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 March 3, 2000
Commission File Number 1-5197
Plymouth Rubber Company, Inc.
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(Exact name of registrant as specified in its charter)
Massachusetts 04-1733970
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
104 Revere Street, Massachusetts 02021
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(Address of principal executive offices) (Zip Code)
(781) 828-0220
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Registrant's telephone number, including area code
Not Applicable
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(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 receding 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 - 1,236,303
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements: Page No.
Condensed Consolidated Statement of Operations and
Retained Earnings (Deficit). . . . . . . . . . . 2
Condensed Consolidated Statement of Comprehensive
Income . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Balance Sheet . . . . . . . . . . . 4
Condensed Consolidated Statement of Cash Flows . . . . . . 5
Notes To Condensed Consolidated Financial Statements . . . 6-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . 11-14
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . 15
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND RETAINED EARNINGS (DEFICIT)
(In Thousands Except Share and Per Share Amounts)
(Unaudited)
First Quarter Ended
------------------------
March 3, Feb. 26,
2000 1999
-------- --------
Revenues:
Net sales. . . . . . . . . . . . . . . $ 16,973 $ 16,406
Cost and expenses:
Cost of products sold. . . . . . . . . 13,562 12,051
Selling, general and administrative. . 3,410 3,284
-------- --------
16,972 15,335
-------- --------
Operating income . . . . . . . . . . . . 1 1,071
Interest expense. . . . . . . . . . . . . (540) (485)
Other income (expense). . . . . . . . . . (12) 13
-------- --------
Income (loss) before taxes. . . . . . . . (551) 599
(Provision) benefit for income taxes. . . 232 (240)
-------- --------
Net income (loss) . . . . . . . . . . . . (319) 359
Retained earnings (deficit) at beginning
of period . . . . . . . . . . . . . . 2,678 (444)
-------- --------
Retained earnings (deficit) at end
of period. . . . . . . . . . . . . . . $ 2,359 $ (85)
======== ========
Per Share Data:
Basic Earnings Per Share:
Net income (loss). . . . . . . . . . $ (.16) $ .17
======== ========
Weighted average number of
shares outstanding . . . . . . . 2,048,456 2,081,333
========== ==========
Diluted Earnings Per Share:
Net income (loss). . . . . . . . . . $ (.16) $ .16
======== ========
Weighted average number of
shares outstanding . . . . . . . 2,048,456 2,207,278
========== ==========
See Accompanying Notes To Condensed Consolidated Financial Statements
2
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHRESIVE INCOME
(In Thousands) (Unaudited)
First Quarter Ended
------------------------
March 3, Feb. 26,
2000 1999
-------- --------
Net income (loss) . . . . . . . . . . . . $ (319) $ 359
Other comprehensive income, net of tax:
Foreign currency translation adjustment (34) (35)
-------- --------
Other comprehensive income . . . . . . . (34) (35)
-------- --------
Comprehensive income (loss) . . . . . . . $ (353) $ 324
======== ========
See Accompanying Notes To Condensed Consolidated Financial Statements
3
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands)
March 3, Dec. 3,
2000 1999
-------- --------
(Unaudited)
Assets
Current Assets:
Cash . . . . . . . . . . . . . . . . . $ 2 $ --
Accounts receivable. . . . . . . . . . 10,191 12,419
Allowance for doubtful accounts . . . (296) (369)
Inventories:
Raw materials. . . . . . . . . . . . 4,694 4,481
Work in process . . . . . . . . . . 2,698 2,332
Finished goods . . . . . . . . . . . 8,059 7,661
-------- --------
15,451 14,474
-------- --------
Deferred tax assets, net . . . . . . . 1,580 1,580
Prepaid expenses and
other current assets . . . . . . . 890 913
-------- --------
Total current assets . . . . . . . . 27,818 29,017
-------- --------
Plant Assets:
Plant assets . . . . . . . . . . . . . 44,763 43,871
Less: Accumulated depreciation . . . . 20,260 19,678
-------- --------
Total plant assets, net . . . . . . . 24,503 24,193
-------- --------
Other Assets:
Deferred tax assets, net . . . . . . . 682 678
Other long-term assets . . . . . . . . 987 1,027
-------- --------
Total other assets. . . . . . . . . . . 1,669 1,705
-------- --------
$ 53,990 $ 54,915
======== ========
Liabilities and Stockholders' Equity
Current Liabilities:
Revolving line of credit . . . . . . . $ 10,493 $ 11,233
Trade accounts payable . . . . . . . . 8,154 6,827
Accrued expenses . . . . . . . . . . 3,762 4,378
Current portion of long-term borrowings 3,267 3,260
-------- --------
Total current liabilities. . . . . . . 25,676 25,698
-------- --------
Long-Term Liabilities:
Borrowings . . . . . . . . . . . . . . 10,388 10,796
Pension obligation . . . . . . . . . . 2,499 2,546
Other. . . . . . . . . . . . . . . . . 2,469 2,538
-------- --------
Total long-term liabilities. . . . . . 15,356 15,880
-------- --------
Stockholders' Equity:
Preferred stock . . . . . . . . . . . -- --
Class A voting common stock. . . . . . 810 810
Class B non-voting common stock . . . 1,280 1,280
Paid in capital. . . . . . . . . . . . 9,083 9,083
Retained earnings. . . . . . . . . . . 2,359 2,678
Accumulated other comprehensive. . . . (213) (179)
Deferred compensation. . . . . . . . . (66) (76)
-------- --------
13,253 13,596
Less: Treasury stock at cost . . . . . (295) (259)
-------- --------
Total stockholders' equity . . . . . . 12,958 13,337
-------- --------
$ 53,990 $ 54,915
======== ========
See Accompanying Notes To Condensed Consolidated Financial Statements
4
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands) (Unaudited)
First Quarter Ended
------------------------
March 3, Feb. 26,
2000 1999
-------- --------
Cash flows relating to operating activities:
Net income (loss) . . . . . . . . . . $ (319) $ 359
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization . . 702 607
Amortization of deferred compensation 10 10
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . 2,091 1,611
Inventory . . . . . . . . . . . . . . . (1,011) (2,364)
Prepaid expenses. . . . . . . . . . . . 22 150
Other assets . . . . . . . . . . . . . (7) (5)
Accounts payable . . . . . . . . . . . 1,361 (532)
Accrued expenses . . . . . . . . . . . (604) 277
Pension obligation. . . . . . . . . . . (47) 23
Other liabilities . . . . . . . . . . . (69) (33)
-------- --------
Net cash provided by operating activities 2,129 103
-------- --------
Cash flows relating to investing activities:
Capital expenditures . . . . . . . . . (1,051) (1,267)
Sale/leaseback of plant assets. . . . . -- 93
-------- --------
Net cash used in investing activities (1,051) (1,174)
-------- --------
Cash flows relating to financing activities:
Net decrease in revolving line of credit (707) (87)
Proceeds from term debt . . . . . . . . 550 1,750
Payments of term debt . . . . . . . . . (732) (435)
Payments on capital leases. . . . . . . (160) (126)
Payments on treasury stock purchase . . (36) (36)
-------- --------
Net cash (used in) provided by
financing activities (1,085) 1,066
-------- --------
Effect of exchange rates on cash . . . . . 9 --
-------- --------
Net change in cash . . . . . . . . . . . . 2 (5)
Cash at the beginning of the period. . . . -- 54
-------- --------
Cash at the end of the period. . . . . . . $ 2 $ 49
======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid for interest . . . . . . . . . . $ 543 $ 487
======== ========
Cash paid for income taxes . . . . . . . . $ 72 $ 58
======== ========
See Accompanying Notes To Condensed Consolidated Financial Statements
5
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The Company, in its opinion, has included all adjustments
(consisting of normal recurring adjustments) 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 December
3, 1999, November 27, 1998, and November 28, 1997, included in
the Company's 1999 Annual Report to the Securities and Exchange
Commission on Form 10-K.
(2) Claims under CERCLA
The Company has been named as a Potentially Responsible Party
("PRP") by the United States Environmental Protection Agency
("EPA") in two ongoing claims under the Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"). These CERCLA claims involve attempts by the EPA to
recover the costs associated with the cleanup of two Superfund
Sites in Southington, Connecticut--the Solvent Recovery Service
of New England Superfund Site ("SRS Site") and the Old
Southington Landfill Superfund Site ("OSL Site"). SRS was an
independent and licensed solvent recycler/disposal company. The
EPA asserts that SRS, after receiving and processing various
hazardous substances from PRPs, shipped some resultant sludges
and wastewater from the SRS Site to the OSL Site.
The Company received a PRP notification regarding the SRS Site in
June, 1992. The EPA originally attributed a 1.74% share of the
aggregate waste volume at the SRS Site to the Company. Remedial
action is ongoing at the Site, and the Company is a participant
in the performing PRP group. Largely because of "orphaned
shares," the Company recently has been contributing approximately
2.05% toward the performing PRP group's expenses. Based upon the
investigations and remedial actions conducted at the Site to
date, including a phytoremediation study, it is presently
estimated that the total cost of the cleanup at the Site will
range from approximately $25 million to $50 million. In the
accompanying consolidated financial statements as of March 3,
2000, management has accrued $484,000 as a reserve in this matter
(which is net of approximately $242,000 in payments made to date
by the Company).
The Company received a PRP notification regarding the OSL Site in
January, 1994. In addition to numerous "SRS transshipper" PRPs
(such as the Company), EPA has named a number of other PRPs who
allegedly shipped waste materials directly to the OSL Site.
Based on EPA's asserted volume of shipments to SRS, EPA
originally attributed 4.89% of the "SRS transshipper" PRPs'
waste volume at the OSL Site to the Company, which is a fraction
of the undetermined total waste volume at the Site. A Record of
Decision ("ROD") was issued in September, 1994 for the first
phase of the cleanup and, in December, 1997, following mediation,
the Company contributed $140,180 (toward a total contribution by
the "SRS transshipper" PRPs of approximately $2.5 million) in
full settlement of the first phase. At present, neither the
remedy for the second phase of the cleanup (groundwater) nor the
allocation of the costs thereof among the PRP's has been
determined. It has been estimated that the total costs of the
second phase may range from $10 million to $50 million.
Management has accrued $337,000 in the accompanying consolidated
financial statements as a reserve against the Company's potential
future liability in this matter.
6
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
Based on all available information as well as its prior
experience, management believes that its accruals in these two
matters are reasonable. However, in each case the reserved
amount is subject to adjustment for future developments that may
arise from one or more of the following -- the long range
nature of the case, legislative changes, insurance coverage, the
joint and several liability provisions of CERCLA, the
uncertainties associated with the ultimate groundwater remedy
selected, and the Company's ability to successfully negotiate an
outcome similar to its previous experience in these matters.
Claims under Massachusetts General Laws, Chapter 21E
While in the process of eliminating the use of underground
storage tanks at the Company's facility in Canton, Massachusetts,
the Company arranged for the testing of the areas adjacent to the
tanks in question--a set of five tanks in 1994 and a set of three
tanks in 1997. The tests indicated that some localized soil
contamination had occurred. The Company duly reported these
findings regarding each location to the Massachusetts Department
of Environmental Protection ("DEP") in 1994 and 1997
respectively, and DEP issued Notices of Responsibility under
Massachusetts General Laws Chapter 21E to the Company for each
location (RTN No. 3-11520 and RTN No. 3-15347, respectively).
The Company has retained an independent Licensed Site
Professional ("LSP") to perform assessment and remediation work
at the two locations. With regard to the first matter (involving
the set of five tanks), the LSP has determined that the soil
contamination appears to be confined to a small area and does not
pose an environmental risk to surrounding property or community.
With regard to the second matter (involving the set of three
tanks), a limited amount of solvent has been found in the soil in
the vicinity of the tanks; however, additional sampling is
required. It presently is estimated that the combined future
costs to complete the assessment and remediation actions at the
two locations will total approximately $219,000, and that amount
has been accrued in the accompanying financial statements.
In January, 1997 the Company received a Chapter 21E Notice of
Responsibility from DEP concerning two sites located in
Dartmouth, Massachusetts (RTN No. 4-0234) and Freetown,
Massachusetts (RTN No. 4-0086), respectively. According to DEP,
drums containing oil and/or hazardous materials were discovered
at the two sites in 1979, which led to some cleanup actions by
the DEP. DEP contends that an independent disposal firm
allegedly hired by the Company and other PRPs, H & M Drum
Company, was responsible for disposing of drums at the two sites.
To date, the DEP has issued Notices of Responsibility to
approximately 100 PRPs. A group of PRPs, including the Company,
has retained an LSP to conduct subsurface investigations at both
sites. The LSP recently completed Limited Subsurface
Investigations at both sites. At the Freetown site, no
reportable contamination was found either in soil or groundwater,
and the LSP has recommended that DEP close the site out. At the
Dartmouth site, no reportable contamination was found in soil,
while reportable, but lower than historical levels of
contaminants were found in groundwater. The LSP's investigation
at the Dartmouth site further indicates that there may be an
upgradient off-site source of contaminants that is impacting the
site, and recommends further investigation into that possibility.
While the results of the Limited Subsurface Investigations at
these sites are relatively encouraging, until additional data is
gathered, it is not possible to reasonably estimate the costs of
any further investigation or cleanup that may be required at
either or both sites, or the Company's potential share of
liability or responsibility therefor. Accordingly, no reserve
has been accrued in the accompanying financial statements with
respect to these two sites.
7
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
(3) The following table reflects the factors used in computing
earnings per share and the effect on income and the weighted
average number of shares of potentially dilutive common stock.
First Quarter Ended March 3, 2000
---------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
Basic EPS
Income (loss) available to
common stockholders $ (319,000) 2,048,456 $ (.16)
=======
Effect of Dilutive
Security (A) options -- --
--------- ---------
Diluted EPS
Income (loss) available to
Common stockholders and
assumed conversions $ (319,000) 2,048,456 $ (.16)
========= ========= ======
First Quarter Ended February 26, 1999
---------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
Basic EPS
Income available to common
stockholders $ 359,000 2,081,333 $ .17
======
Effect of Dilutive
Security (A) options -- 125,945
--------- ---------
Diluted EPS
Income available to common
stockholders and assumed
conversions $ 359,000 2,207,278 $ .16
========= ========= ======
(A) Options for 205,725 and 195,900 shares of common stock were
outstanding at March 3, 2000 and February 29, 1999,respectively,
but were not included in computing diluted earnings per share in
each of the respective periods because their effects were anti-dilutive.
In addition, options for 287,939 shares of common stock were
outstanding at March 3, 2000, but were not included in computing
diluted earnings per share because of the loss.
8
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
(4) On December 30, 1999 the Company entered into a new loan agreement
in the amount of $550,000 with an equipment lender to finance the
acquisition of certain equipment. The new loan is secured by a
first interest in the equipment.
(5) In June, 1998, the Financial Accounting Standards Board issued
FAS 133 - Accounting for Derivative Instruments and Hedging
Activities. FAS 133 will require the Company to record
derivative instruments, such as foreign currency hedges, on the
Consolidated Balance Sheet as assets or liabilities, measured at
fair value. Currently, the Company treats such instruments as
off-balance-sheet items. Gains or losses resulting from changes
in the values of those derivatives would be accounted for
depending on the specific use of each derivative instrument and
whether it qualifies for hedge accounting treatment as stated
in the standard. In June, 1999, the Financial Accounting
Standards Board issued FAS 137 - Accounting for Derivative and
Similar Financial Instruments and for Hedging Activities -
Deferral of the Effective Date of FAS 133. FAS 137 changed the
effective date for implementation of FAS 133. FAS 133 will be
effective for the Company on December 2, 2000, the beginning of
fiscal year 2001. The Company currently does not expect the
impact of adopting FAS 133 to be material.
(6) Plymouth Rubber Company, Inc. and its subsidiaries primarily
operate through the following two business segments: Plymouth
Tapes and Brite-Line Technologies. Management has determined
these to be Plymouth Rubber Company's business segments, based
upon its process of reviewing and assessing Company performance,
and allocating resources. Plymouth Tapes manufactures plastic and
rubber products, including automotive, electrical, and industrial
tapes. Brite-Line Technologies manufactures and supplies rubber
and plastic highway marking and safety products.
Management evaluates the performance of its segments and
allocates resources to them primarily based upon sales and
operating income. Intersegment sales are at cost and are
eliminated in consolidation. In addition, certain of the
selling, general and administrative expenses recorded in Plymouth
Tapes could be considered as incurred for the benefit of Brite-
Line, but are currently not allocated to that segment. These
expenses include certain management, accounting, personnel and
sales services, and a limited amount of travel, insurance,
directors fees and other expenses.
The table below presents information related to Plymouth Rubber's
business segments for the three months ended March 3, 2000 and
February 26, 1999.
First Quarter Ended
------------------------
March. 3, Feb. 26,
2000 1999
-------- --------
Segment sales to unaffiliated customers:
Plymouth Tapes . . . . . . . . . . . $ 16,328 $ 15,717
Brite-Line Technologies . . . . . . . 645 689
-------- --------
Consolidated net sales. . . . . . . . $ 16,973 $ 16,406
======== ========
Segment income:
Plymouth Tapes. . . . . . . . . . . . $ 340 $ 1,542
Brite-Line Technologies . . . . . . . (339) (471)
-------- --------
Consolidated operating income 1 1,071
Interest expense. . . . . . . . . . . (540) (485)
Other, net. . . . . . . . . . . . . . (12) 13
-------- --------
Consolidated income
(loss) before tax . . . . . . . . $ (551) $ 599
======== ========
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Sales increased 3% to $16,973,000 from $16,406,000 last year. Sales at
Plymouth Tapes increased 4% to $16,328,000 from $15,717,000 last year.
Sales in most markets increased modestly, except for the automotive
market, which was approximately level with last year. At Brite-Line
Technologies, sales decreased 6% to $645,000 from $689,000 last year,
and reflected normal seasonal slowness.
Gross margin decreased to 20.1% from 26.5% last year. The major
contributor was Plymouth Tapes, as gross margin decreased to 20.3% from
28.6% last year. There were two major factors contributing to the
decrease. First, rising raw material purchase prices, primarily for
PVC resins, increased product costs when compared to last year.
Second, manufacturing and development costs were high for certain
automotive products. Offsetting this, gross margin at Brite-Line
Technologies increased to 15.3% from negative 19.3% last year, due to
improved product mix and higher manufacturing absorption.
Selling, general and administrative expenses, as a percentage of sales,
was 20.1% and approximately level with last year at 20.0%. At Plymouth
Tapes, selling, general and administrative expenses, as a percentage of
sales, decreased to 18.2% from 18.7% last year. The major factor was a
decrease in professional fees of $128,000. At Brite-Line Technologies,
selling, general and administrative expenses, as a percentage of sales,
increased to 67.9% of sales, from 49.1% last year. The major
contributor was a $109,000 increase in professional fees, primarily for
patent litigation.
Interest expense increased $55,000 from last year, because of higher
loan balances on the revolving line of credit, offset in part by lower
balances for term debt. Although prime-based interest rates on the
revolving line of credit were higher in 2000, they were offset by a
favorable shift in loan balances to Libor-based interest rates.
The above factors generated a pre-tax loss of $551,000, as compared to
a profit of $599,000 last year. The net loss was $319,000 compared to
a $359,000 profit last year.
Liquidity
Cash generated from operating activities was $2.1 million in the first
quarter of 2000, as compared to $0.1 million in the first quarter of
1999. The major factors contributing to cash from operating activities
include a reduction in accounts receivable of $2.0 million, an increase
in accounts payable of $1.4 million, and depreciation and amortization
of $0.7 million, offset in part by an increase in inventory of $1.0
million (1) to support higher levels of activity at Brite-Line, and (2)
reflecting higher raw material product costs, a decrease in accrued
expenses of $0.6 million, a net loss of $0.3 million, and a decrease in
other liabilities of $0.1 million. This operating cash flow and cash
provided through additional term borrowings totaling $0.5 million, were
used to finance capital expenditures of $1.0 million, pay off or reduce
term debt and capital leases of $0.9 million, and reduce the revolving
line of credit balance by $0.7 million.
As of March 3, 2000, the Company had approximately $1.9 million of
unused borrowing capacity under its $18 million line of credit with
its primary lender, after consideration of collateral limitations and
the letter of credit related to a guarantee of 80 million pesetas
(approximately $0.6 million) on a term loan agreement with a Spanish
bank syndicate.
In the opinion of management, anticipated cash flow from operations,
unused capacity under existing borrowing agreements, and additional
funds generated from a capital expenditure line of credit and/or the
sale/leaseback of capital equipment, will provide sufficient funds to
meet expected needs during fiscal 2000, including necessary working
capital expansion to support anticipated revenue growth and investments
in capital equipment, and to service its indebtedness. Although
management expects to be able to accomplish its plans, there is no
assurance that it will be able to do so. Failure to accomplish theses
plans could have an adverse impact on the Company's liquidity and
financial position.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
(Continued)
Year 2000
Computers, software and other equipment utilizing microprocessors that
use only two digits to identify a year in a data field may be unable to
process accurately certain date-based information at or after the year
2000. This is commonly referred to as the "Year 2000 issue." The
Company assembled a task force to oversee the entire Year 2000 project,
which included the Company's domestic and foreign tape business and
Brite-Line, for both information technology ("IT") and non-IT systems.
The Company believed that its greatest potential risks were associated
with its IT systems and non-IT systems embedded in its operations and
infrastructure. The task force identified five phases of the Year 2000
compliance process for the Company's IT and non-IT systems. These
phases were 1) issue identification, 2) assessment, 3) development of
remediation plans, 4) implementation and testing and 5) contingency
planning. These five phases were completed.
With respect to IT systems, the Company's strategy was to upgrade its
mission critical main information systems hardware and software and
other support software, and to replace a group of manufacturing support
software. Regarding the upgrade of the main information systems
hardware and software and other support software, the implementation
and testing phase was 100% complete as of April, 1999. Regarding the
replacement of a group of manufacturing support software, the
implementation and testing phase was 100% complete as of October 1999.
With respect to non-IT systems, the implementation phase was 100%
complete as of December 1999. Large and critical suppliers were
selected for compliance confirmation; responses were received and no
critical problems were identified. Separately, the Company actively
sought information and assurances of a more technical nature from
certain vendors regarding the compliance status of specific
manufacturing and information processing equipment. In addition to
confirming compliance directly with suppliers and vendors, the Company
performed its own testing of certain purchased equipment and
information processing equipment for compliance. The Company monitored
the status of Year 2000 compliance of its most significant customers
through direct contact, written confirmation, and by reviewing publicly
available information.
The Company developed a contingency plan for both IT and non-IT
systems, as appropriate. The contingency plan included building
additional inventories in case of vendor supply or power interruptions,
using alternate suppliers, outsourcing to third parties, utilizing
alternative software, and reverting to manual processing of
information.
Costs incurred to date for Year 2000 have totaled approximately
$660,000 and have been expensed as incurred. Costs included internal
employee costs and costs of external consultants, and were funded
through operating cash flows. The Company believes there was no
material adverse impact of such costs on its long-term results of
operations, liquidity or financial position.
If the Company had not taken any of the remedial steps detailed above,
Year 2000 issues would possibly have caused significant technological
problems for the Company, disrupting business, potentially resulting in
increased costs and/or loss of business. At this time, no
technological problems have occurred.
The worst case scenario had the Company, its customers or suppliers
been unable to adequately resolve Year 2000 issues, would have included
a temporary slowdown or abrupt stoppage of operations at one or more of
the Company's facilities due to the failure of one or more critical
processes or business systems. Such failures could have resulted in
interruptions in manufacturing, safety and/or environmental systems;
and/or a temporary inability to receive raw materials, ship finished
products and process orders and invoices. If such or similar scenarios
had occurred, they could, depending on their duration, have had a
material impact on the Company's results of operations and financial
position. Such theoretical consequences are of a kind and magnitude
generally shared with other manufacturing companies.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
(Continued)
At this time, no significant Year 2000 disruptions have occurred. The
Company will continue to monitor its IT and non-IT systems for any
possible Year 2000 issues.
Impact of New Accounting Pronouncements
In June, 1998, the Financial Accounting Standards Board issued FAS 133
- - Accounting for Derivative Instruments and Hedging Activities. FAS
133 will require the Company to record derivative instruments, such as
foreign currency hedges, on the Consolidated Balance Sheet as assets or
liabilities, measured at fair value. Currently, the Company treats
such instruments as off-balance-sheet items. Gains or losses resulting
from changes in the values of those derivatives would be accounted for
depending on the specific use of each derivative instrument and
whether it qualifies for hedge accounting treatment as stated in
the standard. In June, 1999, the Financial Accounting Standards Board
issued FAS 137 - Accounting for Derivative and Similar Financial
Instruments and for Hedging Activities - Deferral of the Effective Date
of FAS 133. FAS 137 changed the effective date for implementation of
FAS 133. FAS 133 will be effective for the Company on December 2,
2000, the beginning of fiscal year 2001. The Company currently does
not expect the impact of adopting FAS 133 to be material.
Safe Harbor Statement
Certain statements in this report, in the Company's press releases and
in oral statements made by or with the approval of an authorized
executive officer of the Company may constitute "forward-looking
statements" as that term is defined under the Private Securities
Litigation Reform Act of 1995. These may include statements
projecting, forecasting or estimating Company performance and industry
trends. The achievement of the projections, forecasts or estimate is
subject to certain risks and uncertainties. Actual results may differ
materially from those projected, forecasted or estimated. The
applicable risks and uncertainties include general economic and
industry conditions that affect all international businesses, as well
as matters that are specific to the Company and the markets it serves.
General risks that may impact the achievement of such forecast include:
compliance with new laws and regulations, significant raw material
price fluctuations, changes in interest rates, currency exchange rate
fluctuations, limits on the repatriation of funds and political
uncertainty. Specific risks to the Company include: risk of recession
in the economies in which its products are sold, the concentration of a
substantial percentage of the Company's sales with a few major
automotive customers, and competition in pricing.
12
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
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 December 3, 1999, and in Note 12 of the Notes To
Consolidated Financial Statements contained in said report.
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
13
<PAGE>
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)
/s/ Joseph J. Berns
----------------------
Joseph J. Berns
Vice President - Finance
Date: April 7, 2000
14
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
Exhibit
No. Description
(2) Not Applicable.
(3)(i) Restated Articles of Organization -- incorporated by reference
to Exhibit 3(i) of the Company's Annual Report on Form 10-K for
the year ended December 2, 1994.
(3)(ii) By Laws, as amended -- incorporated by reference to Exhibit
(3)(ii) of the Company's Annual Report on Form 10-K for the year
ended November 26, 1993.
(4)(i) Promissory Note between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated December 29, 1995 --
incorporated by reference to Exhibit (4)(viii) to the Quarterly
Report on Form 10-Q for the Quarter ended March 1, 1996.
(4)(ii) Master Security Agreement between Plymouth Rubber Company,
Inc. and General Electric Capital Corporation dated December 29,
1995 -- incorporated by reference to Exhibit (4)(viii) to the
Quarterly Report on Form 10-Q for the quarter ended March 1,
1996.
(4)(iii) Demand Note between Plymouth Rubber Company, Inc. and
LaSalle National Bank dated June 6, 1996 -- incorporated by
reference to Exhibit (2)(i) to the report on Form 8-K with cover
page dated June 6, 1996.
(4)(iv) 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)(v) Amendment to Master Security Agreement between Plymouth Rubber
Company, Inc. and General Electric Capital Corporation dated
February 19, 1997 -- incorporated by reference to Exhibit
(4)(xi) to the Quarterly Report on Form 10-Q for the quarter
ended February 25, 1997.
(4)(vi) Master Security Agreement between Plymouth Rubber Company,
Inc. and General Electric Capital Corporation dated January 29,
1997 -- incorporated by reference to Exhibit (4)(xii) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
February 25, 1997.
(4)(vii) Demand Note between Brite-Line Technologies, Inc. and
LaSalle National Bank dated February 28, 1997 -- incorporated by
reference to Exhibit (4)(xiii) to the Company's Quarterly Report
on Form 10-Q for the quarter ended May 30, 1997.
(4)(viii) Loan and Security Agreement between Brite-Line
Technologies, Inc. and LaSalle National Bank dated February 25,
1997 -- incorporated by reference to Exhibit (4)(xiv) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
May 30, 1997.
(4)(ix) Continuing Unconditional Guaranty between Brite-Line
Technologies, Inc. LaSalle National Bank dated February 25, 1997
- -- incorporated by reference to Exhibit (4)(xv) to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 30,
1997.
(4)(x) Amendment to Loan and Security Agreement between Plymouth
Rubber Company, Inc. and LaSalle National Bank dated May 7, 1997
- -- incorporated by reference to Exhibit (4)(xvi) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
May 30, 1997.
15
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
(Continued)
Exhibit
No. Description
(4)(xi) Continuing Unconditional Guaranty between Plymouth Rubber
Company, Inc. and LaSalle National Bank dated March 20, 1997 --
incorporated by reference to Exhibit (4)(xvii) to the Company's
Quarterly Report on Form 10-Q or the quarter ended May 30,
1997.
(4)(xii) Public Deed which contains the loan guaranteed by mortgage
and granted between Plymouth Rubber Europa, S.A. and Caja de
Ahorros Municipal de Vigo, Banco de Bilbao, and Vizcaya y Banco
de Comercio dated April 11, 1997 -- incorporated by reference to
Exhibit (4)(xviii) to the Company's Quarterly Report on Form 10-
Q for the quarter ended May 30, 1997.
(4)(xiii) Corporate Guaranty between Plymouth Rubber Company, Inc.
and Caja de Ahorros Municipal de Vigo, Banco de Bilbao, and
Vizcaya y Banco de Comercio dated April 11, 1997 -- incorporated
by reference to Exhibit (4)(xix) to the Company's Quarterly
Report on Form 10-Q for the quarter ended May 30, 1997.
(4)(xiv) Promissory Note between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated December 3, 1997 -
incorporated by reference to Exhibit (4)(xiv) to the Company's
Annual Report on Form 10-K for the year ended November 27, 1998.
(4)(xv) Promissory Note between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated April 13, 1998 -
incorporated by reference to Exhibit (4)(xv) to the Company's
Annual Report on Form 10-K for the year ended November 27, 1998.
(4)(xvi) Promissory Note between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated November 12, 1998 -
incorporated by reference to Exhibit (4)(xvi) to the Company's
report on Form 10-K for the year ended November 27, 1998.
(4)(xvii) Promissory Note between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated November 25, 1998 -
incorporated by reference to Exhibit (4)(xvii) to the Company's
report on Form 10-K for the year ended November 27, 1998.
(4)(xviii) Amendments to Loan and Security Agreement between Plymouth
Rubber Company, Inc., and LaSalle National Bank dated July 15,1998 and
February 18, 1999 - incorporated by reference to Exhibit (4)(xviii)
to the Company's report on Form 10-Q for the quarter ended
February 26, 1999.
(4)(xix) Amendment to Loan and Security Agreement between Brite-Line
Technologies, Inc., and LaSalle National Bank dated February 18,
1999 - incorporated by reference to Exhibit (4)(xix) to the Company's
report on Form 10-Q for the quarter ended February 26, 1999.
(4)(xx) Promissory Note between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated July 29, 1999 -
incorporated by reference to Exhibit (4)(xx) to the Company's
report on Form 10-Q for the quarter ended August 27, 1999.
(4)(xxi) First Amended and Restated Schedule A - Special Provisions to
Loan and Security Agreement between Plymouth Rubber Company,
Inc., and LaSalle National Bank dated June 16, 1999.
(4)(xxii) Promissory Note between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated December 29, 1999
16
<PAGE>
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
(Continued)
Exhibit
No. Description
(9)(i) Voting Trust Agreement, as amended, relating to certain shares
of Company's common stock -- incorporated by reference to
Exhibit (9) of the Company's Annual Report on Form 10-K for the
year ended November 26, 1993.
(9)(ii) Voting Trust Amendment Number 6 -- incorporated by reference
to Exhibit 9(ii) of the Company's Annual Report on Form 10-K for
the year ended December 2, 1994.
(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 Kunststoffanlagen GmbH -- incorporated by reference
to Exhibit (10)(vi) of the Company's report on Form 10-Q for the
quarter ended February 28, 1997.
(11) Not Applicable.
(12) Not Applicable.
(13) Not Applicable.
(15) Not Applicable
(16) Not Applicable.
(18) Not Applicable.
(19) Not Applicable
(21) Brite-Line Technologies, Inc. (incorporated in Massachusetts)
and Plymouth Rubber Europa, S.A. (organized under the laws of
Spain).
(22) Not Applicable.
(23) Not Applicable.
(24) Not Applicable.
(27) Financial data schedule for the nine months ended March 3, 2000.
(28) Not Applicable.
(29) Not Applicable.
17
<PAGE>
Exhibit (4)(xxi)
July 6, 1999
Plymouth Rubber Company, Inc.
104 Revere Street
Canton, Massachusetts 02021
RE: FIRST AMENDED AND RESTATED EXHIBIT A
Gentlemen:
Plymouth Rubber Company, Inc., a Massachusetts corporation
("Borrower") and LaSalle Bank National Association f/k/a LaSalle
National Bank, a national banking association ("Bank") have entered
into that certain Exhibit A - Special Provisions dated June 6, 1996
("Exhibit A") attached to that certain Loan and Security Agreement
dated June 6, 1996 between Borrower and Bank (the "Agreement"). From
time to time thereafter, Borrower and Bank may have executed various
amendments (each an "Amendment" and collectively the "Amendments") to
Exhibit A and the Agreement. Borrower and Bank now desire to amend and
restate the entire Exhibit A and to further amend the Agreement as
provided herein, subject to the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the
mutual covenants and agreements set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Exhibit A of the Agreement is amended and restated as the
First Amended and Restated Exhibit A as attached hereto and
made a part hereof.
2. The First Amended and Restated Exhibit A attached hereto and
made a part hereof shall not become effective until this
letter is fully executed by all parties hereto.
3. As expressly amended and restated hereby and by any other
supplemental documents or instruments executed by either party
hereto in order to effectuate the transactions contemplated
hereby, the First mended and Restated Exhibit A is ratified
and confirmed by the parties hereto and is in full force and
effect in accordance with the terms thereof.
Plymouth Rubber Company, Inc.
July 6, 1999
Page 2
LASALLE BANK NATIONAL
ASSOCIATION F/K/A LASALLE
NATIONAL BANK, a national
Banking association
By: /s/ John Mostofi
Title: 1st VP
Accepted and agreed to this
5th day of October, 1999
PLYMOUTH RUBBER COMPANY, INC.
By: /s/ Joseph J. Berns
Title: V.P. Finance
Consented and agreed to by the following Guarantor
Of the obligations of PLYMOUTH RUBBER
COMPANY, INC. to LASALLE BANK NATIONAL
ASSOCIATION F/K/A/ LASALLE NATIONAL BANK.
BRITE-LINE TECHNOLOGIES, INC.
By: /s/ Joseph J. Berns
Title: V.P. Finance
Date: 10/5, 1999
FIRST AMENDED AND RESTATED
EXHIBIT A-SPECIAL PROVISIONS
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
CREDIT TERMS
(1) LOAN LIMIT: Bank may, in its sole discretion, advance an amount
up to the sum of the following sublimits (the "Loan Limit"):
(a) Subject to Paragraph (4) of this First Amended and Restated
Exhibit A, up to eighty-five percent (85%) of the face amount
(less maximum discounts, credits and allowances which may
be taken by or granted to Account Debtors in connection
therewith) of Borrower's Eligible Accounts; provided, that with
respect to Eligible Accounts which are payable in currencies
other than U.S. Dollars, the face amount and all discounts,
credits and allowances shall be determined using the U.S.
Dollar equivalent thereof at such time, determined with such
frequency as Bank shall require, but not less than weekly,
based on the exchange rates published in the Wall Street
Journal on the date of determination; plus
(b) Up to fifty-five percent (55%) of the lower of the cost or market
value of Borrower's Eligible Inventory or Six Million and
No/100 Dollars ($6,000,000.00), whichever is less; plus
(c) Subject to subparagraph (3)(a) of this First Amended and
Restated Exhibit A, Three Million and No/100 Dollars
($3,000,000.00) against that certain real property described in
subparagraph (13)(a) of this First Amended and Restated
Exhibit A ; minus
(d) Such reserves as Bank elects, in its sole discretion, to
establish from time to time; provided, that the aggregate amount of Loans
made pursuant to (i) subparagraph (b) above; and (ii) Loans, as such term is
defined in that certain Loan and Security Agreement entered
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
into by and between Brite-Line Technologies, Inc. ("Brite-
Line") and Bank dated February 25, 1997 (the "Brite-Line
Agreement"), made pursuant to subparagraph (1)(b) of Exhibit
A of the Brite-Line Agreement shall in no event exceed Seven
Million Two Hundred Fifty Thousand and No/100 Dollars
($7,250,000.00);
further provided, that the aggregate Loan Limit shall in no
event exceed Eighteen Million and No/100 Dollars
($18,000,000.00), except as such amount may be increased
or decreased by Bank, in its sole discretion, from time to time;
and
further provided, that the aggregate amount of Loans to (i)
Borrower under this Agreement; and (ii) the aggregate
amount of Loans to Brite-Line under the Brite-Line
Agreement, shall in no event exceed Eighteen Million and
No/100 Dollars ($18,000,000.00).
(2) LETTERS OF CREDIT: Subject to the terms and conditions of this
Agreement, including this First Amended and Restated Exhibit A,
and the Other Agreements, during the Original Term or any Renewal
Term, Bank may, in its sole discretion from time to time issue, upon
Borrower's request, Commercial and/or Standby Letters of Credit,
provided that the aggregate undrawn face amount of all such Letters
of Credit shall at no time exceed Seven Million Five Hundred
Thousand and No/100 Dollars ($7,500,000.00). Bank's contingent
liability under the Letters of Credit shall automatically reduce, dollar
for dollar, the amount which Borrower may borrow based upon the
Loan Limit. Payments made by Bank to any Person on account of
any Letter of Credit shall constitute Loans hereunder. At no time
shall the aggregate of direct Loans by Bank to Borrower plus the
contingent liability of Bank under the outstanding Letters of Credit be
in excess of the Loan Limit. Borrower shall remit to Bank a Letter of
Credit fee equal to two percent (2%) per year on the aggregate
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
undrawn face amount of all Letters of Credit outstanding, which fee
shall be payable monthly in arrears on each day that interest is
payable hereunder. Borrower shall also pay on demand Bank's
normal and customary administrative charges for issuance of any
Letter of Credit.
(3) AVAILABILITY REDUCTIONS:
(a) The availability described in subparagraph (1)(c) of this
First Amended and Restated Exhibit A shall be
automatically curtailed by Fifty Thousand and No/100
Dollars ($50,000.00) per month, commencing on July 2,
1999 and continuing on the corresponding day of each
month thereafter until the earliest to occur of (i) the
date on which said availability shall be reduced in full;
(ii) the date upon which demand for repayment of the
Loans is made by Bank, on which date said availability
shall be reduced in full; and (iii) the date upon which
this Agreement terminates pursuant to the provisions of
Paragraph 9 of the Agreement, on which date said
availability shall be reduced in full.
(4) ELIGIBLE ACCOUNTS CRITERIA REVISIONS:
Subparagraph 1(d)(xii) of the Agreement is hereby amended in its
entirety to read as follows:
The Account Debtor is a resident or citizen of and is located within
the United States of America or is a resident or citizen of and is
located within a foreign country and with respect to Account Debtors
who are residents or citizens of and are located within a foreign
country, the Account is supported by (i) a Letter of Credit which is in
form and substance satisfactory to Bank, issued by a financial
institution acceptable to Bank and assigned to Bank in a manner
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
acceptable to Bank or (ii) credit insurance with an endorsement
acceptable to Bank and assigned to Bank in a manner acceptable to
Bank.
(5) INTEREST RATE: Subject to the terms and conditions set forth
below, the Loans shall bear interest at the per annum rate of interest
set forth in subsection (a) or (b) below:
(a) Bank's publicly announced prime rate per annum (which is not
intended to be Bank's lowest or most favorable rate in effect
at any time) (the "Prime Rate") in effect from time to time,
payable on the last Business Day of each month in arrears.
Said rate of interest shall increase or decrease by an amount
equal to each increase or decrease in the Prime Rate
effective on the effective date of each such change in the
Prime Rate.
(b) Two percent (2%) per annum in excess of the LIBOR Rate
for the applicable Interest Period, such rate to remain fixed
for such Interest Period. "Interest Period" shall mean any
continuous period of thirty (30), sixty (60), ninety (90) or one
hundred eighty (180) days, as selected from time to time by
Borrower by irrevocable notice (in writing, by telex, telegram
or cable) given to Bank not less than three (3) Business
Days prior to the first day of each respective Interest Period)
commencing on the date hereof; provided that: (i) each
such period occurring after such initial period shall
commence on the day on which the immediately preceding
period expires; (ii) the final Interest Period shall be such that
its expiration occurs on or before the end of the Original
Term or any Renewal Term; and (iii) if for any reason
Borrower shall fail to timely select a period, then such Loans
shall continue as, or revert to, Prime Rate Loans. Interest
shall be payable on the last Business Day of each month, at
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
maturity, and on the date of any payment hereon by
Borrower.
Upon the occurrence of an Event of Default and the
continuance thereof, the Loans shall bear interest at the rate
of two percent (2.0%) per annum in excess of the interest rate
otherwise payable thereon, which interest shall be payable on
demand. All interest shall be calculated on the basis of a 360-
day year.
(5).(1) OTHER LIBOR PROVISIONS:
(a) Subject to the provisions of this Agreement, Borrower shall
have the option (i) as of any date, to convert all or any part of
the Prime Rate Loans to, or request that new Loans be made
as, LIBOR Rate Loans of various Interest Periods, (ii) as of
the last day of any Interest Period, to continue all or any
portion of the relevant LIBOR Rate Loans as LIBOR Rate
Loans; (iii) as of the last day of any Interest Period, to convert
all or any portion of the LIBOR Rate Loans to Prime Rate
Loans; and (iv) at any time, to request new Loans as Prime
Rate Loans; provided, that Loans may not be continued as or
converted to LIBOR Rate Loans, if the continuation or
conversion thereof would violate the provisions of
subparagraphs (5).(1)(b) and (5).(1)(c) of this First Amended
and Restated Exhibit A or if an Event of Default has occurred
and is continuing.
(b) Bank's determination of LIBOR as provided above shall be
conclusive, absent manifest error. Furthermore, if Bank
determines, in good faith (which determination shall be
conclusive, absent manifest error), prior to the
commencement of any Interest Period that (i) U.S. Dollar
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
deposits of sufficient amount and maturity for funding the
Loans are not available to Bank in the London Interbank
Eurodollar market in the ordinary course of business, or (ii) by
reason of circumstances affecting the London Interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the Loans
requested by Borrower to be LIBOR Rate Loans or the Loans
bearing interest at the rates set forth in subparagraph (5)(b) of
this First Amended and Restated Exhibit A shall not represent
the effective pricing to Bank for U.S. Dollar deposits of a
comparable amount for the relevant period (such as for
example, but not limited to, official reserve requirements
required by Regulation D to the extent not given effect in
determining the rate), Bank shall promptly notify Borrower and
(x) all existing LIBOR Rate Loans shall convert to Prime Rate
Loans upon the end of the applicable Interest Period, and (y)
no additional LIBOR Rate Loans shall be made until such
circumstances are cured.
(c) If, after the date hereof, the introduction of, or any change in
any applicable law, treaty, rule, regulation or guideline or in
the interpretation or administration thereof by any
governmental authority or any central bank or other fiscal,
monetary or other authority having jurisdiction over Bank or its
lending offices (a "Regulatory Change"), shall, in the opinion
of counsel to Bank, make it unlawful for Bank to make or
maintain LIBOR Rate Loans, then Bank shall promptly notify
Borrower and (i) the LIBOR Rate Loans shall immediately
convert to Prime Rate Loans on the last Business Day of the
then existing Interest Period or on such earlier date as
required by law and (ii) no additional LIBOR Rate Loans shall
be made until such circumstance is cured.
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
(d) If, for any reason, a LIBOR Rate Loan is paid prior to the last
Business Day of any Interest Period or if a LIBOR Rate Loan
does not occur on a date specified by Borrower in its request
(other than as a result of a default by Bank), Borrower agrees
to indemnify Bank against any loss (including any loss on
redeployment of the funds repaid), cost or expense incurred
by Bank as a result of such prepayment.
(e) If any Regulatory Change (whether or not having the force of
law) shall (i) impose, modify or deem applicable any
assessment, reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of or
loans by, or any other acquisition of funds or disbursements
by, Bank; (ii) subject Bank or the LIBOR Rate Loans to any
tax, duty, charge, stamp tax or fee or change the basis of
taxation of payments to Bank of principal or interest due from
Borrower to Bank hereunder (other than a change in the
taxation of the overall net income of Bank); or (c) impose on
Bank any other condition regarding the LIBOR Rate Loans or
Bank's funding thereof, and Bank shall determine (which
determination shall be conclusive, absent any manifest error)
that the result of the foregoing is to increase the cost to Bank
of making or maintaining the LIBOR Rate Loans or to reduce
the amount of principal or interest received by Bank
hereunder, then Borrower shall pay to Bank, on demand,
such additional amounts as Bank shall, from time to time,
determine are sufficient to compensate and indemnify Bank
from such increased cost or reduced amount.
(f) Each request for LIBOR Rate Loans shall be in an amount not
less than One Million and No/100 Dollars ($1,000,000.00),
and in integral multiples of Two Hundred Thousand and
No/100 Dollars ($200,000.00).
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
(g) Unless otherwise specified by Borrower, all Loans shall be
Prime Rate Loans.
(h) No more than three (3) Interest Periods may be in effect with
respect to outstanding LIBOR Rate Loans at any one time.
(i) The maximum amount of Libor Rate Loans outstanding at any
one time shall not exceed fifty percent (50%) of the aggregate
Loan Limit.
(6) FEES AND CHARGES:
(a) Unused Line Fee: Borrower and Brite-Line shall jointly pay
to Bank an unused line fee of one-half of one percent (1/2 of
1%) of the average aggregate monthly loan balance of
Borrower and Brite-Line, which fee shall be fully earned by
Bank and payable monthly in arrears on each day that
interest is payable hereunder. Said fee shall be calculated
on the basis of a 360 day year.
(b) Prepayment Fee: If Borrower and Brite-Line elect to
terminate this Agreement and the Brite-Line Agreement prior
to the termination dates thereof, Borrower and Brite-Line
shall jointly pay to Bank a prepayment fee in the aggregate
equal to (i) Three Hundred Thousand and No/100 Dollars
($300,000.00) if this Agreement and the Brite-Line
Agreement are terminated on or before June 2, 2000; (ii)
Two Hundred Thousand and No/100 Dollars ($200,000.00) if
this Agreement and the Britle-Line Agreement are
terminated after June 2, 2000 and prior to June 2, 2001; and
(iii) One Hundred Thousand and No/100 Dollars
($100,000.00) if this Agreement and the Brite-Line
Agreement are terminated after June 2, 2001 but prior to the
end of the Original Term or any Renewal Term; provided
that if Borrower and Brite-Line sell all or substantially all of
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
their assets or stock to a Person other than an Affiliate and
such sale is consented to by Bank and the Liabilities are
prepaid and this Agreement and the Brite-Line Agreement
are terminated as a result thereof, then Borrower and Brite-
Line shall be required to jointly pay a prepayment fee of one
percent (1%) of the aggregate Loan Limit under this
Agreement and the Brite-Line Agreement.
(6).(1) ORIGINAL TERM: The date of the Original Term set forth in
Paragraph 9 of the Agreement is deleted and the date of June
2, 2002 is substituted in its place.
ADDITIONS AND CHANGES TO COVENANTS
(7) CHECKING ACCOUNT PROVISIONS: Borrower shall maintain its
controlled disbursement account with Bank. Normal charges shall be
assessed thereon.
(8) TANGIBLE NET WORTH: Notwithstanding the provisions of
subparagraph 11(o) of the Agreement, Borrower's and Brite-Line's
consolidated tangible net worth in the aggregate shall not, on the
last day of each fiscal quarter, be less than the Minimum Tangible
Net Worth, as hereinafter defined. On the last day of the first,
second and third fiscal quarters of Borrower's 1999 fiscal year,
"Minimum Tangible Net Worth" shall equal One Million Eight
Hundred Nineteen Thousand and No/100 Dollars ($1,819,000.00).
On the last day of Borrower's1999 fiscal year end and on the last
day of the first, second and third fiscal quarters of Borrower's 2000
fiscal year, Minimum Tangible Net Worth shall equal One Million
Nine Hundred Nineteen Thousand and No/100 Dollars
($1,919,000.00). Thereafter, on the last day of each of Borrower's
fiscal quarters, Minimum Tangible Net Worth shall be equal to
Minimum Tangible Net Worth on the last day of the immediately
preceding fiscal year plus One Hundred Thousand and No/100
Dollars ($100,000.00). "Tangible Net Worth" being defined for
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
purposes of this subparagraph as Borrower's and Brite-Line's
shareholders' equity (including retained earnings) less the book
value of all intangible assets as determined solely by Bank on a
consistent basis plus the amount of any LIFO reserve plus the
amount of any debt subordinated to Bank, all as determined under
generally accepted accounting principles applied on a basis
consistent with the financial statement dated October 30, 1998
except as set forth herein. For purposes of this subparagraph, (a)
intangible assets are: (i) intangible asset-FAS #87, (ii) deferred tax
asset, net of the valuation reserve-FAS #109, and (iii) trade names;
and (b) pension liability adjustments are excluded.
(9) LOANS TO EMPLOYEES: In addition to the restrictions contained
in subparagraph 11(l) of the Agreement, Borrower shall not make
any loan to any Person except loans to employees not exceeding
One Hundred Thousand and No/100 Dollars ($100,000.00) in the
aggregate outstanding at any one time.
(10) PERMITTED BORROWINGS: Notwithstanding the provisions of
subparagraph 10(q) of the Agreement, Borrower may finance or
refinance the acquisition of Equipment, whether by purchase money
financing, lease or otherwise.
(10).(1) REDEMPTION OF STOCK: Notwithstanding the provisions of
subparagraph 11(k) of the Agreement; and provided, that (i)
such redemption is permitted under all applicable laws; and
(ii) no Event of Default shall have occurred prior to the time
of, or would occur as a result of such redemption, Borrower
may redeem the existing shares of its common or preferred
stock in an amount not to exceed Five Hundred Thousand
and No/100 Dollars ($500,000.00) in the aggregate over the
term of the Loans during the Original Term or Renewal Term.
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
(10).(2) YEAR 2000: Borrower and its Subsidiaries have reviewed
the areas within their business and operations which could be
adversely affected by, and have developed or are developing
a program to address on a timely basis, the "Year 2000
Problem" (that is, the risk that computer applications used by
Borrower and its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving
certain dates prior to and any date on or after December 31,
1999), and have made related appropriate inquiry of material
suppliers and vendors. Based on such review and program,
Borrower believes that the "Year 2000 Problem" will not have
a material adverse effect on its business, assets or condition,
financial or otherwise. From time to time, at the request of
Bank, Borrower and its Subsidiaries shall provide to Bank
such updated information or documentation as is requested
regarding the status of their efforts to address the "Year 2000
Problem."
ADDITIONS AND CHANGES TO DEFAULT PROVISIONS
(11) CHANGE OF MANAGEMENT DEFAULT: In addition of the Events
of Default specified in Paragraph 12 of the Agreement, it shall be an
Event of Default hereunder if Maurice Hamilburg shall cease to be
the Chief Executive Officer and President of Borrower.
(11).(1) ADDITIONAL CROSS DEFAULT: In addition to the Events of
Default specified in Paragraph 12 of the Agreement, it shall
be an Event of Default hereunder if Brite-Line shall, subject to
any applicable cure period, fail to perform, keep or observe
any of the covenants, conditions, promises, agreements or
other obligations of Brite-Line to Bank under any agreements
now or hereafter existing between Brite-Line and Bank,
including, without limitation, that certain Brite-Line
Agreement.
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
OTHER PROVISIONS
(12) PERMITTED LIENS: Bank acknowledges that the liens evidenced
by the following filed financing statements and any amendments
thereto, as said financing statements existed as of April 22, 1996,
shall constitute Permitted Liens:
799024; 158343; 248791; 260181; 266662; 277903; 287675;
287676; 319711; 353682; 356799; 3027; 5421; 4845; 4104; 5472;
5537; 5503; 5590; 5591; 5732; 5908; 5918; 884455; 3412; Book
8343 Pg 361; Book 364 Page 164; 362342; and 5937.
(12).(1) Paragraph (1) of the Agreement is amended to add the following
provision:
(a)(a) "LIBOR Rate" shall mean with respect to any LIBOR Rate
Loan for any Interest Period (as defined in subparagraph
(5)(b) of this First Amended and Restated Exhibit A), a rate
per annum equal to the offered rate for deposits in United
States dollars for a period equal to such Interest Period as
it appears on Telerate page 3750 as of 11:00 a.m. (London
time) two Business Days prior to the first day of such
Interest Period. "Telerate page 3750" means the display
designated as "Page 3750" on the Telerate Service (or
such other page as may replace page 3750 of that service
or such other service as may be nominated by the British
Bankers' Association as the vendor for the purpose of
displaying British Bankers' Association interest settlement
rates for United States dollar deposits).
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
(12).(2) Subparagraph 7(c) of the Agreement is deleted in its entirety
and the following is substituted in its place:
(c) Bank shall, within two (2) business days after receipt by Bank
at its office in Chicago, Illinois of cash or other immediately
available funds from collections of items of payment and
proceeds of any Collateral, apply the whole or any part of
such collections or proceeds against the Liabilities in such
order as Bank shall determine in its sole discretion.
(12).(3) Subparagraph 1(y) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(y) "LIBOR Rate Loans" shall mean the Loans bearing interest
at the rate set forth in subparagraph (5)(b) of this First
Amended and Restated Exhibit A.
ADDITIONAL CONDITIONS
(13) ADDITIONAL CONDITIONS: Whenever a condition contained herein
requires delivery of an agreement or other document to Bank, each such
agreement or other document shall be in form and substance satisfactory to
Bank in its sole discretion.
(a) Real Property as Collateral: Borrower has conveyed, mortgaged,
assigned, transferred and pledged to Bank that certain real property
commonly known as 104 Revere Street, Canton, Massachusetts
02021 ("Property") and, if title to said Property is in a land trust, any
beneficial interest relative thereto. In connection therewith, Borrower
has executed such documentation as Bank, in its sole discretion,
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
deemed necessary, including, without limitation, a Mortgage and
Security Agreement or similar instrument, Assignment of Leases and
Rents, Tenant Subordination, Tenant and Attornment Agreement
and Collateral Assignment of Beneficial Interest.
(b) Warehouseman's Letters: Bank hereby acknowledges that Eligible
Inventory is and from time to time may be stored with a bailee,
warehouseman, or similar party at the locations set forth in Exhibit B.
Relative thereto, Borrower shall cause each such party to execute
and deliver to Bank a Warehouseman's Letter.
(c) Processor's Letters: Bank hereby acknowledges that Eligible
Inventory is and from time to time may be delivered to a processor
for processing at the locations set forth in Exhibit B. Relative thereto,
Borrower shall cause each such party to execute and deliver a
Processor's Letter to Bank and shall cause each such party to
execute and deliver a Uniform Commercial Code Financing
Statement to Bank.
(d) Patent, Trademark and License Mortgage: Bank shall retain the
Patent, Trademark and License Mortgage.
(e) Credit Insurance: Borrower has assigned to Bank as Collateral the
proceeds of Borrower's Credit Insurance Policy issued by Foreign
Credit Insurance Association, to the extent such insurance is
maintained by Borrower.
(f) Intercreditor Agreement: Bank shall retain the Intercreditor
Agreement of General Electric Capital.
Attached to and made a part of that certain Loan and Security
Agreement dated June 6, 1996 (the "Agreement") by and between
Plymouth Rubber Company, Inc. ("Borrower") and LaSalle Bank
National Association f/k/a LaSalle National Bank ("Bank").
(g) Intentionally Omitted
(h) Guaranty: Bank shall retain the Continuing Unconditional
Guaranty of Brite-Line of any and all indebtedness of
Borrower to Bank.
Exhibit (4)(xxii)
PROMISSORY NOTE
December 30, 1999
(Date)
104 Revere Street, Canton, Norfolk County, MA 02021
________________________________________________________________________
(Address of Maker)
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 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 Five Hundred fifty thousand and
00/100 Dollars ($550,000.00), with interest thereon, from the date
hereof through and including the dates of payment, at a fixed interest
rate of Eight and 75/100 percent (8.75%) per annum, to be paid in lawful
money of the United States, in sixty (60) consecutive monthly
installments of principal and interest of Eleven thousand two hundred
sixty-eight and 31/100 Dollars ($11,268.31) each ("Periodic
Installment") and a final installment which shall be in the amount of
the total outstanding principal and interest. The first Periodic
Installment shall be due and payable on January 1, 2000 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 may be secured by a security agreement, chattel mortgage,
pledge agreement or like instrument (each of which is hereinafter called
a "Security Agreement") dated as of January 29, 1997, as amended.
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 such installment or other sum, a late payment charge
of five percent (5%) 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 and 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 first annual anniversary date of this Note: three percent
(3%)
Thereafter and prior to the second annual anniversary date of this Note:
two percent (2%)
Thereafter and prior to the third annual anniversary date of this Note:
one percent (1%)
Thereafter and prior to the fourth annual anniversary date of this Note:
one percent (1%)
Thereafter and prior to the fifth 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, (c) 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
supercedes 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.
/s/ Sandra Volpe_________ By: /s/ Joseph J. Berns_______________ (L.S.)
(Witness) (Signature)
Sandra Volpe___________ Joseph J. Berns V.P. - Finance____
(Print name) Print name (and title, if applicable)
104 Revere Street, Canton MA 02021 041733970
(Address) (Federal tax identification number)
(3/91)
COLLATERAL SCHEDULE NO. 003
THIS COLLATERAL SCHEDULE NO. 003 is annexed to and made a part of
that certain Master Security Agreement dated as of January 29, 1997, as
amended between General Electric Capital Corporation as Secured Party
and Plymouth Rubber Company, Inc. as Debtor and describes collateral in
which Debtor has granted Secured Party a security interest in
connection with the Indebtedness (as defined in the Security Agreement)
including without limitation that certain Promissory Note dated
__12/30/99____________ in the original principal amount of $550,000.00.
Year/Model Serial Number Description
SEE EXHIBIT I ATTACHED HERETO AND FORMING A PART HEREOF
SECURED PARTY: DEBTOR:
General Electric Capital Corporation Plymouth Rubber Company, Inc.
By: /s/ Patricia Burk By: /s/ Joseph J. Berns
Title: Transaction Coordinator Title: V.P. Finance
Date: 12/30/99 Date: 12/27/99
(3/91)
EXHIBIT I
TO
COLLATERAL SCHEDULE NO. 003
Equipment Location: 104 Revere Street
Canton, MA 02021
Vendor Qty Description Cost
KAMPF JAGENBERG-GRUPPE 1 KAMPF Roll Slitting and Winding Machine
Kampf GmbH & Co. Model SL 60
Maschinenfabrik, Wiehl Machine No. 210240
Year of Construction: 1999 $550,000.00
Invoice#991011/210240
Invoice Total $550,000.00
EXHIBIT I TOTAL $550,000.00
Debtor's initials:
Secured Party's initials:
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-01-2000
<PERIOD-END> MAR-03-2000
<CASH> 2
<SECURITIES> 0
<RECEIVABLES> 10,191
<ALLOWANCES> 296
<INVENTORY> 15,451
<CURRENT-ASSETS> 27,818
<PP&E> 44,763
<DEPRECIATION> 20,260
<TOTAL-ASSETS> 53,990
<CURRENT-LIABILITIES> 25,676
<BONDS> 0
0
0
<COMMON> 2,090
<OTHER-SE> 10,868
<TOTAL-LIABILITY-AND-EQUITY> 53,990
<SALES> 16,973
<TOTAL-REVENUES> 16,973
<CGS> 13,562
<TOTAL-COSTS> 16,972
<OTHER-EXPENSES> 12
<LOSS-PROVISION> (71)
<INTEREST-EXPENSE> 540
<INCOME-PRETAX> (551)
<INCOME-TAX> (232)
<INCOME-CONTINUING> (319)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (319)
<EPS-BASIC> (.16)
<EPS-DILUTED> (.16)
</TABLE>
