EXHIBIT 10.5
THIRD AMENDED AND RESTATED
FINANCING AGREEMENT AND GUARANTY
AMONG
FIBERMARK, INC.
(as Guarantor)
FIBERMARK DURABLE SPECIALTIES, INC.,
FIBERMARK FILTER AND TECHNICAL PRODUCTS, INC.
AND
FIBERMARK OFFICE PRODUCTS, LLC
(as Borrowers and Guarantors)
THE CIT GROUP/BUSINESS CREDIT, INC.
THE CIT GROUP/EQUIPMENT FINANCING, INC.
SUCH OTHER LENDERS THAT MAY BECOME
SIGNATORY HERETO
(as Lenders)
and
THE CIT GROUP/BUSINESS CREDIT, INC.
(as Agent for the Lenders)
Dated as of September 30, 1999
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS, ACCOUNTING TERMS AND RULES OF CONSTRUCTION.................6
SECTION 1.01. DEFINED TERMS...........................................................6
SECTION 1.02. COMPUTATION OF TIME PERIODS............................................31
SECTION 1.03. ACCOUNTING PRINCIPLES AND TERMS........................................31
SECTION 1.04. RULES OF CONSTRUCTION..................................................32
ARTICLE II. CONDITIONS PRECEDENT...................................................32
SECTION 2.01. CONDITIONS PRECEDENT TO INITIAL REVOLVING CREDIT LOAN..................32
SECTION 2.02. CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT LOAN.....................35
SECTION 2.03. DEEMED REPRESENTATION..................................................36
ARTICLE III. AMOUNT AND TERMS OF THE REVOLVING CREDIT LOANS.........................36
SECTION 3.01. REVOLVING CREDIT LOANS.................................................36
SECTION 3.02. REVOLVING CREDIT NOTE..................................................37
SECTION 3.03. OVERADVANCES...........................................................37
SECTION 3.04. INFORMATION RELATING TO ACCOUNTS.......................................37
SECTION 3.05. REPRESENTATIONS RELATING TO ACCOUNTS...................................38
SECTION 3.06. COLLECTION OF ACCOUNTS.................................................38
SECTION 3.07. NOTICE REGARDING ACCOUNTS..............................................39
SECTION 3.08. BORROWERS'ACCOUNTS.....................................................40
SECTION 3.09. APPLICATION OF PAYMENTS................................................40
SECTION 3.10. PREPAYMENTS............................................................40
SECTION 3.11. FUNDING OF REVOLVING CREDIT LOANS......................................41
SECTION 3.12. NOTICE AND MANNER OF BORROWING.........................................41
SECTION 3.13. OBLIGATIONS OF AGENT AND LENDERS.......................................42
SECTION 3.14. MINIMUM AMOUNTS........................................................43
SECTION 3.15. USE OF PROCEEDS........................................................43
SECTION 3.16. TAXES..................................................................43
SECTION 3.17. ADDITIONAL COSTS.......................................................44
SECTION 3.18. LIMITATION ON TYPES OF REVOLVING CREDIT LOANS..........................45
SECTION 3.19. ILLEGALITY.............................................................46
SECTION 3.20. TREATMENT OF AFFECTED LOANS............................................46
SECTION 3.21. ADEQUACY...............................................................46
ARTICLE IV. GUARANTY...............................................................47
SECTION 4.01. FIBERMARK DURABLE GUARANTY.............................................47
SECTION 4.02. FIBERMARK DURABLE GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL.......47
SECTION 4.03. WAIVERS................................................................48
SECTION 4.04. SUBROGATION............................................................48
SECTION 4.05. FIBERMARK FILTER GUARANTY..............................................49
SECTION 4.06. FIBERMARK FILTER GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL........49
SECTION 4.07. WAIVERS................................................................50
SECTION 4.08. SUBROGATION............................................................50
SECTION 4.09. FIBERMARK OFFICE GUARANTY..............................................50
SECTION 4.10. FIBERMARK OFFICE GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL........51
SECTION 4.11. WAIVERS................................................................52
SECTION 4.12. SUBROGATION............................................................52
SECTION 4.13. FIBERMARK GUARANTY.....................................................52
SECTION 4.14. FIBERMARK GUARANTORS' GUARANTY OBLIGATIONS UNCONDITIONAL...............52
SECTION 4.15. WAIVERS................................................................53
SECTION 4.16. SUBROGATION............................................................54
ARTICLE V. COLLATERAL.............................................................54
SECTION 5.01. (A) GRANT OF A SECURITY INTEREST BY FIBERMARK OFFICE..................54
SECTION 5.02. COVENANTS REGARDING INVENTORY..........................................56
SECTION 5.03. COVENANTS REGARDING EQUIPMENT..........................................57
SECTION 5.04. COLLATERAL COVENANT....................................................58
SECTION 5.05. COVENANTS REGARDING ACCOUNTS...........................................59
SECTION 5.06. CONTINUING SECURITY INTEREST...........................................59
SECTION 5.07. ACTIONS BY AGENT.......................................................60
SECTION 5.08. ADDITIONAL COLLATERAL AND FURTHER ASSURANCES...........................60
SECTION 5.09. ADDITIONAL INFORMATION.................................................61
SECTION 5.10. COMPLIANCE WITH FAIR LABOR STANDARDS ACT...............................61
ARTICLE VI. INTEREST, FEES AND EXPENSES............................................61
SECTION 6.01. METHOD OF ELECTING INTEREST RATES......................................61
SECTION 6.02. INTEREST...............................................................62
SECTION 6.03. FEES...................................................................63
SECTION 6.04. PAYMENTS AND COMPUTATIONS..............................................64
SECTION 6.05. CERTAIN COMPENSATION...................................................64
ARTICLE VII. POWERS.................................................................65
SECTION 7.01. POWERS.................................................................65
ARTICLE VIII. REPRESENTATIONS AND WARRANTIES.........................................65
SECTION 8.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION.....................66
SECTION 8.02. CORPORATE POWER AND AUTHORITY; NO CONFLICTS............................66
SECTION 8.03. LEGALLY ENFORCEABLE AGREEMENTS.........................................66
SECTION 8.04. LITIGATION.............................................................66
SECTION 8.05. FINANCIAL STATEMENTS...................................................67
SECTION 8.06. OWNERSHIP AND LIENS; LOCATION OF INVENTORY AND EQUIPMENT...............67
SECTION 8.07. TAXES..................................................................68
2
SECTION 8.08. ERISA..................................................................68
SECTION 8.09. SUBSIDIARIES...........................................................68
SECTION 8.10. OPERATION OF BUSINESS..................................................68
SECTION 8.11. NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS..........................69
SECTION 8.12. NO DEFAULTS ON OTHER AGREEMENTS........................................69
SECTION 8.13. LABOR DISPUTES AND ACTS OF GOD.........................................69
SECTION 8.14. GOVERNMENTAL REGULATION................................................69
SECTION 8.15. PARTNERSHIPS...........................................................69
SECTION 8.16. ENVIRONMENTAL PROTECTION...............................................69
SECTION 8.17. SOLVENCY...............................................................70
SECTION 8.18. INTELLECTUAL PROPERTY..................................................70
SECTION 8.19. LICENSE OF INTELLECTUAL PROPERTY.......................................71
SECTION 8.20. ENVIRONMENTAL COMPLIANCE...............................................71
SECTION 8.21. CPG MERGER AGREEMENT...................................................71
ARTICLE IX. AFFIRMATIVE COVENANTS..................................................71
SECTION 9.01. REPORTING REQUIREMENTS.................................................71
SECTION 9.02. NOTICES................................................................73
SECTION 9.03. PAYMENT OF TAXES AND CLAIMS............................................75
SECTION 9.04. MAINTENANCE OF EXISTENCE...............................................75
SECTION 9.05. CONDUCT OF BUSINESS....................................................75
SECTION 9.06. COMPLIANCE WITH LAWS...................................................75
SECTION 9.07. INSURANCE..............................................................75
SECTION 9.08. BOOKS AND RECORDS; INSPECTION..........................................79
SECTION 9.09. ERISA COVENANT.........................................................79
SECTION 9.10. INTERCOMPANY TRANSFER OF FUNDS.........................................80
SECTION 9.11. INVENTORY AND ACCOUNTS RECEIVABLE ANALYSIS OF ACQUIRED ENTITY..........80
SECTION 9.12. ACQUIRED ENTITIES......................................................80
SECTION 9.13. COMPLIANCE WITH ENVIRONMENTAL LAWS.....................................80
SECTION 9.14. APPRAISAL..............................................................81
ARTICLE X. NEGATIVE COVENANTS.....................................................81
SECTION 10.01. DEBT..................................................................81
SECTION 10.02. LIENS.................................................................81
SECTION 10.03. SALE OF ASSETS........................................................81
SECTION 10.04. PROHIBITION OF FUNDAMENTAL CHANGES....................................82
SECTION 10.05. INVESTMENTS...........................................................82
SECTION 10.06. TRANSACTION WITH AFFILIATES...........................................82
SECTION 10.07. NATURE OF BUSINESS....................................................82
SECTION 10.08. DIVIDENDS.............................................................82
SECTION 10.09. LEASES................................................................83
SECTION 10.10. ENVIRONMENTAL COMPLIANCE..............................................83
SECTION 10.11. FISCAL YEAR...........................................................83
SECTION 10.12. SUBSIDIARY STOCK ISSUANCE.............................................83
ARTICLE XI. FINANCIAL COVENANTS...................................................83
3
SECTION 11.01. CONSOLIDATED NET WORTH................................................83
SECTION 11.02. CONSOLIDATED FIXED CHARGE COVERAGE RATIO..............................84
ARTICLE XII. EVENTS OF DEFAULT.....................................................84
SECTION 12.01. EVENTS OF DEFAULT.....................................................84
SECTION 12.02. ACCELERATION OF OBLIGATIONS...........................................87
SECTION 12.03. OTHER REMEDIES........................................................87
ARTICLE XIII. AGENCY................................................................89
SECTION 13.01. THE AGENT.............................................................89
SECTION 13.02. DELEGATION OF DUTIES..................................................89
SECTION 13.03. EXCULPATORY PROVISIONS................................................89
SECTION 13.04. RELIANCE BY AGENT.....................................................90
SECTION 13.05. NOTICE OF DEFAULT.....................................................90
SECTION 13.06. NON-RELIANCE ON AGENT AND OTHER LENDERS...............................90
SECTION 13.07. INDEMNIFICATION.......................................................91
SECTION 13.08. THE AGENT IN ITS INDIVIDUAL CAPACITY..................................91
SECTION 13.09. SUCCESSOR AGENT.......................................................91
SECTION 13.10. ARRANGEMENTS REQUIRING CONSENT OF LENDERS.............................91
SECTION 13.11. RECAPTURE OF PAYMENTS.................................................93
ARTICLE XIV. RIGHTS AND OBLIGATIONS OF THE LENDERS AND THE AGENT...................93
SECTION 14.01. ADJUSTMENTS AMONG LENDERS.............................................93
SECTION 14.02. SHARING OF PAYMENTS...................................................94
SECTION 14.03. SALE OF PARTICIPATIONS................................................94
SECTION 14.04. NATURE OF REVOLVING CREDIT COMMITMENTS................................94
SECTION 14.05. SHARING OF COSTS AND EXPENSES.........................................95
SECTION 14.06. SHARING OF PAYMENTS...................................................95
SECTION 14.07. ASSIGNMENTS...........................................................96
SECTION 14.08. ACKNOWLEDGEMENTS BY AGENT.............................................97
SECTION 14.09. TERMINATION OF FINANCING AGREEMENT....................................97
ARTICLE XV. MISCELLANEOUS.........................................................98
SECTION 15.01. WAIVERS...............................................................98
SECTION 15.02. ENTIRE AGREEMENT......................................................98
SECTION 15.03. WAIVER OF COVENANTS IN PREDECESSOR AGREEMENT..........................99
SECTION 15.04. USURY.................................................................99
SECTION 15.05. PAYMENT OF EXPENSES...................................................99
SECTION 15.06. INDEMNITY............................................................100
SECTION 15.07. SEVERABILITY.........................................................100
SECTION 15.08. WAIVER OF JURY TRIAL.................................................100
SECTION 15.09. NOTICES..............................................................101
SECTION 15.10. GOVERNING LAW........................................................102
SECTION 15.11. CONFIDENTIALITY......................................................103
4
THIRD AMENDED AND RESTATED FINANCING AGREEMENT AND GUARANTY DATED AS OF
SEPTEMBER 30, 1999, AMONG FiberMark, Inc. ("FiberMark"), a Delaware corporation,
FiberMark Durable Specialties, Inc. ("FiberMark Durable"), a Delaware
corporation, FiberMark Filter and Technical Products, Inc. ("FiberMark Filter"),
a Delaware corporation, and FiberMark Office Products, LLC ("FiberMark Office"),
a Vermont limited liability company, The CIT Group/Business Credit, Inc.
("CITBC"), a New York corporation, with offices located at 1211 Avenue of the
Americas, New York, New York, The CIT Group/Equipment Financing, Inc. ("CITEF,"
and together with CITBC, the "Initial Lenders"), a New York Corporation, with
offices located at 000 Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx 00000, the other
lenders that may, subsequent to the date hereof, purchase from the Initial
Lenders a portion of their rights and obligations under this Third Amended and
Restated Financing Agreement and Guaranty pursuant to, and in accordance with,
Section 14.07 hereof (CITBC, CITEF and such other lenders each individually a
"Lender" and collectively the "Lenders"), and CITBC as agent for the Lenders (in
such capacity, together with its successors or assigns in such capacity, the
"Agent"). FiberMark Durable, FiberMark Filter and FiberMark Office are referred
to as a "Borrower" and collectively as the "Borrowers". FiberMark, FiberMark
Durable, FiberMark Filter and FiberMark Office and each Acquired Entity are
referred to herein as a "Guarantor" and collectively as the "Guarantors". The
Guarantors and the Borrowers are referred to herein collectively as the
"Obligors".
PRELIMINARY STATEMENTS
1. REFERENCE. Reference is made to the Second Amended and
Restated Financing Agreement and Guaranty dated December 31, 1996 among
Specialty Paperboard, Inc., Specialty Paperboard/Endura, Inc., CPG Investors,
Inc., CPG Holdings, Inc., CPG-Xxxxxx Xxxx Inc., Custom Papers Group Inc., Arcon
Holdings Corp., Arcon Coating Xxxxx Inc., CITBC, each of the other Lenders
signatory thereto and CITBC, as Agent for the Lenders (the "December 1996
Agreement").
2. AMENDMENT AND RESTATEMENT. To the extent this Third Amended
and Restated Financing Agreement and Guaranty amends the December 1996
Agreement, the December 1996 Agreement is amended, and to the extent this Third
Amended and Restated Financing Agreement and Guaranty restates the December 1996
Agreement, the December 1996 Agreement is restated.
The Borrowers desire that the Lenders extend credit as
provided herein and the Lenders are prepared to extend such credit. Accordingly,
the Borrowers, the Guarantors, the Lenders and the Agent agree as follows:
5
ARTICLE I. DEFINITIONS, ACCOUNTING TERMS AND RULES OF
CONSTRUCTION
Section 1.01. DEFINED TERMS. As used in this Third Amended and
Restated Financing Agreement and Guaranty the following terms have the following
meanings (terms defined in the singular to have the same meanings when used in
the plural and vice versa):
ACCOUNT DEBTOR means each Person obligated to pay on an
Account Receivable.
ACCOUNTS shall mean all of an Obligor's now existing and
future: (a) Accounts Receivable (whether or not specifically listed on schedules
furnished to the Agent), and any and all instruments, documents, contract
rights, chattel paper, investment property, rights to proceeds of letters of
credit, money and general intangibles, including, without limitation, all
accounts created by or arising from all of the Obligor's sales of goods or
rendition of services to its customers, (b) unpaid seller's rights (including
rescission, replevin, reclamation and stoppage in transit) relating to the
foregoing or arising therefrom; (c) rights to any goods represented by any of
the foregoing, including rights to returned or repossessed goods; (d) reserves
and credit balances arising hereunder; (e) guarantees or collateral for any of
the foregoing; (f) insurance policies or rights relating to any of the
foregoing; and (g) cash and non-cash proceeds of any and all the foregoing.
ACCOUNTS RECEIVABLE means any right to payment for goods sold
by or services rendered by an Obligor, including all accounts arising from sales
or rendition of services made under any of the Obligor's trade names or styles,
or through any of the Obligor's divisions; regardless of how such right is
evidenced, whether secured or unsecured, or now existing or hereafter arising.
ACQUIRED ENTITY shall mean (x) any Person acquired by any
Obligor hereunder by way of (i) the purchase of stock or assets of such Person
and all or a portion of the consideration paid for such stock or assets is paid
directly or indirectly with the proceeds of the Revolving Credit Loans or (ii)
consolidation or merger of such Person with or into any Obligor or (y) any
entity formed to acquire the assets or stock of another Person and all or a
portion of the consideration paid for such stock or assets is paid directly or
indirectly with the proceeds of the Revolving Credit Loans.
ACQUIRED INDEBTEDNESS means Indebtedness of a Person or any of
its Subsidiaries existing at the time such Person becomes a Subsidiary or at the
time it merges or consolidates with any Obligor or assumed in connection with
the acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Subsidiary or such acquisition, merger or consolidation.
ADDITIONAL COSTS shall have the meaning specified in Section
3.17.
6
ADJUSTED TERMINATION DATE shall mean the date determined by
adding to the Closing Date the number of months calculated by multiplying (i)
the number of months elapsing from the Closing Date to September 30, 2002
(rounded downward to the nearest whole number of months) times (ii) a percentage
derived by dividing (x) the appraised value assigned in the Appraisal to the
Equipment by (y) Thirty Five Million Dollars (rounded downward to the nearest
whole number of months); PROVIDED that if such percentage is 100% or greater,
the Adjusted Termination Date shall be September 30, 2002.
AFFECTED LOANS shall have the meaning specified in Section
3.20.
AFFILIATE means with respect to any designated Person, any
Person which, directly or indirectly, controls or is controlled by or is under
common control with such designated Person. For purposes of this definition,
"control", "controlled by" and "under common control with", as used with respect
to any Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
AGENT means The CIT Group/Business Credit, Inc., or any
successor thereof, acting as agent for Lenders pursuant to this Financing
Agreement.
ANNIVERSARY DATE shall mean each September 30, commencing
September 30, 2000.
APPLICABLE LENDING OFFICE means, for each of the Lenders, the
lending office of such Lender (or of an Affiliate of such Lender) designated as
such for such Type of Loan on the signature page hereto or in the applicable
Assignment and Acceptance Agreement or such other office of such Lender (or of
an Affiliate of such Lender) as such Lender may from time to time specify to
Agent and the Borrower as the office by which its Revolving Credit Loans of such
Type are to be made and maintained.
APPLICABLE MARGIN means (a) with respect to the Chase
Manhattan Bank Rate one half percent (0.50%); and (b) with respect to the Libor
Rate two percent (2.00%).
APPRAISAL shall mean the appraisal, in form and substance
satisfactory to the Agent, conducted by an appraiser satisfactory to the Agent
and at Agent's expense, and appraising the Equipment on a "market value, in
place, in use" basis if sold in one year.
APPROVALS AND PERMITS means any permits, variance, permission,
authorization, consent, approval, license, franchise, ruling, permit, tariff,
rate, certification, exemption, or registration issued by any Governmental
Authority which
7
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 00 Xxxxxx Xxxxxx Code
Annotated Section 3727 and all amendments and supplements thereto and all rules
and regulations promulgated thereunder.
AVAILABILITY shall mean the excess of
(a) the sum of
(i) ninety percent (90%) of the Eligible
Accounts Receivable of the Obligors, plus
(ii) sixty percent (60%) of the aggregate
value of Eligible Inventory of the Obligors, plus
(iii) Twenty Five Million Dollars
($25,000,000), over
(b) the outstanding aggregate amount of all outstanding
Obligations of all the Borrowers taken together.
BOARD OF DIRECTORS shall mean, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
BOARD OF GOVERNORS means the Board of Governors of the Federal
Reserve Bank or any entity succeeding to any or all of its functions.
BOARD RESOLUTION shall mean, with respect to any Person, a
copy of a resolution certified by the Secretary or an Assistant Secretary of
such Person to have been duly adopted by the Board of Directors of such Person
and to be in full force and effect on the date of such certification, and
delivered to the Agent.
BORROWING BASE means an amount equal to the sum of (a) ninety
percent (90%) of the Eligible Accounts Receivable, plus (b) sixty percent (60%)
of the aggregate value of Eligible Inventory, plus (c) Twenty Five Million
Dollars ($25,000,000).
BORROWING BASE CERTIFICATE means a Certificate substantially
in the form of Exhibit H, certified by an officer of FiberMark, with respect to
the Borrowing Base.
8
BRATTLEBORO COLLATERAL shall mean all of FiberMark Office's
present and future right, title and interest in and to the Equipment and the
Real Estate, whether now owned or hereafter acquired; and, to the extent not
otherwise included, all proceeds and products of any and all of the foregoing,
in whatever form.
BUSINESS DAY shall mean (a) for all purposes other than those
covered by clause (b) below, any day that CITBC and The Chase Manhattan Bank are
open for business excluding Saturday, Sunday and any day that either is a legal
holiday under the laws of the State of New York or is a day on which banking
institutions located in such state are closed and (b) with respect to all
notices, determinations, fundings and payments in connection with the Libor
Rate, any date that is a Business Day as described in clause (a) above that is
also a day for trading by and between banks in dollar deposits in the applicable
interbank Libor market.
CAPITAL LEASE means any lease of property (real or personal or
mixed) which, in accordance with GAAP, would be required to be capitalized on a
balance sheet of the lessee.
CAPITALIZED LEASE OBLIGATIONS shall mean, as to any Person,
the obligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes of
this definition, the amount of such obligation at any date shall be capitalized
amount of such obligations at such date, determined in accordance with GAAP.
CHASE MANHATTAN BANK RATE shall mean the rate of interest from
time to time announced by The Chase Manhattan Bank at its principal office in
the City of New York. (The prime rate is not intended to be the lowest rate of
interest charged by The Chase Manhattan Bank to its borrowers).
CHASE MANHATTAN BANK RATE LOANS shall mean all or any portion
of the Revolving Credit Loans for which any Borrower has elected to use the
Chase Manhattan Bank Rate for interest rate calculations.
CLOSING DATE means the date upon which the conditions set
forth in Section 2.01 shall have been fulfilled to the satisfaction of the
Agent.
CODE means The Internal Revenue Code of 1986, as thereafter
amended.
COLLATERAL shall mean, collectively, (i) all of each Obligor's
right, title and interest, whether now owned or hereafter acquired, in and to
all present and future Accounts and Inventory, wherever located, including all
rights under all permits granted in favor of FiberMark Office relating to its
facility in Brattleboro, Vermont; and, to the extent not otherwise included, all
proceeds and products of any and all of the foregoing, in whatever form; and
(ii) the Brattleboro Collateral.
9
COLLATERAL MANAGEMENT FEE shall mean the sum of Thirty-Five
Thousand Dollars ($35,000) which shall be paid to the Agent for its own account
in accordance with Section 6.03 of this Financing Agreement to offset the
expenses and costs of the Agent in connection with record keeping, periodic
examinations, analyzing and evaluating the Collateral.
CONSOLIDATED AMORTIZATION OF DEFERRED BOOK GAIN shall mean the
amortization of the book gain realized from the sale of certain fixed assets to
CITEF in connection with the Lease Agreement, as recorded on the consolidated
financial statements of FiberMark and its Subsidiaries in accordance with GAAP.
CONSOLIDATED EBITDA shall mean, for any period, the sum
(without duplication) of (i) Consolidated Net Income and (ii) to the extent
Consolidated Net Income has been reduced thereby, (A) all income taxes of
FiberMark and its Subsidiaries paid or accrued in accordance with GAAP for such
period (other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses or taxes attributable to sales or dispositions
outside the ordinary course of business), (B) Consolidated Interest Expense and
(C) Consolidated Non-cash Charges less any non-cash items increasing
Consolidated Net Income for such period, all as determined on a consolidated
basis for FiberMark and its Subsidiaries in accordance with GAAP.
CONSOLIDATED FIXED CHARGE COVERAGE RATIO shall mean the ratio
of (i) Consolidated EBITDA during the four full fiscal quarters (the "Four
Quarter Period") ending (A) for the purposes of Section 10.01, on or prior to
the date of the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio (the "Transaction Date"), or (B) for
purposes of Section 11.02, on any date during the term of this Financing
Agreement, to (ii) Consolidated Fixed Charges for the Four Quarter Period. In
addition to and without limitation of the foregoing, in determining the
Consolidated Fixed Charge Coverage Ratio for purposes of Section 10.01,
"Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma (including any pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Securities Act of 1933, as amended) basis for the period of such calculation to
(1) the incurrence or repayment of any Indebtedness of FiberMark or any of its
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (2) any Asset
Sales (as defined in the Indenture) or Asset Acquisitions (as defined in the
Indenture) (including, without limitation, any Asset Acquisition giving rise to
the need to make such calculation as a result of FiberMark or one of its
Subsidiaries (including any Person who becomes an Acquired Entity as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also including any Consolidated EBITDA attributable to
10
the assets which are the subject of the Asset Acquisition or Asset Sale during
the Four Quarter Period) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Acquired Indebtedness) occurred
on the first day of the Four Quarter Period. If FiberMark or any of its
Subsidiaries directly or indirectly guarantee Indebtedness of a third Person,
the preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if FiberMark or any such Subsidiary had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of Section 10.01, in determining the
denominator (but not the numerator) of the "Consolidated Fixed Charge Coverage
Ratio", (I) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest in such Indebtedness in effect on the Transaction Date;
(II) if interest on any Indebtedness actually incurred on the Transaction Date
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, an eurocurrency interbank offered rate, or other rates, then
the interest rate in effect on the Transaction Date will be deemed to have been
in effect during the Four Quarter Period; (III) notwithstanding clause (I)
above, interest on Indebtedness determined on a fluctuating basis, to the extent
such interest is covered by agreements relating to Interest Swap Obligations,
shall be deemed to accrue at the rate per annum resulting after giving effect to
the operation of such agreements, and (IV) there shall be added an amount equal
to the aggregate obligations with respect to all Operating Leases of the
Obligors in effect as of the Transaction Date (and, if applicable, after giving
effect to the Operating Lease being entered into) that are scheduled to become
due and payable within the twelve-month period commencing on the Transaction
Date.
CONSOLIDATED FIXED CHARGES shall mean, with respect to
FiberMark for any period, the sum, without duplication, of (i) Consolidated
Interest Expense, plus (ii) the product of (x) the amount of all dividend
payments on any series of Preferred Stock (as defined in the Indenture) of
FiberMark (other than dividends paid in Qualified Capital Stock paid, accrued or
scheduled to be paid or accrued during such period times (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local tax rate of such Person,
expressed as a decimal.
CONSOLIDATED INTEREST EXPENSE shall mean, with respect to
FiberMark for any period, the sum of, without duplication: (i) the aggregate of
the interest expense of FiberMark and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including without
limitation, (a) any amortization of debt discount, (b) the net costs under
Interest Swap Obligations, (c) the capitalized interest and (d) the interest
portion of any deferred payment obligation; and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by FiberMark and its Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
11
CONSOLIDATED NET INCOME shall mean, with respect to FiberMark,
for any period, the aggregate net income (or loss) of FiberMark and its
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom (a) after-tax gains
or losses from Asset Sales or abandonments or reserves relating thereto, (b)
after-tax items classified as extraordinary or nonrecurring gains or losses, (c)
the net income (or loss) of any Person acquired in a "pooling of interests"
transaction accrued prior to the date it becomes a Subsidiary or is merged or
consolidated with FiberMark or any Subsidiary, (d) the net income (but not loss)
of any Subsidiary to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income is restricted by a contract,
operation of law or otherwise, (e) the net income of any Person, other than a
Subsidiary, except to the extent of cash dividends or distributions paid to
FiberMark or to a Subsidiary by such Person, (f) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period whether or not such operations were classified as
discontinued) and (g) in the case of a successor to FiberMark by consolidation
or merger or as a transferee of FiberMark's assets, any net income of the
successor corporation prior to such consolidation, merger or transfer of assets.
CONSOLIDATED NET WORTH shall mean, at any time, the excess of
Consolidated Total Assets over Consolidated Total Liabilities.
CONSOLIDATED NON-CASH CHARGES shall mean, with respect to
FiberMark, for any period, the aggregate depreciation, amortization and other
non-cash expenses of FiberMark and its Subsidiaries reducing Consolidated Net
Income of FiberMark for such period, determined on a consolidated basis in
accordance with GAAP (excluding any such charges constituting an extraordinary
item or loss or any such charge which requires an accrual of or a reserve for
cash charges for any future period).
CONSOLIDATED TOTAL ASSETS shall mean, at any time, the total
assets of FiberMark and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
CONSOLIDATED TOTAL LIABILITIES shall mean, at any time, the
total liabilities of FiberMark and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP.
CONTINUE, CONTINUATION AND CONTINUED shall refer to the
continuation pursuant to Section 6.01 hereof of a Libor Rate Loan as a Libor
Rate Loan from one Libor Rate Period to the next Libor Rate Period.
CONVERT, CONVERSION AND CONVERTED shall refer to a conversion
pursuant to Section 6.01 hereof of Chase Manhattan Bank Rate Loans into Libor
Rate Loans or Libor Rate Loans into Chase Manhattan Bank Rate Loans, each of
which may be accompanied by the transfer by a Lender (at its sole discretion) of
a Loan from one Applicable Lending Office to another.
12
CORPORATE OBLIGORS means each of FiberMark, FiberMark Durable
and FiberMark Filter.
CORPORATE REORGANIZATION shall mean the corporate
reorganization consummated in December, 1997 pursuant to which:
(a) the corporation formerly known as Specialty
Paperboard/Endura, Inc. and the corporation formerly known as Arcon Coating
Xxxxx, Inc., a Delaware corporation, merged into the corporation formerly known
as Arcon Holdings, Inc, a Delaware corporation;
(b) the name of Arcon Holdings, Inc. was changed to FiberMark
Durable Specialties, Inc.;
(d) the corporation formerly known as Custom Papers Group,
Inc., a Virginia corporation, and the corporation formerly known as CPG
Xxxxxx-Xxxx, Inc., a Virginia corporation, merged into the corporation formerly
known as CPG Holdings, Inc., a Delaware corporation;
(e) subsequent to the mergers described in paragraph (d) of
this definition, CPG Holdings, Inc. was merged into the corporation formerly
known as CPG Investors, Inc., a Delaware corporation;
(f) the name of CPG Investors, Inc. was changed to FiberMark
Filter and Technical Products, Inc.; and
(g) FiberMark Office was formed as a Vermont limited liability
company with FiberMark as the sole member.
CUSTOMARILY PERMITTED LIENS shall mean:
(a) Liens of local, provincial, or state authorities for
franchise or other like taxes provided the aggregate amounts secured by such
Liens shall not exceed One Hundred Thousand Dollars ($100,000) in the aggregate
outstanding at any one time;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other like Liens imposed by Law,
created in the ordinary course of business and for amounts not yet due or which
are the subject of a Good Faith Contest;
(c) deposits made (and the Liens thereon) in the ordinary
course of business (including, without limitation, security deposits for leases,
surety bonds and appeal bonds) in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to secure
the performance of tenders, bids, contracts (other than for the repayment or
guarantee of Indebtedness), statutory
13
obligations and other similar obligations arising as a result of progress
payments under government contracts; and
(d) easements (including, without limitation, reciprocal
easement agreements and utility agreements), encroachments, minor defects or
irregularities in title, variation and other restrictions, charges or
encumbrances (whether or not recorded) affecting the Real Estate and which are
listed in Schedule B of the title insurance policy delivered to the Agent
herewith; PROVIDED, HOWEVER, that in no event shall any Environmental Lien be
deemed to be a Customarily Permitted Lien.
DEFAULT shall mean any event specified in Section 12.01
hereof, whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition, event or act, has been satisfied.
DEFAULT RATE OF INTEREST shall mean a rate of interest per
annum equal to the sum of: (a) four percent (4%) plus (b) the Chase Manhattan
Bank Rate, which the Agent shall be entitled to charge each Borrower on all
Obligations of such Borrower due the Lenders and not paid by such Borrower.
DEPOSITORY ACCOUNTS shall mean those accounts owned by, and in
the name of, the Agent and designated by the Agent for the deposit of proceeds
of Collateral.
DOCUMENTATION FEE shall mean (a) the sum intended to
compensate the Agent (for its own account) for the use of the Agent's internal
or outside counsel and facilities in documenting, in whole or in part, the
initial transaction solely on behalf of the Lenders, exclusive of Out-Of-Pocket
Expenses, which sum shall be included as part of the Loan Facility Fee due and
payable in accordance with Section 6.03 of this Financing Agreement, and (b) the
Agent's standard fees relating to any and all modifications, waivers, releases,
amendments or additional collateral with respect to this Financing Agreement,
the Collateral and/or the Obligations.
DOLLARS AND $ means lawful money of the United States of
America.
ELIGIBLE ACCOUNTS RECEIVABLE shall mean the gross amount of
each Obligor's Accounts Receivable that conform to the warranties contained
herein and at all times continue to be acceptable to the Agent in the exercise
of its reasonable business judgment, less, without duplication, the sum of:
(a) any returns, discounts, claims, credits and allowances of
any nature (whether issued, owing, granted or outstanding); and
(b) reserves for:
(i) sales to the United States of America or to any
agency, department or division thereof except where assignment
of all resulting accounts receivable due or to become due
under a particular contract is
14
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) xxxx 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.
15
ELIGIBLE INVENTORY shall mean the gross amount of each
Obligor's Inventory that conforms to the warranties contained herein and which
at all times continues to be acceptable to the Agent in the exercise of its
reasonable business judgment, less any (i) work-in-process, (ii) supplies (other
than raw material), (ii) goods not present in the United States of America,
(iii) goods returned or rejected by the customers of such Obligor (other than
goods that are undamaged and resalable in the normal course of business), (iv)
goods to be returned to the suppliers of such Obligor, (v) goods in transit to
third parties (other than the agents or warehouses of such Obligor), (vi) goods
that are obsolescent, and (vii) goods, located at a place identified on Schedule
5.04 that is not one of the Excluded Premises, that are moved to one or more of
the Excluded Premises (unless they are returned to a place identified on
Schedule 5.04 that is not one of the Excluded Premises), and less any reserves
required by the Agent in its reasonable discretion for special order goods,
market value declines and xxxx and hold (deferred shipment) or consignment
sales; PROVIDED, HOWEVER, that (without limiting the requirement that Inventory,
to qualify as "Eligible Inventory", must satisfy each of the other components of
this definition) no Inventory located at premises that are subject to a
Warehouse Lease identified on Schedule 5.04 that is not included on Schedule
2.01 as of the Closing Date shall constitute "Eligible Inventory" until such
time as an appropriate landlord's waiver or warehouse acknowledgment is received
by Agent with respect to such premises.
EMPLOYEE BENEFIT PLAN means any plan, agreement, arrangement
or commitment which is an employee benefit plan, as defined in Section 3(3) of
ERISA, maintained by any Obligor, or any ERISA Affiliate or with respect to
which such Obligor, or any ERISA Affiliate at any relevant time has any
liability or obligation to contribute.
ENVIRONMENTAL DISCHARGE means any spill, emission, leaking,
pumping, injection, deposit, dispersal, leaching, migration, disposal, discharge
or release or threatened release of Hazardous Materials into the indoor or
outdoor environment or into or out of any property, including, without
limitation, the movement of Hazardous Materials through or in the air, soil,
surface water or groundwater.
ENVIRONMENTAL LAW means any applicable Law relating to human
health or safety or the environment and any terms and conditions of any
Approvals or Permits issued thereunder, including, without limitation, Laws
relating to noise or to Environmental Discharges or to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, handling or remediation of Hazardous Materials or to the transfer of
industrial or manufacturing facilities or property.
ENVIRONMENTAL LIEN means any Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by, such Governmental Authority in response to, an
Environmental Discharge.
ENVIRONMENTAL NOTICE means any written complaint, order,
claim, citation, letter, inquiry, notice or other written communication from any
Person
16
(a) relating to any Obligor's compliance with or liability or potential
liability under any Environmental Law, (b) relating to the occurrence or
presence of or exposure to or possible or threatened or alleged occurrence or
presence of or exposure to Environmental Discharges or Hazardous Materials at,
to, or from any of Obligor's past, present or future locations or facilities or
Real Estate or at, to or from any other location or facility including, without
limitation: (i) the existence of any contamination or possible or threatened
contamination at any such location or facility or the Real Estate; and (ii)
Remedial Action in connection with any Environmental Discharge or Hazardous
Materials at any such location or facility or Real Estate or any part thereof;
or (c) relating to any violation or alleged violation of any Environmental Law
by any Obligor, the Real Estate, or any prior owner of operator of the Real
Estate.
EQUIPMENT shall mean all currently owned or hereafter acquired
interest of FiberMark Office in all machinery, equipment, furnishings and
fixtures, and all additions, substitutions and replacements thereof, now or at
any time hereafter located at the Real Estate (all of which shall continue to
constitute "Equipment", regardless of its removal from the Real Estate, unless
the Agent expressly releases its security interest therein), together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto and all proceeds and products of the foregoing, of whatever
sort.
ERISA means the Employee Retirement Income Security Act of
1974, as thereafter amended.
ERISA AFFILIATE means any entity required to be aggregated
with any Obligor under Section 414(b), (c), (m) or (o) of the Code.
EVENT(S) OF DEFAULT shall have the meaning provided for in
Section 12.01 of this Financing Agreement.
EXCLUDED PREMISES shall mean those premises (including
warehouses) (i) owned or leased by any Obligor, or occupied by any third-party
processor of Inventory of any Obligor, that are set forth on Schedule 2.01, as
amended by Agent from time to time to reflect Agent's receipt or non-receipt, or
the lapse or termination, of any landlord's waiver, warehouse acknowledgment,
third party processor acknowledgment or filing or other measure required to
create or maintain a first perfected security interest and Lien in favor of
Agent in the Collateral kept, stored or processed at the relevant location or
otherwise to protect Agent's and Lenders' interest therein; PROVIDED THAT any
location that is identified on Schedule 5.04 as a Warehouse Lease but is not
included on Schedule 2.01 as of the Closing Date will become an "Excluded
Premise" effective November 16, 1999, unless, on or before November 15, 1999,
Agent has received an appropriate landlord's waiver or warehouse acknowledgment
with respect to such location.
EXECUTIVE OFFICERS shall mean the Chairman, President, Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Executive
Vice President(s), Senior Vice President(s), and Secretary of FiberMark.
17
FACILITY FEE shall mean the fee payable by the Borrowers to
the Initial Lenders in the amount of One Hundred Twenty-Five Thousand Dollars
($125,000), which fee shall be deemed fully earned, nonrefundable and due on the
Closing Date.
FIBERMARK DURABLE GUARANTORS means each of FiberMark,
FiberMark Filter, FiberMark Office and each Acquired Entity.
FIBERMARK FILTER GUARANTORS means each of FiberMark, FiberMark
Durable, FiberMark Office and each Acquired Entity.
FIBERMARK GUARANTORS means each of FiberMark Durable,
FiberMark Filter and FiberMark Office.
FIBERMARK OFFICE GUARANTORS means each of FiberMark, FiberMark
Durable, FiberMark Filter and each Acquired Entity.
FIBERMARK DURABLE OBLIGATIONS shall mean all loans and
advances made or to be made by the Lenders or by the Agent on behalf of the
Lenders to FiberMark Durable or to others for FiberMark Durable's account; any
and all indebtedness and obligations which may at any time be owing by FiberMark
Durable to the Agent or the Lenders howsoever arising, whether now in existence
or incurred by FiberMark Durable from time to time hereafter; whether secured by
pledge, Lien upon or security interest in any of FiberMark Durable's assets or
property or the assets or property of any other person, firm, entity or
corporation; whether such indebtedness is absolute or contingent, joint or
several, matured or unmatured, direct or indirect and whether FiberMark Durable
is liable to the Lenders and/or the Agent for such indebtedness as principal,
surety, endorser, guarantor or otherwise. FiberMark Durable Obligations shall
also include indebtedness owing to the Lenders and/or the Agent by FiberMark
Durable under this Financing Agreement or under any other agreement or
arrangement now or hereafter entered into between FiberMark Durable and the
Lenders; indebtedness or obligations incurred by, or imposed on, the Lenders
and/or the Agent, as a result of environmental claims (other than as a result of
actions of the Lenders or the Agent) arising out of any FiberMark Durable's
operation, premises or waste disposal practices or sites; FiberMark Durable's
liability to the Lenders and/or the Agent as maker or endorser on any promissory
note or other instrument for the payment of money; FiberMark Durable's liability
to the Lenders and/or the Agent under any instrument of guaranty or indemnity,
or arising under any guaranty, endorsement or undertaking which the Lenders
and/or the Agent may make or issue to others for FiberMark Durable's account,
including any accommodation extended with respect to applications for letters of
credit, the Lenders' and/or the Agent's acceptance of drafts or the Lenders'
and/or the Agent's endorsement of notes or other instruments for FiberMark
Durable's account and benefit.
FIBERMARK FILTER OBLIGATIONS shall mean all loans and advances
made or to be made by the Lenders or by the Agent on behalf of the Lenders to
FiberMark Filter or to others for FiberMark Filter's account; any and all
indebtedness and
18
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
19
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.
20
GOVERNMENTAL AUTHORITY means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
GUARANTORS means all of FiberMark, FiberMark Durable,
FiberMark Filter, FiberMark Office and each Acquired Entity.
GUARANTY OBLIGATIONS shall mean, all obligations of any
Guarantor as guarantor of the obligations of a Borrower or other Guarantor under
this Financing Agreement. Guarantor Obligations shall also include indebtedness
owing to the Lenders and/or the Agent by any Guarantor under this Financing
Agreement or under any other agreement or arrangement now or hereafter entered
into between such Guarantor and the Lenders.
HAZARDOUS MATERIALS means any pollutants, contaminants, toxic
or hazardous substances or wastes, chemicals, radioactive material, medical
wastes or special waste, including, without limitation, asbestos fibers and
friable asbestos, polychlorinated biphenyls, and petroleum or hydrocarbon-based
products, derivatives wastes, or breakdown, constituent or decomposition
products thereof.
INDEBTEDNESS shall mean at any date:
(a) indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services (including trade obligations);
(b) obligations as lessee under Capital Leases (and, for
purposes of determining whether any Obligor may enter into an Operating Lease,
obligations as lessee under Operating Leases);
(c) reimbursement obligations under letters of credit issued
for the account of any Person;
(d) all reimbursement obligations arising under bankers' or
trade acceptances;
(e) all guarantees, endorsements (other than for collection or
deposit in the ordinary course of business), and other contingent obligations to
purchase any of the items included in this definition, to provide funds for
payment, to supply funds to invest in any Person, or otherwise to assure a
creditor against loss;
(f) all obligations secured by any Lien on property owned by
such Person, whether or not the obligations have been assumed; and
(g) all obligations under any agreement providing for a swap,
ceiling rates, ceiling and floor rates, contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described in this definition.
21
INDENTURE means the Indenture dated as of October 15, 1996
among FiberMark, Inc. (formerly known as Specialty Paperboard, Inc.), the
Guarantors (as defined therein) and the Trustee (as defined therein) pursuant to
which the Senior Notes are issued, as amended, modified or supplemented from
time to time.
INITIAL LENDERS means CITBC and CITEF.
INSOLVENCY means, at any particular time, a Multiemployer Plan
is insolvent within the meaning of Section 4245 of ERISA.
INTEREST SWAP OBLIGATIONS means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
INVENTORY of an Obligor shall mean all of such Obligor's
currently owned or hereafter acquired interests in all merchandise, inventory
and goods held for sale or lease or to be furnished under contracts of service,
and all additions, substitutions and replacements thereof, wherever located,
together with all goods and materials used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production- from raw
materials through work-in-process to finished goods - and all proceeds and
products of the foregoing, of whatever sort.
LAW means any treaty, foreign, federal, state or local
statute, law, rule, regulation, ordinance, order, code, policy, or rule of
common law, now or hereafter in effect, and in each case as amended, and any
judicial or administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
LEASE AGREEMENT shall mean that certain Lease Agreement by and
between Specialty Paperboard, Inc., as lessee and the CIT Group/Equipment
Financing, Inc., as lessor, dated as of April 29, 1994, and as further amended
and supplemented by that certain First Amendment to Lease Agreement dated as of
September 29, 1995, as further amended and supplemented by that certain Second
Amendment to Lease Agreement dated as of December 29, 1995, as otherwise
amended, modified and supplemented from time to time, and as assigned and
assumed pursuant to the Assignment and Assumption Agreement - NY, dated as of
December 31, 1997, by and between FiberMark and FiberMark Office.
LENDER(S) shall mean CITBC, CITEF each Assignee which becomes
a Lender pursuant to Section 14.07 hereof, and their respective successors.
LENDER LOAN COMMITMENT shall mean, with respect to each
Lender's making of the Revolving Credit Loans, the obligation of such Lender to
make
22
Revolving Credit Loans under this Financing Agreement up to the aggregate
principal amount outstanding at any time equal to the sum of its Revolving
Credit Commitment and its Pro Rata Share of the Overadvance Availability.
LENDER PARTY shall mean the Agent and each of the Lenders.
LIBOR PERIOD shall mean a thirty (30) day, sixty (60) day, or
ninety (90) day interest period with respect to Libor Rate Loans, as selected by
a Borrower.
LIBOR RATE shall mean, at any time of determination, the then
highest prevailing London Interbank Offered Rate paid in London on thirty (30)
day, sixty (60) day, or ninety (90) day dollar deposits from other banks as
published two (2) days prior to the commencement of the applicable interest
period, under "Money Rate," in the New York City edition of The Wall Street
Journal or if there is no such publication or statement therein as to a Libor
Rate, then in any publication used in the New York City financial community
which was published two (2) days prior to the commencement of the applicable
interest period.
LIBOR RATE LOANS shall mean that portion of the Revolving
Credit Loans with respect to which a Borrower has elected to use the Libor Rate
for the interest rate calculations.
LIBOR RATE PREPAYMENT PREMIUM shall mean, for any payment of
principal of any Libor Rate Loan prior to the end of an applicable interest
period, an amount computed pursuant to the following formula:
(R - T) x P x D
---------------
360
R = interest rate applicable to the Libor Rate Loan
T = effective interest rate per annum at which any readily
marketable bonds or other obligations of the United States,
selected at the Agent's sole discretion, maturing on or near
the last day of the then applicable interest period for such
Libor Rate Loan and in approximately the same principal amount
as such Libor Rate Loan, can be purchased by the Agent on the
day of such prepayment of principal
P = the amount of principal prepaid
D = the number of days remaining in the Libor Period as of the
date of such prepayment
The applicable Borrower shall pay such amount within five (5) business
days of presentation by the Agent to such Borrower of a statement
setting forth the amount and the Agent's calculation thereof pursuant
hereto, which statement shall be conclusive on such Borrower absent
manifest error.
23
LIEN means any mortgage, pledge, hypothecation, security
interest, collateral assignment, Lien (statutory or other), or other security
interest or encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction (except any such filing
that is expired or that relates to an operating lease)).
LOAN DOCUMENTS shall mean each of this Financing Agreement,
the Revolving Credit Notes, and the Security Documents.
MATERIAL ADVERSE CHANGE means (a) a material adverse change in
the status of the business, results of operations, condition (financial or
otherwise), prospects, profitability, assets, operations, or property of an
Obligor, or (b) any event or occurrence of whatever nature which could have a
material adverse effect on an Obligor's ability to perform its obligations under
the Loan Documents.
MOODY'S means Xxxxx'x Investors Service, Inc. and any
successor thereto which provides credit ratings.
MORTGAGE shall mean, collectively, the Mortgage Agreement(s),
in form and substance satisfactory to the Agent, between FiberMark Office and
the Agent pursuant to which FiberMark Office grants to the Agent or to the
Agent's designee for the ratable benefit of the Lenders, a first mortgage in the
Real Estate to secure the Obligations.
NON-EXCLUDED TAXES shall have the meaning specified in Section
3.16.
NOTICE OF BORROWING shall mean a Revolving Credit Notice of
Borrowing.
OBLIGATIONS shall mean collectively the FiberMark Obligations,
FiberMark Durable Obligations, FiberMark Filter Obligations and FiberMark Office
Obligations.
OBLIGORS means all of FiberMark, FiberMark Durable, FiberMark
Filter, FiberMark Office and each Acquired Entity.
OFFICER'S CERTIFICATE shall mean a certificate signed in the
name of each Obligor by (i) with respect to FiberMark, FiberMark Filter and
FiberMark Durable, its President, Vice President, Controller or Treasurer and
(ii) with respect to FiberMark Office, FiberMark (by FiberMark's President, Vice
President, Controller or Treasurer).
OPERATING LEASES shall mean all leases of property (whether
real, personal or mixed) other than Capital Leases.
OTHER TAXES shall have the meaning specified in Section 3.16.
24
OUT-OF-POCKET EXPENSES shall mean all of the Lenders' and the
Agent's present and future expenses incurred relative to this Financing
Agreement, whether incurred heretofore or hereafter, which expenses shall
include, without being limited to, the cost of record searches, all costs and
expenses incurred by the Agent in opening bank accounts, depositing checks,
receiving and transferring funds, and any charges imposed on the Agent due to
"insufficient funds" of deposited checks and the Agent's standard fee relating
thereto, local counsel fees, title insurance premiums, real estate survey costs,
fees and taxes relative to the filing of financing statements, costs of
preparing and recording mortgages/deeds of trust against the Real Estate and all
expenses, costs and fees set forth in Section 3.17 of this Financing Agreement.
OVERADVANCE shall have the meaning specified in Section 3.03.
OVERADVANCE AVAILABILITY has the meaning specified in Section
3.03.
PBGC means Pension Benefit Guaranty Corporation.
PENSION PLAN means any Employee Benefit Plan which is an
employee pension benefit plan as defined in Section 3(2) of ERISA.
PERMITTED ENCUMBRANCES shall mean:
(a) Liens expressly permitted, or consented to, by the Agent;
(b) Purchase Money Liens;
(c) Customarily Permitted Liens;
(d) Liens granted the Agent by an Obligor;
(e) Liens of judgment creditors provided such Liens do not
exceed, in the aggregate, at any time, Two Hundred Fifty Thousand Dollars
($250,000) (other than Liens bonded or insured to the reasonable satisfaction of
the Agent);
(f) Liens for taxes not yet due and payable or which are the
subject of a Good Faith Contest and which Liens are not x) other than with
respect to Real Estate, senior to the Liens of the Agent or y) for taxes due the
United States of America; PROVIDED, HOWEVER, that in no event shall any
Environmental Lien be deemed to be a Permitted Encumbrance;
(g) Liens granted by any Obligor on any of its assets other
than (i) the Brattleboro Collateral, (ii) each Obligor's Accounts and (iii) each
Obligor's Inventory.
25
PERMITTED INDEBTEDNESS shall mean:
(a) Indebtedness incurred in the ordinary course of business
for raw materials, supplies, property, equipment, services, taxes or labor or
otherwise;
(b) Indebtedness secured by Purchase Money Liens;
(c) Indebtedness of FiberMark which is subordinated to the
prior payment and satisfaction of FiberMark's Obligations to the Lenders by
means of a subordination agreement or similar instrument, in each case in form
and substance satisfactory to the Lenders;
(d) deferred taxes and other expenses incurred in the ordinary
course of business;
(e) Indebtedness existing on the date of execution of this
Financing Agreement and listed in the most recent financial statement delivered
to the Lenders or otherwise disclosed to the Lenders in writing on or prior to
the date of execution of this Financing Agreement; and
(f) the Senior Notes.
PERMITTED INVESTMENTS means:
(a) direct obligations of the United States of America or any
agency thereof backed by the full faith and credit of the United States of
America with maturities of one (1) year or less from the date of acquisition;
(b) commercial paper with maturities of two hundred seventy
(270) days or less of (a) a Lender or any parent of a Lender, or (b) a domestic
issuer rated at least "P-1" by Moody's or "A-1" by S&P; and
(c) certificates of deposit with maturities of one (1) year or
less from the date of acquisition issued by (i) any Lender, or (ii) any
commercial bank operating within the United States of America whose outstanding
long-term debt is rated at least "A" by Moody's or "A" by S&P.
PERSON means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
PREDECESSOR AGREEMENT means the Second Amended and Restated
Financing Agreement and Guaranty, dated as of December 31, 1996, among Specialty
Paperboard, Inc., as borrower, Specialty Paperboard/Endura, Inc., CPG Investors
Inc., CPG Holdings, Inc., CPG-Xxxxxx Xxxx Inc., Custom Papers Group Inc., Arcon
Holdings Corp., and Arcon Coating Xxxxx Inc., CITBC, the other lenders, if any,
that
26
subsequent to the date thereof, purchased from CITBC a portion of its rights and
obligations thereunder pursuant to, and in accordance with, Section 14.07
thereof, and CITBC as agent for the lenders.
PREPAYMENT FEE shall mean the fee payable to the Agent for the
ratable benefit of the Lenders in accordance with, and pursuant to, the
provisions of Section 6.03 of this Financing Agreement.
PRO RATA SHARE means, for purposes of this Financing Agreement
and with respect to each Lender, in the case of the Revolving Credit Loans and
the Unused Line Fees and the Overadvances, a fraction, the numerator of which is
such Lender's Revolving Credit Commitment and the denominator of which is the
total of all the Lenders' Revolving Credit Commitments.
PURCHASE MONEY LIENS shall mean Liens on any item of equipment
acquired by an Obligor after the Closing Date, PROVIDED that (a) each such Lien
shall attach only to the property to be acquired, (b) a description of the
property so acquired is furnished to the Agent, and (c) the debt incurred in
connection with such acquisitions shall not exceed, in the aggregate for all
Obligors, Five Hundred Thousand Dollars ($500,000) in any Fiscal Year.
QUALIFIED CAPITAL STOCK shall mean capital stock other than
any capital stock that, by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable), or upon the happening of any
event, (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or (ii) is redeemable at the sole option of the holder
thereof on or prior to the later of (A) the final maturity date of the
Securities (as defined in the Indenture) or (b) the Revolving Credit Commitment
Termination Date then in effect.
QUARTERLY PAYMENT DATE means each March 31, June 30, September
30 and December 31.
REAL ESTATE shall mean the fee and/or leasehold interests in
the real property of FiberMark Office located at Brattleboro, Vermont.
REGULATORY CHANGE means, with respect to any Lender, any
change after December 31, 1996 in United States federal, state, municipal or
foreign Laws (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class of banks
including such Lender of or under any United States, federal, state, municipal
or foreign Laws or regulations (whether or not having the force of Law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
REMEDIAL ACTION means action required to (a) clean up, remove,
treat or in any other way address Hazardous Materials in the indoor or outdoor
environment; (b) prevent an Environmental Discharge or minimize any further
Environmental Discharge; or (c) investigate and determine if a remedial response
is needed, design
27
such a response or conduct post-remedial investigation, monitoring operation,
maintenance or care.
REORGANIZATION means with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
REPORTABLE EVENT means an event described in Section 4043(b)
of ERISA or in the regulations thereunder (other than those events as to which
the thirty (30) day notice period is waived under Subsections .13, .14, .15,
.18, .19 or .20 of PBGC Regulation Section 2615).
REQUIRED LENDERS shall mean, on the date calculation of
Required Lenders is made, the Lenders having Revolving Credit Commitments to
lend at least sixty six and two thirds percent (66 2/3%) of the Revolving Credit
Loans hereunder; PROVIDED that for so long as there are only two Lenders (each
of them an Initial Lender or an assignee of the entire Pro Rata Share of the
Revolving Credit Facility initially owned by one of the Initial Lenders), each
of which has a 50% Pro Rata Share, REQUIRED LENDERS shall mean CITBC and any
assignee of CITBC's entire Pro Rata Share of the Revolving Credit Facility.
RESTRICTED PAYMENT shall mean (a) any dividend or distribution
(other than dividends or distributions payable in Qualified Capital Stock of
FiberMark or to an Obligor) on or in respect of shares of an Obligor's capital
stock to holders of such capital stock, (b) purchase, redemption, or other
acquisition or retirement for value of any capital stock of an Obligor or any
warrants, rights or options to purchase or acquire shares of any class of such
capital stock (other than from another Obligor), or (c) loan or advance to any
Person or purchase or other acquisition of any capital stock, assets,
obligations or other securities of, or any capital contribution to, or other
investment, or acquisition of any interest, in, any Person (other than Permitted
Investments or investments effected pursuant to Section 9.10).
RESTRICTED PAYMENT CONDITIONS shall mean, with respect to any
proposed Restricted Payment, that (a) both at the time of such Restricted
Payment and immediately after giving effect thereto, (i) no Default or Event of
Default shall have occurred and be continuing; (ii) the Company is able to incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 10.01, and (iii) the aggregate amount of Restricted
Payments (including such proposed Restricted Payment) made subsequent to October
15, 1996 (the amount expended for such purposes, if other than in cash, being
the fair market value of such property as determined reasonably and in good
faith by the Board of Directors of the FiberMark) does not exceed the sum of:
(A) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated
Net Income shall be a loss, minus 100% of such loss) of FiberMark subsequent to
October 15, 1996 and on or prior to the date the Restricted Payment occurs (the
"Reference Date") (treating such period as a single accounting period); plus (B)
100% of the aggregate net cash proceeds received by FiberMark from any Person
(other than a Subsidiary of
28
FiberMark) from the issuance and sale subsequent to October 15, 1996 and on or
prior to the Reference Date of Qualified Capital Stock of FiberMark; plus (C)
without duplication of any amounts included in clause (iii)(B) above, 100% of
the aggregate net cash proceeds of any equity contribution received by FiberMark
from a holder of FiberMark's capital stock (excluding, in the case of clauses
(iii)(B) and (C), any net cash proceeds from a Public Equity Offering (as
defined in the Indenture) to the extent used to redeem the Securities (as
defined in the Indenture); and (b) after giving effect to such proposed
Restricted Payment, there remains at least $10,000,000 of Availability.
REVOLVING CREDIT COMMITMENT shall mean, subject to the effect
of any assignment pursuant to Section 14.07, for each Lender, the amount set
forth opposite its name below:
===================== ==================== ======================
Pro Rata Share of
Revolving Credit Amount of Revolving
Lender Facility Credit Commitment
--------------------- -------------------- ----------------------
CITBC 50% $25,000,000
CITEF 50% $25,000,000
===================== ==================== ======================
REVOLVING CREDIT COMMITMENT TERMINATION DATE shall mean the
earlier of (i) September 30, 2002 and (ii) the Adjusted Termination Date;
PROVIDED, HOWEVER, the Borrowers and the Lenders agree that such date shall be
automatically extended for an additional year on such date or on each subsequent
anniversary date thereof unless and until at least sixty (60) days prior to any
such date Borrowers or the Lenders shall have given the other notice in writing
that such date shall not be so extended.
REVOLVING CREDIT FACILITY shall mean Fifty Million Dollars
($50,000,000).
REVOLVING CREDIT LIMIT has the meaning specified in Section
3.01.
REVOLVING CREDIT LOANS shall have the meaning specified in
Section 3.01.
REVOLVING CREDIT NOTE shall have the meaning specified in
Section 3.02.
REVOLVING CREDIT NOTICE OF BORROWING shall have the meaning
specified in Section 3.12.
S&P means Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc. or any successor thereto which provides credit ratings.
SECURITY DOCUMENTS means the Mortgage and any other security
agreement granting a Lien on any assets of an Obligor to secure such Obligor's
Obligations.
29
