SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended February 28, 1997 Commission File Number 1-5197
Plymouth Rubber Company, Inc.
(Exact name of registrant as specified in its charter)
Massachusetts 04-1733970
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
104 Revere Street, Canton, Massachusetts 02021
(Address of principal executive offices) (Zip Code)
(617) 828-0220
Registrant's telephone number, including area code
Not Applicable
(Former name, former address, and former fiscal year, if changed
since last report).
Indicate by checkmark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by
this report.
Class A common stock, par value $1 - 810,586
Class B common stock, par value $1 - 1,090,197
<PAGE>1
PLYMOUTH RUBBER COMPANY, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statement of Operations and
Retained Earnings (Deficit)
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Notes To Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
<PAGE>2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
[CAPTION]
PLYMOUTH RUBBER COMPANY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND
RETAINED EARNINGS (DEFICIT)
(In Thousands Except Share and Per Share Amounts)
(Unaudited)
<TABLE>
First Quarter Ended
Feb. 28, March 1,
1997 1996
<S> <C> <C>
Net Sales $ 15,284 $ 13,312
Cost and Expenses:
Cost of products sold 11,488 10,351
Selling, general and administrative 3,139 2,226
14,627 12,577
Operating income 657 735
Interest expense (336) (302)
Other income (expense), net (76) (21)
Income before taxes 245 412
Provision for income taxes (104) (107)
Net income 141 305
Retained earnings (deficit) at
beginning of period (3,548) (4,577)
Retained earnings (deficit) at
end of period $ (3,407) $ (4,272)
Per Share Data:
Primary Earnings Per Share:
Net Income $ .06 $ .14
Weighted average number of shares
outstanding 2,197,883 2,239,306
Fully Diluted Earnings Per Share:
Net Income $ .06 $ .14
Weighted average number of shares
outstanding 2,197,883 2,239,306
</TABLE>
See Accompanying Notes To Consolidated Financial Statements
<PAGE>3
[CAPTION]
PLYMOUTH RUBBER COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(In Thousands)
<TABLE>
Feb. 28, Nov. 29,
1997 1996
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 30 $ --
Accounts receivable 8,855 7,737
Allowance for doubtful accounts (269) (174)
Inventories:
Raw materials 3,956 3,730
Work in process 1,707 1,962
Finished goods 6,048 5,633
11,711 11,325
Deferred tax assets, net 1,972 1,972
Prepaid expenses and other current assets 870 744
Total current assets 23,169 21,604
PLANT ASSETS:
Plant assets 31,921 27,753
Less: Accumulated depreciation 19,844 17,937
Total plant assets, net 12,077 9,816
OTHER ASSETS:
Deferred tax assets, net 2,599 2,802
Other long-term assets 1,321 528
3,920 3,330
Total Assets $ 39,166 $ 34,750
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit $ 6,292 $ 5,189
Trade accounts payable 4,912 5,626
Accrued expenses 3,914 3,664
Current portion of long-term borrowings 1,485 1,538
Current portion of product warranties 81 106
Total current liabilities 16,684 16,123
LONG-TERM LIABILITIES:
Borrowings 9,429 5,430
Pension obligation 3,507 3,647
Product warranties 678 678
Other 1,574 1,684
Total long-term liabilities 15,188 11,439
STOCKHOLDERS' EQUITY:
Preferred stock -- --
Class A voting common stock 810 810
Class B non-voting common stock 1,220 1,192
Paid in capital 9,081 9,086
Retained earnings (deficit) (3,407) (3,548)
Cumulative translation adjustment (67) --
Pension liability adjustment, net of tax (162) (162)
Deferred compensation (181) (190)
Total stockholders' equity 7,294 7,188
TOTAL LIABILTIES & STOCKHOLDERS EQUITY $ 39,166 $ 34,750
</TABLE>
See Accompanying Notes To Consolidated Financial Statements
<PAGE>4
[CAPTION]
PLYMOUTH RUBBER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands) (Unaudited)
<TABLE>
First Quarter Ended
Feb. 28, March 1,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 141 $ 305
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 339 270
Amortization of deferred compensation 9 10
Accrued foreign currency exchange loss 55 --
Change in valuation allowance -- (58)
Changes in assets and liabilities:
Accounts receivable 12 (298)
Inventory (129) 663
Prepaid expenses (25) (15)
Other assets (20) 1
Accounts payable (477) (498)
Accrued expenses (52) (181)
Pension obligation (140) (60)
Product warranties (25) (24)
Other liabilities (137) (86)
Net cash provided by (used in)
operating activities (449) 29
Cash flows from investing activities:
Capital expenditures (1,145) (544)
Cash paid to purchase Cintas Adhesivas
Nunez, S.A., net of cash acquired of $90 (2,290) --
Purchase price adjustment - Brite-Line
Technologies, Inc. (597) --
Net cash used ininvesting activities (4,032) (544)
Cash flows from financing activities:
Net increase (decrease) in revolving
line of credit 877 (881)
Proceeds from term loan 4,050 3,657
Payments of term loan (313) (2,230)
Payments on capital leases (53) (20)
Payments on insurance financing (66) (56)
Proceeds from issuance of common stock 23 45
Net cash provided by financing activities 4,518 515
Effect of exchange rates on cash (7) --
Net change in cash 30 --
Cash at the beginning of the period -- --
Cash at the end of the period $ 30 $ --
Supplemental Disclosure of Cash Flow Information
<PAGE>5
Cash paid for interest $ 343 $ 242
Cash paid for income taxes $ 1 $ 26
</TABLE>
See Accompanying Notes To Consolidated Financial Statements
<PAGE>6
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) The Company, in its opinion, has included all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation of the results for the interim periods. The interim
financial information is not necessarily indicative of the results
that will occur for the full year. The financial statements and
notes thereto should be read in conjunction with the financial
statements and notes for the years ended November 29, 1996, December
1, 1995, and December 2, 1994, included in the Company's 1996 Annual
Report to the Securities and Exchange Commission on Form 10-K.
(2) In connection with its former roofing materials business, the
Company issued extended warranties as to the workmanship and
performance of its products. Over 99% of these warranties had
expired prior to the end of 1995, and the last of the ten year
warranties expired in 1996. (A small number of certain other, more
restrictive, and limited warranties continue thereafter.) The
estimated costs of these warranties were accrued at the time of
sale, subject to subsequent adjustment to reflect actual experience,
which resulted in additional charges to operations during 1994 of
$325,000. Some warranty holders have filed claims or brought suits
currently aggregating approximately $721,000 against the Company and
others relating to alleged roof failures. The Company believes, upon
advice of counsel, that its warranty obligation under such
warranties is limited to the cost of the roofing materials and that
the amounts of the claims are significantly in excess of its
ultimate liability. The Company is vigorously defending against
these claims and believes that some are without merit and that the
damages claimed in others may not bear any reasonable relationship
to the merits of the claims or the real amount of damage, if any,
sustained by the various claimants. Management believes that the
$784,000 reserve recorded at November 29, 1996 is adequate provision
for the Company's remaining warranty obligations.
The Company is a defendant in several other lawsuits arising in the
normal course of business. Based upon advice of counsel, management
believes that these lawsuits will not have a material adverse effect
on the Company's results of operations or its financial position.
In December 1996, the Company entered into a purchase commitment for
a significant piece of equipment to be financed with a new term
loan.
In October 1996, LB Acquisition, Inc., which was renamed Brite-Line
Technologies, Inc., a new, wholly-owned subsidiary of the Company,
acquired certain assets of Brite-Line Industries, Inc. from senior
secured creditors. In connection with this transaction, the Company
guaranteed the collection of accounts receivable in the amount of
$2,100,000. On or about February 4, 1997, the Company paid
$586,324.71 as the full and final balance due under this guarantee.
The United States Environmental Protection Agency (EPA) has asserted
three (3) outstanding claims against the Company under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), pursuant to which EPA is seeking to recover from the
Company and other "generators" the costs associated with the clean-up
of certain sites used by licensed disposal companies hired by the
Company as independent contractors for the disposal and/or
reclamation of hazardous waste materials. In one case, in respect to
the Superfund site known as Re-Solve, Inc., of Dartmouth,
Massachusetts, the Company entered into a Consent Decree, which
required payment by the Company of $100,000 plus interest over a
period of five years in full settlement of the EPA claim. The
Company has paid $84,000 and owes one payment of $16,000 in 1997.
With respect to the second assertion against the Company under
CERCLA, a General Notice of Potential Liability was sent to 1,659
Potentially Responsible Parties ("PRP") including the Company, in
<PAGE>7
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)Continued
June, 1992, relative to a Superfund Site known as Solvent Recovery
System of New England ("SRS") at a location in Southington,
Connecticut, concerning shipments to the site which occurred between
June 1, 1956, and January 25, 1974.
The EPA has attributed a 1.74% share of the aggregate waste volume
to the Company. The Company believes that this attribution may be
overstated by failing to account for the portion of the gross waste
volume actually returned to the Company. The first phase of a
remediation program is estimated to cost $3.6 million. Phase II of
the clean-up and the Remedial Investigation/Feasibility Study
("RI/FS"), is projected to cost $2.1 million. The most currently
available estimate is that the cost of the clean up for the PRP's
will range from approximately $38 million to $48 million. Based on
all available information as well as its prior experience,
management believes the amount accrued of $498,000, which is net of
a $127,000 payment made by the Company, in the accompanying
consolidated financial statements as of February 28, 1997 is
reasonable in relation to the Company's attributed share of total
estimated aggregate cost. This amount is subject to adjustment for
future developments that may arise from the long-range nature of
this EPA case, legislative changes, insurance coverage, the
uncertainties associated with the ultimate outcome of the Record of
Decision ("ROD"), the joint and several liability provisions of
CERCLA, and the Company's ability to successfully negotiate an
outcome similar to its previous experience in these matters. No
actions have been filed by the EPA against the Company. Therefore,
while the Company is participating in the PRP Group, it is
impossible to determine the Company's total ultimate liability
and/or responsibility at this time.
On January 25, 1994, the Company received a notification of an
additional Superfund Site, Old Southington Landfill, (the "OSL
Site") regarding which the EPA asserts that the Company is a PRP.
The OSL Site is related to the SRS Site in that, the EPA alleges,
after receipt and processing of various hazardous substances from
PRP's, the owners and/or operators of the SRS Site shipped the
resultant contaminated soil from the SRS Site to the OSL Site.
Since the Company is alleged to have shipped materials to the SRS
Site, the EPA alleges that the Company is also a PRP of the OSL
Site. In addition, there were three (3) direct shippers to the
site, the Town of Southington, General Electric, and Pratt &
Whitney, as well as other transporters and/or users. Based on
EPA's asserted volume of shipments to SRS during that time period,
the EPA has attributed 4.89% of waste volume of all SRS customers,
to the Company; no attempt has been made by EPA to adjust the
waste volume for the distillation done by SRS prior to
shipment to OSL, or to allocate a percentage to the Company in
relation to direct users of the OSL Site, or in relation to a
combination of direct and indirect users of the site. An ROD was
issued in September, 1994 for the first Phase of the clean-up,
estimated to cost approximately $16 million. A PRP Group was formed
and the Company became a participant in the Joint Defense Group of
OSL/SRS "transshipper" PRP's and in the Alternative Dispute
Resolution process. This process resulted in a mediated settlement
for the first phase of the clean up, as well as settlement of past
costs and orphan shares. The Company will pay $165,000 to $190,000
in settlement of the first phase. The settlement of the second
phase is currently being mediated; total costs to the SRS
"transshipper" group are not expected to exceed approximately $15
million. The Company has been notified that certain members of the
"transshipper" PRP's, including the Company will likely be precluded
from participating in a mediated settlement on a "de minimis" basis
this time, pending a final allocation. Based on all available
information as well as its prior experience management believes a
reasonable estimate of its ultimate liability for both phases is
$365,000 and has accrued this amount in the accompanying
consolidated financial statements as of February 28, 1997. This
<PAGE>8
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)Continued
amount is subject to future developments that may arise from the
long-range nature of this EPA case, legislative changes, insurance
coverage, the uncertainties associated with the ultimate outcome of
the ROD and the joint and several liability provisions of CERCLA,
and the Company's ability to successfully negotiate an outcome
similar to its previous experience in these matters. No actions
have been currently filed by the EPA against the Company.
Therefore, while the Company intends to vigorously defend this
matter, it is impossible to determine the Company's total liability
and/or responsibility at this time.
In addition, in the process of preparing to eliminate the use of
certain underground storage tanks located at the Company's
manufacturing facility, the Company determined that some soil
contamination had occurred in a small localized area near the tanks
in question. According to the preliminary information obtained by
an independent Licensed Site Professional, the contamination of the
soil appears to be confined to a small area and does not pose an
environmental risk to the surrounding property or community. In
accord with Massachusetts requirements, the Company notified the
Massachusetts Department of Environmental Protection ("DEP") of the
foregoing on or about August 24, 1994. Plymouth has employed a
licensed site professional as required by statute to investigate the
site. Remediation action is in process. It is expected that such
assessment and remediation will take up to two years to complete and
that the remaining costs for same will not exceed the additional
sum of $210,000, which has been provided for in the accompanying
financial statements.
On or about January 21, 1997, the Company received a Notice of
Responsibility from the Massachusetts Department of
Environmental Protection, ("DEP") pursuant to M.G.L. ch. 21E
concerning the certain sites identified as The Ledge, 757-782 State
Road, Dartmouth: RTN No. 4-0234; and Ridge Hill Road, Freetown: RTN
No. 4-0086. The letter indicates that drums containing hazardous
materials, some of which may have contained the Company's wastes,
were discovered at both sites in April 1979, and that response
actions were undertaken at both sites conducted between 1979 and
1981 by DEP. On information and belief, the company which disposed
of these drums is H&M Drum to whom the Company shipped wastes
between 1977 to 1979. While it is probable that other customers of
H&M Drum also shipped waste to them, it is management's
understanding that the DEP has not yet undertaken to notify other
Potentially Responsible Parties, with the exception of the owners of
the sites. The Company has begun an investigation which reveals
that it is probable that other PRP's exist. In compliance with DEP
requests and statutory requirements, the Company has hired a
licensed site professional to perform certain technical service at
the sites. However, the Company has little information regarding
these sites and its potential involvement, including the identity
and contributions of other PRP's and the scope of the clean-up
necessary, and therefore has not recorded any liability as of
February 28, 1997. A response to the Notice of Responsibility has
been made and cooperative efforts, including an investigation of
additional PRP's and the status of the site, will be made.
(3) Checks outstanding in excess of certain cash balances totaling
$646,000 and $623,000 at February 28, 1997 and November 29, 1996,
respectively, have been included in accounts payable.
(4) On June 11, 1996, the Company declared a 5% stock dividend on both
Class A (voting) and Class B (non-voting) common stock. The
dividend was paid in Class B shares on August 19, 1996 to
shareholders of record as of June 24, 1996. Retained earnings was
charged for $843,000 based on a dividend value of $8.875 per share.
Cash was paid in lieu of fractional shares using the closing price
of Class B common stock on June 10, 1996, and was less than $2,000.
<PAGE>9
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)Continued
Earnings per share have been adjusted to reflect the stock dividend
declared. The common shares outstanding, and the common stock
equivalents, are shown below.
Common and Common Equivalent Shares (Primary Basis):
First Quarter Ended
Feb. 28, March 1,
1997 1996
Average shares outstanding 2,004,095 1,980,814
Adjustments thereto (1) 193,788 258,492
2,197,883 2,239,306
Common and Common Equivalent Shares (Fully Diluted Basis):
Average shares outstanding 2,004,095 1,980,814
Adjustments thereto (2) 193,788 258,492
2,197,883 2,239,306
(1) Adjust for options and warrants under the treasury stock
method using average market value during the period.
(2) Same as (1) except using market value at the end of the
period, if greater than the average market value during the
period.
(5) In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128 ("FAS 128"),
Earnings per Share. FAS 128, which is effective for both interim
and annual periods ending after December 15, 1997, requires the
disclosure of basic and diluted earnings per share as well as
certain other disclosures. Basic and diluted earnings per share, as
computed under the new standard, are not materially different from
the Company's current presentation of primary and fully diluted
earnings per share, respectely, and accordingly, pro forma
disclosure is not presented herein.
(6) On January 3, 1997, Plymouth Rubber Europa, S.A. a newly formed,
wholly-owned subsidiary of the Company, acquired 100 percent of the
outstanding shares of Cintas Adhesivas Nunez, S.A ("CANSA"). The
aggregate purchase price of $3,100,000, which includes transaction
costs, was allocated as follows:
Working capital $ 320,000
Plant assets, net 1,160,000
Goodwill 1,020,000
Other 100,000
$ 3,100,000
The accompanying financial statements include the results of
operations and cash flows of CANSA for the two months ended February
28, 1997. The impact of CANSA's results of operations for the one
month ended December 31, 1996 and for the corresponding quarter of
the fiscal year ended November 29, 1996 was not significant.
(7) Financial instruments with off-balance sheet risks
During the current quarter, the Company began to selectively use
foreign currency forward contracts to offset the effects of exchange
rate changes on cash flow exposures denominated in foreign
currencies. At February 28, 1997, these exposures primarily
included a firm purchase commitment and an intercompany loan, both
<PAGE>10
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)Continued
denominated in European currencies. At February 28, 1997, the
Company held buy and sell foreign currency forward contracts on the
two transactions, respectively, with maturities prior to November
28, 1997. The buy contract, which was denominated in Deutschmarks,
is on a notional amount of $3 million at February 28, 1997. The
sell contract, denominated in Spanish Pesetas, is for a notional
amount of $1.6 million at February 28, 1997. The fair value of the
forward exchange contracts is estimated based on quoted market
prices from the bank, and at February 28, 1997, the Company would
have paid approximately $135,000 to terminate the buy contract, and
would have received approximately $104,000 to terminate the sell
contract.
(8) Subsequent event
On or about March 21, 1997, the Company signed a letter of intent
for the sale of a certain parcel of undeveloped land owned by the
Company and located at Revere Street, Canton, Massachusetts. The
negotiated selling price is approximately $500,000, which signifi-
cantly exceeds the nominal recorded value of the land and will
result in a gain approximating the selling price.
<PAGE>11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Net sales at $15,284,000 were up 15% compared with the first quarter of
1996, which was up 6% from the same period in 1995. The sales increase
reflects sales by the October, 1996 and January, 1997 acquisitions now
operating as Brite-Line Technologies, Inc. and Plymouth Rubber Europa,
S.A., respectively, and the continued growth in sales to export markets,
and to wire harnessing tapes to the domestic automotive industry. Sales
to the domestic automotive and export markets increased 12% and 14%,
respectively, over the prior year's first quarter. Sales to the non-
automotive OEM market declined by 22%, due primarily to capacity
restrictions. The automotive and export increases continue to reflect
trends to a more complex electrical systems and motor vehicles and towards
larger vehicles, especially trucks and utility vehicles.
Operating income at $657,000 is down 11% from the first quarter of 1996,
reflecting a moderate increase from Plymouth's traditional business and
Plymouth Rubber Europa, S.A. (acquired January 3, 1997), offset by an
expected loss from operations of Brite-Line Technologies, Inc. (acquired
October 4, 1996). Moderate losses are expected from Brite-Line operations
in the first several months of 1997 because of the highly seasonal nature
of the pavement marking business. The operating income reduction reflects
a 28% increase in gross profit, which was more than offset by a 41%
increase in selling, general, and administrative expenses. The $835,000
gross profit increase is primarily attributable to the higher sales
volume, coupled with favorable manufacturing variances reflecting improved
yields, improved material usage, and volume oriented cost reductions,
which increased the gross margin 2.6 percentage points as compared to the
prior year's first quarter.
Selling expenses increased 29% compared to the first quarter of 1996,
reflecting increases in outgoing freight, salesmen's salaries, warehousing
and travel expenses. General and administrative expenses, exclusive of
the $147,000 recovery from the settlement of a lawsuit in last year's
first quarter, increased 17% over the corresponding period of 1996,
reflecting higher accruals for incentive compensation and profit sharing.
Income before taxes at $245,000 is down $167,000 from the first quarter of
1996, which benefited from the $147,000 lawsuit settlement. Exclusive of
the $147,000 settlement in 1996, income before tax is substantially
unchanged from the prior year's corresponding quarter, reflecting the 12%
higher adjusted operating income, offset by a $34,000 increase in interest
expense, and a $67,000 foreign currency exchange loss on foreign accounts
receivable (intercompany) due to the rapid strengthening of the dollar in
early 1997. The increased interest expense is the result of higher loan
volume due primarily to the financing of the two acquisitions, offset in
part by reduced interest rates attributable to the replacement of the
Company's primary lender on June 6, 1996.
Net income at $141,000 is down $164,000 from the first quarter of 1996,
which included a $58,000 recapture of a deferred tax valuation allowance
that resulted in an effective income tax rate of approximately 26% in that
quarter.
During the first quarter of 1997, the Company used proceeds from
additional term debt ($4,050,000) and an $877,000 increase in its
revolving line of credit with its primary lender to (1) finance a
($449,000) shortfall in cash provided by operations, (2) purchase Cintas
Adhesivas Nunez, S.A. (now operating as Plymouth Rubber Europa,
S.A.)($2,290,000), (3) increase its investment in Brite-Line Technologies,
Inc. ($597,000), and (4) to add to capital equipment ($1,145,000). Cash
provided by net income ($141,000) and depreciation ($339,000) in the first
quarter shortfell the cash used to make a minor increase in inventory
($129,000), reduce accounts payable ($477,000), reduce pension ($140,000),
and to reduce other current obligations.
<PAGE>12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
(Continued)
As of February 28, 1997, because of collateral limitations and after
consideration of the letter of credit related to the purchase of a
significant piece of equipment to be delivered in the fourth quarter of
1997 and to be operational in the second quarter 1998, the Company had
approximately $450,000 of unused borrowing capacity under its $15 million
line of credit. In the opinion of management, anticipated profits, the
second quarter completion of the Spanish bank syndicate loan, as well as
unused capacity under existing and anticipated borrowing arrangements
pertaining to Brite-Line Technologies, Inc. with the Company's primary
lender will provide sufficient funds to meet expected needs during 1997,
including working capital expansion to support sales growth, and an
investment in improved technology and capital equipment.
<PAGE>13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the information contained in Item 3 of
the Company's Annual Report on Form 10-K for its fiscal year
ended November 29, 1996, and in Note 13 of the Notes To
Financial Statements, contained in said Annual Report.
The United States Environmental Protection Agency (EPA) has
asserted three (3) outstanding claims against the Company
under the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), pursuant to which EPA is seeking
to recover from the Company and other "generators" the costs
associated with the clean-up of certain sites used by licensed
disposal companies hired by the Company as independent
contractors for the disposal and/or reclamation of hazardous
waste materials. In one case, in respect to the Superfund site
known as Re-Solve, Inc., of Dartmouth, Massachusetts, the
Company entered into a Consent Decree, which required payment
by the Company of $100,000 plus interest over a period of five
years in full settlement of the EPA claim. The Company has
paid $84,000 and owes one payment of $16,000 in 1997.
With respect to the second assertion against the Company under
CERCLA, a General Notice of Potential Liability was sent to
1,659 Potentially Responsible Parties ("PRP") including the
Company, in June, 1992, relative to a Superfund Site known as
Solvent Recovery System of New England ("SRS") at a location
in Southington, Connecticut, concerning shipments to the site
which occurred between June 1, 1956, and January 25, 1974.
The EPA has attributed a 1.74% share of the aggregate waste
volume to the Company. The Company believes that this
attribution may be overstated by failing to account for the
portion of the gross waste volume actually returned to the
Company. The first phase of a remediation program is
estimated to cost $3.6 million. Phase II of the clean-up and
the Remedial Investigation/Feasibility Study ("RI/FS"), is
projected to cost $2.1 million. The most currently
available estimate is that the cost of the clean up for the
PRP's will range from approximately $38 million to $48
million. Based on all available information as well as its
prior experience, management believes the amount accrued of
$498,000, which is net of a $127,000 payment made by the
Company, in the accompanying consolidated financial statements
as of February 28, 1997 is reasonable in relation to the
Company's attributed share of total estimated aggregate cost.
This amount is subject to adjustment for future developments
that may arise from the long-range nature of this EPA case,
legislative changes, insurance coverage, the uncertainties
associated with the ultimate outcome of the Record of Decision
("ROD"), the joint and several liability provisions of CERCLA,
and the Company's ability to successfully negotiate an outcome
similar to its previous experience in these matters. No
actions have been filed by the EPA against the Company.
Therefore, while the Company is participating in the PRP
Group, it is impossible to determine the Company's total
ultimate liability and/or responsibility at this time.
On January 25, 1994, the Company received a notification of an
additional Superfund Site, Old Southington Landfill, (the "OSL
Site") regarding which the EPA asserts that the Company is a
PRP. The OSL Site is related to the SRS Site in that, the EPA
alleges, after receipt and processing of various hazardous
substances from PRP's, the owners and/or operators of the SRS
Site shipped the resultant contaminated soil from the SRS Site
to the OSL Site. Since the Company is alleged to have shipped
materials to the SRS Site, the EPA alleges that the Company is
also a PRP of the OSL Site. In addition, there were three
<PAGE>14
PLYMOUTH RUBBER COMPANY, INC.
OTHER INFORMATION (Continued)
(3) direct shippers to the site, the Town of Southington, General
Electric, and Pratt & Whitney, as well as other transporters
and/or users. Based on EPA's asserted volume of shipments
to SRS during that time period, the EPA has attributed 4.89%
of waste volume of all SRS customers, to the Company; no
attempt has been made by EPA to adjust the waste volume
for the distillation done by SRS prior to shipment to
OSL, or to allocate a percentage to the Company in relation
to direct users of the OSL Site, or in relation to a
combination of direct and indirect users of the site. An ROD
was issued in September, 1994 for the first Phase of the
clean-up, estimated to cost approximately $16 million. A PRP
Group was formed and the Company became a participant in the
Joint Defense Group of OSL/SRS "transshipper" PRP's and in the
Alternative Dispute Resolution process. This process resulted
in a mediated settlement for the first phase of the clean up,
as well as settlement of past costs and orphan shares. The
Company will pay $165,000 to $190,000 in settlement of the
first phase. The settlement of the second phase is currently
being mediated; total costs to the SRS "transshipper" group are
not expected to exceed approximately $15 million. The Company
has been notified that certain members of the "transshipper"
PRP's, including the Company will likely be precluded from
participating in a mediated settlement on a "de minimis" basis
this time, pending a final allocation. Based on all available
information as well as its prior experience management
believes a reasonable estimate of its ultimate liability for
both phases is $365,000 and has accrued this amount in the
accompanying consolidated financial statements as of February
28, 1997. This amount is subject to future developments that
may arise from the long-range nature of this EPA case,
legislative changes, insurance coverage, the uncertainties
associated with the ultimate outcome of the ROD and the joint
and several liability provisions of CERCLA, and the Company's
ability to successfully negotiate an outcome similar to its
previous experience in these matters. No actions have been
currently filed by the EPA against the Company. Therefore,
while the Company intends to vigorously defend this matter, it
is impossible to determine the Company's total liability
and/or responsibility at this time.
In addition, in the process of preparing to eliminate the use
of certain underground storage tanks located at the Company's
manufacturing facility, the Company determined that some soil
contamination had occurred in a small localized area near the
tanks in question. According to the preliminary information
obtained by an independent Licensed Site Professional, the
contamination of the soil appears to be confined to a small
area and does not pose an environmental risk to the
surrounding property or community. In accord with
Massachusetts requirements, the Company notified the
Massachusetts Department of Environmental Protection ("DEP")
of the foregoing on or about August 24, 1994. Plymouth has
employed a licensed site professional as required by statute
to investigate the site. Remediation action is in process.
It is expected that such assessment and remediation will take
up to two years to complete and that the remaining costs for
same will not exceed the additional sum of $210,000, which
has been provided for in the accompanying financial
statements.
On or about January 21, 1997, the Company received a
Notice of Responsibility from the Massachusetts Department
of Environmental Protection, ("DEP") pursuant to M.G.L. ch.21E
concerning the certain sites identified as The Ledge, 757-782
State Road, Dartmouth: RTN No. 4-0234; and Ridge Hill Road,
Freetown: RTN No. 4-0086. The letter indicates that drums
containing hazardous materials, some of which may have
<PAGE>15
PLYMOUTH RUBBER COMPANY, INC.
OTHER INFORMATION (Continued)
contained the Company's wastes, were discovered at both sites
in April 1979, and that response actions were undertaken at
both sites conducted between 1979 and 1981 by DEP. On
information and belief, the company which disposed of these
drums is H&M Drum to whom the Company shipped wastes between
1977 to 1979. While it is probable that other customers of
H&M Drum also shipped waste to them, it is management's
understanding that the DEP has not yet undertaken to notify
other Potentially Responsible Parties, with the exception of
the owners of the sites. The Company has begun an
investigation which reveals that it is probable that other
PRP's exist. In compliance with DEP requests and statutory
requirements, the Company has hired a licensed site
professional to perform certain technical service at the
sites. However, the Company has little information regarding
these sites and its potential involvement, including the
identity and contributions of other PRP's and the scope of the
clean-up necessary, and therefore has not recorded any
liability as of February 28, 1997. A response to the Notice
of Responsibility has been made and cooperative efforts,
including an investigation of additional PRP's and the status
of the site, will be made.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: See Index to Exhibits
(b) Not Applicable
<PAGE>16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
Plymouth Rubber Company, Inc.
(Registrant)
D. E. Wheeler
D. E. Wheeler
Vice President - Finance
Date April 15, 1997
<PAGE>17
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
(a) Exhibits:
Exhibit No. Description
(2) Not Applicable
(3)(i) Not Applicable
(4)(i) Promissory Note between Plymouth Rubber Company, Ic.
and Thrift Institution Fund For Economic Development
dated June 14, 1989 -- incorporated by reference to
Exhibit (4)(iii) to report on Form 10-Q for the quarter
ended May 27, 1994.
(4)(ii) Loan and Security Agreement between Plymouth Rubber
Company, Inc., and Thrift Institution Fund For Economic
Development dated June 14, 1989 -- incorporated by
reference to Exhibit (4)(iv) to report on Form 10-Q for
the quarter ended May 27, 1994.
(4)(iii) Mortgage Note between Plymouth Rubber Company, Inc.,
and the Board of Education of Charles County, Maryland,
dated November 1, 1991 -- incorporated by reference to
Exhibit (2)(xiii) to Report on Form 10-Q for the
Quarter ended May 30, 1992.
(4)(iv) Promissory Note between Plymouth Rubber Company, Inc.,
and Foothill Capital Corporation dated October 1, 1993
-- incorporated by reference to Exhibit (2)(i) to the
Report on Form 8-K with cover page dated October 1,
1993.
(4)(v) Loan and Security Agreement between Plymouth Rubber
Company, Inc., and Foothill Capital Corporation dated
October 1, 1993 -- incorporated by reference to Exhibit
(2)(ii) to the Report on Form 8-K with cover page dated
October 1, 1993.
(4)(vi) Amendment to Promissory Note between Plymouth Rubber
Company, Inc., and Thrift Institutions Fund For
Economic Development dated November 30, 1993 --
incorporated by reference to Exhibit (4)(x) to Report
on 10-K for the year ended November 26, 1993.
(4)(vii) Promissory Note between Plymouth Rubber Company, Inc.
and General Electric Capital Corporation dated December
29, 1995.
(4)(viii) Master Security Agreement between Plymouth Rubber
Company, Inc. And General Electric Capital Corporation
dated December 29, 1995.
(4)(ix) Demand Note between Plymouth Rubber Company, Inc. and
LaSalle National Bank dated June 6, 1996 --incorporated
by reference to Exhibit (2)(ii) to the report on Form
8-K with cover page dated June 6, 1996.
(4)(x) Loan and Security Agreement between Plymouth Rubber
Company, Inc. and LaSalle National Bank dated June 6,
1996 -- incorporated by reference to Exhibit (2)(ii) to
the report on Form 8-K with cover page dated June 6,
1996.
(4)(xi) Amendment to Master Security Agreement between Plymouth
Rubber Company, Inc. and General Electric Capital
Corporation dated February 19, 1997.
<PAGE>18
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
(Continued)
(a) Exhibits:
Exhibit No. Description
(4)(xii) Master Security Agreement between Plymouth Rubber
Company, Inc. and General Electric Capital Corporation
dated January 29, 1997.
(10)(i) 1982 Employee Incentive Stock Option Plan --
incorporated by reference to Exhibit (10)(i) of the
Company's Annual Report on
Form 10-K for the year ended November 26, 1993.
(10)(ii) General Form of Deferred Compensation Agreement entered
into between the Company and certain officers --
incorporated by reference to Exhibit (10)(ii) of the
Company's Annual Report on Form 10-K for the year ended
November 26, 1993.
(10)(iii) 1992 Employee Incentive Stock Option Plan -incorporated
by reference to Exhibit (10)(iv) of the Company's
Annual Report on Form 10-K for the year ended November
26, 1993.
(10)(iv) 1995 Non-Employee Director Stock Option Plan --
Incorporated by reference to Exhibit (4.3) of the
Company's Registration Statement on Form S-8 dated May
4, 1995.
(10)(v) 1995 Employee Incentive Stock Option Plan --
Incorporated by reference to Exhibit (4.4) of the
Company's Registration Statement on Form S-8 dated May
4, 1995.
(10)(vi) Sales contract entered into between the Company and
Kleinewefers Kunststoffanlangen GmbH.
(11) Not applicable
(15) Not applicable
(18) Not applicable
(19) Not applicable
(22) Not applicable
(23) Not applicable
(24) Not applicable
(27) Financial data schedule three months ended February 28,
1997.
Exhibit (4)(xi)
Ms. Debra Kream, Esq.
Plymouth Rubber, Inc.
104 Revere Street
Canton, MA 02021
Dear Deborah:
This letter will serve to amend the Master Security Agreement dated as of
December 29, 1995 by and between General Electric Capital Corporation
("Secured Party") and Plymouth Rubber Company ("Debtor") as follows:
1. Section 10(a) is hereby amended to read as follows:
(a) At all times during the term of the Security Agreement,
Debtor shall maintain; (I) Minimum Tangible Net Worth of a positive
$4,500,000 plus 75% of Net Income until the maturity of all note(s),
(ii) Minimum Working Capital of $3,000,000.00 for fiscal year 1997 and
$3,750,000 for fiscal year 1998 and each fiscal year thereafter until
the maturity of all note(s), (iii) Minimum Fixed Charge Coverage ratio
of 1.25x to 1.0x for fiscal year 1997 and 1.50 x to 1.0x for fiscal
year 1998 and each fiscal year thereafter until the maturity of all
note(s), (iv) a maximum Total liabilities to Tangible Net Worth of
6.0x to 1.0x until the maturity of all note(s). "Tangible Net Worth"
is defined as Stockholder's Equity less intangible assets, plus any
FAS #87 after tax change for minimum pension obligations. "EBITDA" is
defined as earnings before Interest, Depreciation, Amortization and
Taxes and Unrecognized Net Obligations at transition. "Fixed Charges"
is defined as current portion of long term debt, plus current portion
of capital leases, plus interest expense, plus preferred dividends.
"Fixed Charge Coverage is defined as EBITDA divided by fixed charges
(both determined on a rolling four quarter average). "Total Debt"
includes all liabilities of the Debtor as defined by GAAP.
Intangibles as used for the determination of Minimum Tangible Net
Worth shall be defined by GAAP exclusive of the deferred tax asset and
associated valuation reserve as defined by FAS 109. Accounting terms
used herein not otherwise defined herein shall be as defined, and all
calculations hereunder shall be made, in accordance with GAAP.
All other terms and conditions will remain in full force and effect. The
Amendment is effective beginning November 30, 1996.
Sincerely,
Robert R. Blee
Senior Credit Analyst
AGREED AND ACKNOWLEDGED:
PLYMOUTH RUBBER COMPANY
By:
Name:
Title:
Date:
Exhibit (4)(xii)
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made as of _January 29, 1997
("Agreement"), by and between General Electric Capital Corporation for
itself and as agent for certain participants, a New York corporation with
an address at 4 North Park Drive Suite 500, Hunt Valley, MARYLAND 21030
("Secured Party"), and Plymouth Rubber Company, Inc. for itself and its
subsidiaries, a corporation organized and existing under the laws of the
Commonwealth of Massachusetts with its chief executive offices located at
104 Revere Street, Canton, MA 02021 (collectively the "Debtor").
In consideration of the promises herein contained and of certain
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Debtor and Secured Party hereby agree as
follows:
1. CREATION OF SECURITY INTEREST.
Debtor hereby gives, grants and assigns to Secured Party, its
successors and assigns forever, a security interest in and against any and
all property listed on any collateral schedule now or hereafter annexed
hereto or made a part hereof ("Collateral Schedule"), and in and against
any and all additions, attachments, accessories and accessions thereto,
any and all substitutions, replacements or exchanges therefor, and any and
all insurance and/or other proceeds thereof provided, however, that the
foregoing shall not be deemed to include mixing and feeding systems which
will be used in conjunction with the Collateral (all of the foregoing
being hereinafter individually and collectively referred to as the
"Collateral"). The foregoing security interest is given to secure the
payment and performance of any and all debts, obligations and liabilities
of any kind, nature or description whatsoever (whether primary, secondary,
direct, contingent, sole, joint or several, or otherwise, and whether due
or to become due) of Debtor to Secured Party, now existing or hereafter
arising, including but not limited to the payment and performance of
certain Promissory Notes from time to time identified on any Collateral
Schedule (collectively "Notes" and each a "Note"), and any renewals,
extensions and modifications of such debts, obligations and liabilities
(all of the foregoing being hereinafter referred to as the
"Indebtedness"). Notwithstanding the foregoing, and notwithstanding
anything to the contrary contained elsewhere in this Agreement, to the
extent that Secured Party asserts a purchase money security interest in
any items of Collateral ("PMSI Collateral"): (i) the PMSI Collateral shall
secure only that portion of the Indebtedness which has been advanced by
Secured Party to enable Debtor to purchase, or acquire rights in or the
use of such PMSI Collateral (the "PMSI Indebtedness"), and (ii) no other
Collateral shall secure the PMSI Indebtedness.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor hereby represents, warrants and covenants as of the date
hereof and as of the date of execution of each Collateral Schedule hereto
that:
(a) Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the first paragraph of
this Agreement, has its chief executive offices at the location set forth
in such paragraph, and is, and will remain, duly qualified and licensed in
every jurisdiction wherever necessary to carry on its business and
operations;
(b) Debtor has adequate power and capacity to enter into, and to
perform its obligations, under this Agreement, each Note and any other
documents evidencing, or given in connection with, any of the Indebtedness
(all of the foregoing being hereinafter referred to as the "Debt
Documents");
(c) This Agreement and the other Debt Documents have been duly
authorized, executed and delivered by Debtor and constitute legal, valid
and binding agreements enforceable under all applicable laws in accordance
with their terms, except to the extent that the enforcement of remedies
may be limited under applicable bankruptcy and insolvency laws;
(d) No approval, consent or withholding of objections is required
from any governmental authority or instrumentality with respect to the
entry into, or performance by, Debtor of any of the Debt Documents, except
such as may have already been obtained;
(e) The entry into, and performance by, Debtor of the Debt Documents
will not (i) violate any of the organizational documents of Debtor or any
judgment, order, law or regulation applicable to Debtor, or (ii) result in
any breach of, constitute a default under, or result in the creation of
any lien, claim or encumbrance on any of Debtor's property (except for
liens in favor of Secured Party) pursuant to, any indenture mortgage, deed
of trust, bank loan, credit agreement, or other agreement or instrument to
which Debtor is a party;
(f) Except as have previously disclosed in the debtors most recent
10Q, there are no suits or proceedings pending in court or before any
commission, board or other administrative agency against or affecting
Debtor which could, in the aggregate, have a material adverse effect on
Debtor, its business or operations, or its ability to perform its
obligations under the Debt Documents;
(g)All financial statements delivered to Secured Party in connection
with the Indebtedness have been prepared in accordance with generally
accepted accounting principles, and since the date of the most recent
financial statement, there has been no material adverse change;
(h) The Collateral is not, and will not be, used by Debtor for
personal, family or household purposes;
(i) The Collateral is, and will remain, in good condition and repair
and Debtor will not be negligent in the care and use thereof;
(j) Debtor is, and will remain, the sole and lawful owner, and in
possession of, the Collateral, and has the sole right and lawful authority
to grant the security interest described in this Agreement; and
(k) The Collateral is, and will remain, free and clear of all liens,
claims and encumbrances of every kind, nature and description, except for
(i) liens in favor of Secured Party, (ii) liens for taxes not yet due or
for taxes being contested in good faith and which do not involve, in the
reasonable judgment of Secured Party, any risk of the sale, forfeiture or
loss of any of the Collateral, and (iii) inchoate materialmen's,
mechanic's, repairmen's and similar liens arising by operation of law in
the normal course of business for amounts which are not delinquent (all of
such permitted liens being hereinafter referred to as "Permitted Liens").
3. COLLATERAL.
(a) Until the declaration of any default hereunder, Debtor shall
remain in possession of the Collateral; provided, however, that Secured
Party shall have the right to possess (i) any chattel paper or instrument
that constitutes a part of the Collateral, and (ii) any other Collateral
which because of its nature may require that Secured Party's security
interest therein be perfected by possession. Secured Party, its
successors and assigns, and their respective agents, shall have the right
to examine and inspect any of the Collateral at any time during normal
business hours. Upon any request from Secured Party, Debtor shall provide
Secured Party with notice of the then current location of the Collateral.
(b) Debtor shall (i) use the Collateral only in its trade or
business, (ii) maintain all of the Collateral in good condition and
working order, (iii) use and maintain the Collateral only in compliance
with all applicable laws, and (iv) keep all of the Collateral free and
clear of all liens, claims and encumbrances (except for Permitted Liens).
(c) Debtor shall not, without the prior written consent of Secured
Party, (i) part with possession of any of the Collateral (except to
Secured Party or for maintenance and repair), (ii) remove any of the
Collateral from the continental United States, or (iii) sell, rent,
lease, mortgage, grant a security interest in or otherwise transfer or
encumber (except for Permitted Liens) any of the Collateral.
(d) Debtor shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any of
the Collateral, on the use thereof, or on this Agreement or any of the
other Debt Documents. Upon prior written notice to Debtor by reason of
Debtor's failure to paySecured Party may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the
Collateral and may pay for the maintenance, insurance and preservation of
the Collateral or to effect compliance with the terms of this Agreement or
any of the other Debt Documents. Debtor shall reimburse Secured Party, on
demand, for any and all costs and expenses incurred by Secured Party in
connection therewith and agrees that such reimbursement obligation shall
be secured hereby.
(e) Debtor shall, at all times, keep accurate and complete records
of the Collateral, and Secured Party, its successors and assigns, and
their respective agents, shall have the right to examine, inspect, and
make extracts from all of Debtor's books and records relating to the
Collateral at any time during normal business hours.
(f) If agreed by the parties, Secured Party may, but shall in no
event be obligated to, accept substitutions and exchanges of property for
property, and additions to the property, constituting all or any part of
the Collateral. Such substitutions, exchanges and additions shall be
accomplished at any time and from time to time, by the substitution of a
revised Collateral Schedule for the Collateral Schedule now or hereafter
annexed. Any property which may be substituted, exchanged or added as
aforesaid shall constitute a portion of the Collateral and shall be
subject to the security interest granted herein. Additions to, reductions
or exchanges of, or substitutions for, the Collateral, payments on account
of any obligation or liability secured hereby, increases in the
obligations and liabilities secured hereby, or the creation of additional
obligations and liabilities secured hereby, may from time to time be made
or occur without affecting the provisions of this Agreement or the
provisions of any obligation or liability which this Agreement secures.
(g) Any third person at any time and from time to time holding all
or any portion of the Collateral shall be deemed to, and shall, hold the
Collateral as the agent of, and as pledge holder for, Secured Party. At
any time and from time to time, Secured Party may give notice to any third
person holding all or any portion of the Collateral that such third person
is holding the Collateral as the agent of, and as pledge holder for, the
Secured Party.
4. INSURANCE.
The Collateral shall at all times be held at Debtor's risk, and
Debtor shall keep it insured against loss or damage by fire and extended
coverage perils, theft, burglary, and for any or all Collateral which are
vehicles, for risk of loss by collision, and where requested by Secured
Party, against other risks as required thereby, for the full replacement
value thereof, with companies, in amounts and under policies acceptable to
Secured Party. Debtor shall, if Secured Party so requires, deliver to
Secured Party policies or certificates of insurance evidencing such
coverage. Each policy shall name Secured Party as loss payee thereunder,
shall provide for coverage to Secured Party regardless of the breach by
Debtor of any warranty or representation made therein, shall not be
subject to co-insurance, and shall provide for thirty (30) days written
notice to Secured Party of the cancellation or material modification
thereof. Debtor hereby appoints Secured Party as its attorney in fact to
make proof of loss, claim for insurance and adjustments with insurers, and
to execute or endorse all documents, checks or drafts in connection with
payments made as a result of any such insurance policies. Proceeds of
insurance shall be applied, at the option of Secured Party, to repair or
replace the Collateral or to reduce any of the Indebtedness secured
hereby.
5. REPORTS.
(a) Debtor shall promptly notify Secured Party in the event of (i)
any change in the name of Debtor, (ii) any relocation of its chief
executive offices, (iii) any relocation of any of the Collateral, (iv)
any of the Collateral being lost, stolen, missing, destroyed, materially
damaged or worn out, or (v) any lien, claim or encumbrance attaching or
being made against any of the Collateral other than Permitted Liens.
(b) Subject to Secured Party's continuing obligation of
confidentiality, Debtor agrees to furnish its annual financial statements
within ninety (90) days of Debtor's fiscal year end and such interim
statements with in forty-five (45) days of Debtor's quarter end as Secured
Party may require in form satisfactory to Secured Party. Any and all
financial statements submitted and to be submitted to Secured Party have
and will have been prepared on a basis of generally accepted accounting
principles, and are and will be complete and correct and fairly present
Debtor's financial condition as at the date thereof. Secured Party may at
any reasonable time examine the books and records of Debtor and make
copies thereof.
6. FURTHER ASSURANCES.
(a) Debtor shall, upon request of Secured Party, furnish to Secured
Party such further information, execute and deliver to Secured Party such
documents and instruments (including, without limitation, Uniform
Commercial Code financing statements) and do such other acts and things,
as Secured Party may at any time reasonably request relating to the
perfection or protection of the security interest created by this
Agreement or for the purpose of carrying out the intent of this Agreement.
Without limiting the foregoing, Debtor shall cooperate and do all acts
deemed necessary or advisable by Secured Party to continue in Secured
Party a perfected first security interest in the Collateral, and shall
obtain and furnish to Secured Party any subordinations, releases,
landlord, lessor, or mortgagee waivers, and similar documents as may be
from time to time requested by, and which are in form and substance
satisfactory to, Secured Party.
(b) Debtor hereby grants to Secured Party the power to sign Debtor's
name and generally to act on behalf of Debtor to execute and file
applications for title, transfers of title, financing statements, notices
of lien and other documents pertaining to any or all of the Collateral.
Debtor shall, if any certificate of title be required or permitted by law
for any of the Collateral, obtain such certificate showing the lien hereof
with respect to the Collateral and promptly deliver same to Secured Party.
(c) Debtor shall indemnify and defend the Secured Party, its
successors and assigns, and their respective directors, officers and
employees, from and against any and all claims, actions and suits
(including, without limitation, related attorneys' fees) of any kind,
nature or description whatsoever arising, directly or indirectly, in
connection with any of the Collateral.
7. EVENTS OF DEFAULT.
Debtor shall be in default under this Agreement and each of the other
Debt Documents upon the occurrence of any of the following "Event(s) of
Default":
(a) Debtor fails to pay any installment or other amount due or coming
due under any of the Debt Documents within ten (10) days after its due
date;
(b) Any attempt by Debtor, without the prior written consent of
Secured Party, to sell, rent, lease, mortgage, grant a security interest
in, or otherwise transfer or encumber (except for Permitted Liens) any of
the Collateral;
(c) Debtor fails to procure, or maintain in effect at all times, any
of the insurance on the Collateral in accordance with Section 4 of this
Agreement;
(d) Debtor breaches any of its other obligations under any of the
Debt Documents and fails to cure the same within thirty (30) days after
written notice thereof;
(e) Any warranty, representation or statement made by Debtor in any
of the Debt Documents or otherwise in connection with any of the
Indebtedness shall be false or misleading in any material respect;
(f) Any of the Collateral being subjected to execution, levy, seizure
or confiscation in any legal proceeding or otherwise;
(g) Any of the Collateral being subjected to attachment which has not
been cured/removed within thirty (30) days;
(h) Any default by Debtor under any other agreement between Debtor
and Secured Party;
(i) Any dissolution, termination of existence, merger, consolidation,
insolvency, or business failure of Debtor or any guarantor or other
obligor for any of the Indebtedness (collectively "Guarantor"), or if
Debtor or any Guarantor is a natural person, any death or incompetency of
Debtor or such Guarantor;
(j) The appointment of a receiver for all or of any part of the
property of Debtor or any Guarantor, or any assignment for the benefit of
creditors by Debtor or any Guarantor; or
(k) The filing of a petition by Debtor or any Guarantor under any
bankruptcy, insolvency or similar law, or the filing of any such petition
against Debtor or any Guarantor if the same is not dismissed within thirty
(30) days of such filing.
(l) Debtor is in Default beyond any applicable grace or cure period
under the Loan and Security Agreement dated as of June 6, 1996 with
LaSalle National Bank as Amended, restated or refinanced and any
replacement facility thereof debtor breaches any of the covenants in
Section 10 hereof.
8. REMEDIES ON DEFAULT.
(a) Upon the occurrence of an uncured Event of Default under this
Agreement, the Secured Party, at its option, may declare any or all of the
Indebtedness, including without limitation the Notes, to be immediately
due and payable, without demand or notice to Debtor or any Guarantor. The
obligations and liabilities accelerated thereby shall bear interest (both
before and after any judgment) until paid in full at the lower of twelve
percent (12%) per annum or the maximum rate not prohibited by applicable
law.
(b) Upon such uncured Event of default, Secured Party shall have all
of the rights and remedies of a Secured Party under the Uniform Commercial
Code, and under any other applicable law. Without limiting the foregoing,
Secured Party shall have the right to (i) notify any account debtor of
Debtor or any obligor on any instrument which constitutes part of the
Collateral to make payment to the Secured Party, (ii) with or without
legal process, enter any premises where the Collateral may be and take
possession and/or remove said Collateral from said premises, (iii) sell
the Collateral at public or private sale, in whole or in part, and have
the right to bid and purchase at said sale, and/or (iv) lease or
otherwise dispose of all or part of the Collateral, applying proceeds
therefrom to the obligations then in default. If requested by Secured
Party, Debtor shall promptly assemble the Collateral and make it available
to Secured Party at a place to be designated by Secured Party which is
reasonably convenient to both parties. Secured Party may also render any
or all of the Collateral unusable at the Debtor's premises and may dispose
of such Collateral on such premises without liability for rent or costs.
Any notice which Secured Party is required to give to Debtor under the
Uniform Commercial Code of the time and place of any public sale or the
time after which any private sale or other intended disposition of the
Collateral is to be made shall be deemed to constitute reasonable notice
if such notice is given to the last known address of Debtor at least five
(5) days prior to such action.
(c) Proceeds from any sale or lease or other disposition shall
be applied: first, to all costs of repossession, storage, and disposition
including without limitation attorneys', appraisers', and auctioneers'
fees; second, to discharge the obligations then in default; third, to
discharge any other Indebtedness of Debtor to Secured Party, whether as
obligor, endorser, guarantor, surety or indemnitor; fourth, to expenses
incurred in paying or settling liens and claims against the Collateral;
and lastly, to Debtor, if there exists any surplus. Debtor shall remain
fully liable for any deficiency.
(d) In the event this Agreement, any Note or any other Debt Documents
are placed in the hands of an attorney for collection of money due or to
become due or to obtain performance of any provision hereof, Debtor agrees
to pay all reasonable attorneys' fees incurred by Secured Party, and
further agrees that payment of such fees is secured hereunder.
(e) Secured Party's rights and remedies hereunder or otherwise
arising are cumulative and may be exercised singularly or concurrently.
Neither the failure nor any delay on the part of the Secured Party to
exercise any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. Secured Party shall not be deemed
to have waived any of its rights hereunder or under any other agreement,
instrument or paper signed by Debtor unless such waiver be in writing and
signed by Secured Party. A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future
occasion.
9. ASSIGNMENT AND PARTICIPATION.
(a) The Debtor acknowledges that it has been advised that the Secured
Party is acting hereunder for itself and as agent for certain third
parties (each being herein referred to as a "Participant" and,
collectively, as the "Participants"); that the interest of the Secured
Party in this Agreement, the other Debt Documents and any other related
instruments and documents may be conveyed to, in whole or in part, and may
be used as security for financing obtained from, one or more third parties
without the consent of the Debtor (the "Syndication"). The Debtor agrees
reasonably to cooperate with Secured Party in connection with the
Syndication, including the execution and delivery of such other documents,
instruments, notices, opinions, certificates and acknowledgments as
reasonably may be required by Secured Party or such Participant; provided,
however, in no event shall the Debtor be required to consent to any change
that would adversely affect any of the economic terms of the transactions
contemplated herein.
(b) This Agreement, Collateral Schedules, any Note and/or any of the
other Debt Documents may be assigned, in whole or in part, by Secured
Party without notice to Debtor, and Debtor hereby waives any defense,
counterclaim or cross-complaint by Debtor against any assignee, agreeing
that Secured Party shall be solely responsible therefor. Debtor agrees
that if Debtor receives written notice of an assignment from Secured
Party, Debtor shall pay all payments and other amounts due under the
assigned Note and Collateral Schedule to such assignee as instructed by
Secured Party. Debtor further agrees to confirm in writing receipt of the
notice of assignment as may be reasonably requested by Assignee.
10. ADDITIONAL COVENANTS.
(a) At all times during the term of the Security Agreement, Debtor
shall maintain: (i) Minimum Tangible Net Worth of a positive $4,500,000
plus 75% of Net Income until the maturity of all note(s), (ii) Minimum
Working Capital of $3,000,000.00 for fiscal year 1997 and $3,750,000 for
fiscal year 1998 and each fiscal year thereafter until the maturity of all
note(s), (iii) Minimum Fixed Charge Coverage ratio of 1.25x to 1.0x for
fiscal year 1997 and 1.50 x to 1.0x for fiscal year 1998 and each fiscal
year thereafter until the maturity of all note(s), (iv) a maximum Total
liabilities to Tangible Net Worth of 6.0x to 1.0x until the maturity of
all note(s). "Tangible Net Worth" is defined as Stockholder's Equity less
intangible assets, plus any FAS #87 after tax change for minimum pension
obligations. "EBITDA" is defined as earnings before Interest, Depreciation,
Amortization and Taxes and Unrecognized Net Obligations at transition.
"Fixed Charges" is defined as current portion of long term debt, plus
current portion of capital leases, plus interest expense, plus preferred
dividends. "Fixed Charge Coverage is defined as EBITDA divided by fixed
charges (both determined on a rolling four quarter average). "Total Debt"
includes all liabilities of the Debtor as defined by GAAP. Intangibles as
used for the determination of Minimum Tangible Net Worth shall be defined
by GAAP exclusive of the deferred tax asset and associated valuation
reserve as defined by FAS 109. Accounting terms used herein not otherwise
defined herein shall be as defined, and all calculations hereunder shall
be made, in accordance with GAAP.
(b) Debtor's chief financial officer shall notify Secured Party in
writing that the Debtor is in compliance with the requirements of Section
10(a) above, such notification and certification shall be provided within
forty-five (45) days after the end of each quarter and ninety (90) days
after the fiscal year end reflecting such information as of the end of the
quarter immediately preceding such quarter.
11. ENVIRONMENTAL
(a) Debtor hereby represents, warrants and covenants that: (i) it has
conducted, and will continue to conduct its business operations, and
throughout the term of the Security Agreement will use the Collateral, so
as to comply with all Environmental Laws; and (ii) Debtor has, and
throughout the term of the Security Agreement will continue to have in
full force and effect all federal, state and local licenses, permits,
orders and approvals required to operate the Collateral in compliance with
all Environmental Laws.
(b) Debtor agrees that if required to return the Collateral or any
item thereof to Secured Party or Secured Party's agents, Debtor shall
return such Collateral free from all Contaminants.
(c) Debtor shall fully and promptly pay, perform, discharge, defend,
indemnify and hold harmless Secured Party and its Affiliates, successors
and assigns, directors, officers, employees and agents from and against
any Environmental Claim or Environmental Loss.
Each reference contained in this Security Agreement to:
(i) "Adverse Environmental Condition" shall refer to (i) the
existence or the continuation of the existence, of an Environmental
Emission (including, without limitation, a sudden or non-sudden
accidental or non-accidental Environmental Emission), of, or exposure
to, any substance, chemical, material, pollutant, Contaminant, odor
or audible noise or other release or emission in, into or onto the
environment (including without limitation, the air, ground, water or
any surface) at, in, by, from or related to any Collateral, (ii) the
environmental aspect of the transportation, storage, treatment or
disposal of materials in connection with the operation of any
Collateral or (iii) the violation, or alleged violation of any
statutes, ordinances, orders, rules, regulations, permits or licenses
of, by or from any governmental authority, agency or court relating
to environmental matters connected with any Collateral.
(ii) "Affiliate" shall refer, with respect to any given Person,
to any Person that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such Person.
(iii) "Contaminant" shall refer to those substances which are
regulated by or form the basis of liability under any Environmental
Law, including without limitation, asbestos, polychlorinated biphenyls
("PCBs"), and radioactive substances, or other material or substance
which has in the past or could in the future constitute a health,
safety or environmental hazard to any Person, property or natural
resources.
(iv) "Environmental Claim" shall refer to any accusation,
allegation, notice of violation, claim, demand, abatement or other
order on direction (conditional or otherwise) by any governmental
authority or any Person for personal injury (including sickness,
disease or death), tangible or intangible property damage, damage to
the environment or other adverse effects on the environment, or for
fines, penalties or restrictions, resulting from or based upon any
Adverse Environmental Condition.
(v) "Environmental Emission" shall refer to any actual or
threatened release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, or into or out of any of the
Collateral, including, without limitation, the movement of any
Contaminant or other substance through or in the air, soil, surface
water, groundwater or property.
(vi) "Environmental Law" shall mean any federal, foreign, state
or local law, rule or regulation pertaining to the protection of the
environment, including, but not limited to, the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA") (42
U.S.C. Section 9601 et seq.), the Hazardous Material Transportation
Act (49 U.S.C. Section 1801 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. Section 1361 et seq.), and
the Occupational Safety and Health Act (19 U.S.C. section 651 et
seq.), as these laws have been amended or supplemented, and any
analogous foreign, federal, state or local statutes, and the
regulations promulgated pursuant thereto.
(vii) "Environmental Loss" shall mean any loss, cost, damage,
liability, deficiency, fine, penalty or expense (including, without
limitation, reasonable attorneys' fees, engineering and other
professional or expert fees), investigation, removal, cleanup and
remedial costs (voluntarily or involuntarily incurred) and damages to,
loss of the use of or decrease in value of the Collateral arising out
of or related to any Adverse Environmental Condition.
(viii) "Person" shall include any individual, partnership,
corporation, trust, unincorporated organization, government or
department or agency thereof and any other entity.
12. MISCELLANEOUS.
(a) This Agreement, any Note and/or any of the other Debt
Documents may be assigned, in whole or in part, by Secured Party without
notice to Debtor, and Debtor hereby waives any defense, counterclaim or
cross-complaint by Debtor against any assignee, agreeing that Secured
Party shall be solely responsible therefor.
(b) All notices to be given in connection with this Agreement
shall be in writing, shall be addressed to the parties at their respective
addresses set forth hereinabove (unless and until a different address may
be specified in a written notice to the other party), and shall be deemed
given (i) on the date of receipt if delivered in hand or by facsimile
transmission, (ii) on the next business day after being sent by overnight
delivery service, and (iii) on the fourth business day after being sent
by regular, registered or certified mail. As used herein, the term
"business day" shall mean and include any day other than Saturdays,
Sundays, or other days on which commercial banks in New York, New York are
required or authorized to be closed.
(c) Secured Party may correct patent errors herein and fill in
all blanks herein or in any Collateral Schedule consistent with the
agreement of the parties.
(d) Time is of the essence hereof. This Agreement shall be
binding, jointly and severally, upon all parties described as the "Debtor"
and their respective heirs, executors, representatives, successors and
assigns, and shall inure to the benefit of Secured Party, its successors
and assigns.
(e) This Agreement and its Collateral Schedules constitute the
entire agreement between the parties with respect to the subject matter
hereof and supersede all prior understandings (whether written, verbal or
implied) with respect thereto. This Agreement and its Collateral
Schedules shall not be changed or terminated orally or by course of
conduct, but only by a writing signed by both parties hereto. Section
headings contained in this Agreement have been included for convenience
only, and shall not affect the construction or interpretation hereof.
(f) This Agreement shall continue in full force and effect until
all of the Indebtedness has been indefeasibly paid in full to Secured
Party. The surrender, upon payment or otherwise, of any Note or any of
the other documents evidencing any of the Indebtedness shall not affect
the right of Secured Party to retain the Collateral for such other
Indebtedness as may then exist or as it may be reasonably contemplated
will exist in the future. This Agreement shall automatically be
reinstated in the event that Secured Party is ever required to return or
restore the payment of all or any portion of the Indebtedness (all as
though such payment had never been made).
(g) DEBTOR AND SECURED PARTY HEREBY UNCONDITIONALLY WAIVES THEIR
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE OTHER
DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS
BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS
BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY
OTHER DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, Debtor and Secured Party, intending to be
legally bound hereby, have duly executed this Agreement in one or more
counterparts, each of which shall be deemed to be an original, as of the
day and year first aforesaid.
SECURED PARTY: DEBTOR:
General Electric Capital Corporation Plymouth Rubber Company, Inc.
foritself and as agent for certain
participants
By: By:
Title: Title:
Exhibit (4)(xii)
CROSS-COLLATERAL AND CROSS-DEFAULT AGREEMENT
General Electric Capital Corporation for itself and as agent for
certain participants
4 North Park Drive Suite 500
Hunt Valley, Maryland 21030
Gentlemen:
You have entered into or purchased one or more conditional sale
contracts, lease agreements, chattel mortgages, security agreements, notes
and other chooses in action (herein designated "Accounts") arising from
the bona fide sale or lease to us, by various vendors or lessors, of
equipment (herein designated "Collateral") and/or you have made direct
loans to or otherwise extended credit to us evidenced by Accounts creating
security interests in Collateral.
In order to induce you to extend our time of payment on one or more
Accounts and/or to make additional loans to us and/or to purchase
additional Accounts and/or to lease us additional equipment, and in
consideration of you so doing, and for other good and valuable
consideration, the receipt of which we hereby acknowledge, we agree as
follows:
All presently existing and hereafter acquired Collateral in which you
have or shall have a security interest shall secure the payment and
performance of all of our liabilities and obligations to you of every kind
and character, whether joint or several, direct or indirect, absolute or
contingent, due or to become due, and whether under presently existing or
hereafter created Accounts or agreements, or otherwise.
We further agree that your security interest in the property covered
by any Account now held or hereafter acquired by you shall not be
terminated in whole or in part until and unless all indebtedness of every
kind, due or to become due, owed by us to you is fully paid and satisfied
and the terms of every Account have been fully performed by us. It is
further agreed that you are to retain your security interest in all
property covered by all Accounts held or acquired by you, as security for
payment and performance under each such Account, notwithstanding the fact
that one or more of such Accounts may become fully paid.
This instrument is intended to create cross-default and cross-security
between and among all the within described Accounts now owned or hereafter
acquired by you.
An uncured default under any Account or agreement shall be deemed to
be a default under all other Accounts and agreements. A default shall be
as defined in the Interim Loan and Security Agreement dated as of January
29, 1997 and Master Security Agreement dated January 29, 1997. Upon our
default any or all Accounts and agreements shall, at your option, become
immediately due and payable without notice or demand to us or any other
party obligated thereon, and you shall have and may exercise any and all
rights and remedies of a secured party under the Uniform Commercial Code
as enacted in the applicable jurisdiction and as otherwise granted to you
under any Account or other agreement. We hereby waive, to the maximum
extent permitted by law, notices of repossession and sale or other
disposition of collateral, and all other such notices, and in the event
any such notice cannot be waived, we agree that if such notice is mailed
to us postage prepaid at the address shown below at least five (5) days
prior to the exercise by you of any of your rights or remedies, such
notice shall be deemed to be reasonable and shall fully satisfy any
requirement for giving notice.
All rights granted to you hereunder shall be cumulative and not
alternative, shall be in addition to and shall in no manner impair or
affect your rights and remedies under any existing Account, agreement,
statute or rule of law.
This agreement may not be varied or altered nor its provisions waived
except by your duly executed written agreement. This agreement shall
inure to the benefit of your successors and assigns and shall be binding
upon our heirs, administrators, executors, legal representatives,
successors and assigns.
IN WITNESS WHEREOF, this agreement is executed this 29th day of January,
1997.
Plymouth Rubber Company, Inc.
(Name of Proprietorship, Partnership or
Corporation, as applicable)
By:______________________________
(Signature)
Title:___________________________
(Owner, Partner or Officer,
as applicable)
Address:
104 Revere Street
Canton, MA 02021
Exhibit (4)(xii)
INTERIM LOAN AND SECURITY AGREEMENT
This INTERIM LOAN AND SECURITY AGREEMENT (this "Agreement") is
dated as of January 29, 1997 between General Electric Capital
Corporation for itself and as agent for certain participants, a
Massachusetts corporation having an office and place of business
located at 4 North Park Drive, Suite 500, Hunt Valley, MD 21030
("Lender") and Plymouth Rubber Company, Inc. for itself and its
subsidiaries, a corporation organized and existing under the laws of
the Commonwealth of Massachusetts and having its principal place of
business at 104 Revere Street, Canton, MA 02021 (collectively as
the "Borrower").
RECITALS:
WHEREAS Borrower desires to purchase the equipment more
particularly described in Exhibit A hereto (the "Equipment")
pursuant to a purchase order contract, agreement and/or other
document, copies of which have been attached hereto as Exhibit C
(the "Purchase Agreement"), with Kleinewefers Kunststoffanlagen GmbH
("Supplier");
WHEREAS Borrower desires to borrow from Lender, on the terms
and conditions hereinafter provided, the purchase price and
acquisition costs of the Equipment;
WHEREAS. to induce Lender to lend to Borrower the purchase
price and acquisition costs of the Equipment, Borrower desires to
assign to Lender, as security for all of Borrower's obligations
hereunder, all of Borrower's right, title and interest in and to the
Equipment and the Purchase Agreement.
NOW, THEREFORE, in consideration of these premises and of the
covenants contained herein and other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions . All capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them in
the Loan Schedule attached hereto as Exhibit D (the "Loan
Schedule").
Section 2. Agreement to Make Loans . Subject to the terms and
conditions hereof, and provided no Default (as defined in Section
8), or event which with the passing of time or giving of notice or
both would constitute a Default, has occurred and is continuing,
Lender agrees to advance to Borrower, on the date hereof the amount
of four million, fifty thousand ($4,050,000.00) U.S. Dollars, and,
upon five (5) days written notice, from time to time hereafter until
close of business on the Cut-Off Date to make such additional
advances in such amounts as Borrower may request, but limited in all
events in the aggregate to the Maximum Loan Commitment amount stated
in the Loan Schedule. (Each day on which a loan is made is
hereinafter referred to as a "Funding Date", each advance a "Loan
Funding".) Lender shall not be required or obligated to make any
Loan Funding if such Loan Funding, when added to all previous Loan
Fundings, would cause Lender to advance to Borrower any sum in
excess of the Maximum Loan Commitment set forth in the Loan
Schedule. Lender shall have no obligation to make any Loan Funding
to any person or entity other than Borrower, and shall have no
obligation to make any Loan Funding to Borrower if control of
Borrower shall change in any material respect.
Section 3. Promissory Note(s) .
(a) Each Loan Funding shall be evidenced by a separate demand
Promissory Note, at such interest rate as the parties may hereafter
agree, in the form of Exhibit E .
(b) Subject to the terms hereof, upon the earlier of the (i)
Cut-Off Date or (ii) the Funding Date on which the total Loan
Fundings made as of that date total in the aggregate the Maximum
Loan Commitment, Borrower shall (x) pay all unpaid interest due and
owing under any Promissory Note issued pursuant hereto; and (y)
execute a Consolidated Promissory Note ("Consolidated Note") in the
form of Exhibit F in a principal amount equal to the aggregate
amount of all Loan Fundings (Each Demand Promissory Note and the
Consolidated Promissory Note shall hereinafter be referred to,
individually or collectively, as the "Note(s)".)
Section 4. Conditions Precedent to Loan Fundings . The
obligation of Lender to make any Loan Funding to Borrower on the
applicable Funding Date is subject to the performance by Borrower of
all of its agreements and covenants under this Agreement and the
fulfillment of the following conditions:
(a) No Default, or event which with the passing of time or
the giving of notice or both would constitute a Default, has
occurred and is continuing on such Funding Date under this
Agreement, any Note or any other agreement or instrument then
existing between Borrower and Lender.
(b) Lender has received such executed financing statements,
fixture filings and other documents as it may reasonable request to
perfect a first priority security interest in the Collateral, as
that term is defined in Section 5, below (including, without
limitation, any lien, mortgages, landlord or similar waivers).
(c) Borrower has executed and delivered to Lender a Demand
Promissory Note, in the form of Exhibit E, in the principal amount
of the Loan Funding, executed by an authorized officer of the
Borrower.
(d) Lender has received such other documents, certificates
and opinions, including but not limited to opinions of Borrower's
counsel and invoices and receipts in connection with the Equipment,
as it shall reasonably request.
(e) There has not occurred any adverse change in Borrower's
financial situation from the date of execution hereof to the date of
the Loan Funding which materially impairs Borrower's ability to
perform its obligations hereunder, or under any of the Notes, or
materially impairs Lender's interest in the Collateral.
Section 5. Grant of Security Interest .
(a) As security for the punctual payment and performance of
Borrower's obligations under each and all of the Note(s), whether
now existing or hereinafter arising, whether the same be totally
repaid and extinguished and thereafter reincurred or otherwise,
direct or indirect, liquidated or contingent, whether as primary
obligor or as endorser, indemnitor, or otherwise, including any
obligation arising in connection with or resulting from any
amendment to or extension of any Note and, further, as security for
the performance and observance by Borrower of all representations,
warranties and covenants made by it in this Agreement, any amendment
or extension hereof or in any other agreement, document or
certificate delivered in connection with this Agreement or any Note,
Borrower hereby gives, sets over, assigns, transfers and grants to
Lender a security interest in and to (i) the Equipment, (ii) the
Purchase Agreement, (iii) any and all additions, attachments,
accessories, accessions, and all substitutions, replacements or
exchanges to the Equipment, provided, however, that the foregoing
shall not be deemed to include mixing and feeding systems which will
be used in conjunction with the Collateral and (iv) any and all
products and proceeds of any of the foregoing, including insurance
and lease proceeds. (Together (i) - (iv) are hereinafter referred
to, from time to time, individually and collectively as
"Collateral"). Borrower warrants that such security interest shall
be the only security interest granted by Borrower or retained by any
other person or entity other than Lender (excluding only such
security interest of Supplier in the Equipment as Supplier may
retain to secure payment of the purchase price of the Equipment as
specifically provided for in the Purchase Agreement and a
subordinated lien held by LaSalle National Bank (collectively
"Permitted Liens")) and Borrower shall, at its own cost and expense,
promptly take such action as may be necessary to duly discharge all
liens on the Collateral which result from claims against Borrower
not related to the transactions contemplated by this Agreement.
(b) Additions to, reductions or exchanges of, or
substitutions for, the Collateral, payments on account of any
obligation or liability secured hereby, or increases in the
obligations and liabilities secured hereby, or the creation of
additional obligations and liabilities secured hereby, may from time
to time be made or occur without affecting the provisions of this
Agreement or the provisions of any obligation or liability which is
secured hereby.
(c) Borrower hereby appoints Lender its true and lawful
attorney, with full power of substitution, to take such action as
Lender may deem necessary to protect and preserve its security
interest in the Collateral, and Borrower waives its right of notice,
demand, dishonor, marshalling of Collateral, place and time of sale,
advertising, statutory method of foreclosure and all bonds,
securities and rights of redemption.
Section 6. Representations, Warranties and Covenants of Borrower
With Respect to Organization .
Borrower hereby represents, warrants and covenants, as of the date
hereof and at all times during the term hereof:
(a) Borrower has adequate power and capacity to enter into
each Note and this Agreement, and any document or certificate
delivered in connection with this Agreement or any Note. (Together
the Notes, this Agreement and any document or certificate delivered
in connection with this Agreement or any Note, shall constitute the
"Documents".)
(b) The Documents have been duly authorized, executed and
delivered by Borrower and constitute valid, legal and binding
agreements, enforceable in accordance with their terms, except to
the extent that the enforcement of remedies therein provided may be
limited under applicable bankruptcy and insolvency laws.
(c) No approval, consent or withholding of objections is
required from any federal, state, local or municipal governmental
authority or instrumentality with respect to the entry into or
performance by Borrower of the Documents except such as have already
been or will be obtained.
(d) The entry into and performance by Borrower of the
Documents will not: (i) violate any judgment, order, law or
regulation applicable to Borrower or any provision of Borrower's
Certificate of Incorporation or By-Laws or (ii) result in any
unwaived or uncured breach of, constitute a default under or result
in the creation of any lien, charge, security interest or other
encumbrance upon any unit of Equipment pursuant to any indenture,
mortgage, deed of trust, bank loan or credit agreements or other
instrument to which Borrower is a party.
(e) Except as previously disclosed in the Debtors most recent
10Q, there are no suits or proceedings pending in court or before
any regulatory commission, board or other administrative
governmental agency against or affecting Borrower, which will have
a material adverse effect on the ability of Borrower to fulfill its
obligations under the Documents.
(f) The Borrower is, and will remain during the term hereof,
a corporation organized, existing and in good standing, under the
laws of the Commonwealth of MA. The persons executing any of the
Documents are acting with the full authority of the Board of
Directors of Borrower and hold the offices indicated in the
Documents below their signatures which signatures Borrower hereby
acknowledges to be genuine.
Section 7. Representations, Warranties and Covenants of Borrower
With Respect To The Collateral .
Borrower hereby represents, warrants and covenants, as of the date
hereof and at all times during the term hereof:
(a) Borrower is and will remain during the term of this
Agreement the sole and lawful owner and in possession of the
Equipment and is or will become upon delivery and installation and
remain during the term of this Agreement the sole and lawful owner
and in possession of the Collateral; Borrower shall at all time
during the term hereof keep and maintain the Collateral in good
operating condition and repair, in accordance with Manufacturer's
recommendations therefore.
(b) The Collateral is and will remain during the term of this
Agreement free and clear of all liens and encumbrances of every
kind, nature and description except for security interest granted in
this Agreement and the Permitted Liens. Borrower will warrant and
defend the Collateral and Lender against all claims by all persons
adverse to Lender's interest in and to the Collateral. Borrower
shall not sell, rent, lend, mortgage, grant a security interest in
or otherwise encumber or transfer any of the Collateral during the
term hereof except for the Permitted Liens. Borrower shall not
remove the Equipment from the location designated on the Loan
Schedule.
(c) Borrower shall pay promptly when due all taxes, license
fees, assessments and public and private charges levied or assessed
on any of the Collateral or on the use thereof or on this Agreement
or any Note. Provided borrower shall have failed to do so and upon
thirty (30) days notice to borrower, Lender may discharge taxes,
liens, security interests or other encumbrances at any time levied
or placed on the Collateral and may pay for the maintenance,
insurance and preservation of the Collateral or to effect compliance
with the terms of this Agreement provided Lender has given Borrower
reasonable notice and has failed to pay such amounts at its option.
Borrower agrees to reimburse Lender on demand, for any payment made
or any expense incurred by Lender pursuant to the foregoing
authorization.
(d) The Collateral shall at all times during the term hereof
be held at Borrower's risk, and Borrower shall keep it insured
against loss or damage by fire and extended coverage perils, theft,
burglary, and for any or all Collateral which are vehicles, for risk
of loss by collision, and where requested by Lender, against other
risks as required thereby, for the full replacement value thereof,
with companies, in amounts and under policies acceptable to Lender,
with losses payable to Lender and Borrower as their interests may
appear. Borrower shall, if Lender so requires, deliver to Lender
policy or certificates of insurance evidencing such coverage. Each
policy shall provide for coverage to Lender regardless of the breach
by Borrower of any warranty or representation made therein and shall
provide for ten (30) days written notice to Lender of the
cancellation or material modification thereof.
Section 8. Events of Default .
Borrower shall be in Default under this Agreement and under each
Note upon the occurrence of any of the following :
(a) Failure in the payment or performance of any Note, or any
extension or amendment thereto by Borrower;
(b) Failure in the performance of any obligation by Borrower
of any covenant or warranty made by it in this Agreement, any
amendment or extension hereof or in any other agreement, document or
certificate delivered in connection with this Agreement and fails to
cure same within thirty (30) days after written notice thereof;
(c) Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower, in any Note or in
this Agreement, any amendment or extension thereof or hereof or in
any other agreement, document or certificate delivered in connection
with this Agreement or any Note, or furnished to Lender in order to
induce Lender to make any Loan Funding hereunder, proving to be
false in any material respect;
(d) Any of the Collateral being subjected to levy, seizure or
confiscation in any legal proceeding or otherwise;
(e) Any of the Collateral being subjected to attachment which
has not been cured/removed within thirty (30) days;
(f) Any default by Debtor under any other agreement between
Debtor and Secured Party;
(g) The dissolution, termination of existence, insolvency,
or business failure of Borrower;
(h) The appointment of a receiver for all or of any part of the
property of Borrower or any Guarantor, or any assignment for the
benefit of creditors by Borrower or any Guarantor; or the filing of
a petition by Borrower or any Guarantor under any bankruptcy,
insolvency or similar law, or the filing of any such petition
against Borrower or any Guarantor if the same is not dismissed
within thirty (30) days of such filing.
(i) Debtor breaches any covenants under Section 10 hereof.
(j) Debtor is in default beyond any applicable grace or cure
period under the Loan and Security Agreement dated as of June 6,
1996 with LaSalle National Bank as Amended , restated or refinanced
and any replacement facility thereof.
Section 9. Remedies on Default .
Upon the occurrence of an uncured Event of Default under this
Agreement, Lender, at its option, may declare all of the obligations
and liabilities secured by this Agreement, including without
limitation the Notes, to be immediately due and payable, without
demand or notice to Borrower or any guarantor of any obligations of
Borrower. The obligations and liabilities accelerated thereby shall
bear interest at the lower of 18% per annum or the maximum rate
allowed by applicable law. Upon such declaration of default, Lender
shall have all of the rights and remedies of a secured party under
the Uniform Commercial Code, or under any other applicable law,
including without limitation the right to (i) with or without legal
process, to enter any premises where the Collateral may be and take
possession and/or remove said Collateral from said premises, (ii)
sell the Collateral at public or private sale, in whole or in part,
and have the right to bid and purchase at said sale, (iii) lease or
otherwise dispose of all or part of the Collateral, applying
proceeds therefrom to the obligations then in default. Proceeds
from any sale or lease or other disposition shall be applied first
to all costs of repossession, storage, and disposition including
without limitation attorneys', appraisers', and auctioneers' fees,
second to discharge the obligations then in default, third to
discharge any other obligations of Borrower to Lender under this
Agreement or any Note, whether as obligor, endorser, or otherwise,
fourth to expenses incurred in paying or settling liens and claims
against the Collateral, fifth to Borrower, if there exists any
surplus. Any notice which Lender is required to give to Borrower
under the Uniform Commercial Code of the time and place of any
public sale or the time after which any private sale or other
intended disposition of the Collateral is to be made shall be deemed
to constitute reasonable notice if such notice is mailed by
registered or certified mail to the last known address of Borrower
at least five (5) days prior to such action.
Section 10. Additional Covenants.
(a) At all times during the term of the Security Agreement,
Debtor shall maintain: (i) Minimum Tangible Net Worth of a positive
$4,500,000 plus 75% of Net Income until the maturity of all
note(s), (ii) Minimum Working Capital of $3,000,000.00 for fiscal
year 1997 and $3,750,000 for fiscal year 1998 and fiscal year
thereafter until the maturity of all note(s), (iii) Minimum Fixed
Charge Coverage ratio of 1.25x to 1.0x for fiscal year 1997 and
1.50 x to 1.0x for fiscal year 1998 and fiscal year thereafter until
the maturity of all note(s), (iv) a maximum Total liabilities to
Tangible Net Worth of 6.0x to 1.0x until the maturity of all
note(s). "Tangible Net Worth" is defined as Stockholder s Equity
less intangible assets plus any FAS #87 after tax charge for minimum
pension obligations. "EBITDA" is defined as earnings before Interest,
Depreciation, Amortization and Taxes and Unrecognized Net
Obligations at transition. "Fixed Charges" is defined as current
portion of long term debt, plus current portion of capital leases,
plus interest expense, plus preferred dividends. "Fixed Charge
Coverage is defined as EBITDA divided by fixed charges (both
determined on a rolling four quarter average). "Total Debt" includes
all liabilities of the Debtor as defined by GAAP. Intangibles as
used for the determination of Minimum Tangible Net Worth shall be
defined by GAAP exclusive of the deferred tax asset and associated
valuation reserve as defined by FAS 109. Accounting terms used
herein not otherwise defined herein shall be as defined, and all
calculations hereunder shall be made, in accordance with GAAP.
(b) Debtor's chief financial officer shall notify Secured
Party in writing that the Debtor is in compliance with the
requirements of Section 10(a) above, such notification and
certification shall be provided within forty-five (45) days after
the end of each quarter and ninety (90) days after the fiscal year
end, reflecting such information as of the end of the quarter
immediately preceding such quarter.
Section 11. Assignment And Participation.
(a) The Borrower acknowledges that it has been advised that
the Lender is acting hereunder for itself and as agent for certain
third parties (each being herein referred to as a "Participant" and,
collectively, as the "Participants"); that the interest of the
Lender in this Agreement, the other Debt Documents and any other
related instruments and documents may be conveyed to, in whole or in
part, and may be used as security for financing obtained from, one
or more third parties without the consent of the Borrower (the
"Syndication"). The Borrower agrees reasonably to cooperate with
Lender in connection with the Syndication, including the execution
and delivery of such other documents, instruments, notices,
opinions, certificates and acknowledgments as reasonably may be
required by Lender or such Participant; provided, however, in no
event shall the Borrower be required to consent to any change that
would adversely affect any of the economic terms of the transactions
contemplated herein.
(b) This Agreement, Collateral Schedules, any Note and/or any
of the other Debt Documents may be assigned, in whole or in part, by
Lender without notice to Borrower, and Borrower hereby waives any
defense, counterclaim or cross-complaint by Borrower against any
assignee, agreeing that Lender shall be solely responsible therefor.
Borrower agrees that if Borrower receives written notice of an
assignment from Lender, Borrower shall pay all payments and other
amounts due under the assigned Note and Collateral Schedule to such
assignee as instructed by Lender. Borrower further agrees to
confirm in writing receipt of the notice of assignment as may be
reasonably requested by Assignee.
Section 12. Miscellaneous.
(a) Borrower shall, upon request of Lender, furnish to Lender
such further information, execute and deliver to Lender such
documents, including without limitation Uniform Commercial Code
Financing Statements, and do such other acts and things, as Lender
may at any time reasonable request relating to the perfection or
protection of the security interest created by this Agreement or for
the purpose of carrying out the intent of this Agreement.
(b) Lender's rights and remedies hereunder are cumulative.
Neither the failure nor any delay on the part of Lender to exercise
any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof or the
exercise of any other right, power or privilege.
(c) Lender shall not be deemed to have waived any of its
rights hereunder or under any other agreement, instrument or paper
signed by Borrower unless such waiver be in writing and signed by
Lender.
(d) Lender may correct patent errors herein and fill in all
blanks herein or in any document provided in connection herewith or
now or hereafter attached hereto consistent with the agreement of
the parties.
(e) All notices from Lender to Borrower shall be sufficiently
given if sent by overnight delivery, first-class mail, postage
prepaid or delivered in hand to Borrower at Borrower's address shown
above.
(f) Time is of the essence hereof. This Agreement shall be
binding, jointly and severally, upon all parties described as the
"Borrower" and their respective heirs, executors, representatives,
successors and assigns, and shall inure to the benefit of Lender,
its successors and assigns. If any provision of this Agreement is
in conflict with any statute, rule or law applicable hereto, then
such provision shall be deemed null and void to the extent that it
may conflict therewith, but without invalidating any other
provision(s) hereof. This Agreement shall not be changed or
terminated orally, but only by a writing signed by both parties
hereto. This Agreement and the Notes or any other document or
certificate given in connection herewith or therewith may be
assigned without notice to Borrower and Borrower hereby waives any
defense, counterclaim or cross-complaint by Borrower against any
assignee, agreeing that Lender shall be solely responsible therefor.
(g) Borrower hereby grants to Lender the power to sign
Borrower's name and file applications for title, transfers of title,
financing statements, notices of lien and other documents pertaining
to any or all of the Collateral. Borrower shall, if any certificate
of title be required or permitted by law for any of the Collateral,
obtain such certificate showing the lien hereof with respect to the
Collateral and promptly deliver same to Lender.
(h) In the event this Agreement and any Note are placed in
the hands of an attorney for collection of money due or to become
due or to obtain performance of any provision hereof, Borrower
agrees to pay reasonable attorney's fees incurred by Lender.
(i) Borrower agrees to furnish its annual financial
statements ninety (90) days after fiscal year end and such interim
statements forty-five (45) days after quarter end as Lender may
require in form satisfactory to Lender. Any and all financial
statements submitted and to be submitted to Lender have and will
have been prepared on a basis of generally accepted accounting
principles, and are and will be complete and correct and fairly
present Borrower's financial condition as at the date thereof.
Lender may at any reasonable time examine the books and records of
Borrower and make copies thereof.
(j) This Agreement and any and all obligations and
liabilities secured hereby shall be governed by and construed under
the laws of the Commonwealth of Massachusetts, without regard to
choice of law principles thereof, and any provision of this
Agreement or of the obligations and liabilities secured by this
Agreement which may prove to be unenforceable shall not affect the
validity of any other provision of this Agreement or of the said
obligations and liabilities. Borrower acknowledges receipt of a
true copy hereof and waives acceptance hereof.
(k) This Agreement shall continue in full force and effect
for so long as there shall remain in existence obligations or
liabilities from Borrower to Lender hereunder or under the Notes.
(l) BORROWER AND LENDER HEREBY UNCONDITIONALLY WAIVES THEIR
RIGHTS TO A JURY TRIAL OF ANY CAUSE OF ACTION BASED UPON OR ARISING
OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN BORROWER AND LENDER RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN BORROWER
AND LENDER. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court
(including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims).
THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.
In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court. Time is of the essence of this
Agreement. Lender's failure at any time to require strict
performance by Borrower of any of the provisions hereof shall not
waive or diminish Lender's right thereafter to demand strict
compliance therewith. Borrower agrees, upon Lender's request, to
execute any instrument necessary or expedient for filing, recording
or perfecting the interest of Lender. All notices required to be
given hereunder shall be deemed adequately given if sent by
registered or certified mail to the addressee at its address stated
herein, or at such other place as such addressee may have designated
in writing. This Agreement and any, Exhibits or Annexes thereto
constitute the entire agreement of the parties with respect to the
subject matter hereof. NO VARIATION OR MODIFICATION OF THIS
AGREEMENT OR ANY WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS,
SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE PARTIES HERETO.
IN WITNESS WHEREOF, Borrower and Lender, intending to be
legally bound hereby, have caused their duly authorized
representatives to execute this Agreement, as of the day and year
first above-written.
LENDER BORROWER
General Electric Capital Corporation Plymouth Rubber Company, Inc.
for itself and as agent for certain
participants
By:_____________________________ By:_________________________
Title:__________________________ Title:______________________
LIST OF EXHIBITS TO
INTERIM LOAN AND SECURITY AGREEMENT BY AND
BETWEEN General Electric Capital Corporation for itself and as
agent for certain participants
AND Plymouth Rubber Company, Inc.
DATED: January 29, 1997
EXHIBIT A Equipment Description
EXHIBIT B Certificate
EXHIBIT C Purchase Agreement
EXHIBIT D Loan Schedule
EXHIBIT E Form of Demand Promissory Note
EXHIBIT F Form of Consolidated Promissory Note<PAGE>
3901
EXHIBIT A
THIS EXHIBIT A is annexed to and made a part of the Interim
Loan and Security Agreement of even date herewith between General
Electric Capital Corporation for itself and as agent for certain
participants as Lender and Plymouth Rubber Company, Inc. as Borrower
and describes Equipment in which Borrower has granted Lender a
security interest in the following equipment in connection with all
Loan Fundings in connection therewith.
Description Year/Model Serial Number Location
1- Complete High Precision Four Roll Calendar Line dia. 650x2200 mm,
inverted L-type, for the manufacture of soft PVC film and
sheet as described in detail in the technical specification as
per Annex 1 to this Contract and including Detail Engineering
Services as described in Annex 5, para C and D of the Sales
Contract attached hereto and forming a hereof.
Package of spare and wear parts for initial period of operation
Two calendar spare rolls
See EXHIBIT C for a complete copy of the Sales Contract
LENDER: BORROWER:
General Electric Capital Corporation Plymouth Rubber Company, Inc.
for itself and as agent for certain
participants
By: By:
Title: Title:
Date:January 29, 1997 Date: January 29, 1997
EXHIBIT B
SECRETARY'S CERTIFICATE OF INCUMBENCY AND AUTHORITY
I, Deborah A. Kream, do hereby certify that I am the duly elected,
qualified and acting (Assistant) Secretary of Plymouth Rubber
Company, Inc., a corporation; that the persons whose names, titles
and signatures appear below are duly elected (or appointed),
qualified and acting employees of said Corporation and hold on the
date of this Certificate and on the date of execution of the Master
Security Agreement, Interim Loan Agreement, Promissory Notes,
Collateral Schedules and all related documents ("Loan Document") the
positions set opposite their respective names; that the signatures
appearing opposite their respective names are the genuine signatures
of such employees; that each of such employees is duly authorized
for an on behalf of said Corporation to execute and deliver or to
delegate his/her authority to execute and deliver any Loan Documents
between said Corporation and General Electric Capital Corporation
for itself and as agent for certain participants, and all
agreements, documents, and instruments in connection therewith, and
that the execution and delivery of any such Loan Documents, and all
agreements, documents, and instruments in connection therewith for
and on behalf of said Corporation is not prohibited by or in any
manner restricted by the terms of said Corporation's Certificate of
Incorporation, its by-laws, or of any lease agreement, indenture or
contract to which said Corporation is a party or under which it is
bound.
NAME OF OFFICER TITLE OF OFFICER SIGNATURE OF OFFICER
Duane E. Wheeler Vice President-Finance
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal
of said Corporation this 29th day of January , 1997.
By: Deborah A. Kream
(Assistant) Secretary
(Corporate Seal)
EXHIBIT C
SEE ATTACHED PURCHASE AGREEMENT/SALES CONTRACT DATED AS OF DECEMBER
17, 1996 BETWEEN PLYMOUTH RUBBER, INC. AND KLEINEWEFERS
KUNSTSTOFFANLAGEN GmbH
(See Exhibit (10)(vi) to this Form 10-Q incorporated by reference
herein).
EXHIBIT D
THIS EXHIBIT D is annexed to and made a part of the Interim
Loan and Security Agreement of even date herewith between General
Electric Capital Corporation for itself and as agent for certain
participants as Lender and Plymouth Rubber Company, Inc. as
Borrower.
LOAN SCHEDULE
LENDER: BORROWER:
General Electric Capital Corporation Plymouth Rubber Company, Inc.
for itself and as agent for certain 104 Revere Street
participants Canton, MA 02021
4 North Park Drive, Suite 500
Hunt Valley, MD 21030
ADDITIONAL TERMS AND DEFINITIONS:
1. Maximum Loan Commitment: $4,550,000.00.
2. Cut-Off Date: March 31, 1998.
3. Borrower's Down Payment: $N/A.
4. Loan Fundings: (Borrower hereby authorizes Lender to insert
below the date on which any Loan Funding is made and the
amount thereof.)
Funding Date: Loan Funding Amount:
January 31, 1997 $4,050,000.00
5. Location of Equipment and of Additional Equipment (if
different than Borrower's address given above.)
6. Supplier of Equipment (name and address):
LENDER: BORROWER:
General Electric Capital Corporation Plymouth Rubber Company, Inc.
for itself and as agent for
certain participants
By:___________________________________ By:_______________________________
Title:________________________________ Title:____________________________
Date: January 29, 1997 Date: January 29, 1997
EXHIBIT E
TO
INTERIM LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY ______, 1997
DEMAND PROMISSORY NOTE
(Floating Rate)
January 31, 1997
Date
104 Revere Street, Canton, Norfolk County, MA
___________________________________________________________________
(Street Address of Maker) (Town) (County) (State)
FOR VALUE RECEIVED, Plymouth Rubber Company, Inc. (hereinafter
called the "Maker") promises (jointly and severally, if more than
one) to pay upon demand to the order of General Electric Capital
Corporation for itself and as agent for certain participants
(hereinafter called "Payee") at its office located at 4 North Park
Drive, Suite 500, Hunt Valley, MD 21030 or at such other place as
Payee or the holder hereof may designate, the principal sum of Four
Million Fifty Dollars and 00/100 ($4,050,000.00), with interest
thereon at a floating simple interest per annum rate equal to the
sum of (a) two and 60/100 percent (2.60%) per annum (the "Fixed
Rate") plus (b) an interest rate per annum defined as one-month
LIBOR (London Interbank Offered Rates). LIBOR shall mean the latest
monthly average of one month maturity as indicated in the "Money
Rates" section of the Wall Street Journal. as last published as of
the first business day of the preceding month in which an
installment of interest is due. The floating simple interest per
annum rate of interest as determinable herein shall hereafter be
referred to as the "Monthly Rate".
The Maker shall, without demand, pay to Payee on the first day of
each calendar month, until such time as this Note has been paid in
full, all interest accrued hereunder during the preceding calendar
month.
This Note is given in connection with and secured by an Interim
Loan and Security Agreement, dated as of January 29, 1997 between
Payee and the Maker (the "Agreement").
All payments shall be paid in lawful money of the United States.
The acceptance by Payee or the holder hereof of any payment which is
less than payment in full of all amounts due and owing at such time
shall not constitute a waiver of Payee's or the holder's right to
receive payment in full at such time or at any prior or subsequent
time. All payments shall be applied first to interest and then to
principal.
Time is of the essence hereof. If any payment of principal and
interest or any other sum due under this Note or the Agreement is
not paid within ten (10) days after demand or the due date (as the
case may be), the Maker agrees to pay a late charge of five cents
($.05) per dollar on, and in addition to, the amount of each such
payment, but not exceeding any lawful maximum. The Maker agrees
that upon the failure of the Maker to make payment of any amount due
hereunder within ten (10) days after demand or the same becomes due
and payable or upon the happening of any Default under the
Agreement, the entire principal sum remaining unpaid, together with
all accrued interest thereon and any other sum payable under this
Note or the Agreement, shall, at the election of Payee or the holder
hereof, immediately become due and payable, with interest thereon at
18% per annum or the highest rate allowable by law (whichever is
lower) from the date of such accelerated maturity until paid.
The Maker and all sureties, endorsers, guarantors or any others
who may at any time become liable for the payment hereof jointly and
severally consent of, and all substitutions or releases of security
or of any party primarily or secondarily liable on this Note or the
Agreement or any term and provision of either, which may be made,
granted or consented to by Payee or the holder hereof, and agree
that suit may be brought and maintained against any one or more of
them, at the election of Payee or the holder hereof, without joinder
of any other as a party thereto, and that Payee or the holder hereof
shall not be required first to foreclose, proceed against, or
exhaust any security hereof in order to enforce payment of this
Note. The Maker and all sureties, endorsers, guarantors or any
others who may at any time become liable for the payment hereof
jointly and severally hereby waive presentment, protest, notice of
protest, notice of dishonor, and all other notices in connection
herewith, as well as filing of suit (if permitted by law) and
diligence in collecting this Note or enforcing any of the security
hereof, and agree to pay (if permitted by law) all expenses incurred
in collection, including Payees reasonable attorney's fees if placed
with an attorney for the collection hereof, or if prohibited by law,
such lesser sum as may not be so prohibited, and hereby waive all
benefits of valuation, appraisement and exemption laws.
Notwithstanding the foregoing, in no event shall the interest to
be charged hereunder exceed the maximum which Payee is lawfully
entitled to collect from the Maker.
PLYMOUTH RUBBER COMPANY, INC.
By:
(Witness)
EXHIBIT F
PROMISSORY NOTE
________
104 Revere Street, Canton, Norfolk County, MA 02021
FOR VALUE RECEIVED, Plymouth Rubber Company, Inc. ("Maker") promises,
jointly and severally if more than one, to pay to the order of
General Electric Capital Corporation for itself and as agent for
certain participants or any subsequent holder hereof (each, a
"Payee") at its office located at 4 North Park Drive, Suite 500, Hunt
Valley, MD 21030 or at such other place as Payee or the holder
hereof may designate, the principal sum of
Dollars ($ ), with
interest thereon, from the date hereof through and including the
dates of payment, at a fixed interest rate of percent (
%) per annum, to be paid in lawful money of the
United States, in one hundred nineteen (119) consecutive monthly
installments of principal and interest ("Periodic Installment") and
a final installment which shall be in the amount of the total
outstanding principal and interest. Periodic Installments 1-60 will
be equal to ($ ) and Periodic Installments
61-119 will be equal to ($ ). The first
Periodic Installment shall be due and payable on
and the following Periodic Installments and the
final installment shall be due and payable on the same day of each
succeeding month (each, a "Payment Date"). Such installments have
been calculated on the basis of a 360 day year of twelve 30-day
months. Each payment may, at the option of the Payee, be calculated
and applied on an assumption that such payment would be made on its
due date.
The acceptance by Payee of any payment which is less than payment in
full of all amounts due and owing at such time shall not constitute
a waiver of Payee's right to receive payment in full at such time or
at any prior or subsequent time.
The Maker hereby expressly authorizes the Payee to insert the date
value is actually given in the blank space on the face hereof and on
all related documents pertaining hereto.
This Note shall be secured by a security agreement, chattel
mortgage, pledge agreement or like instrument (each of which is
hereinafter called a "Security Agreement.")
Time is of the essence hereof. If any installment or any other sum
due under this Note or any Security Agreement is not received within
ten (10) days after its due date, the Maker agrees to pay, in
addition to the amount of each installment or other sum, a late
payment charge of five percent (1%) of the amount of said
installment or other sum, but not exceeding any lawful maximum. If
(I) Maker fails to make payment of any amount due hereunder within
ten (10) days after the same becomes due and payable; or (ii) Maker
is in uncured or unwaived default under, or fails to perform under
any term or condition contained in any Security Agreement, then the
entire principal sum remaining unpaid, together with all accrued
interest thereon and any other sum payable under this Note or any
Security Agreement, at the election of Payee, shall immediately
become due any payable, with interest thereon at the lesser of
twelve percent (12%) per annum or the highest rate not prohibited by
applicable law from the date of such accelerated maturity until paid
(both before and after any judgment).
The Maker may prepay in full, but not in part, its entire
indebtedness hereunder upon payment of an additional sum as a
premium equal to the following percentages of the original principal
balance for the indicated period:
Prior to the third annual anniversary
date of this Note: three percent (3%)
Thereafter and prior to the fifth annual
anniversary date of this Note: two percent (2%)
Thereafter and prior to the tenth annual
anniversary date of this Note: one percent (1%)
and zero percent (0%) thereafter, plus all other
sums due hereunder or under any Security Agreement.
It is the intention of the parties hereto to comply with the
applicable usury laws; accordingly, it is agreed that,
notwithstanding any provision to the contrary in this Note or any
Security Agreement, in no event shall this Note or any Security
Agreement require the payment or permit the collection of interest
in excess of the maximum amount permitted by applicable law. If any
such excess interest is contracted for, charged or received under
this Note or any Security Agreement, or if all of the principal
balance shall be prepaid, so that under any of such circumstances
the amount of interest contracted for, charged or received under
this note or any Security Agreement on the principal balance shall
exceed the maximum amount of interest permitted by applicable law,
then in such event (a) the provisions of this paragraph shall govern
and control, (b) neither Maker nor any other person or entity now or
hereafter liable for the payment hereof shall be obligated to pay
the amount of such interest to the extent that it is in excess of
the maximum amount of interest permitted by applicable law, any
such excess which may have been collected shall be either applied as
a credit against the then unpaid principal balance or refunded to
Maker, at the option of the Payee, and (d) the effective rate of
interest shall be automatically reduced to the maximum lawful
contract rate allowed under applicable law as now or hereafter
construed by the courts having jurisdiction thereof. It is further
agreed that without limitation of the foregoing, all calculations of
the rate of interest contracted for, charged or received under this
Note or any Security Agreement which are made for the purpose of
determining whether such rate exceeds the maximum lawful contract
rate, shall be made, to the extent permitted by applicable law, by
amortizing, prorating, allocating and spreading in equal parts
during the period of the full stated term of the indebtedness
evidenced hereby, all interest at any time contracted for, charged
or received from Maker or otherwise by Payee in connection with such
indebtedness; provided, however, that if any applicable state law is
amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for the Payee to
receive a greater interest per annum rate than is presently allowed,
the Maker agrees that, on the effective date of such amendment or
preemption, as the case may be, the lawful maximum hereunder shall
be increased to the maximum interest per annum rate allowed by the
amended state law or the law of the United States of America.
The Maker and all sureties, endorsers, guarantors or any others
(each such person, other than the Maker, an "Obligor") who may at any
time become liable for the payment hereof jointly and severally
consent hereby to any and all extensions of time, renewals, waivers
or modifications of, and all substitutions or releases of, security
or of any party primarily or secondarily liable on this Note or any
Security Agreement or any term and provision of either, which may be
made, granted or consented to by Payee, and agree that suit may be
brought and maintained against any one or more of them, at the
election of Payee without joinder of any other as a party thereto,
and that Payee shall not be required first to foreclose, proceed
against, or exhaust any security hereof in order to enforce payment
of this Note. The Maker and each Obligor hereby waives presentment,
demand for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, and all other notices in connection
herewith, as well as filing of suit (if permitted by law) and
diligence in collecting this Note or enforcing any of the security
hereof, and agrees to pay (if permitted by law) all expenses
incurred in collection, including Payee's reasonable attorneys'
fees.
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF,
DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY
DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF
THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION,
THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
This Note and any Security Agreement constitute the entire agreement
of the Maker and Payee with respect to the subject matter hereof and
supersedes all prior understandings, agreements and representations,
express or implied.
No variation or modification of this Note, or any waiver of any of
its provisions or conditions, shall be valid unless in writing and
signed by an authorized representative of Maker and Payee. Any such
waiver, consent, modification or change shall be effective only in
the specific instance and for the specific purpose given.
Any provision in this Note or any Security Agreement which is in
conflict with any statute, law or applicable rule shall be deemed
omitted, modified or altered to conform thereto.
Plymouth Rubber Company, Inc.
By: (L.S.)
(Witness) (Signature)
(Print name) Print name (and title,
if applicable)
(Address) (Federal tax identification
number)
Exhibit (10)(vi)
SALES CONTRACT
Date: December 17th, 1996
The Buyer: Plymouth Rubber Company, Inc.
Canton, Massachusetts 02021-2996
U.S.A.
The Seller: Kleinewefers Kunststoffanlagen GmbH
Warngauer Str. 47
D-81539 Munchen
FEDERAL REPUBLIC OF GERMANY
This Contract is made by and between the Buyer and the Seller;
whereby the Buyer agrees to buy and the Seller agrees to sell the
under-mentioned commodity according to the conditions stipulated
as below:
1. Scope of Supplies & Services
1.1 Project Management and Basic Engineering Services as per
Annex 5, paras A and B
1.2 1 (one) Complete High Precision Four Roll Calender Line
dia. 650 x 2200 mm. inverted L-type, for the manufacture
of soft PVC film and sheet as described in detail in the
technical specification as per Annex 1 to this Contract
and including Detail Engineering Services as described in
Annex 5, para C and D of this contract.
1.3 Package of spare and wear parts for initial period of
operation
1.4 Two calender spare rolls
2. Prices
2.1 Total price for scope of supply
according to technical specification Confidential
portions omitted
2.2 Allocation for necessary spare and wear and filed separa-
parts tely along with
Confidential
2.3 Calender spare rolls Treatment Request
with the
2.4 Total Contract Price for delivery FOB Commission
Northeast port as per Incoterms 1990
3. Packing and Shipping Marks
3.1 Packing
By strong solid seaworthy wooden case suitable for long
distance ocean shipment or as far as possible in
container.
3.2 Shipping Marks
The Seller shall mark on each package with fadeless paint
the package number, gross weight, net weight, measurement
and wordings: "KEEP AWAY FROM MOISTURE", "HANDLE WITH CARE",
"THIS SIDE UP", etc.
4. Time of Delivery
4.1 The commodities as per Article 1 will be ready for
delivery FOB Northsea port within 10 months of the date of
effectiveness of this contract.
FOB shipment will be completed when last container has
been shipped. Spare parts and minor non-essential items
Sales Contract
(2)
which Will not hinder or delay progress of work can be
shipped later.
4.2 Ports of shipment are Hamburg or Bremen.
4.3 Part shipments are allowed.
5. Insurance
5.1 Insurance expenses will be covered by the Buyer.
5.2 The transport insurance will be valid for the transport CIF
US port and to warehouse.
6. Terms of Payment
6.1.1 15% of the total contract price as per Article 2.4 will be
paid to the Seller as advance payment within thirty (30)
days after signing of this Contract.
6.1.2 85% of the total contract price as per Article 2.4 will be
paid to the Seller out of an irrevocable Letter of Credit to
be opened at the expense of the Buyer with a first class
bank and to be advised through and confirmed by the Dresdner
Bank AG, D-47707 Krefeld, FRG.
6.1.3 The Letter of Credit mentioned above is to be opened with
forty-five (45) days after signing of this Contract.
The validity of the Letter of Credit should cover a period
of at least two (2) months after the appointed acceptance of
the plant as per Article 6.2.3.
6.2 The Letter of Credit mentioned above will be payable to the
Seller as follows:
6.2.1 75% of the total contract price pro rata delivery against
presentation of the relevant shipping documents consisting
of:
- commercial invoices
- packing lists
- certificate of origin
- full set of bills of lading Or
- instead of bills of lading warehouse receipt in case
shipment cannot be effected for reasons not attributable
to the Seller
6.2.2 10% of the total contract price against presentation of a
certificate signed by the Seller and the Buyer confirming
that the calender line was taken over by the Buyer after
successful trial run of the calender line.
6.2.3 The instalment of 10% of the total contract price will be
due for payment to the Seller at the latest six (6) months
after the date of the bill of lading or the date of the
relevant warehouse receipt as per Article 6.2.1 in case the
Seller confirms in writing that the trial runs could not be
completed successfully for reasons not attributable to the
Seller.
Sales Contract
(3)
7. Technical Service
7.1 After delivery of the equipment as per Article 1 and receipt
of the Buyer's information, the Seller shall dispatch
engineer(s) to Buyer's factory for guiding machine
installation, trial run and production. Any expenses
incurred from these services shall be borne by the Buyer.
7.2 The required number of supervisors, their qualification as
well as the daily rates, allowances and other conditions
related to their assignment are stipulated in Annex 2 to
this Contract.
7.3 Payment shall be at actual cost against monthly invoices
which are due within thirty (30) days after date of issue.
8 Seller's Warranty
8.1 The Seller warrants that the commodity hereof is made of the
best materials with first class workmanship, brand new and
unused, and complies in all respects with the quality and
specifications stipulated in the contract and any defects or
other faults that have been detected or occurred within the
warranty period shall be the responsibility of the Seller at
his own cost.
8.2 The warranty period will be eighteen (18) months counting
from the date of FOB shipment/date of warehouse receipt or
twelve (12) months from the date of the protocol as per
Article 12 whichever will be earlier.
8.3 As a pecuniary security against the Seller's due performance
of their contractual obligations during the warranty period
the Seller will furnish a bank guarantee in the value of 5%
of the total contract price.
This bank guarantee will be furnished on the date of signing
the acceptance certificate as per Article 12.3 and will be
valid for twelve (12) months. The bank guarantee will be
issued by Dresdner Bank AG, D-47707 Krefeld, FRG.
8.4 Seller will not be held liable in case of improper or
inadequate treatment or handling of the equipment by the
Buyer.
8.5 Wear and tear parts are excluded from warranty.
9. Force Majeure
9.1 The Seller shall not be held responsible for any delay or
non-delivery of the goods due to force majeure which might
occur. The Seller shall advise the Buyer immediately of the
occurrence mentioned above within fourteen (14) days
thereafter, the Seller shall send by airmail to the Buyer
for their acceptance a certificate of the accident issued by
the competent government authority where the accident
occurred as evidence thereof, under such circumstances, the
Seller, however, is still under the obligation to take all
necessary measures t hasten the delivery of the goods. In
case the accident lasts for more than sixteen (16) weeks,
the Buyer shall have the right to cancel the contract.
Sales Contract
(4)
10. Delay of Delivery
10.1 If due to the responsibility of the Seller the equipment has
not been delivered at the relevant dates according to
Article 4.1, the Seller shall be obliged to pay the Buyer
penalty of 0.5% of the contract price as per Article 2.4 for
every full week of delay, thereby excluding any further
demands. The total amount of penalty shall not exceed 5% of
the contract price.
11. Governing Law and Arbitration
This agreement shall be governed by and construed in
accordance with the laws of the State Massachusetts.
Place of jurisdiction is Norfolk - County / U.S.A.
Arbitration
Any disputes arising hereunder with respect to the
fulfilment or interpretation of any terms or conditions
hereof shall be settled by an amicable effort of the
parties.
Either party may request that any such dispute which is not
amicable settled by such efforts of the parties shall be
submitted to voluntary binding arbitration according to the
Commercial Arbitration Rules of the American Arbitration
Association (AAA). Each party shall appoint one arbitrator
and the third arbitrator, who shall act as Chairman, shall
be appointed by the American Arbitration Association.
The arbitration court shall also decide on the liability for
costs including the reimbursement of reasonable attorney
fees.
The arbitration shall be performed in the English language,
unless otherwise agreed to by the parties.
12. Terms and conditions to be met to issue the certificate of
acceptance
12.1 After completion of the erection of the equipment under the
supervision of the Seller's personnel as per Article 7.1
trial runs will be carried out in the presence of Seller's
personnel to prove the capability of the equipment
stipulated in the technical specification and in accordance
with Annex 4.
12.2 In case during the trial runs the capability of the
equipment was not proven due to mechanical reasons the
Seller is responsible for, the Seller has the right to alter
the equipment accordingly and repeat the trial runs.
12.3 After completion of successful trial runs a certificate of
acceptance will be issued to this effect and will be signed
by both parties.
12.4 In case a successful trial run cannot be carried out six (6)
months after date of bill of lading or warehouse receipt for
reasons the Seller is not responsible for, the certificate
of acceptance is to be considered issued upon expiry of the
six (6) months mentioned above.
Sales Contract
(5)
13. Limitation of Seller's's Liability
13.1 Buyer and Seller will not be liable for indirect or
consequential losses or damages such as loss of profit, loss
of production, etc.
14. Scope of Spare and Wear Parts
14.1 Till end of January 1997 the Seller shall submit a list of
recommended spare and wear parts with itemized prices.
14.2 Out of this list, Buyer and Seller shall jointly select the
spare and wear parts for the initial period of operation
(1 1/2 to 2 years) up to the allocated amount as per Art. 2.2.
14.3 These spare and wear parts shall be shipped together with
commodities as per Art. 1.2.
15. General Conditions
15.1 Unless otherwise agreed in this Contract, Seller's General
Conditions of Supply attached to this Contract as Annex 3
shall apply.
16. Coming into Force on Contract
16.1 This contract shall come into force at the date of Seller's
receipt of the down payment as per Article 6.1.1 and
furnishing the L/C as per Article 6.1.2.
17. Secrecy
17.1 Neither party has any right, without the permission of the
other party, to use or disclose any secrecy unless this is
essential for the first party to be able to fulfil his
obligations under the terms of this Agreement or to be able
to operate or maintain the Plant.
17.2 Each party shall take reasonable steps to prevent Secrecy
from becoming known to unauthorised persons or otherwise
being used without permission by empolyees, consultants,
subcontractors or by other persons.
18. Annexes to the Contract
18.1 The following Annexes form integrated part of this Contract:
1 - Technical Specification
2 - Conditions for Supervisory Personnel
3 - General Conditions of Supply
4 - Conditions to be fulfilled for taking over
5 - Scope of Engineering Services
6 - Limitation of Scope of Supply/Exclusions
7 - Time Schedule
8 - Profile monitor/data viewing screen MC 68 K02.K1
for KLEINEWEFERS KUNSTSTOFF- for PLYMOUTH RUBBER COMPANY,INC.
ANLAGEN GMBH
ANNEX 1
TECHNICAL SPECIFICATION
Confidential portions omitted and filed separately along with
Confidential Treatment Request with the Commission.
ANNEX 2
Conditions for Supervisory Personnel
Confidential portions omitted and filed separately along with
Confidential Treatment Request with the Commission.
Remainder of text also filed with Confidential Treatment
Request.
ANNEX 3
General Conditions of Supply
The full text of this Exhibit is extensive and filed in hard
copy separately with the Commission in the Company's
Confidential Treatment Request.
ANNEX 4
Conditions to be Fulfilled for Taking Over
Confidential portions omitted and filed separately along with
Confidential Treatment Request with the Commission.
ANNEX 5
Scope of Engineering Services
The full text of this Exhibit is extensive and filed in hard
copy separately with the Commission in the Company's
Confidential Treatment Request.
ANNEX 6
Limitation of Scope of Supply/Exclusions
Confidential portions omitted and filed separately along with
Confidential Treatment Request with the Commission.
ANNEX 7
Time Schedule
The full text of this Exhibit is extensive and filed in hard
copy separately with the Commission in the Company's
Confidential Treatment Request.
ANNEX 8
Profile monitor/data viewing screen MC 68 K02.K1
Confidential portions omitted and filed separately along with
Confidential Treatment Request with the Commission.
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