be conducted in
the German language; however, this Agreement or any other agreements or
instruments which have been signed and/or executed in the English language
shall be introduced in the arbitration proceedings in the English language.
The place of arbitration shall be Munich. In as far as the said Rules do not
provide procedural regulations, the statutory provisions of the ZPO (German
Code of Civil Procedure) shall apply.
IN WITNESS HEREOF, this Agreement has been executed as of the date first above
written.
Steinbeis Holding GmbH Steinbeis Xxxxxxx GmbH
_____________________ ________________________
GUARANTEE
FiberMark, Inc., a corporation organized under the laws of the State of
Delaware, United States, hereby assumes a guarantee (Burgschaft) within the
meaning of Section 765 BGB (German Civil Code) towards Steinbeis Holding GmbH
(hereinafter referred to as "LENDER") for any payment obligations of
Steinbeis Xxxxxxx GmbH (hereinafter referred to as "BORROWER") pursuant to
the terms and conditions of a certain Loan Agreement between LENDER and
BORROWER of November 24, 1997 in the principal amount of DM 8,000,000 (eight
million Deutsche Xxxx) which are either (i) undisputed between LENDER and
BORROWER or (ii) which have been determined by final arbitration court
decision against BORROWER, if and to the extent that BORROWER has failed to
fulfill its payment obligations under this Agreement within a period of one
month after justified demand for payment by LENDER, it being understood that
if the foregoing requirements are satisfied LENDER shall have the right to
initiate court proceedings against FiberMark, Inc. directly without taking
any further legal action against BORROWER.
This guarantee shall expire either (i) if the certain Share Purchase
Agreement of November 26, 1997 according to which the shares in BORROWER are
sold and assigned by LENDER to wholly owned subsidiaries of FiberMark, Inc.
is terminated by way of rescission or otherwise for whatever legal reason, in
which case this guarantee shall expire with immediate effect or (ii) on the
date when all payment claims under the Loan Agreement have been finally
settled.
FiberMark, Inc. Steinbeis Holding GmbH
____________________ _______________________
