Document:

Exhibit 10.47

 

THIRD

AMENDMENT TO FINANCING AGREEMENT

 

This THIRD AMENDMENT TO FINANCING AGREEMENT,

dated as of December 27, 2002 (this “Amendment”), is entered into by and among

FiberMark, Inc., a Delaware corporation (“FiberMark”), FiberMark Durable Specialties, Inc., a Delaware corporation, FiberMark

North America, Inc., a Delaware corporation (formerly known as FiberMark Filter

and Technical Products, Inc.), 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”) and that certain Second Amendment to

Financing Agreement dated as of October 31, 2002 (the “Second Amendment”).  The term “Financing Agreement” as used

herein means the Original Financing Agreement as amended by the First Amendment

and the Second 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 establish a subfacility of

$10,000,000, a portion of which shall be used for capital expenditures by one

or more Borrowers and a portion of which shall be used for working capital and

general corporate purposes by one or more Borrowers.  The Lenders, on the terms and conditions, and subject to the

limitations, set forth herein, are willing to modify the Financing Agreement to

provide for such subfacility.

 

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                               Amendments

to Article I.

 

(a)           Each

definition set forth below is hereby added to Article I of the Financing

Agreement in proper alphabetical order:

 

“Aggregate

Capex Principal” means, as of any date of determination, the

aggregate outstanding principal balance of all Capex Loans as of the applicable

date.

 

“Calendar Quarter” means

each consecutive three (3) month period ending on a Quarterly Payment Date.

 

“Capex Availability”

means the lesser of (a) the Capex Subfacility less the aggregate original

principal amount of all Capex Loans previously funded; and 

 

 

(b) the Revolving Credit

Facility less the outstanding aggregate amount of all outstanding Obligations

of all the Borrowers taken together.

 

“Capex Loan” means the

Initial Capex Loan and each subsequent advance under the Capex Subfacility.

 

“Capex Loan Maturity Date”

means, with respect to each Capex Loan, the earlier of (a) the Quarterly

Payment Date that is two (2) years and nine (9) months from the first Quarterly

Payment Date on which a payment is due with respect to such Capex Loan and (b)

the Revolving Credit Commitment Termination Date.

 

“Capex Prepayment Premium”

means, with respect to any prepayment of all or any portion of a Capex Loan, as

of any date of determination, an amount equal to the outstanding principal of

such Capex Loan being prepaid as of such date multiplied by the applicable

percentage set forth below:

 

	

  Date of Payment

  	

   

  	

  Percentage

  	

   

  
	

  Prior to the

  date that is 12 months from the date such Capex Loan is funded

  	

   

  	

  1.75

  	

  %

  
	

  On or after the

  date that is 12 months, but prior to the date that is 24 months, from the

  date such Capex Loan is funded

  	

   

  	

  0.75

  	

  %

  
	

  Anytime

  thereafter prior to the applicable Capex Loan Maturity Date

  	

   

  	

  0.50

  	

  %

  

 

“Capex Subfacility”

means an amount equal to $10,000,000.

 

“Converting Facilities Equipment”

means all currently owned or hereafter acquired interest of Borrowers, or any

of them, in the machinery, equipment, furnishings and fixtures described on

Schedule 1.01A, and all additions, substitutions and replacements thereof,

together with (a) all attachments, components, parts, equipment and accessories

installed thereon or affixed thereto; (b) all software and intellectual

property used in connection with the foregoing or that is necessary for the

operation of the foregoing in the ordinary course and in a manner that is safe

and that complies with applicable law; and (c) all proceeds and products of the

foregoing, of whatever sort.

 

“Converting Facilities Equipment’s Net

OLV” means the net orderly liquidation value of the Converting

Facilities Equipment as set forth in that certain appraisal dated November 8,

2002, with an effective date of September 20, 2002, by DoveBid Valuation

Services, Inc.

 

“Equipment Costs”

means, with respect to Financed Equipment, an amount not in excess of eighty

percent (80%) of the acquisition costs of such Financed Equipment (determined

at the time of acquisition), exclusive of costs related to assembly,

installation, maintenance, shipping, taxes and import or custom charges related

thereto.

 

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“Financed Equipment”

means any equipment purchased by a Borrower and financed in whole or in part

with the proceeds of a Capex Loan, together with (a) all attachments,

components, parts, equipment and accessories installed thereon or affixed

thereto; (b) all software and intellectual property used in connection with the

foregoing or that is necessary for the operation of the foregoing in the

ordinary course and in a manner that is safe and that complies with applicable

law; and (c) all proceeds and products of the foregoing, of whatever sort.

 

“Initial Capex Loan”

means the initial advance under the Capex Subfacility, to be funded on the date

hereof in the amount of the Initial Capex Loan Amount.

 

“Initial Capex Loan Amount”

means the lesser of (a) eighty-five percent (85%) of the Converting Facilities

Equipment’s Net OLV and (b) Three Million Dollars ($3,000,000).

 

“Lowville Capex Loan”

means an advance to be made under the Capex Subfacility the proceeds of which

will be used by a Borrower to purchase Financed Equipment installed, or to be

installed, at that certain real property more commonly known as 7740 West

Street, Lowville, New York.

 

(b)           The following definitions set forth

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

in their entirety as set forth below:

 

“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 Borrowers as the office by which its Revolving Credit Loans or

Capex Loans of such Type are to be made and maintained.

 

“Applicable

Margin” means (a) with respect to all Revolving Credit Loans,

the relevant “Applicable Margin”, determined in accordance with Schedule 1.01

based on the Leverage Ratio as of the date of determination; and (b) with

respect to (i) Capex Loans that are Libor Rate Loans, three and one-half

percent (3.50%) and (ii) Capex Loans that are Chase Manhattan Bank Rate Loans,

two percent (2.00%).

 

“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 demonstrate compliance with the financial covenants set forth in

Sections 11.01, 11.02 and 11.03 hereof, the excess of

 

(i)            the least of (A) the Borrowing Base

plus the Aggregate Capex Principal; (B) the Revolving Credit Facility; and (C)

the 1996 Indenture Limit; over

 

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(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 demonstrate compliance with the

financial covenants set forth in Sections 11.01, 11.02 and 11.03 hereof,

the excess of

 

(i)            the least of (A) the Borrowing Base

plus the Aggregate Capex Principal; (B) the Revolving Credit Facility; and (C)

the 1996 Indenture Limit; over

 

(ii)           the outstanding aggregate amount of

all outstanding Obligations of all the Borrowers taken together.

 

“Chase

Manhattan Bank Rate Loans” means that portion of the Revolving

Credit Loans or any Capex Loan with respect to which a Borrower has elected to

use the Chase Manhattan Bank Rate for interest rate calculations.

 

“Collateral”

means, 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 any Borrower relating to the facility in

Brattleboro, Vermont and to any facility at which any Financed Equipment or the

Converting Facilities Equipment is located; and, to the extent not otherwise

included, all proceeds and products of any and all of the foregoing, in

whatever form (including, but not limited to, accounts, chattel paper,

commercial tort claims, deposit accounts, documents, goods, instruments,

investment property, letter-of-credit rights, letters of credit, money, oil,

gas or other minerals before extraction, and general intangibles); (ii) the

Brattleboro Collateral; (iii) all of each Obligor’s right, title and interest,

whenever acquired, in the Financed Equipment, together with all additions or

accessions thereto and replacements or substitutions thereof and all proceeds

and products of any and all of the foregoing, in whatever form; and (iv)  all

of each Obligor’s right, title and interest, whenever acquired, in the

Converting Facilities Equipment, together with all additions or accessions

thereto and replacements or substitutions thereof and all proceeds and products

of any and all of the foregoing, in whatever form.

 

“Lender

Loan Commitment” means, with respect to each Lender’s making of

the Revolving Credit Loans and the Capex Loans, the obligation of such Lender

to make Revolving Credit Loans and Capex 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.

 

“Libor

Period” or “Libor Rate Period” means a thirty (30)

day, sixty (60) day, or ninety (90) day interest period with respect to Libor

Rate Loans, as selected by a Borrower.

 

4

 

“Libor

Rate Loans” means that portion of the Revolving Credit Loans or

any Capex Loan with respect to which a Borrower has elected to use the Libor

Rate for the interest calculations.

 

“Permitted

Encumbrances” means:

 

(a)           Liens expressly permitted, or

consented to, by the Agent;

 

(b)           Customarily Permitted Liens;

 

(c)           Liens granted the Agent by an

Obligor;

 

(d)           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);

 

(e)           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;

 

(f)            Liens granted by any Obligor on any

of its assets other than (i) the Brattleboro Collateral, the Financed Equipment

or the Converting Facilities Equipment, (ii) such Obligor’s Accounts, (iii)

such Obligor’s Inventory, or (iv) such Obligor’s equity interest, direct or

indirect, in any of its Subsidiaries, other than in non-Domestic Subsidiaries

acquired after the date of this Financing Agreement that own neither (x) any

equity interest in a Domestic Subsidiary of any Obligor, (y) any equity

interest in a non-Domestic Subsidiary of any Obligor owned as of the date of

this Financing Agreement, nor (z) any property described in any of the

preceding clauses (i) through (iii) of this paragraph (f) that has been, or is,

acquired from an Obligor; and

 

(g)           Purchase Money Liens.

 

“Pro Rata

Share” means, for purposes of this Financing Agreement and with

respect to each Lender, in the case of the Revolving Credit Loans, the Capex

Loans, 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” means Liens on any item of equipment (other than

the Financed Equipment and, if applicable, the Converting Facilities 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.

 

5

 

“Required

Lenders” means, 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 (or if the Revolving Credit Commitments have terminated and there

remain outstanding Revolving Credit Loans or Capex Loans, Lenders holding

sixty-six and two-thirds percent (66 2/3%) of the sum of the Revolving Credit

Loans plus the Aggregate Capex Principal); 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.

 

“Settlement

Date” means the date each week on which the Agent and the

Lenders shall settle amongst themselves so that the Agent shall not have, as

Agent, any money at risk and on such Settlement Date each of the Lenders shall

have its Pro Rata Share of all outstanding Revolving Credit Loans and Capex

Loans, based upon its Revolving Credit Commitment.  Notwithstanding the previous sentence, upon the occurrence of an

Event of Default or a continuing decline or increase of the Revolving Credit

Loans, Capex Loans or other Obligations, the Agent may, at its discretion,

elect to settle its and the Lenders’ accounts more often than weekly.

 

“Unused

Line Fee” means the aggregate fee due to the Agent for the

ratable benefit of the Lenders at the end of each Calendar Quarter for each

Lender Loan Commitment, determined by multiplying the difference between the

Revolving Credit Facility and the average daily amount of the outstanding

Revolving Credit Loans and Capex Loans for such Calendar Quarter by the applicable

rate set forth on Schedule 1.01 for the number of days in said Calendar

Quarter.

 

2.2                               Usage

of “Revolving Credit Loans”.

 

(a)           In each

of the following Sections of the Financing Agreement, each instance of the term

“Revolving Credit Loans” is hereby amended and restated to read “Revolving

Credit Loans and Capex Loans”:  3.08,

3.16, 3.18, 3.20, 14.03 and 14.07.

 

(b)           In each

of the following Sections of the Financing Agreement, each instance of the term

“Revolving Credit Loans” is hereby amended and restated to read “Revolving

Credit Loans and/or Capex Loans”:  3.17,

13.10 (provided that any new loans made pursuant to the last two sentences of

the second paragraph thereof shall be made as Revolving Credit Loans), 14.01,

14.04 and 14.06.

 

(c)           In Section 12.02 of the Financing

Agreement, each of the first two instances of the term “Revolving Credit Loans”

is hereby amended and restated to read “Revolving Credit Loans and/or Capex

Loans”.

 

(d)           Clause (a) of Section 12.02 of the

Financing Agreement is hereby amended and restated to read in its entirety as

follows:

 

6

 

(a) declare (i) the

Revolving Credit Commitments terminated, whereupon such Revolving Credit

Commitments shall forthwith terminate immediately and any accrued fees shall

forthwith become due and payable and (ii) all Obligations and all other amounts

payable under this Financing Agreement and any other Loan Documents to be,

whereupon the same shall become, forthwith due and payable without presentment,

demand or protest of any kind, all of which are hereby waived by the Borrowers,

anything contained in this Financing Agreement to the contrary notwithstanding,

and, as liquidated damages for loss of a bargain and not as a penalty, a lost

transaction fee shall be due and payable in addition to the accelerated amounts

set forth herein equal to the full outstanding principal amounts of the

Revolving Credit Loans being accelerated multiplied by two percent (2%) plus

the Capex Prepayment Premium;

 

(e)           In the first paragraph of each of

Article IX and Article X of the Financing Agreement, each instance of the term

“Revolving Credit Loans” is hereby amended and restated to read “Revolving

Credit Loans and/or Capex Loans”.

 

(f)            In Section 13.08 of the Financing

Agreement, the term “Revolving Credit Loan” is hereby amended and restated to

read “Revolving Credit Loan and/or Capex Loan”.

 

(g)           In Section 14.01 of the Financing

Agreement, each instance of the term “Revolving Credit Note” is hereby amended

and restated to read “Revolving Credit Note and/or Capex Loan” and each

instance of the term “Revolving Credit Notes” is hereby amended and restated to

read “Revolving Credit Notes and/or Capex Loans”.

 

2.3                               Amended

and Restated Section 3.01 of the Financing Agreement.  Section

3.01 of the Financing Agreement is hereby amended and restated to read in its

entirety as follows:

 

Section 3.01.          Revolving Credit Loans.  Subject to the terms and conditions of this

Financing Agreement, each Lender severally agrees to make loans (together with

all “Revolving Credit Loans,” as defined in, and made pursuant to, the

September 1999 Agreement that remain outstanding as of the Closing Date,

“Revolving Credit Loans”) to each Borrower from time to time during the period

from the Closing Date to the Revolving Credit Commitment Termination Date,

provided that, subject to Section 3.03, (a) the amount of each Revolving Credit

Loan does not exceed the then effective Availability, and (b) the aggregate

principal amount of all Revolving Credit Loans outstanding at any time plus the

L/C Outstandings does not exceed the lesser of:  (i) the Revolving Credit Facility minus the Aggregate Capex

Principal and (ii) the then effective Borrowing Base (“Revolving Credit Limit”).  Within the limits of the Revolving Credit

Limit each Borrower may borrow, make a payment pursuant to Section 3.10, and

reborrow under this Section 3.01.  The

Revolving Credit Loans may be outstanding as Chase Manhattan Bank Rate Loans or

Libor Rate Loans.  Each Type of

Revolving Credit Loan of each Lender shall be made and maintained at such

Lender’s Applicable Lending Office for such Type of Loan.  Each “Revolving Credit Loan,” as defined in,

and made pursuant to, the September 1999 Agreement that remains outstanding

 

7

 

as of the Closing Date, shall constitute a “Revolving

Credit Loan” for purposes of this Financing Agreement (including, without

limitation, for purposes of determining Availability).

 

2.4          Amended and Restated Section 3.09 of

the Financing Agreement.  Section 3.09 of the Financing Agreement is

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

 

Section 3.09.  Application of Payments.  Subject to Sections 5.03(b) and 9.07 hereof,

notwithstanding anything to the contrary contained in this Article 3 or in this

Financing Agreement (other than Sections 5.03(b) and 9.07), the Agent shall

apply all amounts received by it in payment of Accounts or Obligations of the

applicable Borrower in the following order: (i) first to Reimbursement

Obligations; (ii) second to Revolving Credit Loans that are Chase Manhattan

Bank Rate Loans; (iii) third to Revolving Credit Loans that are Libor Rate

Loans; (iv) fourth to Capex Loans that are Chase Manhattan Bank Rate Loans; and

(v) fifth to Capex Loans that are Libor Rate Loans; provided, however,

(a) upon the occurrence of an Event of Default or (b) in the event the

aggregate amount of outstanding Revolving Credit Loans of the Borrowers which

are Libor Rate Loans exceeds the Revolving Credit Limit, the Agent may apply

all such amounts received by it to the payment of Obligations in such manner

and in such order as the Agent may elect in its reasonable business

discretion.  In the event that any such

amounts are applied to Revolving Credit Loans or Capex Loans of any Borrower

which are Libor Rate Loans, such application shall be treated as a prepayment

of such loans of such Borrower and the Agent shall be entitled to the Libor

Rate Prepayment Premium and the Capex Prepayment Premium with respect thereto.

 

2.5                               Amended

and Restated Section 3.10 of the Financing Agreement.  Section

3.10 of the Financing Agreement is hereby amended and restated to read in its

entirety as set forth below:

 

Section 3.10.          Prepayments.  Subject to the limitation noted below, and

without limiting Section 5.03(b) hereof, any Borrower may prepay its Revolving

Credit Loans or Capex Loans upon at least one (1) Business Day’s notice to

Agent in the case of Chase Manhattan Bank Rate Loans, and at least three (3)

Business Day’s notice to Agent in the case of Libor Rate Loans, in whole or in

part with accrued interest to the date of such prepayment on the amount

prepaid, provided that (a) each partial prepayment shall be, in the case of a

Libor Rate Loan, in a principal amount of not less than One Million Dollars

($1,000,000) and integral multiples of One Hundred Thousand Dollars ($100,000);

(b) Libor Rate Loans prepaid on any Business Day other than the last day of the

Libor Period applicable for such Loan shall require such Borrower to pay the

Libor Rate Prepayment Premiums; and (c) any prepayment of all or any part of a

Capex Loan shall be accompanied by payment of any applicable Capex Prepayment

Premium.

 

In the event that the

Borrowers shall cause the Revolving Credit Facility to be cancelled effective

as of any date prior to the then-current Revolving

 

8

 

Credit Commitment

Termination Date and FiberMark or any Borrower shall obtain an alternative

commitment from another lender for financing, all Borrowers shall prepay all

Revolving Credit Loans and Capex Loans in whole with accrued interest to the

date of such cancellation and shall provide either (a) cash collateral in an

amount equal to 105% of the aggregate amount remaining available to be drawn

under all L/Cs or (b) an indemnification, in form and substance reasonably

satisfactory to the Agent, from a commercial bank or other financial

institution acceptable to the Agent for the L/C Obligations with respect to the

L/Cs.  In addition, unless such

cancellation is in connection with (i) an offering of senior notes registered

under the Securities Exchange Act of 1934, as amended, or (ii) an Asset

Acquisition (as defined in either Indenture), the Borrowers shall pay to the

Agent, for the ratable account of each Lender, a prepayment fee in the amount

of (A) 1% of the Revolving Credit Facility, other than with respect to such

portion of the Revolving Credit Facility comprised of Capex Loans and (B) with

respect to Capex Loans, the Capex Prepayment Premium.

 

To the extent that, at

any time, the sum of the outstanding principal amount of all the Revolving

Credit Loans plus the L/C Outstandings taken together exceeds the Revolving

Credit Limit, the Borrowers shall pay to the Agent, for the ratable benefit of

the Lenders, the amount of such excess which shall be applied by the Agent in

the following order: (i) first to Reimbursement Obligations; (ii) second to

Revolving Credit Loans that are Chase Manhattan Bank Rate Loans; and (iii) third

to Revolving Credit Loans that are Libor Rate Loans.  To the extent that, following such payments and prepayments, the

L/C Outstandings exceed the Revolving Credit Limit, the Borrowers shall provide

cash collateral to the Agent in an amount equal to 105% of such excess, to be

held in accordance with Section 3.02A.

 

Without limiting Section

5.03(b) hereof, upon any sale, exchange or other disposition of any Financed

Equipment or any Converting Facilities

Equipment, the proceeds of any such sale, exchange or other disposition

shall not be commingled with any Borrower’s other property, but shall be

segregated, held by the applicable Borrower in trust for the Lenders as the

Lenders’ exclusive property, and shall be delivered immediately by such

Borrower to the Agent in the identical form received by the Borrower and shall

be (i) applied to payment of the applicable Capex Loan and the payment of any

Capex Prepayment Premium and Libor Rate Prepayment Premium, and (ii) to the

extent of any excess, returned to the Borrowers or otherwise remitted or

applied in accordance with the instructions of the Borrowers.  If the proceeds from any sale, exchange or

other disposition of any Financed Equipment or any Converting Facilities Equipment are insufficient to pay in full

the outstanding balance of the applicable Capex Loan and all other amounts

described in clause (i) of the immediately preceding sentence, then the

applicable Borrower shall concurrently pay any such shortfall to the Agent.

 

2.6          Amended and Restated Section 3.11

of the Financing Agreement.  Section 3.11 of the Financing Agreement is

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

 

9

 

Section 3.11.  Funding of Revolving Credit Loans and Capex

Loans.   The Agent, for the account

of the Lenders, shall disburse all Revolving Credit Loans and Capex Loans and

shall handle all collections of Collateral and repayment of Obligations.

 

On each Settlement Date,

the Agent and the Lenders shall each remit to the other, in immediately

available funds, all amounts necessary so as to ensure that, as of such

Settlement Date, each Lender shall have its Pro Rata Share of (i) all

outstanding Revolving Credit Loans and (ii) all outstanding Capex Loans, in accordance

with its Lender Loan Commitment.

 

The Agent shall forward

to each Lender, at the end of each month, a copy of the account statement

rendered by the Agent to each Borrower.

 

2.7          Amended and Restated Sections 3.13,

3.14 and 3.15 of the Financing Agreement.  Sections

3.13, 3.14 and 3.15 of the Financing Agreement are hereby amended and restated

to read in their entirety as follows:

 

Section 3.13.  Obligations of Agent and Lenders.  Each Lender is solely responsible for its

Pro Rata Share of each Revolving Credit Loan and Capex Loan and neither Agent

nor any Lender shall be responsible for, nor assume any obligations for, the

failure of any Lender to make available its Pro Rata Share of any such

Revolving Credit Loans or Capex Loans. 

Should any Lender refuse to make available its Revolving Credit Loans or

Capex Loans, then each of the other Lenders may, but without obligation to do

so, increase, unilaterally, its portion of the Revolving Credit Loans or Capex

Loans in which event the applicable Borrower shall be so obligated to such

other Lender.

 

Nothing contained herein

shall be deemed to obligate the Agent to make available to the Borrowers the

full amount of a requested Revolving Credit Loan or Capex Loan when the Agent

has not received any Lender’s Pro Rata Share of such Revolving Credit Loan or

Capex Loan or if the Agent otherwise has any notice that any of the Lenders

will not advance its Pro Rata Share thereof. 

The Agent, for the account of the Lenders, shall disburse all Revolving

Credit Loans and Capex Loans and shall handle all collections of Collateral and

repayment of Obligations.

 

Unless the Agent shall

have been notified in writing by any Lender prior to any advance to a Borrower

that such Lender will not make the amount which would constitute its share of

the borrowing on such date available to the Agent, the Agent may assume that

such Lender shall make such amount available to the Agent on a Settlement Date,

and the Agent may, in reliance upon such assumption, make available to such

Borrower for the benefit of such Borrower a corresponding amount.  Absent such notice each Lender’s commitment

shall be absolute and unconditional and such Lender shall reimburse the Agent

its Pro Rata Share of such borrowing upon demand.  A certificate of the Agent submitted to any Lender with respect

to any amount owing under this subsection shall be conclusive, absent manifest

error.  If such Lender’s Pro Rata Share

of such borrowing is not in fact

 

10

 

made available to the

Agent by such Lender on the Settlement Date, the Agent shall be entitled to

charge the applicable Borrower’s account with any such amount with interest

thereon at the rate per annum applicable to Revolving Credit Loans and/or Capex

Loans, as applicable, hereunder, on demand, from the applicable Borrower

without prejudice to any rights which the Agent may have against such Lender

hereunder.  Nothing contained in this

subsection shall relieve any Lender which has failed to make available its Pro

Rata Share of any borrowing hereunder from its obligation to do so in

accordance with the terms hereof. 

Nothing contained herein shall be deemed to obligate the Agent to make

available to the applicable Borrower the full amount of a requested advance

when the Agent has not received any Lender’s Pro Rata Share of such Revolving

Credit Loan and/or Capex Loan or if the Agent has any notice that any of the

Lenders will not advance its Pro Rata Share thereof.

 

Section 3.14.   Minimum Amounts.

 

(a)           The amount of all Revolving Credit

Loans borrowed on any given day and the aggregate amount of all Revolving

Credit Loans with the same interest rate after giving effect to the conversions

and continuations provided for in Section 6.01 shall, in the case of Revolving Credit

Loans that are Libor Rate Loans, be in an amount at least equal to One Million

Dollars ($1,000,000) or a greater amount which is an integral multiple of One

Hundred Thousand Dollars ($100,000) (Revolving Credit Loans that are Libor Rate

Loans having different Libor Rate Periods outstanding at the same time shall be

deemed separate Loans for purposes of the foregoing, one for each Libor Rate

Period).  There shall be no minimum

amount of principal applicable to a conversion or continuation of a Revolving

Credit Loan that is a Chase Manhattan Bank Rate Loan.

 

(b)           Each Capex Loan, other than the

Initial Capex Loan and the Lowville Capex Loan, shall be in an amount at least

equal to One Million Five Hundred Thousand Dollars ($1,500,000) or a greater

amount, not in excess of the Equipment Costs, which is an integral multiple of

One Hundred Thousand Dollars ($100,000). 

Each separate Capex Loan shall, in its entirety, be either a Chase

Manhattan Bank Rate Loan or a Libor Rate Loan; provided that any Capex

Loan with an outstanding principal balance of less than One Million Dollars

($1,000,000) shall be a Chase Manhattan Bank Rate Loan.  There shall be no minimum amount of

principal applicable to a conversion or continuation of a Capex Loan that is a

Chase Manhattan Bank Rate Loan.  The

amount of the Initial Capex Loan shall be the Initial Capex Loan Amount.

 

Section 3.15.  Use of Proceeds.

 

(a)           The proceeds of the Revolving Credit

Loans (other than the Capex Loans) shall be used by the applicable Borrower (i)

for its working capital and general corporate purposes, and (ii) to make loans

to any Obligor for working capital purposes; provided, however,

that proceeds of Revolving Credit Loans (other than the Capex Loans) may be

used to pay all or a portion of the consideration for the

 

11

 

acquisition of stock or

assets of another Person only if each of the Restricted Payment Conditions is

satisfied with respect to such acquisition. 

No Borrower will, directly or indirectly, use any Revolving Credit Loan

proceeds for the purpose of purchasing or carrying any margin stock within the

meaning of Regulations T, U or X of the Board of Governors or to extend credit

to any Person for the purpose of purchasing or carrying any such margin stock.

 

(b)           The proceeds of a Capex Loan, other

than the Initial Capex Loan, shall be used by the applicable Borrower solely to

pay Equipment Costs of the Financed Equipment as such Equipment Costs are

represented to the Lenders in connection with such Borrower’s request for such

Capex Loan.  The proceeds of the Initial

Capex Loan shall be used by the Borrowers for working capital and general

corporate purposes.

 

2.8          New Article IIIB of the Financing

Agreement.  Article IIIB is hereby inserted into the Financing

Agreement, immediately following Article IIIA (which was inserted into the

Financing Agreement pursuant to the First Amendment), to read in its entirety

as follows:

 

ARTICLE IIIB

 

CAPEX LOANS

 

SECTION 3.01B             Capex Loans

 

(a)           In order to provide financing for

working capital and general corporate purposes (with respect to the Initial

Capex Loan only) and the purchase by the Borrowers of certain equipment, the

Borrowers have requested that the Lenders provide, and the Lenders have agreed

to provide, the Capex Subfacility.  Each

Lender severally agrees to make Capex Loans to the Borrowers in an aggregate

original principal amount not to exceed its Pro Rata Share of the Capex

Subfacility.  Each Type of Capex Loan of

each Lender shall be made and maintained at such Lender’s Applicable Lending

Office for such Type of Loan.  Capex

Loans made under the Capex Subfacility shall be subject to the terms and

conditions set forth herein.

 

(b)           In addition to satisfaction of all of

the conditions precedent set forth in Section 2.02 (as if the Initial Capex

Loan was a Revolving Credit Loan), the obligations of the Lenders to make the

Initial Capex Loan shall be subject to the further conditions precedent that:

 

(i)            the Agent shall have received prior

to the funding date, and approved, a request for the Initial Capex Loan from

the applicable Borrower(s), which request shall include, in addition to the

other information required hereby, a detailed description of the Converting

Facilities Equipment, descriptions of the real property on which it is located

sufficient for purposes of permitting the filing of an effective fixture filing

under the Uniform Commercial Code, as in effect in the jurisdiction in which it

is located, and that certain appraisal

 

12

 

with respect to the

Converting Facilities Equipment dated November 8, 2002, with an effective date

of September 20, 2002, by DoveBid Valuation Services, Inc.;

 

(ii)           the Agent shall have determined, in

good faith, that the amount of the Initial Capex Loan will not exceed

eighty-five percent (85%) of the Converting Facilities Equipment’s Net OLV;

 

(iii)          the amount of such Initial Capex Loan

shall not exceed Capex Availability, determined immediately prior to funding

such Initial Capex Loan (but after giving effect to any Revolving Credit Loans

and other Capex Loans made on such date);

 

(iv)          the Agent shall have received

evidence, satisfactory to the Agent, that each Borrower owning an interest in

the Converting Facilities Equipment has obtained the insurance described in

Section 9.07 with respect to the Converting Facilities Equipment; and

 

(v)           Borrower shall have delivered to the

Agent, in form and substance satisfactory to the Agent, such documentation and

evidence that, upon disbursement of the Initial Capex Loan, Lender shall have a

perfected security interest in the Converting Facilities Equipment having the

priority required under this Agreement, as the Agent may reasonably

request.  Such documentation may

include, without limitation, financing statements and, if applicable, fixture

filings related to the Converting Facilities Equipment.

 

(c)                                  In

addition to satisfaction of all of the conditions precedent set forth in

Section 2.02 (as if Capex Loans were Revolving Credit Loans), the obligations

of the Lenders to make each Capex Loan, other than the Initial Capex Loan,

shall be subject to the further conditions precedent that:

 

(i)            the Agent shall have received, at

least thirty (30) days prior to the requested funding date, and approved, a

request for a Capex Loan from the applicable Borrower, which request shall

include, in addition to the other information required hereby, a detailed

description of the Equipment Costs and Financed Equipment proposed to be

acquired therewith;

 

(ii)           evidence shall have been submitted to

the Agent, in form and substance satisfactory to the Agent (which shall include

invoices and other contracts for purchases), that the amount of such Capex Loan

will not exceed the related Equipment Costs;

 

(iii)          the requested Capex Loan, other than

the Lowville Capex Loan, shall be for an amount of no less than One Million

Five Hundred Thousand Dollars ($1,500,000);

 

(iv)          the amount of such Capex Loan shall

not exceed Capex Availability, determined immediately prior to funding such

Capex Loan (but after giving effect to any Revolving Credit Loans and other

Capex Loans made on

 

13

 

such date) and, upon

funding such Capex Loan, the original principal amount of all Capex Loans

previously made plus such Capex Loan shall not exceed the Capex Subfacility;

 

(v)           the Agent shall have received

evidence satisfactory to the Agent that the disbursement of the Capex Loan will

be concurrent with, or within three (3) months after, delivery, assembly and

installation of the Financed Equipment to be acquired therewith;

 

(vi)          the Agent shall have received

evidence, satisfactory to the Agent, that the applicable Borrower has obtained

the insurance described in Section 9.07 with respect to such Financed

Equipment;

 

(vii)         Borrower shall have delivered to the

Agent, in form and substance satisfactory to the Agent, such documentation and

evidence that, upon disbursement of the Capex Loan, Lender shall have a

perfected security interest in the Financed Equipment having the priority

required under this Agreement, as the Agent may reasonably request.  Such documentation may include, without

limitation, financing statements and, if applicable, fixture filings related to

the Financed Equipment; and

 

(viii)        no other Capex Loan shall have been

funded during the Calendar Quarter on which the requested Capex Loan is to be

funded.

 

(c)                                  Commencing

on the second Quarterly Payment Date following the date on which a Capex Loan

is made (or if such Capex Loan is made on a Quarterly Payment Date, the first

Quarterly Payment Date following the date on which such Capex Loan is made),

and continuing on each Quarterly Payment Date thereafter until the Capex Loan

Maturity Date for such Capex Loan, Borrower shall make principal amortization

payments for each Capex Loan in such amount as would be necessary to fully

amortize the principal amount of such Capex Loan on a quarterly straight-line

basis in sixteen (16) equal payments of principal.  On each Capex Loan Maturity Date, Borrower shall pay to the

Agent, for the ratable benefit of the Lenders, all outstanding principal,

accrued and unpaid interest, and any other amounts due under the applicable

Capex Loan.

 

2.9                               New

Section 5.01(f) of the Financing Agreement.  Section 5.01(f) is hereby inserted into the

Financing Agreement, immediately following Section 5.01(e), to read in its

entirety as follows:

 

(f)            Grant of a Security Interest by

Borrowers.  As security for the

prompt payment in full of all Obligations, each Borrower hereby pledges and

grants to the Agent for the ratable benefit of the Lenders a continuing general

Lien upon and security interest in all of its right, title and interest in and

to the Financed Equipment and the Converting Facilities Equipment, whether now

owned or hereafter acquired, together with

all additions or accessions thereto and replacements or substitutions thereof

and all proceeds and products of any and all of the foregoing, in

 

14

 

whatever form (including, but not limited

to, accounts, chattel paper, commercial tort claims, deposit accounts,

documents, goods, instruments, investment property, letter-of-credit rights,

letters of credit, money, oil, gas or other minerals before extraction, and general

intangibles).

 

2.10                        Amended

and Restated Section 5.03 of the Financing Agreement.  Section

5.03 of the Financing Agreement is hereby amended and restated to read in its

entirety as set forth below:

 

Section 5.03.  Covenants Regarding Equipment, Financed

Equipment and Converting Facilities Equipment.

 

(a)           Equipment.  The Equipment is and will only be used by

FiberMark Office in its business and will not be held for sale or lease, or

removed from its premises, or otherwise disposed of by FiberMark Office without

the prior written approval of the Agent. 

FiberMark Office will not sell, transfer, lease or otherwise dispose of

any of the Equipment constituting a part of the Brattleboro Collateral, or

attempt, offer or contract to do so, except for sales of assets permitted by

this Financing Agreement.  Concurrently

with any such permitted disposition, the property acquired by a transferee in

such disposition shall automatically be released from the security interest

created by this Financing Agreement (the “Security Interest”).  It is acknowledged and agreed that

notwithstanding any release of property from the Security Interest in

accordance with the foregoing provisions of this Section 5.03, the Security

Interest shall in any event continue in the proceeds of the Brattleboro

Collateral.  The Agent shall promptly

execute and deliver (and, when appropriate, shall cause any separate agent,

co-agent or trustee to execute and deliver) any releases, instruments or

documents reasonably requested by FiberMark Office to accomplish or confirm the

release of the Equipment constituting a part of the Brattleboro Collateral

provided by this Section 5.03.  Any such

release of the Equipment constituting a part of the Brattleboro Collateral

provided by the Agent shall specifically describe that portion of the

Brattleboro Collateral to be released, shall be expressed to be unconditional

and shall be without recourse or warranty (other than a warranty that the Agent

has not assigned its rights and interests to any other Person).  The Borrowers shall pay all of the Agent’s

out-of-pocket expenses in connection with any release of the Brattleboro

Collateral.

 

The Borrowers agree at

their own cost and expense to keep the Equipment in as good and substantial

repair and condition as the same is now or at the time the Lien and security

interest granted herein shall attach thereto, reasonable wear and tear

excepted, making any and all repairs and replacements when and where

necessary.  The Borrowers also agree to

safeguard, protect and hold all Equipment for the Lenders’ account and make no

disposition thereof unless the Borrowers first obtain the prior written

approval of the Agent.  Any sale,

exchange or other disposition of any Equipment shall only be made with the

prior written approval of the Agent, and the proceeds of any such sales shall

not be commingled with FiberMark Office’s or any other Borrower’s other

property, but shall be segregated, held by the Borrowers in trust for the

Lenders as the Lenders’ exclusive

 

15

 

property, and shall be

delivered immediately by the Borrowers to the Agent in the identical form

received by the Borrowers by deposit to the Depository Accounts.  Upon the sale, exchange, or other

disposition of the Equipment, as herein provided, the security interest

provided for herein shall, without break in continuity and without further

formality or act, continue in, and attach to, all proceeds, including any

instruments for the payment of money, accounts receivable, contract rights,

documents of title, shipping documents, chattel paper and all other cash and

non cash proceeds of such sales, exchange or disposition.  As to any such sale, exchange or other

disposition, the Agent shall have all of the rights of an unpaid seller,

including stoppage in transit, replevin, rescission and reclamation.  Notwithstanding anything hereinabove

contained to the contrary, FiberMark Office may sell, exchange or otherwise

dispose of obsolete Equipment or Equipment no longer needed in FiberMark

Office’s operations, provided, however, that (a) the then book value of the

Equipment so disposed of does not exceed Five Hundred Thousand Dollars

($500,000) in the aggregate in any Fiscal Year and (b) the proceeds of such

sales or dispositions are delivered to the Agent for the ratable benefit of the

Lenders in accordance with the foregoing provisions of this paragraph, except

that FiberMark Office may retain and use such proceeds to purchase forthwith

replacement Equipment which FiberMark Office determines in its reasonable

business judgment to have a collateral value at least equal to the Equipment so

disposed of or sold, provided, however, that the aforesaid right shall

automatically cease upon the occurrence of an Event of Default which is not

waived.

 

In the event of any

merger of Fibermark Office into another Borrower, or any transfer by Fibermark

Office of the Equipment to another Borrower, the covenants set forth in this

Section 5.03(a) shall bind such successor/transferee Borrower, as fully as

though its name were originally set forth in this Section.

 

(b)           Financed Equipment and Converting

Facilities Equipment.  The Financed

Equipment and Converting Facilities Equipment are and will only be used by the

Borrowers in their business and will not be held for sale or lease, or removed

from the premises on which such Financed Equipment and/or Converting Facilities

Equipment is initially (or, in the case of Converting Facilities Equipment, is

currently) installed, or otherwise disposed of by any Borrower without the

prior written approval of the Agent.  No

Borrower shall permit any of the Financed Equipment or Converting Facilities

Equipment to be located in any of the Excluded Premises.  The Borrowers agree at their own cost and

expense to keep the Financed Equipment and the Converting Facilities Equipment

in as good and substantial repair and condition as the same is on the date

acquired by a Borrower or at the time the Lien and security interest granted

herein shall attach thereto, reasonable wear and tear excepted, making any and

all repairs and replacements when and where necessary.  The Borrowers also agree to safeguard,

protect and hold all Financed Equipment and Converting Facilities Equipment for

the Lenders’ account.  The Borrowers

will not sell, transfer, lease or otherwise dispose of any of the Financed

Equipment or Converting Facilities Equipment until all of the Capex Loans have

been paid in full.  Concurrently with

any disposition not prohibited by the 

 

16

 

immediately preceding

sentence, the property acquired by a transferee in such disposition shall

automatically be released from the security interest created by this Financing

Agreement.  The Agent shall promptly execute

and deliver (and, when appropriate, shall cause any separate agent, co-agent or

trustee to execute and deliver) any releases, instruments or documents

reasonably requested by a Borrower to accomplish or confirm the release of such

Financed Equipment or Converting Facilities Equipment.  Any such release of the Financed Equipment

or Converting Facilities Equipment provided by the Agent shall specifically

describe that portion of the Financed Equipment or Converting Facilities

Equipment to be released, shall be expressed to be unconditional and shall be

without recourse or warranty (other than a warranty that the Agent has not

assigned its rights and interests to any other Person).  The Borrowers shall pay all of the Agent’s

out-of-pocket expenses in connection with any release of the Collateral

comprised of Financed Equipment or Converting Facilities Equipment.

 

While any Capex Loans are

outstanding, any sale, exchange or other disposition of any Financed Equipment

or Converting Facilities Equipment shall only be made by a Borrower with the

prior written approval of the Agent, and the proceeds of any such sales shall

not be commingled with any Borrower’s other property, but shall be segregated,

held by the applicable Borrower in trust for the Lenders as the Lenders’

exclusive property, and shall be delivered immediately by such Borrower to the

Agent in the identical form received by the Borrower and shall be applied as

provided in Section 3.10 hereof.  Upon

the sale, exchange, or other disposition of the Financed Equipment or Converting

Facilities Equipment, as herein provided, the security interest provided for

herein shall, without break in continuity and without further formality or act,

continue in, and attach to, all proceeds, including any instruments for the

payment of money, accounts receivable, contract rights, documents of title,

shipping documents, chattel paper and all other cash and non-cash proceeds of

such sales, exchange or disposition.  As

to any such sale, exchange or other disposition, the Agent shall have all of

the rights of an unpaid seller, including stoppage in transit, replevin,

rescission and reclamation.

 

2.11                        Amended

and Restated Sections 6.01, 6.02 and 6.05 of the Financing Agreement.  Sections

6.01, 6.02 and 6.05 of the Financing Agreement are hereby amended and restated

to read in their entirety as set forth below:

 

Section 6.01.  Method of Electing Interest Rates.   The Revolving Credit Loans and Capex Loans

made to the Borrowers shall bear interest at either the Chase Manhattan Bank

Rate or the Libor Rate; provided, however, that with respect to

Capex Loans that are Libor Rate Loans (i) in no event shall the applicable

Libor Rate Period extend beyond the next Quarterly Payment Date; and (ii) the

entire amount of such Capex Loan shall be a Libor Rate Loan.  Thereafter, the applicable Borrower may from

time to time elect to change or continue the Type borne by each Revolving

Credit Loan or Capex Loan, as follows:

 

(a)           if such Revolving Credit Loans or

Capex Loans are Chase Manhattan Bank Rate Loans, the applicable Borrower may

elect to convert such

 

17

 

Revolving Credit Loans or

Capex Loans to Libor Rate Loans as of any Business Day; provided that

with respect to Capex Loans (i) in no event shall the applicable Libor Rate

Period extend beyond the next Quarterly Payment Date; (ii) the entire amount of

such Capex Loan shall be a Libor Rate Loan; and (iii) the outstanding principal

balance of such Capex Loan exceeds One Million Dollars ($1,000,000).

 

(b)           if such Revolving Credit Loans or

Capex Loans are Libor Rate Loans, the applicable Borrower may elect to convert

such Revolving Credit Loans or Capex Loans to Chase Manhattan Bank Rate Loans,

or elect to continue such Libor Rate Loans as Libor Rate Loans for an

additional Libor Rate Period, in each case effective on the last day of the

then current Libor Rate Period applicable to such Revolving Credit Loans or

Capex Loans; provided, however, that with respect to Capex Loans

in no event shall the applicable Libor Rate Period extend beyond the next

Quarterly Payment Date.

 

Each such election shall

be made by delivering a notice substantially in the form of Exhibit C hereto (a

“Notice of Interest Rate Selection”) to Agent by (1) 12:00 Noon (New York City

time) at least one (1) Business Day before the conversion of a Libor Rate Loan

into a Chase Manhattan Bank Rate Loan, or (2) 12:00 Noon (New York City time)

at least three (3) Business Days before the conversion of a Chase Manhattan

Bank Rate Loan into a Libor Rate Loan or the continuation of a Libor Rate Loan

as a Libor Rate Loan.  A Notice of

Interest Rate Selection may, if it so specifies, apply to only a portion of the

aggregate principal amount of the relevant Revolving Credit Loan; provided that

the portion to which such notice applies, and the remaining portion to which it

does not apply, each are sufficient to meet the minimum amount specified in

Section 3.14.  A Notice of Interest Rate

Selection with respect to a Capex Loan shall apply to the entire principal amount

of the relevant Capex Loan.

 

Each Notice of Interest

Rate Selection relating to a Chase Manhattan Bank Rate Loan or Libor Rate Loan

shall specify:

 

(i)  the Revolving Credit Loan (or portion

thereof) or the Capex Loan to which such notice applies;

 

(ii)  the date on which the conversion or

continuation selected in such notice is to be effective, which shall comply

with the applicable clause of the first paragraph of this Section 6.01;

 

(iii)  if the Revolving Credit Loans or the Capex

Loans are to be converted, and if such new Revolving Credit Loans or Capex

Loans are Libor Rate Loans, the duration of the initial Libor Rate Period

applicable thereto (subject to the limitation with respect to Capex Loans that

such Libor Rate Period does not extend beyond the next Quarterly Payment Date);

and

 

(iv)  if such Revolving Credit Loans or Capex

Loans are to be continued as Libor Rate Loans for an additional Libor Rate

Period, the duration of

 

18

 

such additional Libor

Rate Period (subject to the limitation with respect to Capex Loans that such

Libor Rate Period does not extend beyond the next Quarterly Payment Date).

 

Each Libor Rate Period

specified in a Notice of Interest Rate Selection shall comply with the provisions

of the definition of Libor Rate Period. 

No conversion into a Libor Rate Loan and no continuation of a Libor Rate

Loan shall be permitted when a Default or Event of Default has occurred and is

continuing.  If the applicable Borrower

fails to deliver a timely Notice of Interest Rate Selection to the Agent for

any Libor Rate Loans to such Borrower such Revolving Credit Loans or Capex

Loans shall be converted into Chase Manhattan Bank Rate Loans on the last day

of the then current Libor Rate Period applicable thereto.

 

Anything herein to the

contrary notwithstanding, at no time shall there be outstanding more than five

(5) different Libor Rate Periods relating to Libor Rate Loans in the aggregate

for all Borrowers.

 

Section 6.02.  Interest.  Each applicable Borrower shall pay interest on the outstanding

unpaid principal amount of its Revolving Credit Loans and/or Capex Loans for

each day from and including the date such Revolving Credit Loan or Capex Loan

is made until but excluding the date such Revolving Credit Loan or Capex Loan

is paid in full, at one of the following rates per annum:

 

(a)           Chase Manhattan Bank Rate Loan.  For a Chase Manhattan Bank Rate Loan, a rate

per annum equal at all times to the sum of the Chase Manhattan Bank Rate in

effect for such day plus the Applicable Margin; and

 

(b)           Libor Rate Loan.  For a Libor Rate Loan, a rate per annum

equal at all times during each Libor Rate Period of such Revolving Credit Loan

or Capex Loan to the sum of the Libor Rate for such Libor Rate Period plus the

Applicable Margin.

 

All accrued and unpaid

interest on the Revolving Credit Loans (including accrued and unpaid interest

under the September 1999 Agreement as of the Closing Date) and Capex Loans will

be payable in arrears on each Quarterly Payment Date, regardless of interest

rate, and shall be calculated based on a 360 day year.  The Agent shall be entitled to charge the

applicable Borrower’s account with the applicable interest rate(s) until all

such Obligations have been paid in full.

 

The interest rate on

Chase Manhattan Bank Rate Loans shall change when the Chase Manhattan Bank Rate

changes.  Interest on the Chase

Manhattan Bank Rate Loans and the Libor Rate Loans shall not exceed the maximum

amount permitted under applicable Law. 

Upon the occurrence of an Event of Default interest will accrue at the

Default Rate of Interest as provided in Section 12.02.

 

Agent shall determine

each interest rate applicable to the Revolving Credit Loans and Capex Loans

hereunder.  Agent shall give prompt

notice to the

 

19

 

applicable Borrower and

each Lender of each rate of interest so determined, and its determination

thereof shall be conclusive in the absence of manifest error.

 

Section 6.05.  Certain Compensation.  Each Borrower hereby agrees to indemnify the

Agent and each Lender and hold the Agent and each Lender harmless from any

loss, cost or expense they may sustain or incur as a consequence of the failure

by such Borrower to complete any borrowing hereunder of a Libor Rate Loan after

notice thereof has been given by such Borrower to the Agent, including, without

limitation, any loss, cost or expense incurred by reason of the liquidation or

re-employment of deposits or other funds acquired by the Agent to fund such

borrowing when the applicable amount of the Revolving Credit Loan or the Capex

Loan, as a result of such failure, is not made subject to such interest rates

on such date.  The Agent shall certify

the amount of its and/or the Lenders’ loss, cost or expense to the applicable

Borrower, and such certification shall be final and conclusive absent manifest

error.

 

Without limiting the

foregoing, such compensation shall include the Libor Rate Prepayment Premium.

 

2.12                        Amended

and Restated Section 9.07 of the Financing Agreement.  Section

9.07 of the Financing Agreement is hereby amended and restated to read in its

entirety as set forth below:

 

Section 9.07.          Insurance.             (a)  FiberMark Office will maintain, with financially sound and

reputable companies, acceptable to the Agent, insurance policies (i) insuring

FiberMark Office, the Agent and the Lenders against Comprehensive General

Liability and auto liability, liability for personal injury and property damage

relating to the Brattleboro Collateral and Inventory and (ii) insuring the

Brattleboro Collateral and Inventory of FiberMark Office against all risk of

loss by fire, explosion, theft and auto comprehensive/collision, and such other

casualties as may be reasonably satisfactory to the Agent, such policies to be

in such amounts and on such terms as the Agent shall reasonably require.  All policies covering the Brattleboro

Collateral and Inventory are, subject to the rights of any holders of Permitted

Encumbrances holding claims senior to the Lenders, to be made payable to the

Agent for the benefit of the Lenders, in case of loss, under a standard non

contributory “mortgage”, “lender” or “secured party” clause and are to contain

such other provisions as the Lenders may require to fully protect the Lenders’

interest in the Real Estate and shall protect the Lenders’ interest in the

Brattleboro Collateral and Inventory and any payments to be made under such

policies.  All original certificates of

Insurance, policies or true copies thereof are to be delivered to the Agent,

premium prepaid, with the loss payable endorsement in the Agent’s favor for the

benefit of the Lenders, and shall provide for not less than thirty (30) days

prior written notice to the Agent of the exercise of any right of cancellation.

 

In addition to the

foregoing, FiberMark Office will maintain Business Interruption and

Comprehensive Boiler and Machinery Insurance in form and

 

20

 

amounts and with insurers

acceptable to the Agent.  In addition,

Workman’s Compensation Insurance in amounts required by applicable law and in

form acceptable to the Agent shall be maintained in connection with the

Brattleboro Collateral and Inventory.

(b)           Each Corporate Obligor will maintain,

with financially sound and reputable companies, acceptable to the Agent,

insurance policies (i) insuring such Corporate Obligor, the Agent and the

Lenders against Comprehensive General Liability and auto liability, liability

for personal injury and property damage relating to the Inventory of such

Corporate Obligor and (ii) insuring the Inventory of such Corporate Obligor

against all risk of loss by fire, explosion, theft and auto

comprehensive/collision, and such other casualties as may be reasonably

satisfactory to the Agent, such policies to be in such amounts and on such

terms as the Agent shall reasonably require. 

All policies covering the Inventory of each such Corporate Obligor are,

subject to the rights of any holders of Permitted Encumbrances holding claims

senior to the Lenders, to be made payable to the Agent for the benefit of the

Lenders, in case of loss, under a standard non contributory “lender” or

“secured party” clause and are to contain such other provisions as the Lenders

may require to fully protect the Lenders’ interest in the Inventory of such

Corporate Obligor and any payments to be made under such policies.  All original certificates of Insurance,

policies or true copies thereof are to be delivered to the Agent, premium prepaid,

with the loss payable endorsement in the Agent’s favor for the benefit of the

Lenders, and shall provide for not less than thirty (30) days prior written

notice to the Agent of the exercise of any right of cancellation.

 

In addition to the

foregoing, each such Corporate Obligor will maintain Business Interruption and

Comprehensive Boiler and Machinery Insurance in form and amounts and with

insurers acceptable to the Agent.  In

addition, Workman’s Compensation Insurance in amounts required by applicable

law and in form acceptable to the Agent shall be maintained in connection with

the Inventory of each such Corporate Obligor.

 

(c)           Each Borrower shall maintain with

financially sound and reputable companies, acceptable to the Agent, insurance

policies insuring the Financed Equipment and Converting Facilities Equipment

against all risk of loss by fire, explosion, theft and auto

comprehensive/collision, and such other casualties as may be reasonably

satisfactory to the Agent, such policies to be in such amounts and on such

terms as the Agent shall reasonably require. 

All policies covering the Financed Equipment and Converting Facilities

Equipment are to be made payable to the Agent for the benefit of the Lenders,

in case of loss, under a standard non-contributory “mortgage”, “lender” or

“secured party” clause and are to contain such other provisions as the Lenders

may require to fully protect the Lenders’ interest in the Financed Equipment

and Converting Facilities Equipment and shall protect the Lenders’ interest in

the Financed Equipment and Converting Facilities Equipment and any payments to

be made under such policies.  All

original certificates of Insurance, policies or true copies thereof are to be

delivered to the Agent, premium prepaid, with the loss payable endorsement in

the Agent’s favor for the benefit of the

 

21

 

Lenders, and shall

provide for not less than thirty (30) days prior written notice to the Agent of

the exercise of any right of cancellation.

 

(d)           At the request of FiberMark or if any

Obligor fails to maintain such insurance, the Agent may arrange for such

insurance, but at the applicable Obligor’s expense and without any

responsibility on the Lenders’ part for: 

obtaining the insurance, the solvency of the insurance companies, the adequacy

of the coverage, or the collection of claims. 

Upon the occurrence and during the continuance of an Event of Default,

the Agent shall, subject to the rights of any holders of Permitted Encumbrances

holding claims senior to the Lenders, have the sole right, in the name of the

Agent for the benefit of the Lenders or the applicable Obligor, to file claims

under any insurance policies, to receive, receipt and give acquittance for any

payments that may be payable thereunder, and to execute any and all endorsements,

receipts, releases, assignments, reassignments or other documents that may be

necessary to effect the collection, compromise or settlement of any claims

under any such insurance policies.

 

In the event of any loss

or damage by fire or other casualty, insurance proceeds relating to Inventory

shall first reduce all the outstanding Revolving Credit Loans and then be paid

to the Agent to be held as cash collateral pending repair, restoration or

replacement of the insured property pursuant to the provisions below.  In the event of any loss or damage by fire

or other casualty related to the Financed Equipment or Converting Facilities

Equipment, insurance proceeds relating thereto shall at the election of the Agent,

in its sole and absolute discretion, either (i) reduce the outstanding Capex

Loans or (ii) be held as cash collateral pending repair, restoration or

replacement of the Financed Equipment or Converting Facilities Equipment, as

applicable, pursuant to the provisions below.

 

(1)           Brattleboro Collateral.  In the event any part of the Brattleboro

Collateral is damaged by fire or other casualty and the insurance proceeds for

such damage or other casualty (the “Proceeds”) is less than or equal to One

Hundred Thousand Dollars ($100,000), the Agent shall promptly apply such

Proceeds to reduce the outstanding balances of all the Revolving Credit Loans.

 

As long as no Event of

Default shall have occurred and be continuing, FiberMark Office has sufficient

business interruption insurance to replace the lost profits of any of its

facilities, and the Proceeds are in excess of One Hundred Thousand Dollars

($100,000), FiberMark Office may elect (by delivering written notice to the

Agent) to repair or restore the Brattleboro Collateral to substantially the

equivalent condition prior to such fire or other casualty as set forth herein,

or to replace the same with substantially the equivalent or functionally

equivalent Real Estate or Equipment.  If

FiberMark Office does not, or cannot, elect to use the Proceeds as set forth

above, the Agent may, subject to the rights of any holders of Permitted

Encumbrances holding claims senior to the Lenders and the Agent, apply the

Proceeds to the payment of the Obligations in such manner and in such order as

the Agent may reasonably elect.

 

22

 

If FiberMark Office

elects to use the Proceeds for the repair, replacement or restoration of any

Real Estate or Equipment, and there is then no Event of Default, (a) proceeds

on Equipment and Real Estate in excess of One Hundred Thousand Dollars

($100,000) will be applied to the reduction of the Revolving Credit Loans, and

(b) the Agent may set up a reserve against Availability for an amount equal to

the amount of proceeds so allocated to the Revolving Credit Loans.  The reserves will collectively be reduced

dollar for dollar upon receipt of non cancelable executed purchase orders,

delivery receipts or contracts for the replacement, repair or restoration of

Equipment or the Real Estate and disbursements in connection therewith, such

reduction to be allocated between FiberMark Office’s reserve in such

proportions as the Agent shall determine. 

Prior to the commencement of any restoration, repair or replacement of

Real Estate, FiberMark Office shall provide the Agent with a restoration plan

and a total budget certified by the chief executive officer and chief financial

officer of FiberMark Office, and, if the total budget exceeds One Million

Dollars ($1,000,000), also certified by an independent third party experienced

in construction costing.  If there are

insufficient proceeds to cover the cost of restoration as so determined,

FiberMark Office shall be responsible for the amount of any such insufficiency

prior to the commencement of restoration and shall demonstrate evidence of such

before the reserve will be reduced. 

Completion of restoration shall be evidenced by a final, unqualified

certification of the design architect employed, if any, but only if the cost of

restoration exceeded One Million Dollars ($1,000,000); an unconditional

certificate of occupancy, if applicable; such other certification as may be

required by law; or if none of the above is applicable, a written good faith

determination of completion by the chief executive officer and chief financial

officer of FiberMark Office as the case may be (herein collectively the

“Completion”).  Upon Completion, any

remaining reserves as established hereunder will be automatically released.

 

(2)           Financed Equipment and Converting

Facilities Equipment.  In the event

any part of the Financed Equipment or Converting Facilities Equipment is

damaged by fire or other casualty, the insurance proceeds for such damage or

other casualty (the “Capex Insurance Proceeds”), shall, at the Borrowers’

election if no Default or Event of Default exists and otherwise in the Agent’s

sole and absolute discretion, either be (i) applied to reduce the outstanding

balance of the related Capex Loan (with any excess Capex Insurance Proceeds

applied to the outstanding balance of the Revolving Credit Loans) or (ii) held

by the Agent as cash collateral pending repair, restoration or replacement of

the Financed Equipment or Converting Facilities Equipment, as applicable,

pursuant to the provisions below.  If

the Agent elects to proceed under clause (i) of the immediately preceding

sentence and if the Capex Insurance Proceeds are insufficient to pay in full

the outstanding balance of the applicable Capex Loan, then the applicable

Borrower shall concurrently pay to the Agent the additional amounts required to

pay in full the outstanding balance of the applicable Capex Loan.

 

If the Agent has elected

to hold the Capex Insurance Proceeds as cash collateral and so long as no Event

of Default shall have occurred and be continuing,

 

23

 

the applicable Borrower

may repair or restore the Financed Equipment or Converting Facilities

Equipment, as applicable, to substantially the equivalent condition prior to

such fire or other casualty as set forth herein, or to replace the same with

substantially the equivalent or functionally equivalent Financed Equipment or

Converting Facilities Equipment, as applicable.  If the applicable Borrower does not, or cannot, use the Capex

Insurance Proceeds as set forth above, the Agent shall apply the Capex

Insurance Proceeds to the payment of the related Capex Loan (with any excess

Capex Insurance Proceeds applied to the outstanding balance of the Revolving

Credit Loans) and the applicable Borrower shall concurrently pay to the Agent

any additional amounts required to pay in full the outstanding balance of the

applicable Capex Loan.

 

If the Agent has elected

to hold the Capex Insurance Proceeds as cash collateral and if there is then no

Event of Default, the Agent shall disburse the Capex Insurance Proceeds on a

dollar-for-dollar basis upon receipt of non-cancelable executed purchase

orders, delivery receipts or contracts for the replacement, repair or

restoration of the applicable Financed Equipment or Converting Facilities

Equipment.

 

All policies of insurance

required under the provisions of this Section 9.07 shall contain (a) an

endorsement by the insurer that any loss shall be payable in accordance with

the terms of such policy notwithstanding any act or negligence of any Obligor

that might otherwise give rise to a defense by the insurer to its payment of

such loss, and (b) a waiver by the insured of all rights of subrogation to any

rights of the additional insureds against the applicable Obligor, and (c) a

disclaimer of all rights of setoff, counterclaim or deduction against the

insureds other than the applicable Obligor. 

The applicable Obligor shall not take out separate insurance concurrent

in form or contributing in the event of loss with that required by this Financing

Agreement unless the same shall contain a standard non-contributory lender’s

loss payable endorsement in scope and form approved by the Required Lenders

prior to the Closing Date with loss payable to the Agent for the benefit of the

Lenders as its interests may appear. 

All retentions and deductibles under policies where the Agent is loss

payee shall be the sole responsibility of the applicable Obligor maintaining

such policies subject to the Lenders’ approval.

 

Without limiting any of

the foregoing, each of the insurance policies required by this Section 9.07

which is required to name the Agent in its capacity as agent for each of the

Lenders, as an additional insured thereunder shall provide:

 

(a)  that no cancellation, reduction in amount or

material change in coverage thereof shall be effective until at least thirty

(30) days after receipt by the Agent of written notice thereof;

 

(b)  that the interests of Agent and each of the

Lenders will be insured regardless of any breach by any Obligor or any other

Person of any warranties, declarations or conditions contained therein; and

 

24

 

(c)  that neither Agent nor any of the Lenders

shall have any obligation or liability for premiums, commissions, assessments

or calls in connection with such insurance.

 

On or before the Closing

Date (or, with respect to (y) Financed Equipment, the relevant funding date of

the Capex Loan related to such Financed Equipment and (z) Converting Facilities

Equipment, the funding date of the Initial Capex Loan) and prior to each policy

expiration thereafter, each Obligor shall deliver to the Agent an original

certificate or binder signed by the insurer or its duly authorized

representative showing the insurance then maintained by such Obligor pursuant

to this Section 9.07, and stating that such insurance complies with the terms

of this Section 9.07, together with evidence that payment of the premiums on

such insurance is current.  Each Obligor

shall effect such changes in the form (but not the amount or types) of the

policies required pursuant to this Section 9.07, as may be required by the

Agent, provided such changes (a) are commercially available at reasonable

rates, which determination shall be made by Agent and (b) the effect of such

changes by FiberMark Office would not result in a violation of the provisions

of the Mortgage.

 

2.13                        Amendments

to Sections 10.05 and 10.06.  Each reference to “Section 9.07” set forth in

Sections 10.05 and 10.06 is hereby corrected to read “Section 9.10”.

 

2.14                        Amended

and Restated Section 12.01(a) of the Financing Agreement.  Section

12.01(a) of the Financing Agreement is hereby amended and restated to read in

its entirety as set forth below:

 

(a)           failure of any Obligor to pay any of

its Obligations within five (5) business days of the due date thereof, provided

that nothing contained herein shall prohibit the Agent from charging such

amounts to any Obligor’s loan account on the due date thereof and such amount

shall be deemed to be a Revolving Credit Loan (if the Agent so charges such

Obligor’s loan account, no Event of Default relating to non-payment of

Obligations will be deemed to have occurred) and, provided  further,

that if the Agent chooses not to charge such amounts to an Obligor’s loan account

on the due date thereof, the Agent shall so notify the Obligor and the Obligor

shall have five (5) days from the date it receives such notice to pay such

Obligations;

 

2.15                        Schedule

1.01A of the Financing Agreement.  Schedule 1.01A attached hereto is hereby

inserted into the Financing Agreement as Schedule 1.01A.

 

3.                                      Execution

of Loan Documents by FiberMark Office Products, LLC.  Certain Loan Documents to which FiberMark

Office Products, LLC, a Vermont limited liability company (“FiberMark

Office”), is a party have been executed on behalf of FiberMark

Office by FiberMark, Inc., identified as the sole member of FiberMark

Office.  FiberMark Office acknowledges

that, on December 18, 1997, FiberMark, Inc. conveyed its interest in FiberMark

Office to FiberMark Filter and Technical Products, Inc. (“FiberMark Filter”), and

FiberMark Office acknowledges and agrees that it intended to execute, and to be

bound by, all of the Loan Documents that have been

 

25

 

executed on its behalf by FiberMark, Inc., and hereby

ratifies and confirms the execution and delivery of such Loan Documents and the

grants of security interests and liens set forth therein and all actions taken

by FiberMark Office thereunder or otherwise in connection therewith.  All such Loan Documents executed on behalf

of FiberMark Office by FiberMark, Inc. shall be deemed to have been properly

executed by FiberMark Office.

 

4.                                      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:

 

4.1          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.

 

4.2          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.

 

4.3          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.

 

4.4          After giving effect to this Amendment, no Event of

Default or Default has occurred and is continuing.

 

4.5          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.

 

5.                                      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 and acknowledges that all Capex Loans incurred by any other Obligor

shall automatically, without notice or action of any party, be a Guaranty

Obligation.

 

26

 

6.                                      Miscellaneous.

 

6.1                               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 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.

 

6.2                               Loan

Document.  This Amendment shall be a Loan Document for all purposes.

 

6.3                               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.

 

6.4                               Severability;

Section Headings.

 

6.4.1       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.

 

6.4.2       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.

 

6.5                               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 ]

27

 

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 first 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 NORTH

  AMERICA, INC.,

  	 

	

   

  	

  a Delaware corporation,

  	 

	

   

  	

  formerly known as FiberMark Filter and Technical

  Products, Inc.

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

  By

  	

    /s/ Bruce Moore

  	

   

  	 

	

   

  	

   

  	

  Name: 

  	

    Bruce Moore

  	

   

  	 

	

   

  	

   

  	

  Title: 

  	

      Vice President

  	

   

  
	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

  FIBERMARK

  OFFICE PRODUCTS, LLC,

  	 

	

   

  	

  a Vermont limited liability company

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

  BY

  	

  FIBERMARK

  NORTH AMERICA, INC.,

  	 

	

   

  	

   

  	

  its sole Member

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By

  	

  /s/ Bruce Moore

  	

   

  	 

	

   

  	

   

  	

   

  	

  Name: 

  	

    Bruce Moore

  	

   

  	 

	

   

  	

   

  	

   

  	

  Title: 

  	

      Vice President

  	

   

  	 

											

 

28

 

	

   

  	

  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/ Edward M. Alt

  	

   

  
	

   

  	

   

  	

  Name: 

  	

    Edward M. Alt

  	

   

  
	

   

  	

   

  	

  Title: 

  	

      Vice President

  	

   

  
							

 

29

 

SCHEDULE 1.01A

 

Converting

Facilities Equipment Located at

7740 West Street

Lowville, New York

 

	

  Qty

  	

   

  	

   

  
	

   

  	

   

  	

  Laminating

  Department

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Specially Manufactured

  60”W Laminator; (Complete Line Refurbished In 2001); 60 Yards/Minute Maximum

  Operating Speed, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured

  Unwind Stand; 44”D x 60”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured

  60”W Automatic Tension

  Roll Stand; with Fife Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured Glue Application Stand; with

  Dip Pan; 7”D x 64”W Glue Applicator Roll; 14”D x 60”W Rubber Backing Roll;

  (2) Nip Rolls; and Variable-Speed Controls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured

  Unwind Stand; 44”D x 60”W Roll Capacity, Powered; with Fife Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Can Drying Section,

  (1993); with (2) 36”D x 64”W Hot Water Heated Drying Cans, Driven

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Waldron Hartig Rewinder,

  (1975); 44”D x 60”W Maximum Wind-Up Roll; with Automatic Tension Controls;

  and Fife Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Coffing 2-Ton Chain Hoist; Pendant Controlled; with Roll Lift

  
	

   

  	

   

  	

  (2)

  	

   

  	

  Budgit 2-Ton Chain Hoists; Pendant Controlled; Each with Roll Lift

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Controls

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Coating Department

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Rogers Machine 60”W Coating Line, Asset #2, (1999);

  60 Yards/Minute Maximum Operating Speed, Single Sided, To Include:

  
	

   

  	

   

  	

   

  	

  (1)        Therioult

  Unwind Stand; 44”D x 64”W Maximum Roll Capacity; with Automatic Brake

  Tensioner; and Fife Web Guide

  
	

   

  	

   

  	

   

  	

  (1)        Rogers

  Machine 64”W Coating Applicator Stand; Meyer Rod Type; with Steel Covered

  Roll

  
	

   

  	

   

  	

   

  	

  (1)        J.R.

  Greene Natural Gas Fired Drying Oven; 450°F Maximum Operating Temperature,

  2-Zone, Estimated 8’W x 50’L; with Steel Roller Powered Feed Through Conveyor

  
	

   

  	

   

  	

   

  	

  (1)        Specially

  Manufactured Chill Roll Stand; with (2) 19”D x 70”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

   

  	

  (-)        Therioult

  Automatic Tensioning Rolls

  
	

   

  	

   

  	

   

  	

  (1)        Rogers

  Machine 64”W Coating Applicator Stand; Meyer Rod Type;

  
						

 

30

 

	

  Qty

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  with

  Rubber Applicator Roll

  
	

   

  	

   

  	

   

  	

  (1)        Coffing

  2-Ton Chain Hoist; Pendant Controlled; with Lift Bar

  
	

   

  	

   

  	

   

  	

  (1)        J.R.

  Greene Natural Gas Fired Drying Oven; 450°F Maximum Operating Temperature,

  2-Zone, Estimated 8’W x 50’L; with Steel Roller Powered Feed Through Conveyor

  
	

   

  	

   

  	

   

  	

  (-)        Therioult

  Automatic Tensioning Rolls

  
	

   

  	

   

  	

   

  	

  (1)        Rogers

  Machine Chill Roll Stand; with (2) 19”D x 70”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

   

  	

  (1)        Specially

  Manufactured Backwetting Stand; 64”W; with Rotogravure Roll; and Tensioning

  Rolls

  
	

   

  	

   

  	

   

  	

  (1)        John

  Berduin Machine 40-Ton Calender, S/N 765-A-8155; 60”W; with (3) 14”D x 64”W

  Steel Covered Rolls; and Pressure Controls

  
	

   

  	

   

  	

   

  	

  (1)        Rogers

  Machine Chill Roll Stand; with (2) 19”D x 70”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

   

  	

  (1)        Therioult

  Surface-Type Rewind Stand; Powered, 44”D x 60”W Maximum Roll Capacity

  
	

   

  	

   

  	

   

  	

  (-)        Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Rogers Machine 60”W Coating Line, Asset #8, (2000);

  60 Yards/Minute Maximum Operating Speed, Single Sided, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Therioult

  Unwind Stand; 44”D x 60”W Maximum Roll Capacity; with Automatic Brake

  Tensioner; and Fife Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rogers

  Machine 64”W Coating Applicator Stand; Meyer Rod Type; with Steel Covered

  Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  J.R.

  Greene Natural Gas Fired Drying Oven; 450°F Maximum Operating Temperature,

  2-Zone, Estimated 8’W x 50’L; with Steel Roller Powered Feed Through Conveyor

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rogers

  Machine Chill Roll Stand; with (2) 19”D x 70”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Therioult

  Automatic Tensioning Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rogers

  Machine 64”W Coating Applicator Stand; Meyer Rod Type; with Steel Covered

  Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Coffing

  2 Ton Chain Hoist; Pendant Controlled; with Lift Bar

  
	

   

  	

   

  	

  (1)

  	

   

  	

  J.R.

  Greene Natural Gas Fired Drying Oven; 450°F Maximum Operating Temperature,

  2-Zone, Estimated 8’W x 50’L; with Steel Roller Feed Through Conveyor

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Therioult

  Automatic Tensioning Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rogers

  Machine Chill Roll Stand; with (2) 19”D x 70”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially

  Manufactured Backwetting Stand; 64”W; with Rotogravure Roll; and Tensioning

  Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rogers

  Machine Chill Roll Stand; with (2) 19”D x 70”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Therioult

  Surface-Type Rewind Stand; Powered, 44”D x 60”W Maximum Roll Capacity

  

 

31

 

	

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  (-)

  	

   

  	

  Controls

  
	

   

  
	

  1-

  	

   

  	

  Magnat 62”W Coating Line,

  Asset #11, (1977); 135 Yards/Minute Maximum Operating Speed, 2 Sided Coating,

  To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Magnat

  2-Position Unwind Stand; 60”D x 70”W Roll Capacity; with (2) Powered

  Unwinders, Automatic Brake Tensioner; Automatic Flying Cut-Off Splicer;

  Displacing Head; and Tensioning Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Magnat

  Coating Applicator Stand; 64”W, Meyer Rod Type; with Tensioning Rolls

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Magnat

  Drying Oven; Top and Bottom Dual-Entry Type, 350°F Maximum Operating

  Temperature, 2-Zone; with Electric Infrared Heaters; Steam Heated Coils, Hot

  Air; Powered Roller Feed Through Conveyor; and Temperature Controls

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Magnat

  Chill Roll Stand; with 12”D x 64”W Water Cooled Chill Roll

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Turn

  Bar Station; with (2) 120”L 90° Turn Bars; and Blower

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Magnat

  64”W Coating Application Stand; Meyer Rod Type; with Tensioning Rolls

  
	

   

  	

   

  	

   

  	

   

  	

  (-)        Automatic

  Tensioning Rolls

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Fife

  Web Guide

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Magnat

  Backwet Station; 64”W

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Thermo

  Web Systems Steam Foil Stand; 64”W

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Magnat

  2-Position Unwind Stand; 70”W; with Powered Slate Roll; (2) Unwind Stations;

  and Automatic Flying Cut-Off Splicer

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Roll

  Outfeed Shuttle-Type Conveyor; with Outfeed Ramp, Estimated 6’W x 45’L; and

  Toledo Model 8136 Floor Scale, 48” x 48” Platform

  
	

   

  	

   

  	

   

  	

   

  	

  (1)        Shaw

  Box 3-Ton Cable Hoist; Pendant Controlled; with Roll Lift

  
	

   

  	

   

  	

   

  	

   

  	

  (-)        Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Specially Manufactured 58”W Coating Line, Asset #12;

  (Components Estimated 1960 To Mid 1995), 50 Yards/Minute Maximum Operating

  Speed, 2-Sided Coating, 3-Pass, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Stanford Model T0-40-M

  Dual Turret Unwinder, S/N 565-2303; 450 Feet/Minute Maximum Operating Speed,

  44”D x 60”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Splice On The Fly Roll

  Change Unit; 64”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured

  Coating Application Stand; 64”W, Meyer Rod Type

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Steam Coil-Type Drying

  Oven; Dual Pass, 64”W Capacity, Estimated 6’W x 40’L, 290°F Maximum Operating

  Temperature, 2-Zone; with Steel Roll Powered Feed Through Conveyor

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured

  Coating Applicator; (Water Base Top Coat), 64”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Festoon Box; with (3) Top

  Rolls; and (3) Bottom Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Glenro Electric IR Dryer,

  (1996); with Controls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  AccuGuide Electronic Web

  Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured

  64”W Coating Application Stand; Meyer Rod Type

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Chill Roll Stand; with (2)

  20”D x 64”W Water Cooled Chill Rolls

  

 

32

 

	

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  (1)

  	

   

  	

  Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Chill Roll Stand; with

  12”D x 64”W Water Cooled Chill Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Surface-Type Rewinder;

  Powered, 44”D x 62”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Budgit 2-Ton Chain Hoist;

  Pendant Controlled; with Roll Lift

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Rogers Machine 58”W Direct

  Gravure Printing Press, Asset #4, (2000); 60 Yards/Minute Maximum Operating

  Speed, Single Color, Single-Sided Printing, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Therioult Surface-Type

  Unwinder; 44”D x 60”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Therioult Tensioning Roll

  Stand; with Fife Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rogers Machine Printing

  Unit; 60”W, Direct Gravure Type; with Rubber Covered Nip Roll; Spare Aqueous

  Knife Coating Unit, 2-Tone, Spanish Type; and 24 Spare Patterned Gravure

  Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  J.R. Greene Natural Gas

  Drying Oven; 400°F Maximum Operating Temperature, 2-Zone; with Powered Roller

  Feed Through Conveyors

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rogers Machine Chill Roll

  Stand; with (2) 16”D x 64”W Water Cooled Chill Rolls, Powered

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Dahlgren Model LAS62JR

  Mini Backwetting Stand, S/N 300-84, (1984); 65”W; with (2) 6”D x 65”W Rubber

  Rolls; and 6”D x 65”W Steel Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tensioning Roll Stand;

  65”W; with Fife Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Therioult Surface-Type

  Rewinder; Powered, 44”D x 60”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (2)

  	

   

  	

  Coffing 2-Ton Chain

  Hoists; Pendant Controlled; Each with Roll Lift Bar

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Controls

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Embossing Department

   

  
	

  1-

  	

   

  	

  Fadows Machine Works 58”W

  Embosser, Asset #4; (Estimated 1960s); 70 Yards/Minute Maximum Operating

  Speed; with Surface-Type Unwind Stand, Manual, with Automatic Brakes, and

  Fife Web Guide; 18”D x 60”W Rubber Covered Powered Pressure Roll; Embossing

  Roll, 225°F Maximum Operating Temperature; Chill Roll; Budzar Heat Exchanger,

  225°F Maximum Operating Temperature; IR Heater; and Surface-Type Rewind

  Stand, 60”W, Powered

   

  
	

  1-

  	

   

  	

  Fadows Machine Works 58”W

  Embosser, Asset #7; (Estimated 1960s); 83 Yards/Minute Maximum Operating

  Speed; with Surface-Type Unwind Stand, Manual, with Automatic Brakes, and

  Fife Web Guide; 18”D x 60”W Rubber Covered Powered Pressure Roll; Embossing

  Roll, 225°F Maximum Operating Temperature; Chill Roll; Budzar Heat Exchanger,

  225°F Maximum Operating Temperature; and Surface-Type Rewind Stand, 60”W,

  Powered

   

  
	

  1-

  	

   

  	

  Fadows Machine Works 58”W Embosser, Asset #8;

  (Estimated 1960s); 53 Yards/Minute Maximum Operating Speed; with Surface-Type

  Unwind Stand, 

   

  

 

33

 

	

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  Manual, with Automatic

  Brakes, and Fife Web Guide; 18”D x 60”W Paper Backing Rubber Covered Powered

  Pressure Roll; Embossing Roll, 250°F Maximum Operating Temperature; Chill

  Roll; and Surface-Type Rewind Stand, 60”W, Powered

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Fadows Machine Works

  58”W Embosser, Asset #10; (Estimated 1960s); 70 Yards/Minute Maximum

  Operating Speed; with Surface-Type Unwind Stand, Manual, with Automatic Brakes,

  and Fife Web Guide; 18”D x 60”W Rubber Covered Powered Pressure Roll;

  Embossing Roll, 225°F Maximum Operating Temperature; Chill Roll; IR Heater;

  and Surface-Type Rewind Stand, 60”W, Powered

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Fadows Machine Works 58”W Embosser, Asset #9; (Estimated

  1960s); 75 Yards/Minute Maximum Operating Speed; with Surface-Type Unwind

  Stand, Manual, with Friction Brake, and Fife Web Guide; 18”D x 60”W Rubber

  Covered Powered Pressure Roll; Embossing Roll, 250°F Maximum Operating

  Temperature; Chill Roll; Surface-Type Rewind Stand, 60”W, Manual; and

  Friction Brake

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Fadows Machine Works 58”W Embosser, Asset #5;

  (Estimated 1960s); 80 Yards/Minute Maximum Operating Speed; with Surface-Type

  Unwind Stand, Manual, with Friction Brake, and Fife Web Guide; 18”D x 60”W

  Rubber Covered Powered Pressure Roll; Embossing Roll, 225°F Maximum Operating

  Temperature; Chill Roll; Budzar Heat Exchanger, 225°F Maximum Operating

  Temperature; and Surface-Type Rewind Stand, 60”W, Powered

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Johnstone Model RTE4

  58”W Embosser, S/N 32235, Asset #6; (Refurbished In 1995), Custom Built, 100

  Yards/Minute Maximum Operating Speed; with 60”W Powered Unwind Stand, with

  Automatic Tensioners, and Secondary Friction Brake; Embossing Station, 60”W,

  with 4-Position Turret-Type Embossing Roll Changer, Steam Heated, 250°F

  Maximum Operating Temperature; 20”D x 60”W Rubber Covered Pressure Roll; and

  Powered 60”W Forward and Reverse Rewind Stand

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Sheeting

  Department

   

  
	

  1-

  	

   

  	

  Maxson Model 5664M 60” Precision Sheeter, S/N

  Unknown, Asset #2, (1997); 300 Feet/Minute Maximum Operating Speed, 60” x 54”

  Maximum Cut Size, 10.875” Minimum Sheet Length, 7 Maximum Slits Across, 3” to

  6” Core Sizes, 46” Maximum Pile Height, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Unwind Stand; Powered, 44”D x 70”W Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Inspection Station; with Lighting

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Decurler Stand; with Slitting Station, Double Fly

  Knife-Type, 60”W Capacity, 9 Knife Capability; with Automation Defect

  Rejection System; and Edge Trimmers

  
	

   

  	

   

  	

  (6)

  	

   

  	

  Tabbers

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Takeoff Conveyor Section

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Automatic Stacker; 34” x 64” Platform, 46” Maximum

  Pile Height, Vibrating Stacker Type

  

 

34

 

	

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  (-)

  	

   

  	

  Controls; with Automatic Sheet and Rejection Count

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Strachen Henshaw Model 1700DK 60” Sheeter, S/N

  3C23-01, (1996); 1,000 Feet/Minute Maximum Operating Speed, 60” Maximum Web

  Width, 48” Maximum Sheet Length, 60” x 48” Maximum Cut Size, 11” x 12”

  Minimum Cut Size, 46” Maximum Pile Height, 3” to 6” Core Sizes, (4) Maximum

  Slits Across, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  60”W Unwind Stand; with

  Automatic Tensioner

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Fife Web Guide

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Automatic Decurler

  System

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Sheeter Section;

  Single-Fly Knife Type, 6-Knife Blade Capability; with Edge Trimmers; and

  Automatic Defect Rejection System

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Take-Away Conveyor

  Section

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Automatic Stacker; 46”

  Pile Height, 66” x 75” Platform, Vibrating Type, Automatic Drop Capability

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Controls, with

  Automatic Defect and Sheet Counting

  

 

35

 

Converting

Facilities Equipment Located at

45 North Fourth Street

Quakertown, Pennsylvania

 

	

  Qty

  	

   

  	

   

  
	

   

  	

   

  	

  Finishing

  Department

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Shanks Model Unknown 64”W

  Slitter/Rewinder, Asset #3; (Estimated Mid 1970s), 300 Yards/Minute Maximum

  Operating Speed, 50” Maximum Unwind Roll Diameter, 40” Maximum Wind-Up Roll

  Diameter, 3” Minimum Wind-Up Roll Diameter; with Dusenbery 64”W Unwind Stand;

  Rewind Station; (2) Trimming Blades, 19” Minimum Slitting Width; and Web

  Tension/BrakeVariable-Speed Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Dusenbery Model 840-XY 62”W

  Slitter/Rewinder, S/N 52700, Asset #4, (1967); 300 Yards/Minute Maximum

  Operating Speed, 50” Maximum Roll Unwind Diameter, 40” Maximum Wind-Up Roll

  Diameter, 3” Minimum Wind-Up Roll Diameter; with Dusenbery 62”W Unwind Stand;

  (2) Trimming Blades; Rewind Stand; and Web Tension/Brake/Variable-Speed

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Dusenbery Model 840-XAL

  84”W Slitter/Rewinder, S/N 56077, Asset #5, (1970); 300 Yards/Minute Maximum

  Operating Speed, 50” Maximum Roll Unwind Diameter, 50” Maximum Wind-Up Roll

  Diameter, 3” Minimum Wind-Up Roll Diameter; with Dusenbery 84”W Unwind Stand;

  (2) Trimming Blades; Rewind Stand; and Web Tension/Brake/Variable-Speed

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Dusenbery Model 840-AL

  84”W Slitter/Rewinder, S/N 57873, Asset #6, (1979); 400 Yards/Minute Maximum

  Operating Speed, 50” Maximum Roll Unwind Diameter, 50” Maximum Wind-Up Roll

  Diameter, 3” Minimum Wind-Up Roll Diameter; with Dusenbery 84”W Unwind Stand;

  (2) Trimming Blades; Rewind Stand; and Web Tension/Brake/Variable-Speed

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Cameron Model 26 48”W

  Slitter, Asset #1; (Estimated Early 1970s), 100 Yards/Minute Maximum

  Operating Speed, 45” Maximum Unwind Roll Diameter, 18” Maximum Wind-Up Roll

  Diameter, 1-1/2” Minimum Slit Width, Accurate to 1/64”; with 48”W Unwind

  Stand; Slitting Blades; 2-Position Rewind Station; and Variable-Speed

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Shanks Model 521-30 54”W

  Slitter, Asset #4, (1992); 100

  

 

36

 

	

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  Yards/Minute Maximum

  Operating Speed, 45” Maximum Unwind Roll Diameter, 30” Maximum Wind-Up Roll

  Diameter, 1-1/2” Minimum Slit Width, Accurate to 1/64”; with 54”W Unwind

  Stand; Slitting Blades; 2-Position Rewind Station; and Variable-Speed

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Shanks Model 521 54”W

  Slitter, Asset #3; (Estimated Early 1980s), 100 Yards/Minute Maximum

  Operating Speed, 45” Maximum Unwind Roll Diameter, 30” Maximum Wind-Up Roll

  Diameter, 1-1/2” Minimum Slit Width, Accurate to 1/64”; with 54”W Unwind

  Stand; Slitting Blades; 2-Position Rewind Station; and Variable-Speed

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Cameron Model 28-3D 60”W Slitter, Asset #2;

  (Estimated Early 1970s), 100 Yards/Minute Maximum Operating Speed, 45”

  Maximum Unwind Roll Diameter, 30” Maximum Wind-Up Roll Diameter, 1-1/2”

  Minimum Slit Width, Accurate to 1/64”; with 60”W Unwind Stand; Slitting Blades;

  2-Position Rewind Station; and Variable-Speed Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  BF Perkins 62”W Calender, S/N H-5304-81, (1981);

  1,000 Feet/Minute Maximum Operating Speed, 2,000 Lbs./Linear Inch, 3-Roll

  Stack Type, Double Nip, 52” Maximum Unwind Roll Diameter, 48” Maximum Wind-Up

  Roll Diameter, Single or Double Roll Nipping; with 62”W Unwind Stand; Tension

  Roll; 20”D x 62”W Upper and Lower Nip Rolls, Steel Covered, Hot Oil Heated,

  325°F Maximum Operating Temperature; 23”D x 62”W Center Calender Roll, Nylon

  Covered, 350°F Maximum Operating Temperature, Hot Oil Heated; Outfeed

  Tensioning Rolls; and BF Perkins 62”W Rewind Stand; (Built To Add 4th Roll;

  Currently Used As 3-Roll)

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Beck 60”W Sheeter, S/N 2514; (Estimated 1970s), 100

  Sheets/Minute Maximum Operating Speed, 12” to 70” Minimum to Maximum Sheet

  Length Capacity; with 60”W Unwind Stand; Slitting and Cutting Station;

  Outfeed Conveyor; Outfeed Table; and Variable-Speed Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Brackett Model RFES 27-1/2”W End Sheeter, S/N P194,

  Asset #2; Estimated 200 Sheets/Minute Maximum Operating Speed; with (2) 28”W

  In-Line Unwind Stands; 28”W Side-Mounted Unwind Stand; Nip-and-Fold Roll

  Station; Feed Through Belt Conveyor Station, with Tape and Glue Application;

  Cut To Length Station; Counter; Stack Outfeed Table; and Variable-Speed

  Controls

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Brackett Model RFES 27-1/2”W End Sheeter, Asset #1;

  Estimated 150 Sheets/Minute Maximum Operating Speed; with (2) 28”W In-Line

  Unwind Stands; 28”W Side-Mounted Unwind Stand; Nip-and-Fold Roll Station;

  Feed Through Belt Conveyor Station, with Tape Applicator, Animal Glue

  Applicator, and Hot Air Dryer; (2) Elmer’s Glue Applicators, Top and Bottom;

  Cut-To-Length Station; Stack Table; and Variable-Speed Controls

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Coating

  Department

  
	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Black Clawson 62”W Coating Line, Asset #10;

  (Estimated Mid 1980s), 300 Yards/Minute Maximum Operating Speed, Meyer Rod

  Type, Tandem Type, (2) Coats On One Side Capability, Single Side-Coating, To

  Include:

  

 

37

 

	

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  (1)

  	

   

  	

  Black Clawson Dual-Turret Unwinder; 44”D x 62”W Roll

  Capacity, Brake Type

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Splice On The Fly Unit; 62”W Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 150010311 Dancer Roll, S/N

  386935, (2000); 66”W Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Coating Application Station; (Water

  Based Latex), Meyer Rod Type, 62”W Capacity; with Applicator Roll; Dip Pan;

  and Air Knife Doctor Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Vacuum Belt; Estimated 70”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tec Systems Natural Gas Fired Flotation Drying Oven;

  500°F Maximum Operating Temperature, Estimated 10’W x 32’L, 2-Zone, 4” x 66”

  Opening

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Mixing Platform; with (4) Carbon Steel Open Top

  Mixing Tanks, Estimated 500 Gallon Capacity, with Center-Mounted Agitators,

  Variable-Speed, and Pumps

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Edge Guides

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Chill Roll Stand; with (2) 24”D x 70”W

  Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Blower; Estimated 25 hp

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Coating Application Stand; (Water Based Clear Coat),

  Meyer Rod Type, 62”W Capacity; with Applicator Roll; and Air Knife Doctor

  Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Vacuum Belt; Estimated 62”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tec Systems Natural Gas Fired Drying Flotation Oven;

  500°F Maximum Operating Temperature, Estimated 10’W x 60’L, 3-Zone, 4” x 66”

  Opening

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Edge Guides

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Chill Roll Stand; with (2) 24”D x 70”W

  Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Roll Change Flying Knife Cut-Off

  Stand; with Tension Control

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 21-201 Dual-Turret Unwinder, S/N

  3030262273, (1980); 44”D x 62”W Maximum Wind-Up Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Control Console

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Black Clawson 62”W Coating Line, Asset #8;

  (Estimated Mid 1960s), 160 Yards/Minute Maximum Operating Speed, Air Knife

  Type, Tandem Type, (2) Coats On One Side Capability, Single-Side Coating, To

  Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Dual-Turret Unwinder; Rig Type, 62”W

  Roll Capacity, 42” Maximum Roll Diameter

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Splice On The Fly Unit; Estimated 62”W

  Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Coating Application Station; (Water

  Based Latex); with Applicator Roll; Dip Pan; and Air Knife Doctor Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Vacuum Belt; Estimated 70”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Natural Gas Fired Hot Box Type Drying Oven; 450°F

  Maximum Operating Temperature, Single Zone, Estimated 10’W x 18’L; with

  Teflon Slat-Type Conveyor

  

 

38

 

	

  Qty.

  
	

   

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Mixing Platform; with Carbon Steel Open Top Mixing

  Tanks, Estimated 300 Gallon Capacity; with Center-Mounted Agitators,

  Variable-Speed, Pumps; and Fairbanks Scales

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Edge Guides

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Chill Roll Stand; with (2) Estimated

  20”D x 70”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Coating Application Stand; (Water

  Based Clear Coat); with Applicator Roll; Dip Pan; and Air Knife Doctor Roll

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Natural Gas Fired Hot Box Type Drying Oven;

  Estimated 450°F Maximum Operating Temperature, Estimated 10’W x 90’L, 5-Zone;

  with Teflon Slat-Type Conveyor

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Edge Guides

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Chill Roll Stand; with (2) 20”D x 62”W

  Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 113 Roll Change Flying Knife

  Cut-Off Stand, S/N 293E162993; 62”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 20F Dual-Turret Unwinder, S/N

  303D162901, (1965); 62”W, 61” Maximum Wind-Up Roll Diameter

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Control Console

  
	

   

  
	

  1-

  	

   

  	

  Black Clawson 62”W Coating Line, Asset #11, (2000);

  300 Yards/Minute Maximum Operating Speed, Air Knife Type, Tandem Type, (2)

  Coats On One Side Capability, 2-Sided Coating, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 130041001 Dual-Turret Unwinder,

  S/N 385568; AC Drive Type, 62”W Roll Capacity, 50” Maximum Unwind Roll

  Diameter; with Allen-Bradley Model PanelView 1000 Touch Screen Interface

  Control

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Dancer Roll; 62”W Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 101063311 Coating Application

  Station, S/N 386462; 66”W; with Meyer Rod Metering System; Applicator Roll;

  Dip Pan; Air Knife Doctor Roll; and Allen-Bradley Model PanelView 1000 Touch

  Screen Interface Control

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Natural Gas Fired Drying Oven; 500°F

  Maximum Operating Temperature, 2-Zone, Estimated 12’W x 35’L; with

  Flotation/Roll Support Type Feed Through Conveyor

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Mixing Platform; with (4) Carbon Steel Open Top

  Mixing Tanks; Estimated 600 Gallon Capacity, Each with Center-Mounted

  Agitators, and Pumps

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Chill Roll Stand; with (3) 20”D x 70”W

  Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Turn Bar Station; with (2) 90° Turn Bars, Estimated

  120”L

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Coating Application Stand; 66”W; with

  Meyer Rod Metering System; Applicator Roll; Dip Pan; Air Knife Doctor Roll;

  and Allen-Bradley Model PanelView 1000 Touch Screen Control

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Natural Gas Fired Drying Oven; 500°F

  Maximum Operating Temperature, 3-Zone, Estimated 12’W x 60’L; with

  Flotation/Roll Support Feed Through Conveyor

  

 

39

 

	

  Qty.

  
	

   

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 150070130 Chill Roll Stand, S/N

  Unknown, (2000); with (3) 20”D x 66”W Water Cooled Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured 72”W Calendar; Single-Nip, 2

  Roll; with Kusters Variable-Speed Crown, 18”D x 72”W Roll; 24”D x 72”W Steel

  Roll; and Allen-Bradley Model PanelView 600 Interface Control

  
	

   

  	

   

  	

  (3)

  	

   

  	

  Valmet Caliper Profile Gauging Systems, (1992);

  (Upgraded; To Be Installed; (2) Used As Spares)

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Dual-Turret Unwinder; 62”W, AC Driven;

  with Allen-Bradley Model PanelView 1000 Touch Screen Interface Controls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Control Console

  
	

   

  
	

  1-

  	

   

  	

  Specially Manufactured 48”W Coating Line, Asset #1;

  (Estimated 1970s), 100 Yards/Minute Maximum Operating Speed, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Lembo 60”W Unwind Stand; Line Shaft Driven

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Corotec Corona Treater; 50”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Flexographic Analox Roll-Type Print Station; with

  Rubber Coated Transfer Roll

  
	

   

  	

   

  	

  (2)

  	

   

  	

  Natural Gas Fired Dryers; Estimated 6’W x 10’L,

  Single Zone, 400°F Maximum Operating Temperature

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rotogravure Print Station; 50”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Surface-Type Rewinder; Line Shaft Driven

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Controls

  
	

   

  
	

  1-

  	

   

  	

  Inta Roto 48”W Coating Line, S/N M270, Asset #2,

  (1975); (Estimated Early 1980s), 100 Yards/Minute Maximum Operating Speed, To

  Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  2-Position Unwinder; 60”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Corotec Corona Treater; 50”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tension Roll Station

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Meyer Rod-Type Coating Station; Double Rod

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Natural Gas Fired Dryer; Single-Zone, 400°F Maximum

  Operating Temperature

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Flexographic Coating Station; with Analox Rollers;

  and Rubber Print Roll; (Varnish Finish)

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Natural Gas Fired Dryer; Single-Zone, 400°F Maximum

  Operating Temperature

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Rotogravure Coating Station; 48”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Natural Gas Fired Dryer; Single-Zone, 400°F Maximum

  Operating Temperature

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tension Roll Stand

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Surface-Type Rewinder; Line Shaft Driven

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Controls

  
	

   

  

 

40

 

	

   

  	

   

  	

  Saturation

  Department

  
	

  Qty.

  
	

   

  
	

  1-

  	

   

  	

  Black Clawson 62”W Saturator, Asset #7; (Estimated

  New In Mid 1980s; Rebuilt In 2001); 250 Yards/Minute Maximum Operating Speed,

  To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Dual-Turret 62”W Unwinder; Brake Type,

  50”D x 62”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Splice Unit; 62”W; (Slows Down On The

  Fly)

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Vacuum Roll; with Dancer Roll, 66”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Zink Manufacturing Saturator; (Early 1990s); with

  (2) Squeeze Rolls, Estimated 14”D x 68”W, Chilled Iron, Chrome Plated; and

  Dip Tank

  
	

   

  	

   

  	

  (2)

  	

   

  	

  Web Flotation Units

  
	

   

  	

   

  	

  (2)

  	

   

  	

  Marsden Gas IR Units, (2001)

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Mixing Platform; with (2) Open Top Mixing Tanks, 6’D

  x 4-1/2’H; Center-Mounted Agitators; and Pumps

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tec Systems Natural Gas Fired Flotation-Type Drying

  Oven, (1985); 500°F Maximum Operating Temperature, 2-Zone, Estimated 6’W x

  40’L

  
	

   

  	

   

  	

  (-)

  	

   

  	

  Edge Guides

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Morrison Can Dryer; 10-Can, 100-Lbs. Pressure/Can,

  Steam Heated, 36”D x 66”W, 3-Zone, 320°F Maximum Operating Temperature; with

  Allen-Bradley Model PanelView 600 Control; and (2) ABB Kent Taylor Model

  Commander 1900 Chart Recorders

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Chill Roll Station; with (3) Water Cooled Chill

  Rolls, Estimated 20”D x 66”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Specially Manufactured Calender; 66”W; with Crown

  Roll, Estimated 20” x 66”; and Flat Roll, Estimated 20” x 66”

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Roll Change Flying Cut-Off Unit; 62”W Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Dual-Turret Unwinder; 62”W Capacity,

  50” Maximum Wind Up Roll Diameter, AC Driven

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Control Console

  
	

   

  
	

  1-

  	

   

  	

  Black Clawson 62”W Saturator, Asset #6; (Estimated

  Mid 1950s), 120 Yards/Minute Maximum Operating Speed, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Dual-Turret Unwinder; Estimated 40”D x

  62”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Vacuum Roll; Estimated 62”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson 65”W Saturator; with (2) Squeeze

  Rolls, (1) Rubber Covered, (1) Chilled Iron and Chrome Plated; and Dip Pan

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Drying Oven; Estimated 10’W x 20’L; with Marsden Natural

  Gas IR Unit, (2001); Marsden Electric IR Unit; Steam Coils; and Controls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Mixing Platform; with (2) Estimated 300-Gallon Open

  Top Mixing Tanks; Center-Mounted Agitators; and Pumps

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Can Dryer; Estimated 66”W; with (6)

  31”D x 66”W Horizontally-Stacked Steam Heated Cans; (4) 24”D x 66”W

  Vertically-Stacked Steam Heated Cans; (10) 24”D x 62”W Vertically-Stacked

  Steam Heated Cans; and (10) 24”D x 66”W Vertically-Stacked Steam Heated Cans

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Corrugated Roll Station; with (2) 12”D x 62”W

  Corrugated Rolls, Water

  

 

41

 

	

  Qty.

  
	

   

  	

   

  	

   

  	

   

  	

  Cooled, Powered

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Chill Roll Station; with (2) 20”D x 66”W Chill Rolls

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 20 Manual Dual-Turret Rewinder,

  S/N 303A99070; 42”D x 62”W Maximum Roll Capacity

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Control Console

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1-

  	

   

  	

  Black Clawson 78”W Saturator, Asset #9; (Estimated

  Early 1970s), 250 Yards/Minute Maximum Operating Speed, To Include:

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Model 21/221 Dual-Turret Unwinder, S/N

  99D194431, (1970); Estimated 84”W, 46” Maximum Roll Diameter

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Splice Unit; Estimated 84”W; (Slow

  Down On The Fly); with Automatic Tensioning Control

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Vacuum Roll; 24”D x 84”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tensioning Roll Station

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Saturator; 84”W; with (2) Squeeze

  Rolls, Estimated 14”D x 84”W, Chilled Iron, Chrome Plated

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Drying Oven; 10’ x 35’; with Marsden

  Natural Gas IR Unit, (2000); Electric IR Units; and Steam Coils, with Blowers

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Mixing Platform; with (2) Carbon Steel Mixing Tanks,

  Estimated 500 Gallon Capacity; Center-Mounted Agitators; and Pumps

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Morrison Can Dryer; with (24) 48”D x 84”W

  Horizontally-Stacked Steam Heated Cans, 100-Lb. Steam Pressure, 320°F Maximum

  Operating Temperature; and (2) Cooling Drums, 48”D x 84”W, Water Cooled

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Tension Roll Stand

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Roll Change Flying Knife Cut-Off Unit;

  62”W

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Dual-Turret Rewinder; 48”D x 76”W

  Maximum Roll Wind-Up

  
	

   

  	

   

  	

  (1)

  	

   

  	

  Black Clawson Control Console

  

 

42Exhibit

10.48

 

LEASE AGREEMENT

 

This LEASE AGREEMENT (hereinafter referred to as

“Lease”) made as of this 30 day of May, 2002, by and between GROUP THREE

PROPERTIES, INC., a Pennsylvania corporation, having offices at Cross Roads

Corporate Center, 4641 Pottsville Pike, Suite E, Reading, PA 19605 (hereinafter

referred to as “Lessor”) and FIBERMARK DSI, INC., a Pennsylvania corporation,

having offices at 161 Wellington Road, Brattleboro, VT 05302 (hereinafter

referred to as “Lessee”).

 

BACKGROUND

 

WHEREAS, Lessor entered into a Lease Agreement, dated

December 5, 1997 with REXAM DSI, INC. (the “Existing Lease Agreement”) for

premises comprising approximately 100,000 square feet, located in the

“FiberMark Building” (as defined in Article I below) (the “Existing Premises”)

on the land more particularly described on Exhibit “A” attached hereto and made

a part hereof (the “Property”).  Lessor

is the owner of the “Building” (as defined in these recitals below) and the

Property.

 

WHEREAS, subsequent to December 5, 1997, Lessee

acquired REXAM DSI, INC.  through a

merger and assumed the Existing Lease Agreement.

 

WHEREAS, Lessor and Lessee have continued to lease and

rent, respectively, the Existing Premises under the terms and conditions of the

Existing Lease Agreement to the present.

 

WHEREAS, Premium Beverage Packers, Inc., a

Pennsylvania corporation (“Premium”), as sublessor, entered into a Sublease

Agreement dated February 7, 2002 with Lessee, as sublessee (as amendmed to

date, the “Sublease Agreement”) for premises comprising the entire portion of

the FiberMark Building not occupied by Lessee under the Exisiting Lease (the

“Sublease Premises”) located adjacent to the Existing Premises in the FiberMark

Building.  The Existing Premises and

Sublease Premises together are the same premises as the “Leased Premises” (as

defined in Article I below).  The Leased

Premises comprise all of the premises located in the FiberMark Building.

 

WHEREAS, the FiberMark Building adjoins an

approximately 208,000 square foot building designated the “Adjacent Building”

on the site plan attached hereto as Exhibit “B” and made a part hereof (the

“Site Plan”).  The FiberMark Building

and Adjacent Building are hereinafter together referred to as the “Building.”

 

WHEREAS, pursuant to that certain Agreement of

Termination, Assignment, Indemnity and Release among Lessor, Premium, and JMH,

Inc., a Pennsylvania corporation (“JMH”), dated on or about the date hereof,

Lessor and Premium, agreed, inter alia,

to terminate any leasehold or other interest maintained by Premium, or any

other party, in the Building and the Property, and (ii) JMH agreed, inter alia, to terminate its option to

purchase the Building and the Property.

 

WHEREAS, Lessor and Lessee wish to terminate the

Existing Lease Agreement and enter intothis Lease pursuant to which Lessor

shall demise the Leased Premises to Lessee under theterms and conditions

contained herein.

 

1

 

NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY,

for themselves, their successors and assigns, Lessor and Lessee agree as

follows:

 

ARTICLE I. -

LEASED PREMISES

 

1.            The

Lessor leases to the Lessee and the Lessee leases from the Lessor that certain

portion of the Building (hereinafter referred to as the “FiberMark Building”)

presently occupied by the Lessee, as designated on the Site Plan and floor plan

(the “Floor Plan”) (attached as Exhibits “B” and “C” hereto, respectively),

known as 171-173 Tuckerton Road, Muhlenberg Township, Berks County,

Pennsylvania (hereinafter referred to as the “Leased Premises”).The Leased

Premises contain (i) approximately one hundred seventy thousand (170,000)

square feet of floor space, and (ii) the 17,000 square foot Basement Area

described in the next paragraph and shown on the Floor Plan) and rights of

ingress, egress and regress over and across private and public rights-of-way,

streets and other facilities as may be designated by Lessor from time to time,

as more fully set forth in and subject to the terms and conditions of this Lease

and to such rules and regulations for the use thereof as may be reasonably

prescribed from time to time by the Lessor in accordance with this Lease.  Lessee shall have the right to the exclusive

use of the automobile parking spaces located adjacent to the Leased Premises

and designated on the Site Plan as the “FiberMark Parking”.

 

The Basement Area, consisting of approximately

seventeen thousand (17,000) square feet, is included as a part of the Leased

Premises, but not in the calculation of Basic Monthly Rent as defined in

Article III below, it being understood and agreed that Lessee shall not pay any

Basic Monthly Rent or other fee for the use and occupancy of such basement

area.

 

ARTICLE II. - TERM

OF LEASE

 

1.            The

term (hereinafter referred to as the “Term”) of this Lease shall commence as of

the date of this Lease (the “Lease Commencement Date”) and shall terminate on

the last day of the month of the fifth (5th) anniversary of the Lease

Commencement Date (the “Lease Termination Date”) unless extended pursuant to

the provisions of Article XIX below.

 

2.            Except

to the extent permitted by the terms of this Lease, in the event that the

Lessee shall continue to occupy the Leased Premises beyond the Term hereof or

any renewal term as provided in Article XIX hereof and the Lessor elects to

accept rent therefor, a tenancy at will from month to month only shall be

created and no tenancy for any longer period of time shall be deemed to exist.

 

ARTICLE III. -

BASIC MONTHLY RENT

 

1.            Except

as otherwise provided in this Lease, the Lessee shall pay to the Lessor, during

the initial thirty-six months of the Term, an annual rental of Five Hundred

Seventy-one Thousand Two Hundred Dollars ($571,200) determined by multiplying

$3.36 times the number of square feet in the Leased Premises, payable in equal

monthly installments of Forty-seven Thousand Six Hundred Dollars ($47,600) per

month, on the first day of each month by legal tender without deduction or

setoff (except as otherwise permitted herein) (hereinafter referred to as

“Basic Monthly Rent”).

 

2

 

2.            The

Lessee shall pay to the Lessor, during the remaining twenty-four (24) months of

the Term, an annual rental of Six Hundred Thousand One Hundred Dollars

($600,100) determined by multiplying $3.53 times the number of square feet in

the Leased Premises, payable in equal monthly installments Fifty Thousand Eight

Dollars and Thirty-three Cents ($50,008.33) per month, on the first day of each

month by legal tender without deduction or setoff (except as otherwise

permitted herein)(hereinafter referred to as “Basic Monthly Rent”).

 

The Basic Monthly Rent for any month during the term

which begins or ends on other than the first or last calendar day of a calendar

month shall be prorated based on actual days elapsed.

 

ARTICLE IV. USE OF

LEASED PREMISES

 

1.            The

Leased Premises may be used for the purpose of manufacturing, storing,

warehousing, and distributing Lessee’s full range of products currently being

produced in the Leased Premises and any other lawful use permitted by the

zoning ordinance of the Township of Muhlenberg, but Lessee shall not use or

permit the storage or use of any hazardous or toxic materials within the Leased

Premises, in violation of applicable federal, state or local laws, statutes,

rules, ordinances or regulations.

 

2.            The

Lessee covenants and warrants to the Lessor:

 

(a)           Not to use the Leased Premises or

permit the Leased Premises to be used for any unlawful purpose or any purpose

not specifically permitted by this Lease.

 

(b)           Not to use or occupy or suffer or

permit the Leased Premises or any part thereof to be used or occupied in any

manner so as to materially increase the cost of fire or other casualty

insurance above the commercially reasonable cost of such insurance maintained

by property owners of property for the type and location of the Building or

contrary to this Lease.

 

(c)           Not to place garbage, rubbish, trash

or containers thereofoutside the Leased Premises except in such containers,

which the Lessee shall have provided for such purpose with the approval of the

Lessor, which approval Lessor will not unreasonably withhold, delay or

condition.

 

(d)           To keep the Leased Premises in a

good, safe and clean condition, reasonable wear and tear excepted.

 

(e)           To prevent the Leased Premises from

being used in any way which shall injure or damage the same or the Building or

which may be or result in damage to the other tenants of the Building.

 

(f)            To

abide by all reasonable rules and regulations established by Lessor, from time

to time, and uniformly applied to all tenants of the Building, provided,

however, that no such rules or regulations shall prohibit or unreasonably

hinder the use of the Leased Premises for the purposes referred to in this

Article.

 

3

 

ARTICLE V. - SIGNS

 

1.             Lessee

shall have the right to erect a sign upon the Leased Premises of a size and

shape permitted by governmental authorities with jurisdiction and at a location

on the Premises reasonably acceptable to the Lessor.  The Lessor and Lessee hereby acknowledge the existence and

continued permissive use of Lessee’s existing sign.

 

ARTICLE VI. -

ALTERATIONS BY LESSEE

 

1.             Except

as herein provided and subject to the provisions of Section l(b) of Article XII

below, Lessee shall not make or permit to be made any structural alterations,

improvements or additions (hereinafter collectively referred to as

“Alterations”) to the Leased Premises or any part thereof without first

obtaining the written consent of the Lessor, which consent shall not be

unreasonable withheld or delayed, but Lessee shall nevertheless be permitted to

make non-structural Alterations without the necessity of obtaining Lessor’s

consent.  In the event that the Lessor

shall give such consent such consent may be conditioned upon the fulfillment of

such reasonable requirements as the Lessor shall reasonably determine.  All Alterations to the Leased Premises shall

be made in accordance with all applicable laws and governmental rules and regulations

and, upon the expiration or earlier termination of this Lease, shall

immediately become the property of the Lessor or, at Lessor’s option, provided

Lessor gives Lessee written notice thereof at the time of Lessor’s consent,

such Alterations shall be removed at Lessee’s expense and all damage caused to

the Building as a result of such removal shall be repaired at Lessee’s

expense.  In the event of the making of

such Alterations as herein provided, the Lessee shall indemnify and save the

Lessor harmless of and from any and all loss and damage arising out of the

construction thereof, except for any and all loss or damage arising from

Lessor’s negligence or willful acts or omissions.

 

2.             Upon

the request of Lessee in connection with any Alterations, Lessor, at Lessee’s

cost and expense, shall join in any applications for any permits, approvals or

certificates from any governmental authority required to be obtained by Lessee,

and shall sign such applications reasonably promptly after request by Lessee and

shall otherwise cooperate with Lessee in connection therewith, provided,

however, that Lessor shall not be obligated to incur any cost or expense,

including reasonable attorneys’ fees and disbursements, or suffer to incur any

liability, in connection therewith.

 

3.             In

the event that the Lessee shall make any Alterations to the Leased Premises

pursuant to Section 1 of this Article, the Lessee shall promptly pay when due

all contractors and materialmen who shall have supplied labor, work or

materials to the Lessee.  In addition,

the Lessee shall take all other steps, including without limitation the timely

filing of stipulations or waivers, permitted or provided by applicable law in

order to avoid the imposition of any mechanic’s, laborer’s or materialmen’s charge

or lien upon the Leased Premises (hereinafter referred to as “Mechanic’s

Lien”).  In the event that any

Mechanic’s Lien shall be filed with respect to the Leased Premises for work

performed by or on behalf of the Lessee, the Lessee shall bond against or cause

the same to be discharged within thirty (30) days after the Mechanic’s Lien has

been filed or formal notice of said lien has been issued, whichever shall first

occur, regardless of the validity of such Mechanic’s Lien.  Nothing contained in this Lease or otherwise

is intended to authorize the Lessee to do or cause any work or labor to be done

or any materials to be supplied for the account of the Lessor, all of the same

risk solely for the Lessee’s account and at the Lessee’s sole risk, cost and expense.  Notwithstanding anything in this Section 3

to the

 

4

 

contrary, Lessee shall be permitted in good faith and at its expense to

contest the existence, amount or validity of any Mechanics Lien or other lien

upon the Leased Premises by appropriate proceedings sufficient to prevent the

collection or other realization of any such Mechanic’s Lien or other lien or

claim so contested, as well as the sale, forfeiture or loss of any of the

Leased Premises.

 

ARTICLE VII. -

MAINTENANCE AND REPAIR

 

1.             Repairs and Maintenance by Lessee

 

(a)           Lessee

is presently in possession of the Leased Premises and accepts the Leased

Premises in “as is” condition and Lessee shall at all times at its own expense

keep and maintain the Leased Premises in good order and repair and in a neat,

safe, clean and orderly condition, reasonable wear and tear, casualty, or

condemnation excepted, including, but not limited to, making all non-structural

ordinary and extraordinary, foreseen and unforeseen repairs and replacements to

the Leased Premises, including, without limitation, repairs and replacements to

the plumbing, electrical, heating, ventilation and air conditioning systems and

mechanical systems and installations within the Leased Premises except to the

extent that any of the foregoing repairs or replacements are caused by or

result from negligence, willful acts or omissions of the Lessor or any third

party.  Lessor shall maintain the sewage

pumps located within the FiberMark Building.

 

(b)           Lessee

will repair promptly at its own expense any damage (whether structural (without

Lessor’s consent) or non-structural) to the Leased Premises caused by any

construction or alterations performed by Lessee, whether said structural or

non-structural damage is known or unknown or which may have occurred prior to

the time of the execution of this Lease, or from the bringing into the Leased

Premises any property for Lessee’s use, or by the installation or removal of

such property, regardless of fault or by whom such damage shall be caused,

unless caused by the negligence, willful acts or omissions of Lessor or its

servants, agents, contractors, subcontractors, or employees.

 

(c)           In

the event Lessee defaults in the performance of any of its obligations under

this Section 1, and such default continues for a period of thirty (30) days

after written notice from Lessor, Lessor, in addition to Lessor’s other

remedies under this Lease, at law or in equity, may (but shall not be obligated

to do so) cure such default on behalf of Lessee, without any liability of

Lessor, its agents, servants, employees, contractors or subcontractors for

damage to Lessee’s merchandise, fixtures or other property or to Lessee’s

business by reason thereof, unless caused by the negligence, willful acts or

omissions of Lessor or its servants, agents, contractors, subcontractors, or

employees, and Lessee shall reimburse Lessor, as Additional Rent, upon demand,

One Hundred percent (100%) of costs incurred by Lessor in curing such default,

unless Lessee has begun curing within said thirty (30) day period and is

thereafter diligently and in good faith prosecuting such cure to completion.

 

(d)           Notwithstanding

the foregoing or any other provision of this Lease, Lessee shall not be

responsible for compliance with any laws, regulations, or the like requiring

(i) structural repairs or modifications, (ii) repairs or modifications to the

utility or building service equipment, or (iii) installation of new building

service equipment, such as fire detection or

 

5

 

suppression equipment, unless such repairs, modifications, or

installations shall be (a) due to Lessee’s particular manner of use of the

Leased Premises, or (b) due to the negligence or willful misconduct of Lessee

or any agent, employee, or contractor of Lessee.

 

(e)           Notwithstanding

the foregoing or any other provision of this Lease, if any repairs or

replacements to the Leased Premises performed by Lessee are considered capital

improvements or expenses in accordance with generally accepted accounting

principles consistently applied, then upon expiration or the earlier

termination of this Lease, Lessor shall reimburse Lessee for the non-amortized

portion of any such capital improvements or expenses.

 

2.             Structural

Repairs.

 

(a)           Lessor

is required to make, at its sole cost and expense, structural repairs, ordinary

and extraordinary, foreseen and unforeseen to the Leased Premises and the

FiberMark Building, subject to the provisions of this Section 2.

 

(b)           In

the event that by reason of acts of negligence by the Lessee the Lessor is

required to make structural repairs to the Leased Premises, Lessor shall have

the right to collect One Hundred percent (100%) of the cost incurred by Lessor

for such repairs as Additional Rent from Lessee.  For purposes of this Lease, any difference in floor level or

shifting of floor slab, which in either case results from Lessee installing new

machinery or equipment which exceeds the load bearing capacity of the floor

slab, shall not be determined a structural defect required to be repaired by

Lessor, but shall be considered maintenance which shall be the responsibility

of Lessee.

 

(c)           If,

without Lessor’s prior consent (if such consent is required under this Lease),

Lessee performs any alterations, additions, improvements, changes, or other

work which affects the structural portions of the Leased Premises and/or the

roof of the FiberMark Building and/or that portion of the exterior of the

Leased Premises which Lessor is obligated to repair pursuant to Section 2. (a)

and which materially adversely affects the structural integrity of the

Building, such action by Lessee shall release and discharge Lessor as of the

commencement of such alteration, addition, improvement, affixation or other

work of and from such repair obligation and thereafter Lessee agrees to be

solely responsible for the maintenance, repair, and replacement of any or all

such structural portions, roof, exterior and FiberMark Building which have been

affected as aforesaid; provided, in the event Lessee shall default in the

performance, to Lessor’s satisfaction, of such responsibilities, Lessor, in

addition to Lessor’s other remedies under this Lease, at law or in equity, may

(but shall not be obligated to do so) cure such default on behalf of Lessee

without any liability of Lessor, its agents, servants, employees, contractors

or subcontractors for damage to Lessee’s merchandise, fixtures or other

property or to Lessee’s business by reason thereof, except to the extent that

any such repair, maintenance or replacement is caused by the negligence or

willful acts or omissions of Lessor and Lessee shall reimburse Lessor, as

Additional Rent, upon demand, One Hundred percent (100%) of the costs incurred

by Lessor in curing such default.  For

the purposes of the foregoing, if Lessee performs any such alterations,

additions, improvements, changes, affixation or other work in a manner not

consistent with Lessor’s prior consent thereto (if such consent is required

under this Lease), such work shall be deemed to have been performed without

Lessor’s consent.

 

6

 

3.             The

Lessee shall place throughout the Leased Premises such fire extinguishers as

are necessary in order to comply with all applicable laws and shall maintain

the same in good working order and repair. 

In the event that the Lessee refuses or neglects to provide such fire

extinguishers, the Lessor may, but shall not be required to, provide the same

and the Lessee shall pay the cost and expense thereof to the Lessor upon demand

as Additional Rent.  In the event that

the fire extinguishers are provided by the Lessee as required herein, the fire

extinguisher shall be and remain the property of the Lessee.

 

4.             Nothing

contained in this Article VII shall obligate Lessee to bring the Leased

Premises into compliance with the provisions of the Americans With Disabilities

Act, the codes or ordinances of Muhlenberg Township, the requirements of any

environmental law or statute, or the requirements of the statutes or

regulations of the Commonwealth of Pennsylvania or any department, bureau or

agency thereof, all of which shall be the obligation of Lessor.

 

ARTICLE VIII. -

MAINTENANCE OF COMMON AREA (CAM)

 

1.             The

Lessee shall be responsible for its pro rata share of the cost of keeping and

maintaining the common area (CAM charges), which common area shall include, but

not be limited to all roadways, entrances, accessways, the installation, repair

and replacement thereof, the cutting of grass, removal of snow and other

activities to keep the Property and Building in good order.  The Lessee’s portion of the CAM charges

shall be determined by the following formula, the numerator of which shall be

the square foot area of the Leased Premises (exclusive of the Basement Area)

and the denominator of which shall be the square foot area of the Building, and

if the Lessor shall construct a new building on the Property or an addition to

the Building, the denominator shall be increased by the square foot area of any

such new building or addition.  Lessee

shall pay its pro rata share, in advance, in equal monthly installments on the

first day of each month, as may be estimated and billed by the Lessor.  Lessor may revise its estimate and may

adjust such monthly payment semi-annually on April 1 and November 1 of each

year upon at least 30 days notice to Lessee together with reasonable evidence

of the basis for such increase.  The

first such payment shall be due and payable by Lessee on the Rent Commencement

Date (prorated for the remaining number of days in the calendar year) and

subsequent installments shall be due and payable at the beginning of each

ensuing calendar month during the term and any extensions or renewals thereof.  At the end of each calendar year the Lessor

shall prepare and submit to the Lessee a statement of all expenses incurred by

the Lessor in connection with the CAM charges and if it is determined that

Lessee has paid more than its pro rata share of the CAM charges, then the

Lessee shall receive a credit for such excess against Basic Monthly Rent during

the next succeeding months.  If,

however, it is determined that Lessee has paid less than its pro rata share of

the CAM charges, then Lessee shall make payment to Lessor within thirty (30)

days of the amount due.

 

As of the date of this Lease, Lessee’s pro rata

portion of the CAM charges is as follows (which pro rata portion is subject to

adjustment as provided in the preceding paragraph); (i) for all CAM charges

excluding water and sewer, forty-five percent (45%); and (ii) for water and

sewer, sixty-four and five-tenths of one percent (64.5%).

 

2.             Lessor

covenants and agrees to keep and maintain all common areas in good order and

repair and in a clean and safe condition. 

Lessor shall be responsible, among other things, for

 

7

 

maintaining all driveways and parking areas and keeping such areas

lighted and free from accumulations of ice and snow; cutting grass and

maintaining shrubbery; and all other matters pertaining to the proper

maintenance of the common areas.  In the

event Lessor shall fail to do so, Lessee shall give written notice of such

failure to Lessor and, if the same shall not be corrected within ten days after

the giving of such notice, or if such correction(s) are commenced within such

10-day period but are not thereafter diligently pursued, Lessee shall have the

right to correct all matters specified in such notice and to charge the full

cost thereof to Lessor or set-off any or all such charge against subsequent

payments of Basic Monthly Rent.

 

3.             Lessee

shall have the right to audit applicable records of Lessor to confirm that the

charges billed to Lessee under this Article VIII and Article IX below are

proper and conform to the provisions of such Articles.  Such right shall be exercisable by Lessee

within one (1) year after Lessee’s receipt of Lessor’s annual statement of such

charges.  Lessor shall cooperate with

Lessee in providing Lessee reasonable access to Lessor’s books and records

during normal business hours to enable Lessee to audit Lessor’s books and

records as they relate to any costs or expenses passed through to Lessee

pursuant to any provisions of this Lease. 

If the audit discloses any overpayment on the part of Lessee, then at

Lessee’s election, (i) Lessor shall immediately refund the overpayment to

Lessee, or (ii) Lessee shall be entitled to a credit on the next succeeding

installments of Basic Monthly Rent for an amount equal to the overcharge plus

interest on the amount of such overcharge from the date on which same was paid

by Lessee until the date refunded by Lessor or credited by Lessee (as the case

may be) at the prime rate then published in the Wall Street Journal, provided,

however, that in the event the term of this Lease has expired or been earlier

terminated, Lessee shall be entitled to a refund of such excess from Lessor

within thirty (30) days after such date or expiration or earlier

termination.  In addition, in the event

such audit by Lessee discloses such an overcharge in excess of three (3%)

percent of the amount payable in accordance with Articles VIII or IX of this

Lease, then Lessor shall pay to Lessee the reasonable costs and expenses of

such audit.

 

ARTICLE IX. -

TAXES AND ASSESSMENTS

 

1.             Lessee

shall pay to Lessor in each calendar year, as additional rent, “Lessee’s Share”

(as hereinafter defined) of all real estate, and other ad valorem taxes and

other impositions, excises and other governmental or quasi-governmental charges

of every kind and nature (including, but not limited to, sewer and fire

district assessments, foreseen and unforeseen and ordinary as well as

extraordinary, but excluding general and special assessments), with respect to

the Building and the Property.  Such

taxes and assessments are sometimes referred to in this Lease as “taxes”,

“taxes and assessments”, or “impositions”. 

Lessee’s Share shall be determined by the following formula: (i) the

Assessment (as hereinafter defined), multiplied by the tax millage of the

various taxing bodies, as such millage may exist from year to year, multiplied

by (ii) a fraction, (x) the numerator of which shall be the square foot floor

area of the Leased Premises (exclusive of the Basement Area) , and (y) the

denominator of which shall be the total square foot floor area of the Building,

and if hte Lessor shall construct a new building on the Property or an addition

to the Building, the denominator shall be increased by the square foot area of

any such new building or addition . 

“Assessment” shall mean the current assessment of the Building and

Property.

 

8

 

As of the date hereof, Lessee’s pro rata charge for

taxes is forty-five percent (45%) (which pro rata charge is subject to

adjustment as provided in the preceding pargraph).

 

2.             (a)           Payment of the taxes required by

Section 1 above shall be paid by the Lessee in equal monthly installments in

advance in such amounts as are reasonably estimated and billed by Lessor based

upon the total taxes payable in each calendar year.  Lessor shall hold such amounts and apply the same to the timely

payment of the obligations with respect to which the amounts were

deposited.  Lessor may revise its

estimate and may adjust such monthly payment at the end of any calendar

year.  The first such payment shall be

due and payableby Lessee on the Rent Commencement Date (prorated for the

remaining number of days in the calendar year) and subsequent, installments

shall be due and payable at the beginning of each ensuing calendar month during

the term and any extensions or renewals thereof.

 

(b)           After

Lessor has received the tax bills for each calendar year, Lessor will notify

Lessee of (i) the amount of taxes on which the Lessee’s tax portion is based;

(ii) the amount of any refund, reduction or deferral expense; (iii) the gross

square foot area of the Leased Premises and the Building and other

improvements, of which the Leased Premises are a part, on which the tax is

based; (iv) the amount of the tax.  If

the aforesaid monthly payments on account of the taxes paid by Lessee for a

given calendar year are greater than the Lessee’s share of the taxes payable

for the given calendar year, Lessee shall receive a credit for the excess

against Basic Monthly Rent during the next succeeding months, and if said

payments are less than Lessee’s share, Lessee shall forthwith pay to Lessor the

difference.  Lessor agrees to provide

Lessee with a copy of the actual tax bill each year within thirty (30) days of

receipt of such bill.

 

3.             (a)           Lessee shall pay before delinquency

any and all taxes, assessments, impositions, excises, fees and other charges

levied, assessed or imposed by governmental or quasi-governmental authority

upon Lessee or its business operation, or based upon the use or occupancy of

the Leased Premises or upon Lessee’s leasehold interest, trade fixtures,

furnishings, equipment, leasehold furnishings, alterations, changes and

additions made by Lessee, merchandise and personal property of any kind owned,

installed or used by Lessee in, from or upon the Leased Premises.

 

(b)           Nothing

herein contained shall be construed to include in taxes and assessments or

impositions the following which shall be paid solely by Lessor: estate,

succession, transfer, gift, franchise, inheritance, corporation, income, profit

or excise tax, capital levy or capital stock that is or may be imposed upon the

Lessor or any increase in taxes or assessments resulting from the sale of or

other transfer by Lessor of its interest in the Property or Building (or any

part thereof); or taxes, charges, fees, levies incurred as a result of Lessor’s

development of on-site or off-site improvements or utilities; provided,

however, that if at any time during the Term the methods of taxation prevailing

at the Lease Commencement Date shall be altered so that in lieu of the real

estate taxes now levied, there is assessed or imposed (i) a tax upon the rents

received from such real estate; or (ii) a license fee measured by the rents

receivable by Lessor from the Leased Premises or any portion of the Property or

the Building; or (iii) a tax or license fee imposed upon Lessor which is

otherwise measured by or based in full or in part upon the Leased Premises, the

Building or any portion thereof, then the same shall be included in the

computation of the real estate taxes hereunder, but only to the extent calculated as if Lessor’s interest in the Property and

the Building were Lessor’s sole asset.  In addition,

 

9

 

Lessee shall not be required to pay any increase in taxes or

assessments resulting from the sale of or other transfer by the Lessor of its

interest in the Building, or any part thereof; or taxes, charges, fees, levies

incurred as a result of Lessor’s development of on-site or off-site

improvements or utilities.

 

4.             Lessee

shall have the right to audit the appropriate records of Lessor to confirm the

charges billed Lessee under this Article IX are proper and conform to the

provisions of this Article IX as provided in Section 3 of Article VIII above.

 

ARTICLE X. -

UTILITIES

 

1.             So

long as Lessee is the sole occupant of the FiberMark Building, the Lessee shall

pay for the cost and expense of all utilities and other services rendered or

furnished to the Leased Premises during the Term, including (without

limitation) heat, water, sewer, gas, electricity, telephone and trash disposal,

together with all taxes levied or assessed and all other charges on such

utilities or services.

 

It shall be the responsibility of the Lessee to make

payment of such services before same become delinquent.  In the event that Lessee shall fail to make

such payment as required, Lessor shall have the right, but not the obligation,

to make payment thereof and collect one hundred percent (100%) of the cost

thereof incurred by Lessor as Additional Rent. 

Lessee shall furnish Lessor evidence of such payment within fifteen (15)

days after same become due.  In no event

shall the Lessor be liable for the quality, quantity, failure or interruption

of such utilities or services to Leased Premises.

 

2.             Interruption

of Use.  An “Abatement Event” shall

be defined as an event or circumstances that prevents Lessee from using the

Leased Premises or any portion thereof, as a result of any failure of Lessor to

provide services or access to the Leased Premises.  Lessee shall give Lessor notice (“Abatement Notice”) of any such

Abatement Event, and if such Abatement Event continues beyond the “Eligibility

Period” (as that term is defined below), then the Basic Monthly Rent and Lessee’s

other monetary obligations to Lessor shall be abated entirely or reduced, as

the case may be, after expiration of the Eligibility Period for such time that

the Lessee continues to be so prevented from using, and does not use, the

Leased Premises or a portion thereof, in the proportion that the rentable area

of the portion of the Leased Premises that the Lessee is prevented from using,

and does not use, bears to the total rentable area of the Leased Premises;

provided, however, in the event that Lessee is prevented from using, and does

not use, a portion of the Leased Premises for a period of time in excess of the

Eligibility Period and the remaining portion of the Leased Premises is not

sufficient to allow Lessee to effectively conduct its business therein, and if

Lessee does not conduct its business from such remaining portion, then for such

time after expiration of the Eligibility Period during which Lessee is so

prevented from effectively conducting its business therein, Basic Monthly Rent

and Lessee’s other monetary obligations to Lessor shall be abated entirely for

such time as Lessee continues to be so prevented from using, and does not use,

the Leased Premises.  The term

“Eligibility Period” shall mean a period of three (3) consecutive days after Lessor’s

receipt of any Abatement Notice(s).  In

addition, if an Abatement Event continues for ninety (90) consecutive days

after any Abatement Notice, Lessee may terminate this Lease by written notice

to Lessor at any time before the date such Abatement Event is cured by Lessor.

 

10

 

3.             Lessee

may, at its sole cost, and after written notice to Lessor, cause the FiberMark

Building to be metered separately for electric service.  Upon the request of Lessee in connection

with separately metering the FiberMark Building for electric service, Lessor,

at Lessee’s cost and expense, shall join in any applications for any permits,

approvals or certificates from any governmental authority or electric service

provider required to be obtained by Lessee, and shall sign such applications

reasonably promptly after request by Lessee and shall otherwise cooperate with

Lessee in connection therewith, provided, however, that Lessor shall not be

obligated to incur any cost or expense, including reasonable attorneys’ fees

and disbursements or suffer to incur any liability in connection

therewith.  Lessee shall not interrupt

the electric service provided to other tenants at the Building while causing

the FiberMark Building to be separately metered for electric service without

the Lessee obtaining the consent of the other affected tenants at the Building.

 

ARTICLE XI. -

INSURANCE AND DAMAGE

 

1.             The

Lessor shall maintain and keep in effect throughout the Term hereof, with

policies from an insurer and in form and substance reasonably satisfactory to

the Lessor and its lender, insurance against loss or damage to the Building and

all other buildings and improvements now or hereafter located on Lessor’s

premises by fire and such other casualties as may be included in the broadest

form of all-risk insurance from time to time available, in an amount equal to

at least the full insurable replacement value of the Building and all other

buildings and improvements on Lessor’s premises.

 

2.             Lessee

will keep in force with companies licensed to do business in the Commonwealth

of Pennsylvania where the Leased Premises are located at Lessee’s expense at

all times during the term of this Lease or any renewals or extensions thereof

and during such other times as Lessee occupies the Leased Premises or any part

thereof:

 

(a)           Public

liability insurance with respect to Leased Premises, and the business operated

by Lessee in or from the Leased Premises with minimum limits of Three Million

Dollars ($3,000,000.00) on account of bodily injuries to or death of one

person, and Five Million Dollars ($5,000,000.00) on account of bodily injuries

to or death of more than one person as the result of any one accident or

disaster, and property damage insurance with minimum limits of Five Hundred

Thousand Dollars ($500,000.00).  If the

nature of Lessee’s operation is such as to place any or all of its employees

under the coverage of local worker’s compensation or similar statues, Lessee

shall also keep in force, at its own expense, worker’s compensation or similar

insurance affording statutory coverage and containing statutory limits.

 

(b)           Lessee

shall deposit with Lessor the policies of insurance required by the provisions

of this Section, or certificates thereof, together with satisfactory evidence

of the payment of the required premium or premiums thereof.

 

(c)           All

policies of insurance required to be carried by Lessee pursuant to this Lease

shall provide that the policy shall not be subject to cancellation, termination

or change except after ten (10) days prior written notice to Lessor and shall

name Lessor as an additional insured as its interest may appear, but only to

the extent of the One Million Dollar ($1,000,000) base public liability policy.

 

11

 

3.             (a)           Lessee will not do, omit to do, or

suffer to be done or keep or suffer to be kept anything in, upon or about the

Leased Premises which will violate the provisions of Lessor’s policies insuring

against loss or damage-by fire or other hazards, which will materially

adversely affect Lessor’s fire/casualty or liability insurance premium rating

or which will prevent Lessor from procuring such policies with companies

acceptable to Lessor, provided Lessee is first given adequate notice of the

requirements of such policies.  If

anything done, omitted to be done or suffered to be done by Lessee, or kept or

suffered by Lessee to be kept in, upon or about the Leased Premises shall by

itself or in combination with other circumstances existing on residue property

of Lessor cause the premium rate of fire or other insurance on the Leased

Premises or other property of the Lessor in companies acceptable to Lessor to

be increased beyond the established rate from time to time fixed by the appropriate

underwriters with regard to the use of the Leased Premises for the purposes

permitted under this Lease, Lessee will pay the amount of such increase of

Lessor as Additional Rent upon Lessor’s demand and will thereafter pay the

amount of such increase, as the same may vary from time to time, with respect

to every premium relating to coverage of the Leased Premises during a period

falling within the Term of this Lease until such increase is eliminated.  In addition, if applicable, after notice

thereof to Lessee and an opportunity to cure, Lessor may at its option-rectify

the condition existing on the Leased Premises which caused or was a

contributing cause of the increased premium rate in the event that the Lessee

should fail to do so and may charge the cost of such action to Lessee as

Additional Rent, payable on demand after notice thereof and opportunity to

cure.

 

(b)           If

Lessee shall not comply with its covenants made in this section, Lessor in

addition to Lessor’s other remedies hereunder may (but shall not be obligated

to) cause insurance, as aforesaid, to be issued, and in such event Lessee

agrees to pay the premium for such insurance as Additional Rent promptly upon

Lessor’s demand, or Lessor, at its option, may treat such failure to comply as

an Event of Default.

 

4.             Throughout

the Term of this Lease, Lessee shall reimburse the Lessor for its pro rata

share of the premium paid by the Lessor for insuring the Building and any

additions theret and Lessee’s portion of the premium shall be determined by the

following formula: the numerator of which shall be the square feet area of the

Leased Premises (exclusive of the Basement Area) and the denominator shall be

the square feet area of the Building and any additions thereto, or such portion

thereof as is covered by the insurance policy for which the premium is being

paid, and the Lessor may recover one hundred percent (100%) of Lessee’s pro

rata share of the cost incurred by Lessor as Additional Rent, if the Lessee

fails to make payment thereof.

 

5.             If

the Leased Premises are damaged or destroyed so they cannot be repaired with

reasonable diligence within one hundred eighty (180) days of the date of such

damage or destruction, then either Lessor or Lessee may terminate this Lease

upon thirty (30) days written notice to the other party after occurrence of the

casualty; provided, however, that if Lessor has not entered into binding

contracts within thirty (30) days of the date of damage, which contracts

require the repair and reconstruction of the Leased Premises within one hundred

eighty (180) days of the date of the damage or destruction, Lessee shall have

the option, at its sole

 

12

 

discretion, to terminate this Lease upon thirty (30) days written

notice to Lessor.  If this Lease has not

been terminated as provided in this Section 5 and restoration is not complete

within one hundred eighty (180) days from the commencement of work, Lessee

shall have the option, at its sole discretion, to terminate this Lease upon thirty

(30) days written notice to Lessor.  If

the casualty occurs within the last twelve (12) months of the Term, Lessee

shall have the option, at its sole discretion, to terminate this Lease upon

thirty (30) days written notice to Lessor. 

In the event of such termination, all rent and other charges payable by

Lessee shall be payable only to the date of the damage or destruction and any

rent or other charges paid in advance by Lessee shall be refunded by Lessor to

Lessee to the extent that the same are for a period after the damage or

destruction, and neither party shall have any further claim against the other.

 

6.             If

the Leased Premises or any portion thereof are damaged or destroyed, but this

Lease is not terminated, as provided above, then Lessor shall rebuild and

restore the Leased Premises within such 180-day period and during the period

from the date of such damage or destruction until completion of rebuilding and

restoration, the charges payable by Lessee shall abate as follows:

 

(a)           If

the Leased Premises are used during such period, then all rent and other

charges payable hereunder by Lessee shall abate in direct proportion to the

amount of the Leased Premises which are unusable or inaccessible to Lessee in

the ordinary conduct of its business or to the extent of the interference with

Lessee’s use of the common areas of the Building;

 

(b)           If

the Leased Premises cannot be used during such period for any purpose by

Lessee, then there shall be a complete abatement of all rent and other charges

from the date of the casualty until completion of rebuilding and restoration.

 

7.             If

any damage to or condition of the Leased Premises, which by this Lease is

Lessor’s responsibility, shall in Lessee’s reasonable judgment be considered of

such a nature as to require emergency action, then Lessee may undertake, at

Lessor’s expense temporary emergency measures and Lessor shall reimburse Lessee

on demand for the costs and expenses associated with such measures.  Lessee shall use all reasonable efforts to

notify Lessor by telephone of any such emergency.

 

8.             The

Lessor’s obligation or election to restore the Leased premises under this

Article shall not include the repair, restoration or replacement of the

fixtures, improvements, alterations, furniture or any other property owned,

installed, or for any goods or inventory, made by or in the possession of the

Lessee.

 

9.             Lessor

shall obtain and keep in force a policy of general liability insurance with

coverage against such risks and in such amounts as Lessor deems advisable insuring

Lessor against liability arising out of the ownership, operation and management

of the Building and the property on which the Building is located.

 

ARTICLE XII. -

LESSEE’S PROPERTY

 

1.             All

of the Lessee’s personal property of every kind or description which may at any

time be in the Leased Premises shall be at the Lessee’s sole risk, or at the

risk of those claiming under the Lessee, and the Lessor shall not be liable for

any damage to said property or loss suffered by the business or occupation of

the Lessee caused by water from any source whatsoever or from the bursting,

overflowing or leading of sewer or steam pipes or from the

 

13

 

sprinkler system or from the heating or plumbing fixtures or from electric

wires or from gas or odors caused in any manner whatsoever.

 

2.             “Lessee’s

Property” means Lessee’s furniture, fixtures, equipment and partitions whether

moveable or affixed to the Leased Premises or the Building, including, without

limitation, telephone and other office communications equipment, computer

systems, HVAC units, generators, UPS, raised floors, dry coolers, equipment

racks and cages, metal cabinets, and other furniture, fixtures, trade fixtures,

furnishings and items of personal property which are removable from the Leased

Premises or Building subject to repair of any damage to the Leased Premises or

Building by Lessee arising from such removal.

 

(a)           Lessee

may, from time to time and without the consent or approval of Lessor, grant

security interests in Lessee’s Property and execute and deliver security

agreements, Uniform Commercial Code Financing Statements, equipment financing

agreements, conditional bills of sale, leases or other title retention

agreements or any modifications, extensions, replacement or amendments thereto

in connection with the granting of security interests in Lessee’s Building

(collectively “Equipment Financing Agreements”).

 

(b)           Lessee

may, from time to time and without the consent of Lessor, assign, mortgage,

hypothecate or otherwise transfer on encumber Lessee’s interest in this Lease

as collateral security by way of a leasehold mortgage in connection with (i)

the payment and performance of Lessee’s obligations under the terms of any

Equipment Financing Agreement affecting Lessee’s Property or (ii) other

financing of Lessee made in the ordinary course; provided, however, that the

holder of any such leasehold mortgage shall be the grantee of a security

interest in substantially all of Lessee’s Property subject to the Equipment

Financing Agreements.

 

(c)           Lessor

hereby waives any contractual and/or statutory “landlord lien” or similar

security interest it would otherwise have as to Lessee’s Property and equipment

of Lessee located within the Leased Premises or on the Building and Lessor

shall execute and deliver consents, access agreements, lien waivers and other

documents reasonably required by the holder or beneficiary of any Equipment

Financing Agreement, including, without limitation, an access agreement and

lien waiver; provided, however, that Lessor specifically reserves any such

rights or interest as to the fire protection system located in the Leased

Premises,

 

ARTICLE XIII. -

ACCESS TO LEASED PREMISES

 

1.             The

Lessee shall permit the Lessor and the Lessor’s agents, upon reasonable advance

notice to Lessee, to inspect and examine the Leased Premises at any reasonable

time and from time to time during normal business hours accompanied by a

representative of Lessee to make repairs, decorations, alterations, improvements

or additions in the Leased Premises or to the Building.

 

2.             The

Lessor shall also have the right to enter the Leased Premises for a period

commencing one hundred eighty (180) days prior to the expiration of the Term of

this Lease for the purpose of exhibiting the same to prospective tenants or

purchasers.  During said period the

 

14

 

Lessor may place signs in or upon the Leased Premises to indicate that

same are for rent or sale, which signs shall not be removed, obliterated or

hidden by Lessee.

 

ARTICLE XIV. -

ESTOPPEL CERTIFICATE; SUBORDINATION; ATTORNMENT

 

1.             At

any time, and from time to time, upon the written request of Lessor or Lessor’s

mortgagee, or Lessee, Lessee or Lessor, within twenty (20) days of the date of

such written request, agrees to execute and deliver to Lessor, or Lessor’s

mortgagee, or Lessee without charge and in a commercially reasonable form

satisfactory to Lessor or Lessee, a written statement stating, to the best of

Lessee’s or Lessor’s knowledge, the following, to the extent that such matters

are true and correct: (a) confirming the commencement and expiration dates of

the term of this Lease; (b) certifying that Lessee is in occupancy of the

Leased Premises, and that the Lease is in full force and effect and has not

been modified, assigned, supplemented or amended except by such writings as

shall be stated; (c) certifying that all conditions and agreements under this

Lease to be satisfied or performed by Lessor have been satisfied and performed

or stating those conditions and agreements under this Lease which Lessee claims

have not been so satisfied; (d) certifying that there are no defenses or

offsets against the enforcement of the Lease by Lessor, or stating those

claimed by Lessee; (e) reciting the amount paid by Tenant and the date to which

such to which such rent has been paid; (f) reciting the amount of security

deposited with Lessor, if any; and (h) any other information which Lessor,

Lessee or Lessee’s mortgagee shall reasonably require.

 

2.             Intentionally

Omitted.

 

3.             Provided

that Lessee has received from each mortgagee of Lessor a non-disturbance and

attornment agreement, which shall be in form and substance reasonably

satisfactory to Lessee and its counsel and which shall be in recordable form,

Lessee agrees: (a) that except as hereinafter provided, this Lease, and all of

Lessee’s rights hereunder, shall be subject and subordinate to any first

mortgage and to all advances made or to be made thereunder and to the interest thereon,

and all renewals, replacements, modifications, consolidations, or extensions

thereof; and (b) that if the holder of any such mortgage (“Mortgagee”) or if

the purchaser at any foreclosure sale or at any sale under a power of sale

contained in any Mortgage shall at its sole option so request, Lessee will

attorn to, and recognize such Mortgagee or purchaser, as the case may be, as

Lessor under this Lease for the balance then remaining of the Term of this

Lease, subject to all terms of this Lease. 

Notwithstanding anything to the contrary set forth above, any Mortgagee

may at any time subordinate its Mortgage to this Lease, without Lessee’s

consent, by execution of a written document subordinating such Mortgage to this

Lease to the extent set forth therein, and thereupon this Lease shall be deemed

prior to such Mortgage to the extent set forth in such written document without

regard to their respective dates of execution, delivery and/or recording and in

that event, to the extent-set forth in such written document such Mortgagee

shall have the same rights with respect to this Lease as though this Lease had

been executed and a memorandum thereof recorded prior to the execution,

delivery and recording of the Mortgagee and as though this Lease had been assigned

to such Mortgagee.  Should Lessor or any

Mortgagee or purchaser desire confirmation of either such subordination or such

attornment, as the case may be, Lessee upon written request, and from time to

time, will execute and deliver without charge and in form satisfactory of

Lessor the Mortgagee or the

 

15

 

purchaser all instruments and/or documents that may be requested to

acknowledge such subordination and/or agreement to attorn, in recordable form.

 

ARTICLE XV. -

EVENTS OF DEFAULT; LESSOR’S REMEDIES AND DAMAGES

 

l.              Each

of the following shall constitute an “Event of Default”:

 

(a)           If

Lessee defaults in the payment of any sum of money (whether Basic monthly Rent,

Additional Rent or otherwise) when due and such default shall continue for ten

(10) days after the date of written notice from Lessor to Lessee.

 

(b)           If

Lessee defaults in fulfilling any of the other covenants of this Lease on

Lessee’s part to be performed hereunder and such default shall continue for the

period within which performance is required to be made by specific provision of

this Lease, or, if no such period is so provided, for thirty (30) days after

the date or written notice from Lessor to Lessee specifying the nature of said

default, or, if the default so specified shall be of such a nature that the

same cannot be reasonably cured or remedied within said thirty (30) day period,

if Lessee shall not in good faith have commenced the curing or remedying of

such default within such thirty (30) day period and shall not thereafter

diligently proceed therewith to completion.

 

(c)           If

any execution or attachment shall be issued against Lessee or any of Lessee’s

property and shall not be discharged, bonded off, or vacated within sixty (60)

days after the issuance thereof.

 

(d)           If

by order of a court of competent jurisdiction, a receiver or liquidator or

trustee of Lessee or any guarantor, if any, of this Lease, or of any of its

property, shall be appointed and shall not have been discharged, dismissed or

stayed within 90 days, or if by decree of a court of competent jurisdiction

Lessee or any such guarantor shall be adjudicated bankrupt or insolvent, or any

of its property shall have been sequestered, and such decree shall have

continued undischarged, undismissed, or unstayed for 90 days after the entry

thereof, or if any proceedings under the Federal Bankruptcy Act or any similar

statute applicable to Lessee or any such guarantor, if any, as or hereafter in

effect, shall be instituted by or against it and shall not be discharged,

dismissed or stayed within 90 days after such filing, or if Lessee or any such

guarantor, if any, shall institute any such proceeding or shall consent to the

institution of any such proceeding against it under any such law, or Lessee or

any such guarantor shall consent the appointment of a receiver or liquidator or

trustee of it or of all or any part of its property,

 

2.             During

the occurrence of any Event of Default, upon compliance with the requirements

of applicable law, or, at any time thereafter, Lessor may, at its option,

terminate this Lease, whereupon the estate hereby vested in Lessee shall cease

and any and all other right, title and interest of Lessee hereunder shall

likewise cease without notice or lapse of time, as fully and with like effect

as if the entire term of this Lease had elapsed, but Lessee shall continue to

be liable to Lessor as hereinafter provided.

 

3.             During

the occurrence of any Event of Default, upon compliance with the requirements

of applicable law, or at any time thereafter, Lessor, in addition to and

without prejudice to any other rights and remedies Lessor shall have at law or

in equity, shall have the right to re-enter the Leased Premises, either by

force or otherwise, and recover possession

 

16

 

thereof and dispossess any or all occupants of the Leased Premises in

the manner prescribed by the applicable statute relating to summary

proceedings, or similar statutes, but Lessee in such case shall remain liable

to Lessor as hereinafter provided.

 

4.             In

case of any re-entry, expiration and/or dispossession by summary proceedings,

as provided in Sections 2 and 3 of this Article XV above, whether or not this

Lease shall have been terminated as aforesaid:

 

(a)           All

delinquent rent and all other sums required to be paid by Lessee hereunder

shall become payable thereupon and be paid up to the time of such re-entry,

expiration and/or dispossession;

 

(b)           Lessor

shall use its best efforts to mitigate Lessee’s damages.  Consistent therewith Lessor shall have the

right to relet the Leased Premises or any part or parts thereof for the account

of Lessee, either in the name of Lessor or otherwise, for a term or terms which

may, at Lessors option, be less than or exceed the period which would otherwise

have constituted the balance of the term of this Lease and on such conditions

(which may include commercially reasonable concessions or free rent) as Lessor,

in its reasonable discretion, may determine, and Lessor may collect and receive

the rents therefor; and

 

(c)           Lessee

shall reimburse Lessor for any expenses that Lessor may incur in connection

with recovering possession of the Leased Premises and any reletting thereof,

such as court costs, reasonable attorneys’ fees and brokerage fees, the costs

of advertising and the costs of any alterations, repairs, replacements and/or

decorations in or to the Leased Premises as Lessor, in Lessor’s reasonable

judgment, considers advisable and necessary for the purpose of such reletting of

the Leased Premises.

 

5.             In

the case of termination of this Lease as provided in Section 2 of this Article

XV above, Lessee shall pay Lessor, at Lessor’s option, either:

 

(a)           An

amount equal to (i) the rent and all other sums required to be paid by Lessee hereunder

during the period which otherwise would have constituted the unexpred portion

of the term of this Lease, and all damages, costs, fees and expenses incurred

by Lessor as a result of such Event of Default, including without limitation,

reasonable attorneys’ fees, costs and expenses incurred by Lessor in pursuit of

its remedies hereunder, less (ii) rent, if any, received by Lessor pursuant to

any reletting of the Leased Premises during the period which would otherwise

have constituted the balance of the term of this Lease; such amount calculated

pursuant to this subparagraph shall be payable in monthly installments, in

advance, on the first day of each calendar month following occurrence of such

termination and continuing during the period which would otherwise have

constituted the balance of the term of this Lease; or

 

(b)           An

amount equal to (i) the present worth of the rent and all other sums required

to be paid by Lessee hereunder during the period which would otherwise have

constituted the balance of the term of this Lease, and all damages, costs, fees

and expenses incurred by Lessor as a result of such Event of Default, including

without limitation, reasonable attorneys’ fees, costs and expenses incurred by

Lessor in pursuit of its remedies hereunder, less (ii) the present worth of the

fair rental value of the Leased Premises during such period of time,

 

17

 

as determined by an independent real estate appraiser named by Lessor

and approved by Lessee; such amount calculated pursuant to this subparagraph

shall be payable to Lessor in one lump sum on demand and shall bear interest at

eight percent (8%) per annum, until paid. 

For purposes of this clause (b), “present worth” shall be computed by

discounting such amount to present worth at a discount rate equal to the

greater of (X) prime plus one percent (1%), and six percent (6%) per annum.

 

6.             In

the event Lessee commits an Event of Default, or suffers an Event of Default to

exist, Lessee shall reimburse Lessor for Lessor’s reasonable attorneys’ fees

incurred by Lessor in the enforcement of this Lease, within ten (10) days after

written demand.

7.             Tenant

shall pay Lessor interest at eight percent (8%) per annum on all failures to

pay timely the Basic Monthly Rent or any other sums required to be paid by

Lessee to Lessor hereunder, such interest to be calculated from the date such

payment is due until the date such payment is made to Lessor.

 

8.             Lessor’s

Default.  Lessor shall be deemed to

be in default of this Lease if Lessor fails to make any payments to Lessee

required under this Lease and such failure continues for ten (10) days after

written notice from Lessee to Lessor, or if Lessor shall be in default in the

prompt and full performance of any other of its promises, covenants or

agreements contained in this Lease and such default in performance continues

for more than thirty (30) days after written notice thereof from Lessee to

Lessor specifying the particulars of such default or breach of performance; provided,

however, that if the default complained of, other than for the payment of

monies, is of such a nature that the same cannot be rectified or cured within

such thirty (30) day period, then such default shall be deemed to be rectified

or cured if Lessor, within such thirty (30) day period shall have commenced

such cure and shall continue thereafter with due diligence to cause such cure

to be completed.  Upon any default of

this Lease by Lessor, Lessee shall be entitled to pursue any and all remedies

available to Lessee at law or in equity.

 

ARTICLE XVI. -

INDEMNIFICATION; SUBROGATION

 

1.             Indemnification

and Waiver of Claim.

 

(a)           To

the extent that the same shall not be covered by insurance, Lessee will, except

to the extent caused by the negligence of Lessor, its agents, servants, and

employees, defend, indemnify and save harmless Lessor and its agents from and

against any and all claims, actions, damages (excluding consequential or

punitive damages), liabilities and expenses (including, but not limited to,

reasonable attorney’s fees and disbursements) in connection with the loss of

life, personal injury or damage to property or business to the extent arising

from, related to, or in connection with the occupancy or use by Lessee of the

Leased Premises or any part of Lessor’s property or to the extent resulting

from the negligence of Lessee, its agents, servants or employees, provided that

Lessee shall have the right to choose counsel to defend such claims and Lessee

shall keep Lessor informed and no settlement shall be made which would

materially adversely affect Lessor’s interest. 

Lessee shall also pay all costs, expenses and reasonable attorneys fees

that may be expended or incurred by Lessor in successfully enforcing the

covenants and agreements of this Lease.

 

18

 

(b)           To

the extent that the same shall not be covered by insurance, Lessor will, except

to the extent caused by the negligence of Lessee, its agents, servants and

employees, defend, indemnify and save harmless Lessee and its agents from and

against any and all claims, actions, damages (excluding consequential or

punitive damages), liabilities and expenses (including, but not limited to

reasonable attorney’s fees and disbursements) in connection with the loss of

life, personal injury or damage to property or business to the extent arising

from, related to, or in connection with the ownership of the Building

(including the Leased Premises) by Lessor or to the extent resulting from the

negligence of Lessor, its agents, servants, or employees, provided that Lessor

shall have the right to choose counsel to defend such claims and Lessor shall

keep Lessee informed and no settlement shall be made which would adversely

affect Lessee’s interest.  Lessor shall

also pay all costs, expenses, and reasonable attorneys’ fees as may be incurred

by Lessee in successfully enforcing the covenants and agreements of this Lease.

 

2.             Subrogation.

 

In the event the Leased Premises or its contents are

damaged or destroyed by fire or other insured casualty, (a) Lessor, to the

extent of the coverage of Lessor’s policies of fire insurance with extended

coverage endorsements, hereby waives its rights, if any, against Lessee with

respect to such damage or destruction, even if said fire or other casualty

shall have been caused, in whole or in part, by the negligence of Lessee, its

agents, servants or employees, and (b) Lessee, to the extent of the coverage of

Lessee’s policies of fire insurance with extended coverage, hereby waives its

rights, if any, against Lessor with respect to such damage, or destruction,

even if said fire or other casualty shall have been caused, in whole or in

part, by the negligence of Lessor, its agents, servants or employees, provided,

however, such waivers of subrogation shall only be effective with respect to

loss or damage occurring during such time as Lessor’s or Lessee’s policies of

fire insurance with extended coverage endorsements (as the case may be) shall

contain a clause or endorsement providing in substance that the aforesaid

waiver of subrogation shall not prejudice the type and amount of coverage under

such policies or the right of Lessor or Lessee (as the case may be) to recover

thereunder.  If, at any time, Lessor’s

or Lessee’s insurance carrier refuses to write insurance which contains a

consent to the foregoing waiver of subrogation, Lessor or Lessee, as the case

may be, shall notify the other party thereof in writing, and upon the giving of

such notice, the provisions of this Section shall be null and void as to any

casualty which occurs after such notice. 

If Lessor’s or Lessee’s insurance carrier shall make a charge for the

incorporation of the aforesaid waiver of subrogation in its policies, then the party

requesting the waiver shall promptly pay such charge to the other party, upon

demand.  In the event the party

requesting the waiver fails to pay such charge upon demand, the other party

shall be released of its obligation to supply such waiver.

 

ARTICLE XVII. - NO

WAIVER

 

1.             No

failure on the part of the Lessor and/or Lessee to exercise, and no delay in

exercising, any right or remedy of which it may be possessed shall operate as a

waiver thereof, nor shall any single or partial exercise by the Lessor and/or

Lessee of any right or remedy of which it may be possessed preclude any other

or future exercise thereof or the exercise of any other right or remedy.

 

19

 

ARTICLE XVIII. –

EMINENT DOMAIN

 

1.             Total

condemnation.

 

If the whole of the Leased Premises shall be taken by

any public or quasi-public authority under the power of eminent domain,

condemnation or expropriation or in the event of a conveyance in lieu thereof,

then this Lease shall terminate as of the date on which possession of the Leased

Premises is required to be surrendered to the condemning authority.

 

2.             Partial

condemnation.

 

If any part of the Leased Premises shall be so taken

or conveyed and if such partial taking or conveyance shall render the Leased

Premises unsuitable for the business of the Lessee, then the term of this Lease

shall cease and terminate as of the date on which possession of the Leased

Premises is required to be surrendered to the condemning authority.  In the event such partial taking is

extensive enough to render the Leased Premises unsuitable for the business of

Lessee, in Lessee’s sole discretion, Lessee shall have the right to terminate

this Lease by giving written notice of termination to Lessor.  In the event such partial taking is not

extensive enough to render the Leased Premises unsuitable for the business of

Lessee, this Lease shall continue in full force and effect except that the

Basic Monthly Rent shall be reduced in the same proportion that the floor area

of the Leased Premises so taken or conveyed bears to such floor area

immediately prior to such taking or conveyance such reduction commencing as of

the date Lessee is required to surrender possession of such portion.  Lessor shall promptly restore the Leased Premises,

to the extent of condemnation proceeds available for such purpose, as nearly as

practicable to a condition comparable to their condition at the time of such

condemnation less the portion lost in the taking or conveyance and Lessee shall

promptly make all necessary repairs, restoration and alterations of Lessee’s

fixtures, equipment and furnishings and shall promptly re-enter the Leased

Premises and commence doing business in accordance with the provisions of this

Lease.  For purposes of determining the

amount of funds available for restoration of the Leased Premises from the

condemnation award said amount will be deemed to be that part of the award

which remains after payment of Lessor’s reasonable expenses incurred in

recovering same and of any amounts due to any mortgagee of Lessor, and which

represents a portion of the total sum so available (excluding any award or

other compensation for land) which is equitably allocable to the Leased

Premises.

 

3.             In

the event of total condemnation or of partial condemnation, Lessor and Lessee

shall each be entitled to receive such damages from the condemning authority as

are provided by applicable law.

 

ARTICLE XIX. -

OPTION TO RENEW

 

1.             Providing

that no Event of Default then exists, Lessee shall have the right and option,

which option shall be exercised by written notice by the Lessee to the Lessor

at least six (6) months prior to the expiration of the then current term, to

extend the term of the within Lease for up to two (2) additional five (5) year

terms immediately following the original Term or any extension term, as the

case may be, under the same terms and conditions as herein provided, except

that the rents payable during each of the extension terms shall be as follows:

 

20

 

(a)           During

the initial thirty (30) months of the first extension term, the annual rent

shall be Six Hundred Twenty Thousand Five Hundred Dollars ($620,500), payable

in equal monthly installments of Fifty One Thousand Seven Hundred and Eight

Dollars and Thirty-three Cents ($51,708.33), which annual rental shall be

determined by multiplying $3.65 per square foot times the 170,000 square feet

of leased area as provided in this Lease.

 

(b)           During

the remaining thirty (30) months of the first extension term, the annual rent

shall be Six Hundred Thirty Nine Thousand Two Hundred Dollars ($639,200),

payable in equal monthly installments of Fifty Three Thousand Two Hundred

Sixty-six Dollars and Sixty-six Cents ($53,266.66), which annual rental shall

be determined by multiplying $3.76 per square foot times the 170,000 square

feet of leased area as provided in this Lease.

 

(c)           During

the initial thirty (30) months of the second extension term, the annual rent

shall be Six Hundred Fifty-seven Thousand Nine Hundred Dollars ($657,900),

payable in equal monthly installments of Fifty-four Thousand Eight Hundred

Twenty-five Dollars ($54,825), which annual rental shall be determined by

multiplying $3.87 per square foot times the 170,000 square feet of leased area

as provided in this Lease.

 

(d)           During

the remaining thirty (30) months of the second extension term, the annual

rental shall be Six Hundred Seventy-four Thousand Nine Hundred Dollars

($674,900), payable in equal monthly installments of Fifty-six Thousand Two

Hundred Forty-one Dollars and Sixty-six Cents ($56,241.66), which annual rental

shall be determined by multiplying $3.97 per square foot times the 170,000

square feet of leased area as provided in this Lease.

 

All other terms and conditions of this Lease shall

remain in full force and effect during each of the option terms.

 

ARTICLE XX. -

ASSIGNMENT AND SUBLETTING

 

1.             Assignment

and Subletting.

 

(a)           Lessee

shall not voluntarily, involuntarily, or by operation of law, assign, transfer,

mortgage or otherwise encumber (herein collectively referred to as an

“assignment”) this Lease or any interest of Lessee herein, in whole or in part,

nor sublet the whole or any part of the Leased Premises, nor permit the Leased

Premises or any part thereof to be used or occupied by others, without first obtaining

in each and every instance the prior written consent of Lessor, not to be

unreasonably withheld, delayed or conditioned. 

Any consent by Lessor to an assignment or subletting or use or occupancy

by others shall be held to apply only to the specific transaction thereby

authorized and shall not constitute a waiver of the necessity for such consent

to any subsequent assignment or subletting or use or occupancy by others,

including, but not limited to a subsequent assignment or subletting by any

trustee, receiver, liquidator, or personal representative of Lessee, nor shall

the references anywhere in this Lease to subtenants, licensees and

concessionaires be construed as a consent by Lessor to an assignment.  If this Lease or any interest herein be

assigned or if the Leased Premises or any part thereof be sublet or used or

occupied by anyone other than Lessee without Lessor’s prior written consent

having been obtained thereto, Lessor may nevertheless collect rent (including,

but not limited to, Basic Monthly Rent, and Additional Rent) from the assignee,

sublessee, user or occupant and apply the

 

21

 

net amount collected to the rents herein reserved, and furthermore in

any such event Lessee shall pay to Lessor monthly, as additional rent, the

excess of the consideration received or to be received during such month for

such assignment, sublease or occupancy (whether or not denoted as rent) over

the rental reserved for such month in this Lease applicable to such portion of

the Leased Premises so assigned, sublet or occupied.  In calculating any excess rent payable by Lessee to Lessor

pursuant to this provision, Lessee shall first be entitled to deduct (a) the

gross revenue paid to Lessor by Lessee with respect to the subject portion of

the Leased Premises during the period commencing on the date the Lessee vacates

the subject portion of the Leased Premises until the date the assignee or

sublessee is obligated to pay rent pursuant to its assignment or sublease; (b)

improvement allowances or other economic concessions granted by Lessee to the

assignee or sublessee; (c) the unamortized costs of initial and subsequent

improvements to the subject portion of the Leased Premises paid for by Lessee;

(d) costs incurred by Lessee to buy-out or take over the previous lease of the

assignee or sublessee; (e) all costs incurred by Lessee to advertise the

subject portion of the Leased Premises for assignment or sublease; and (f)

brokerage commissions and or legal fees paid by Lessee in connection with the

assignment or sublease.  No such

assignment, subletting, use, occupancy or collection shall be deemed a waiver

of the covenant herein against assignment, subletting or use or occupancy by

others, or the acceptance of the assignee, subtenant, user or occupant as

Lessee hereunder or constitute a release of Lessee from the further performance

by Lessee of the terms and provisions of this Lease.  If this Lease or any interest of Lessee herein be assigned or if

the whole or any part of the Leased Premises be sublet or used or occupied by

others, after having obtain Lessor’s prior written consent thereto, Lessee

shall nevertheless remain fully liable for the fall performance of all

obligations under this Lease to be performed by Lessee and Lessee shall not be

released therefrom in any manner.

 

(b)           The

foregoing provisions regarding assignment or subletting shall in no way

prohibit and Lessor’s consent shall not be required in connection with, (i) the

sale of all or substantially all of the assets of Lessee, (ii) the sale of all

or any part of the shares of capital stock of Lessee including without

limitation in connection with an initial public offering or follow-on public

offering or otherwise, (iii) the merger, consolidation, or any other combination

of Lessee to or with any other business entity, (iv) an assignment or

subletting to a subsidiary, affiliate, or other parent entity to which Lessee

controls is controlled by or is under common control with, Lessee.  Following any such sale, merger,

consolidation or combination, successor Lessee resulting from such sale,

merger, consolidation or combination shall remain bound by the provisions of

this Article XX.

 

ARTICLE XXI. -

SURRENDER

 

1.             The

Lessee covenants to the Lessor to deliver up and surrender to the Lessor

possession of the Leased Premises upon expiration of this Lease or its earlier

termination as herein provided, structurally sound, broom clean and in good

condition and repair, ordinary wear and tear excepted.  Acceptance of delivery of the Leased

Premises or opening same for business shall be deemed conclusive evidence that

the Leased Premises were in good condition and repair at the commencement of

the Term of this Lease.

 

2.             The

Lessee shall at Lessee’s expense remove all property of Lessee and repair all

damage to the Leased Premises caused by such removal.  Any property not so removed and as to

 

22

 

which the Lessor shall have not made said election, shall be deemed to

have been abandoned by the Lessee and may be retained or disposed of by the

Lessor, as the Lessor shall desire.  The

Lessee’s obligation to observe or perform this covenant shall survive the

expiration of the Term of this Lease. 

Anything to the contrary notwithstanding in this paragraph, it is

acknowledged by Lessor that Lessee has installed a certain air

conditioning/humidifier in the space being leased, title to which will remain

in the Lessee and which may be removed by Lessee at the end of the Term or any

renewal term, or on termination of this Lease, provided, however, that Lessee

shall, at Lessee’s sole cost and expense, upon removal of said units, repair

and replace the opening created by such removal, which will be reasonably

acceptable to the Lessor.

 

ARTICLE XXII. -

LESSOR’S RIGHT OF EXPANSION

 

1.             During

the term of this Lease, at the option of Lessor, Lessor shall have the right to

expand the Building by making such additions thereto as Lessor may desire

and/or by constructing a separate building, providing the expansion or separate

building shall not jeopardize the Lessee’s safety or its flow of production or

unreasonably interfere with Lessee’s operation of its business at the Leased

Premises.

 

ARTICLE XXIII. -

MISCELLANEOUS

 

1.             Intentionally

Omitted.

 

2.             Holding

over.  Should Lessee hold over in

possession of the Leased Premises after the expiration of the term hereof

without the execution of a new lease, agreement of extension or renewal

agreement, Lessee shall be deemed to be occupying the Leased Premises from

month to month, subject to such occupancy being terminated by either party upon

at least thirty (30) days, written notice, at the rental, including, but not

limited to, Basic Monthly Rent and Additional Rent all calculated, from time to

time, as though the Term of this Lease had continued and otherwise subject to

all of the other terms, covenants and conditions of the Lease insofar as the

same may be applicable to a month to month tenancy.

 

3.             Intentionally

Omitted.

 

4.             Quiet

enjoyment.  So long as there exists

no Event of Default, Lessor covenants and agrees that Lessee shall peaceably

and quietly hold and enjoy the Leased Premises for the Term hereby demised

without hindrance or interruption by Lessor or any other person or persons

lawfully claiming by, through or under Lessor.

 

5.             Waiver.  The waiver by Lessor or Lessee of any breach

of any term, covenant or condition herein contained shall not be deemed to be a

waiver or any subsequent breach of the same or a waiver of any other term,

covenant or condition herein contained. 

The subsequent acceptance by Lessor of rent due hereunder or any or all

other monetary obligations of Lessee hereunder, whether or not denoted as rent

hereunder, shall not be deemed to be a waiver of any preceding breach by Lessee

of any term, covenant or condition of this Lease, other than the failure of

Lessee to make the particular payment so accepted, regardless of Lessor’s

knowledge of such preceding breach at the time of acceptance of such rent.  No covenant, term or condition of the Lease

shall be deemed to have been waived by Lessor or Lessee, unless such waiver be

in writing and executed by Lessor or Lessee.

 

23

 

6.             Accord

and Satisfaction.  No payment by

Lessee or Lessor or receipt by Lessor or Lessee of a lesser amount than any

payment of Basic Monthly Rent or Additional Rent or other amount herein

stipulated to be paid to Lessor or Lessee shall be deemed to be other than on

account of the earliest stipulated Basic Monthly Rent or Additional Rent or

other amount then due and payable to Lessor or Lessee, as the case may be, nor

shall any endorsement or statement on any check or any letter accompanying any

check or payment as rent or other amount due and payable to Lessor or Lessee be

deemed an accord and satisfaction, and Lessor or Lessee may accept such check

or payment without prejudice to Lessor’s or Lessee’s right to recover the

balance of such rent or any other amount due and payable to Lessor or Lessee or

pursue any other remedy provided in this Lease, at law or in equity.

 

7.             Performance

of Covenants.  Lessee covenants and

agrees that it will perform all agreements and observeall covenants herein

expressed on its part to be performed and observed and that it will promptly, upon

receipt of written notice specifying the action required by Lessee in

connection with any such agreement or covenant, comply with such notice; and

further, that if Lessee shall not comply with any such notice to the

satisfaction of Lessor prior to the date on which such noncompliance would

constitute an Event of Default, in addition to, and not in lieu of or in

limitation of any other remedy which Lessor may have pursuant to this Lease, at

law or in equity, Lessor may, but shall not be obligated to, enter upon the

Leased Premises and do the things specified in said notice.  Lessor shall have no liability to Lessee for

any loss or damage existing in any way from such action and Lessee agrees to

pay upon demand, as Additional Rent, any expense incurred by Lessor in taking

such action.  Notwithstanding the

foregoing, Lessor’s performance of any or all of Lessee’s covenants shall not

release Lessee from liability-for non-performance except arising out of

Lessor’s negligence or willful acts or omissions.

 

Lessor covenants and agrees that it will perform all

agreements and observe all covenants herein expressed on its part to be

performed and observed and that it will promptly, upon receipt of written

notice specifying the action required by Lessor in connection with any such

agreement or covenant, comply with such notice.  In the event Lessor shall fail to perform any such covenant, as

specified in any such notice, Lessee shall have the right to perform the same

and to charge One Hundred percent (100%) of the cost thereof to Lessor,

including the right to offset such charges against Basic Monthly Rent

thereafter becoming due.

 

9.             Entire

Agreement.  The Lease, including the

Exhibits and Rider, if any, and that certain Subordination, Non-Disturbance and

Attornment Agreement dated

                 ,

    , 2002 among Archon Financial, L.P., a Delaware limited

partnership, Lessor and Lessee (the “SNDA”), set forth all the covenants,

promises, agreements, conditions and understandings between Lessor and Lessee

concerning the Leased Premises and there are no covenants, promises,

agreements, conditions or understandings, either oral or written, between them

other than as herein set forth.  All

prior communications, negotiations, arrangements, representations, agreements and

understandings, whether oral, written or both, between the parties hereto, and

their representatives, are merged herein and extinguished, this Lease

superseding and canceling the same. 

Except as herein otherwise provided, no subsequent alteration, amendment,

change or addition to this Lease shall be binding upon Lessor or Lessee unless

reduced to writing and executed by both Lessor and Lessee.

 

24

 

10.           No

Partnership.  Lessor does not, in

any way or for any purpose, become a partner of Lessee in the conduct of its

business, or otherwise, or joint venturer or a member of a joint enterprise

with Lessee.

 

11.           Captions

and Index.  The captions and index

appearing in the -Lease are inserted only as a matter of convenience and i n no

way define, limit, construe or describe the scope or intent of such sections or

articles of this Lease nor in any way affect this Lease.

 

12.           Lessee

Defined.  The word “Lessee” shall be

deemed and taken to mean each and every person or party mentioned as a Lessee

herein, be the same one or more; and if there shall be more than one Lessee,

any noticed required or permitted by the terms of this Lease may be given by or

to any one thereof, and shall have the same force and effect as if given by or

to all thereof.  The use of the neuter

singular pronoun to refer to Lessor or Lessee shall be deemed a proper

reference even though Lessor or Lessee may be an individual, a partnership, a

corporation, or a group of two or more individuals or corporations.  The necessary grammatical changes required

to make the provisions of this Lease apply in the plural number where there is

more than one Lessor or Lessee and to either corporations, associations,

partnerships or individuals, males and females, shall in all instances be

assumed as though in each case fully expressed.

 

13.           Partial

Invalidity; Separate Covenants.  If

any term, covenant or condition of this Lease or the application thereof to any

person or circumstance shall to any extent, be invalid or unenforceable, the

remainder of this Lease or the application of such term, covenant, or condition

to persons or circumstances other than those as to which it is held invalid or

unenforceable shall not be affected thereby and each term, covenant and condition

of this Lease shall be valid and be enforced to the fullest extent permitted by

law.  Furthermore, each covenant,

agreement, obligation and other provision contained in this Lease is, and shall

be deemed and construed as a separate and independent covenant of the party

bound by, undertaking or making the same, and not dependent on any other

provision of this Lease unless expressly so provided.

 

14.           Recording.  Lessee and Lessor shall not record this

Lease without the written consent of the other party.  If Lessor or Lessee requests, the parties shall execute and

acknowledge a short form memorandum of lease in form suitable for recording

purposes of which shall be recorded at Lessor’s expense.

 

15.           Broker’s

Commission.  Lessee represents and

warrants to Lessor that it has not dealt with any broker and Lessee shall

indemnify and save harmless Lessor from and against all claims, costs, suits or

actions, including any cost and reasonable attorney’s fees, which may be

asserted against the Lessor by any broker who claims to be owed a fee or

commission from Lessee in connection with the execution of this Lease.  Lessor does hereby represent and warrant to

Lessee that it has not dealt with any broker and Lessor agrees to indemnify and

save harmless Lessee from, and against allclaims, costs, suits or actions,

including any cost and reasonable attorney’s fees, which may be asserted

against the Lessee by any broker who claims to be owed a fee or commission from

Lessor in connection with the execution of this Lease.

 

25

 

16.           Construction.  It is the intent of the parties hereto that

all terms, covenants, conditions, or agreements of this Lease shall be

interpreted according to their fair meaning and shall not be strictly construed

against either party.

 

17.           Notices.  All notices, requests, consents, approvals

or other communications required or otherwise given hereunder shall be in

writing and mailed by written notice or personal delivery, by Federal Express

or other similar service, or by Certified mail, Return Receipt Requested,

postage prepaid, addressed to the parties as follows:

 

As to Lessor:

Group Three Properties, Inc.

Cross Roads Corporate Center

4641 Pottsville Pike, Suite E

Reading, PA 19605

 

As to Lessee:

 

FiberMark DSI, Inc.

161 Wellington Road

Brattleboro, VT 05302

 

With a copy to:

 

Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention:  Peter Tarr, Esquire

 

which written

notice shall be deemed to have been given by either party when said written notice

is actually received by either party.

 

18.           Governing

Law.  This Agreement shall be

construed and interpreted in accordance with the laws of the Commonwealth of

Pennsylvania, without regard for the law of conflict of laws.

 

19.           Successors.  The parties hereto do hereby agree that this

Agreement shall be binding upon and shall inure to the benefit of the parties

hereto, their respective heirs, personal representatives and assigns.

 

20.           Counterparts.  This Lease may be executed in any number of

counterparts, all of which shall be deemed an original, but all of which shall

together constitute one and the same instrument.

 

21.           Reasonableness.  Regardless of any references to the words

“sole” or “absolute” (but except for matters which will have an adverse effect

on (a) structural integrity of the Building (b) the Building’s plumbing,

heating, life safety, ventilating, air conditioning, mechanical or electrical

systems, or (c) the exterior appearance of the Building, whereupon in each such

case Lessor’s duty is to act in good faith and in compliance with the Lease),

any time

 

26

 

the consent of Lessor or Lessee is required, such consent shall not be

unreasonably withheld, conditioned or delayed. 

Whenever the Lease grants Lessor or Lessee the right to take action,

exercise discretion, establish rules and regulations, or make allocations or

other determinations, Lessor and Lessee shall act reasonably in good faith.

 

22.           Reciprocal

Litigation.  In the event of any litigation

between Lessor and Lessee, the unsuccessful party as determined by a court of

competent jurisdiction shall reimburse the successful party for all legal fees

and expenses incurred by the successful party in prosecuting or defending any

such action.

 

23.           Lease

Conditioned Upon Execution and Delivery of Lease Termination Agreements.  This Lease is conditioned upon, and shall

not be effective, and the Existing Lease shall not terminate, unless and until,

(i) Lessor has delivered to Lessee a certified copy of a fully executed

Agreement of Termination, Assignment, Indemnity and Release among Lessor,

Premium, and JMH, providing for, inter

alia, the termination of that certain lease agreement between

Lessor and Premium dated December 8, 1997, as amended to date(as so amended,

the “PBP Lease”) and all of Premium’s and/or JMH’s right, title and interest in

and to the Leased Premises and the Building, including, without limitation,

termination of JMH’s option to purchase the Building (or any portion thereof),

including a discharge of such option to purchase in recordable form, and (ii)

Lessor has delivered to Lessee the SNDA.

 

24.           Lessor’s

Representations.  Lessor (i)

represents and warrants to Lessee that, as of the date hereof, no third parties

have any right, title and interest in and to the Leased Premises and the

FiberMark Building, including without limitation any right of first refusal or

option to expand into the Leased Premises or the FiberMark Building, or any

option to purchase the FiberMark Building, and (ii) shall indemnify and save

harmless Lessee from any and all liability, costs, expenses, damages, causes of

action, claims, judgments (including reasonable attorneys’ fees) suffered by

Lessee as a result of the representation and warranty in the foregoing clause

(i) not being true and correct as of the date hereof.

 

25.           Termination

of Existing Lease and Release.

 

(a)           The

Existing Lease shall terminate simultaneously with the effectiveness of the

Lease (the “Termination Event”), whereupon the term of the Existing Lease shall

cease and expire as if the date of the Termination Event were the expiration

date set forth in the Existing Lease. 

Upon such termination, Lessee shall be released from all liability under

the Existing Lease arising before and after the termination of the Existing

Lease, including the obligation to pay rent.

 

(b)           Effective

as of the termination of the Existing Lease, Lessee and its successors and

assigns hereby release, acquit, satisfy and forever discharge Lessor and its

employees, agents, officers, subsidiaries, affiliates, partners, trustees,

beneficiaries, members, successors and assigns, from any and all actions,

causes of actions, claims, demands, rights, damages, losses, expenses,

occurrences and liabilities, of any kind whatsoever, both known and unknown,

arising out of any matter, happening or thing, from the beginning of time

relating to the Lease.

 

27

 

(c)           Effective

as of the termination of the Existing Lease, Lessor and its successors and

assigns hereby release, acquit, satisfy and forever discharge Lessee and its

employees, agents, officers, subsidiaries, affiliates, partners, trustees,

beneficiaries, members, successors and assigns, from any and all actions,

causes of actions, claims, demands, rights, damages, losses, expenses,

occurrences and liabilities, of any kind whatsoever, both known and unknown,

arising out of any matter, happening or thing, from the beginning of time

relating to the Lease.

 

[Balance of Page Intentionally Left Blank]

 

28

 

IN WITNESS WHEREOF, the parties hereto have caused

this Lease to be duly executed and their seals to be hereunto affixed on the

day and year first above written.

 

	

   

  	

  GROUP THREE PROPERTIES, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Frederick L. Snyder

  	

   

  
	

   

  	

   

  	

  Frederick L. Snyder

  
	

   

  	

   

  	

  President

  
	

   

  	

   

  
	

   

  	

  Attest:

  	

  /s/ Karen L. Schantz

  	

   

  
	

   

  	

   

  
	

   

  	

  FIBERMARK DSI, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Bruce Moore

  	

   

  
	

   

  	

   

  	

  Bruce Moore

  
	

   

  	

   

  	

  Vice President

  
	

   

  	

   

  
	

   

  	

  Attest:

  	

  /s/ Mary Larsen

  	

   

  

 

29

 

Exhibit “A”

 

ALL THOSE TWO

CERTAIN tracts or parcels of land, the first situated on the north side of

Township Route No. T-547, Tuckerton Road, with the concrete block and brick

building and other improvements erected thereon, the second situated on the

north side of Pennsylvania State Highway S.R. 0222, Road To Nowhere, in the

Township of Muhlenberg, County of Berks, Commonwealth of Pennsylvania, being

more fully bounded and described as follows to wit:

 

TRACT 1

 

BEGINNING at an iron

pin on the northern right-of-way line of Township Route No. T-547, Tuckerton

Road, being the southeasternmost corner of the herein described tract; thence

along the same the six following courses and distances 1) South seventy-five

degrees zero minutes eighteen seconds West (S.75°00’18”W.) a distance of

forty-five and forty-seven hundredths feet (45.47’) to an iron pin 2) South

eighty-two degrees thirteen minutes three seconds West (S.82°13’03”W.) a

distance of one hundred three and thirty-six hundredths feet (103.36’) to an

iron pin 3) South eighty-seven degrees fourteen minutes fifty-eight seconds

West (S.87°14’58”W.) a distance of seventy-four and eighty hundredths feet

(74.80’) to an iron pin 4) North eighty degrees twenty-six minutes fifty-one

seconds West (N.80°26’51”W.) a distance of three hundred five and eighty-seven

hundredths feet (305.87’) to an iron pin 5) South seventy-seven degrees

fifty-six minutes seven seconds West (S.77°56’07”W.) a distance of one hundred

forty-four and fifty-six hundredths feet (144.56’) to an iron pin 6) South

thirty-nine degrees twenty-five minutes twenty-nine seconds West

(S.39°25’29”W.) a distance of twenty and six hundredths feet (20.06’) to an

iron pin; thence along property of Reading Blue Mountain & Northern Railroad

Company North eighteen degrees twenty-one minutes fifteen seconds West

(N.18°21’15”W.) a distance of one thousand six hundred twenty-three and

twenty-seven hundredths feet (1,623.27’) to an iron pin; thence along the

southern line of Pennsylvania State Highway S.R. 0222, Road to Nowhere, the

five following courses and distances 1) North sixty-five degrees three minutes

twenty-seven seconds East (N.65°03’27”E.) a distance of two hundred forty-eight

and fifty-six hundredths feet (248.56’) to a point 2) North twenty-four degrees

fifty-six minutes thirty-three seconds West (N.24°56’33”W.) a distance of

twenty feet (20.00’) to a point 3) North sixty-five degrees three minutes

twenty-seven seconds East (N.65°03’27”E.) a distance of two hundred feet

(200.00’) to a point 4) North twenty-four degrees fifty-six minutes

thirty-three seconds West (N.24°56’33”W.) a distance of ten feet (10.00’) to a

point 5) North sixty-five degrees three minutes twenty-seven seconds East

(N.65°03’27”E.) a distance of two hundred nine and twenty-two hundredths feet

(209.22’) to an iron pin; thence along property of Erin Partners South eighteen

degrees twenty-one minutes fifteen seconds East (S.18°21’15”E.) a distance of

one thousand nine hundred eighteen and fifty-nine hundredths feet (1,918.59’)

to the place of beginning.

 

CONTAINING in area

twenty-six and three hundred fifty-five thousandths (26.355) acres.

 

TRACT 2

 

BEGINNING at an

iron pin on the northern line of Pennsylvania State Highway S.R. 0222, Road To

Nowhere being the southwesternmost corner of the herein described tract located

North five degrees fifty-three minutes thirteen seconds West (N.5°53’13”W.) a

distance of three hundred

 

30

 

forty-two and

seventy-eight hundredths feet (342.78’) from the northwest corner of Tract 1;

thence along property of Reading Blue Mountain & Northern Railroad crossing

a rail monument 102.12 feet from the next described corner North eighteen

degrees twenty-one minutes fifteen seconds West (N.18°21’15”W.) a distance of

four hundred seventeen and eighty hundredths feet (417.80’) to a point; thence

passing through and along the Schuylkill River the six following courses and

distances 1) South sixty-eight degrees twenty-six minutes East (S.68°26’E.) a

distance of two hundred and forty-two hundredths feet (200.42’) to a point 2)

North seventy-four degrees fifteen minutes East (N.74°15’E.) a distance of two

hundred eight feet (208.00’) to a point 3) North sixty-two degrees forty-five

minutes East (N.62°45’E.) a distance of one hundred eighty-two feet (182.00’)

to a point 4) North eighty-seven degrees forty-five minutes East (N.87°45’E.) a

distance of one hundred sixty feet (160.00’) to a point 5) North sixty-one

degrees fifteen minutes East (N. 61°15’E.) a distance of one hundred

twenty-three and fifty hundredths feet (123.50’) to a point 6) North fifty-two

degrees East (N.52°E.) a distance of two hundred sixty-one and fifty hundredths

feet (261.50’) to a point; thence along property of No. 1 Contracting Corporation

of Delaware passing through an iron pin located 120.00 feet from the last

described corner South fifteen degrees thirty minutes East (S.15°30’E.) a

distance of two hundred eighty-two and forty hundredths feet (282.40’) to an

iron pin on the northern right-of-way line of Pennsylvania State Highway S.R.

0222, Road To Nowhere; thence along the same the seven following courses and

distances 1) on a line curving to the right with a radius of 2,788.93 feet, a

central angle of 1 degree 41 minutes 55 seconds, and a chord bearing of South

sixty-three degrees three minutes forty-four seconds West (S.63°03’44”W.) a

distance of eighty-two and sixty-eight hundredths feet (82.68’) to a point 2)

South twenty-six degrees five minutes eighteen seconds East (S.26°05’18”E.) a

distance of seventeen and eighty-four hundredths feet (17.84’) to a point 3)

South sixty-five degrees three minutes twenty-seven seconds West

(S.65°03’27”W.) a distance of two hundred eighty-three and thirty-eight

hundredths feet (283.38’) to a point 4) North twenty-four degrees fifty-six

minutes thirty-three seconds West (N.24°56’33”W.) a distance of sixty feet

(60.00’) to a point 5) South sixty-five degrees three minutes twenty-seven

seconds West (S.65°03’27”W.) a distance of two hundred feet (200.00’) to a

point 6) South twenty-four degrees fifty-six minutes thirty-three seconds East

(S.24°56’33”E.) a distance of ten feet (10.00’) to a point 7) South sixty-five

degrees three minutes twenty-seven seconds West (S.65°03’27”W.)

a distance of four hundred eighty-six and sixty-five hundredths feet (486.65’)

to the place of beginning.

 

CONTAINING in area

six and two hundred sixty-one thousandths (6.261) acres.

 

BEING a portion of

the same premises which Rexam DSI, Inc. granted and conveyed unto Group Three

Properties, Inc. by deed dated December 5, 1997 and recorded in Record Book

Volume 2891, Page 29, Berks County Records.

 

31

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