Exhibit 10.46




 




SECOND AMENDMENT TO FINANCING AGREEMENT




 




This SECOND

AMENDMENT TO FINANCING AGREEMENT, dated as of October 31, 2002 (this

“Amendment”),

is entered into by and among FiberMark, Inc., a Delaware corporation (“FiberMark”),

FiberMark Durable Specialties, Inc., a

Delaware corporation, FiberMark Filter and Technical Products, Inc., a Delaware

corporation, FiberMark Office Products, LLC, a Vermont limited liability

company, FiberMark DSI Inc., a New York corporation (each individually a “Borrower”

and collectively, the “Borrowers”), The CIT Group/Business

Credit, Inc., a New York corporation (in its capacity as agent for the Lenders,

the “Agent”)

and the Lenders.




 




A.            The Borrowers, FiberMark, the

Lenders and the Agent are parties to that 

certain Fourth Amended and Restated Financing Agreement and Guaranty

dated as of January 31, 2002 (the “Original Financing Agreement”), as amended

by that certain First Amendment to Financing Agreement dated as of April 8,

2002 (the “First Amendment”).  The

term “Financing

Agreement” as used herein means the Original Financing Agreement as

amended by the First Amendment. 

Pursuant to, and on the terms and conditions of, the Financing Agreement

the Lenders have agreed to extend credit to the Borrowers.




 




B.            The Obligors have requested that the

Lenders modify certain provisions of the Financing Agreement and the Lenders,

on the terms and conditions, and subject to the limitations, set forth herein,

are willing to modify the Financing Agreement.




 




Accordingly, the

Borrowers, the Guarantors, the Lenders and the Agent agree as follows:




 




1.                                      Defined

Terms.  All

initially-capitalized terms not otherwise defined herein have the meanings

ascribed to them in the Financing Agreement, unless the context clearly

indicates otherwise.




 




2.                                      Amendments

to Financing Agreement.




 




2.1                               Definition

of “Availability”.  The definition

of “Availability” set forth in Article I of the Financing Agreement is hereby

amended and restated to read in its entirety as set forth below:




 




“Availability”

means:




 




(a)                                  Through the date on which the financial

statements described in Section 9.01(a) hereof are delivered to the Agent for

the period ending December 31, 2003,

which comply with the financial covenants set forth in Sections 11.01,

11.02 and 11.03 hereof, the excess of




 




(i)            the lesser of (A) the Borrowing

Base, and (B) the Revolving Credit Facility, over




 




(ii)           the sum of (A) the outstanding

aggregate amount of all outstanding Obligations of all the Borrowers taken

together, and (B) the Availability Block; and




 





























 




(b)                                 After the date on which the financial statements

described in Section 9.01(a) hereof are delivered to the Agent for the period

ending December 31, 2003, which comply with the financial covenants

set forth in Sections 11.01, 11.02 and 11.03 hereof, the excess of




 




(i)            the lesser of (A) the Borrowing

Base, and (B) the Revolving Credit Facility, over




 




(ii)           the outstanding aggregate amount of

all outstanding Obligations of all the Borrowers taken together.




 




2.2          Reporting

Requirements.  The first clause of

Section 9.01 of the Financing Agreement is hereby amended and restated to read

in its entirety as follows:




 




Section 9.01.          Reporting Requirements.  FiberMark will furnish to the Agent, with a

copy for each Lender:




 




2.3          Projections.  Section 9.01(i) of the Financing Agreement

is hereby amended and restated to read in its entirety as follows:




 




(i)        Projections.  No later than September 30, 2003,

projections for the Borrowers and their Subsidiaries in substantially the

format of Exhibit I, or in such other format as may be reasonably acceptable to

the Agent, on a quarterly and yearly basis, for the period commencing October

1, 2003 and ending September 30, 2005.




 




2.4          Financial

Covenants.  Sections 11.01, 11.02

and 11.03 of the Financing Agreement are hereby amended and restated to read in

their entirety as follows:




 




Section 11.01.        Consolidated Net Worth.  FiberMark and its Subsidiaries shall, as of

the last day of each fiscal quarter, commencing with the fiscal quarter ending

December 31, 2003, have a Consolidated Net Worth of not less than such amount

as the Agent may establish in good faith based on the Projections delivered by

the Borrowers pursuant to Section 9.01(i) hereof.




 




Section 11.02         Consolidated Fixed Charge Coverage

Ratio.  FiberMark and its Subsidiaries

shall, as of the last day of each fiscal quarter, commencing with the fiscal

quarter ending December 31, 2003, maintain a Consolidated Fixed Charge Coverage

Ratio of greater than such ratio as the Agent may establish in good faith based

on the Projections delivered by the Borrowers pursuant to Section 9.01(i)

hereof.




 




Section 11.03.        Domestic EBITDA.  FiberMark

and its Subsidiaries shall, as of the last day of each fiscal quarter,

commencing with the fiscal quarter ending December 31, 2003, maintain

a Domestic EBITDA for such fiscal quarter of not less than such amount

as the Agent may establish in good faith based on the Projections delivered by

the Borrowers pursuant to Section 9.01(i) hereof.




 




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3.                                      Representations

and Warranties.  To induce the

Agent and the Lenders to enter into this Amendment, the Obligors hereby

represent and warrant to the Agent and the Lenders as follows:




 




3.1          Corporate Power

and Authority; No Conflicts.  The

execution, delivery and performance by each Obligor of this Amendment has been

duly authorized by all necessary corporate action and do not and will not: (a)

in the case of each Corporate Obligor require any consent or approval of its

stockholders and in the case of FiberMark Office require any consent or

approval of its members-managers, which consent or approval has not already

been obtained; (b) in the case of each Corporate Obligor contravene its

certificate of incorporation or by-laws and in the case of FiberMark Office contravene

its Articles of Organization or Operating Agreement; (c) violate any provision

of, or require any filing, registration, consent or approval under any Law

(including, without limitation, Regulation U), order, writ, judgment,

injunction, decree, determination or award presently in effect having

applicability to such Obligor; (d) result in a breach of or constitute a

default under or require any consent under any indenture or loan or credit

agreement or any other agreement, lease or instrument to which such Obligor is

a party or by which it or its properties may be bound or affected; or (e)

result in, or require, the creation or imposition of any Lien (other than as

created hereunder), upon or with respect to any of the properties now owned or

hereafter acquired by such Person.




 




3.2          Legally

Enforceable Agreements.  This

Amendment is a legal, valid and binding obligation of such Obligor, enforceable

against such Obligor in accordance with its terms, except to the extent that

such enforcement may be limited by applicable bankruptcy, insolvency and other

similar laws affecting creditors’ rights generally.




 




3.3          Representations

and Warranties.  Both before and

after giving effect to this Amendment, the representations and warranties set

forth in Article VIII of the Financing Agreement are true and correct in all

material respects with the same effect as if made on the date hereof, except to

the extent such representations and warranties expressly relate to an earlier

date.




 




3.4          No Event of

Default or Default.  After giving

effect to this Amendment, no Event of Default or Default has occurred and is

continuing.




 




3.5          No Material

Adverse Change.  Since January 31,

2002, there has been no development or event, or any prospective development or

event, which has had or could result in a Material Adverse Change.




 




4.                                      Execution

by Guarantors.  Each Guarantor,

as a guarantor, is executing this Amendment and consenting to the modifications

to the Financing Agreement set forth herein. 

Each Guarantor hereby reaffirms its guaranty set forth in the Financing

Agreement.




 




5.                                      Miscellaneous.




 




5.1          Financing

Agreement.   Except as expressly set

forth herein, this Amendment shall not, by implication or otherwise, limit,

impair, constitute a waiver of, or otherwise affect the rights and remedies of

the Lenders under the Financing Agreement, and shall not alter, modify, amend

or in any way affect any of the terms, conditions, obligations, covenants or

agreements contained in the Financing Agreement, all of which are ratified and

affirmed in all




 




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respects and shall

continue in full force and effect. 

Nothing herein shall be deemed to entitle any Obligor to a consent to,

or a waiver, amendment, modification or other change of, any of the terms,

conditions, obligations, covenants or agreements contained in the Financing

Agreement in similar or different circumstances.  This Amendment shall apply and be effective only with respect to

the provisions of the Financing Agreement specifically referred to herein.  After the date hereof, any reference to “the

Financing Agreement,” in the Financing Agreement or any other Loan Document,

shall mean the Financing Agreement as amended hereby.




 




5.2                               Loan

Document.  This Amendment shall be a

Loan Document for all purposes.




 




5.3                               Applicable

Law.  THIS AMENDMENT SHALL BE

GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW

YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES OTHER THAN NYGOL

5-1401.




 




5.4                         Severability;

Section Headings.




 




5.4.1       If any provision or

agreement in or obligation under this Amendment shall be held to be invalid,

illegal or unenforceable in any jurisdiction, the validity, legality and

enforceability of the remaining provisions or obligations, or of such provision

or obligation in any other jurisdiction, shall not in any way be affected or

impaired thereby.




 




5.4.2       The headings herein are

included for convenience of reference only and shall be ignored in the

construction or interpretation hereof. 

When used in this Amendment, (i) “or” is not exclusive; (ii) “including”

is not limiting; (iii) a reference to any law, rule or regulation includes any

amendment or modification thereto or thereof, as well as any replacement

therefor; and (iv) unless otherwise provided for in this Amendment, a reference

to any Loan Document or other agreement, instrument or document, shall include

such Loan Document, other agreement, instrument or document, as it may be

amended, restated, supplemented or otherwise modified from time to time in

accordance with its terms.  References

herein to Articles, Sections, paragraphs, Schedules and the like, unless

otherwise stated are references to Articles, Sections or paragraphs of, or

Schedules to, this Amendment.  Terms

such as “herein”, “hereof” or “hereunder” refer to this Amendment as a whole,

and not to any particular provision hereof.




 




5.5                         Counterparts.  This Amendment may be executed in any number

of counterparts and by different parties hereto in separate counterparts, each

of which when so executed and delivered shall be an original, but all of which

shall together constitute one and the same instrument.




 




[ remainder of page

intentionally blank ]




 




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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to

be executed and delivered by their proper and duly authorized officers as of

the date set forth above.




 




	

   


  	

  FIBERMARK, INC.,


  	

   


  
	

   


  	

  a Delaware corporation


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By


  	

    /s/ Bruce

  Moore


  	

   


  
	

   


  	

   


  	

  Name:  


  	

    Bruce Moore


  	

   


  
	

   


  	

   


  	

  Title:  


  	

      Vice

  President


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  FIBERMARK DURABLE SPECIALTIES, INC.,


  
	

   


  	

  a Delaware corporation


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By


  	

    /s/ Bruce

  Moore


  	

   


  
	

   


  	

   


  	

  Name: 


  	

    Bruce Moore


  	

   


  
	

   


  	

   


  	

  Title: 


  	

      Vice

  President


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  FIBERMARK FILTER AND TECHNICAL PRODUCTS, INC.,


  
	

   


  	

  a

  Delaware corporation


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By


  	

    /s/ Bruce

  Moore


  	

   


  
	

   


  	

   


  	

  Name: 


  	

    Bruce Moore


  	

   


  
	

   


  	

   


  	

  Title: 


  	

      Vice

  President


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  FIBERMARK OFFICE PRODUCTS, LLC,


  
	

   


  	

  a Vermont limited

  liability company


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  BY


  	

  FIBERMARK, INC.,


  	

   


  
	

   


  	

   


  	

  its sole Member


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  By


  	

    /s/ Bruce

  Moore


  	

   


  
	

   


  	

   


  	

   


  	

  Name: 


  	

    Bruce Moore


  	

   


  
	

   


  	

   


  	

   


  	

  Title: 


  	

      Vice

  President


  	

   


  
									





 




5





























 




	

   


  	

   


  	

   


  	

   


  
	

   


  	

  FIBERMARK DSI INC.,


  
	

   


  	

  a New York corporation


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By


  	

    /s/ Bruce

  Moore


  	

   


  
	

   


  	

   


  	

  Name: 


  	

    Bruce Moore


  	

   


  
	

   


  	

   


  	

  Title: 


  	

        Vice

  President


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  THE CIT GROUP/BUSINESS CREDIT, INC.,


  
	

   


  	

  a New York corporation,


  
	

   


  	

  as Agent


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By


  	

    /s/

  Roderick Jarrett


  	

   


  
	

   


  	

   


  	

  Name: 


  	

    Roderick

  Jarrett


  	

   


  
	

   


  	

   


  	

  Title: 


  	

       Assistant

  Vice President


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  THE CIT GROUP/BUSINESS CREDIT, INC.,


  
	

   


  	

  a New York corporation,


  
	

   


  	

  as Lender


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By


  	

    /s/

  Roderick Jarrett


  	

   


  
	

   


  	

   


  	

  Name: 


  	

    Roderick

  Jarrett


  	

   


  
	

   


  	

   


  	

  Title: 


  	

      Assistant

  Vice President


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  THE CIT GROUP/EQUIPMENT FINANCING, INC.,


  
	

   


  	

  a New York corporation,


  
	

   


  	

  as a Lender


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By


  	

    /s/ Mark

  Saylor


  	

   


  
	

   


  	

   


  	

  Name: 


  	

    Mark Saylor


  	

   


  
	

   


  	

   


  	

  Title: 


  	

      Vice

  President


  	

   


  
							





 




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