UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File number 1-9487
ATLANTIS PLASTICS, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 06-1088270
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2665 South Bayshore Drive, Suite 800, Miami, Florida 33133
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including Area Code)
(305) 858-2200
Indicate by check mark 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 latest practicable date.
<TABLE>
<CAPTION>
<S> <C>
Class Shares Outstanding at March 31, 1995
A, $.10 par value 4,082,437
B, $.10 par value 3,002,363
</TABLE>
ATLANTIS PLASTICS, INC.
TABLE OF CONTENTS
Page No.
Part I. Financial Information
Consolidated Income Statements (Unaudited)
for the three months ended March 31, 1995 and 1994
Consolidated Balance Sheets (Unaudited)
as of March 31, 1995 and December 31, 1994
Consolidated Statements of Cash Flows (Unaudited)
for the three months ended March 31, 1995 and 1994
Notes to Unaudited Consolidated Financial Statements
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Part II. Other Information
Item 1 - Legal Proceedings
Item 6 - Exhibits and Reports on Form 8-K
Signatures
ATLANTIS PLASTICS, INC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Three Months Ended
March 31,
1995 1994
Net sales $77,857,353 $54,127,967
Cost of sales 63,687,318 43,394,650
Gross profit 14,170,035 10,733,317
Selling, general and administrative
expenses 8,697,853 6,167,958
Operating income 5,472,182 4,565,359
Interest expense (3,664,787) (3,056,919)
Interest income 60,223 30,600
Income from continuing operations
before income taxes 1,867,618 1,539,040
Income tax provision (924,793) (742,413)
Income from continuing operations 942,825 796,627
Income (loss) from discontinued
operations,less applicable taxes 8,086 (11,878)
Net income 950,911 784,749
Preferred stock dividends (36,250) (36,250)
Income applicable to
common shares and equivalents $914,661 $748,499
INCOME PER COMMON SHARE:
Continuing operations $0.12 $0.10
Discontinued operations 0.00 0.00
Net income $0.12 $0.10
Weighted average shares outstanding 7,559,626 7,551,836
DIVIDENDS DECLARED PER COMMON SHARE $0.03 $0.03
See accompanying notes to consolidated financial statements
(unaudited)
</TABLE>
ATLANTIS PLASTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
March 31, December 31,
1995 1994
ASSETS
Cash and equivalents $1,366,714 $1,432,567
Accounts receivable, net 37,267,700 36,584,996
Inventories 26,711,137 22,854,778
Other current assets 5,298,558 6,353,248
Current assets 70,644,109 67,225,589
Property and equipment, net 63,368,816 61,255,540
Investment in WinsLoew
Furniture, Inc stock 4,954,432 5,096,722
Net assets of discontinued operations 9,883,461 9,378,506
Goodwill, net of amortization 62,999,367 63,466,653
Other assets 5,048,924 5,098,953
$216,899,109 $211,521,963
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $28,736,044 $32,398,197
Current portion of long-term debt 2,454,894 1,859,821
Current liabilities 31,190,938 34,258,018
Long-term debt, net of current portion 134,663,232 127,374,389
Deferred income taxes 7,810,951 7,841,678
Other liabilities 1,564,123 1,625,530
Total liabilities 175,229,244 171,099,615
Commitments and contingencies
Shareholders' equity:
Series A convertible preferred
stock, $1.00 par value, 20,000
shares authorized, issued and
outstanding in 1995 and 1994 2,000,000 2,000,000
Class A common stock, $.10 par value,
20,000,000 shares authorized,
4,082,437 shares issued and
outstanding in 1995 and 1994 408,244 408,244
Class B common stock, $.10 par value,
7,000,000 shares authorized,
3,002,363 shares issued and
outstanding in 1995 and 1994 300,236 300,236
Additional paid-in capital 6,781,206 6,781,206
Unrealized holding gains (losses),
net of tax 226,975 (284,219)
Retained earnings 31,953,204 31,216,881
Total shareholders' equity 41,669,865 40,422,348
$216,899,109 $211,521,963
See accompanying notes to consolidated financial statements
(unaudited)
</TABLE>
ATLANTIS PLASTICS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Three Months Ended
March 31,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $950,911 $784,749
Adjustments to reconcile net income
to net cash used in operating
activities:
Depreciation 2,162,515 1,826,994
Amortization of goodwill 476,616 403,365
Loan fee and other amortization 134,826 127,472
Changes in assets and liabilities:
Accounts receivable (682,704) (1,803,350)
Inventories (3,856,359) (2,020,807)
Other current assets 1,054,690 396,439
Accounts payable (3,662,153) (5,503,474)
Deferred income taxes 21,899 105,859
Other liabilities (61,407) 0
Other, net (71,533) 198,046
Effects of discontinued operations 108,396 (24,171)
Total adjustments (4,375,214) (6,293,627)
Net cash used in operating
activities (3,424,303) (5,508,878)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,310,878) (3,347,584)
Net cash used in investing
activities (4,310,878) (3,347,584)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving
credit agreements 12,968,023 11,112,645
Repayments under revolving
credit agreements (10,765,946) (2,444,478)
Payments on long-term debt (241,183) (51,159)
Proceeds from issuance of
long-term debt 5,923,022 0
Dividends on preferred and
common stock (214,588) (214,588)
Purchases of treasury stock 0 (702,656)
Proceeds from exercise of
stock options 0 49,625
Net cash provided by financing
activities 7,669,328 7,749,389
Net decrease in cash and equivalents (65,853) (1,107,073)
Cash and equivalents at beginning
of period 1,432,567 2,170,060
Cash and equivalents at end
of period $1,366,714 $1,062,987
See accompanying notes to consolidated financial statements
(unaudited)
</TABLE>
ATLANTIS PLASTICS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Three Months Ended
March 31,
1995 1994
Supplemental disclosures of cash flow information
continuing operations:
Cash paid during the period for:
Interest $6,279,495 $5,681,774
Income taxes $133,071 $1,351,300
See accompanying notes to consolidated financial statements
(unaudited)
</TABLE>
ATLANTIS PLASTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited consolidated financial statements of
Atlantis Plastics, Inc. ("Atlantis" or the "Company"), which are
for interim periods, do not include all disclosures provided in
the annual consolidated financial statements. These unaudited
consolidated financial statements should be read in conjunction
with the consolidated financial statements and the footnotes
thereto contained in the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 as filed with the
Securities and Exchange Commission. The December 31, 1994
balance sheet, included herein, was derived from audited
financial statements, but does not include all disclosures
required by generally accepted accounting principles.
Atlantis Plastic Films currently accounts for approximately two-
thirds of the Company's net sales and consists of: (i) stretch
films (multi-layer plastic films that are used principally to
stretchwrap pallets of materials for shipping or storage), and
(ii) custom film products (high-grade laminating films, embossed
films and specialty film products targeted primarily to
industrial and agricultural markets).
Atlantis Molded Plastics currently accounts for approximately
one-third of the Company's net sales and consists of three
principal technologies, serving a wide variety of specific
market segments: (i) injection molded thermoplastic parts that
are sold primarily to original equipment manufacturers and used
in major household appliances, agricultural and automotive
products, (ii) a variety of standard and custom extruded parts
(profile extrusion) that are incorporated into a broad range of
consumer and commercial products, including plastic moldings,
trims, channels, seals and gaskets that are used in recreational
vehicles, doors, residential windows, office furniture and
retail store fixtures, and (iii) blow molded milk, juice, water
and industrial containers in a variety of shapes and sizes.
The accounts of wholly owned Western Pioneer Insurance Company
("Western Pioneer") have been presented as a discontinued
operation in the accompanying financial statements (see Note 6).
All material intercompany balances and transactions have been
eliminated. Certain amounts included in prior period financial
statements have been reclassified to conform with the current
year presentation.
2. In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (which
are of a normal recurring nature) necessary for a fair
presentation of the financial statements. The results of
operations for the three months ended March 31, 1995 are not
necessarily indicative of the results to be expected for the
full year.
3. Net income per common share was computed by dividing net income,
after deducting dividends applicable to preferred stock, by the
weighted average number of shares and share equivalents
outstanding during the period. Fully diluted net income per
common share is substantially equivalent to primary net income
per common share.
4. During May 1994, the Company purchased substantially all of the
assets (excluding cash) and assumed all of the liabilities
(excluding interest bearing indebtedness and amounts due to the
seller) of Advanced Plastics, Inc. ("Advanced"). The
acquisition was accounted for using the purchase method, and
accordingly, the results of operations of Advanced have been
included in the consolidated income statements since the date of
the acquisition. If the acquisition of Advanced had occurred on
January 1, 1994, the Company's pro forma income from continuing
operations for the first quarter of 1994 would have been $1.1
million, or $.14 per share.
5. The following table summarizes the cost and approximate fair
value of the Company's investments, which are classified as
available-for-sale, at March 31, 1995:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Unrealized
Fair
Cost Gains Losses Value
WinsLoew Stock . . . . $ 4,519,050 $435,382 -- $ 4,954,432
Western Pioneer Investment
Portfolio:
State, municipal and
political subdivision
bonds. . . . . . 21,021,274 -- 39,917 20,981,357
Preferred stock. . . . 1,964,063 -- 51,563 1,912,500
$27,504,387 $435,382 $91,480 $27,848,289
</TABLE>
6. The operations of Western Pioneer, the Company's California
property-casualty insurance subsidiary, have been presented
as a discontinued operation in the accompanying financial
statements.
The Company expects to dispose of Western Pioneer during
1995, and has engaged an outside broker to assist in
pursuing potential sale opportunities. In this connection,
a selling memorandum was prepared and distributed to
potential buyers. The Company has received expressions of
interest from several parties; however, no arrangement or
understanding exists for a sale at the present time, and
there can be no assurance that the sale of Western Pioneer
will be consummated. The Company believes that the ultimate
sale proceeds will equal or exceed Western Pioneer's net
assets.
The following table summarizes Western Pioneer's operating
results for the first quarter periods of 1995 and 1994:
<TABLE>
<CAPTION>
<S> <C>
Three Months
Ended March 31,
1995 1994
REVENUES:
Insurance premiums earned . $5,878,000 $5,002,000
Interest, dividends and
other revenues . . . . . 341,000 298,000
6,219,000 5,300,000
EXPENSES:
Losses and loss
adjustments. . . . . . . 4,603,000 3,630,000
Selling, general and
administrative . . . . . 1,721,000 1,632,000
Operating income (loss). (105,000) 38,000
Interest expense. . . . . . (1,000) (4,000)
Income tax (provision)
benefit. . . . . . . . . 114,000 (46,000)
Net income (loss). . . . $ 8,000 $ (12,000)
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The Company's continuing operations consist of two major
business segments producing a wide variety of polyethylene stretch
and custom films ("Atlantis Plastic Films") and molded plastic
products ("Atlantis Molded Plastics").
The operations of Western Pioneer, the Company's California
property-casualty insurance subsidiary, have been presented as a
discontinued operation in the accompanying financial statements.
See Note 6 for certain information regarding Western Pioneer.
Continuing Operations
Sales, gross profit and operating income for the first quarter
periods ended March 31, 1995 and 1994 were as follows (in thou-
sands):
<TABLE>
<CAPTION>
<S> <C>
Three Months Ended
March 31,
1995 1994
% of % of
SALES: Amount Total Amount Total
Atlantis Plastic
Films $55,076 71% $35,986 66%
Atlantis Molded
Plastics 22,781 29% 18,142 34%
TOTAL $77,857 100% $54,128 100%
<S> <C> <C> <C>
% of % of
GROSS PROFIT: Sales Sales
Atlantis Plastic
Films $10,863 20% $7,531 21%
Atlantis Molded
Plastics 3,307 15% 3,202 18%
TOTAL $14,170 18% $10,733 20%
OPERATING INCOME:
Atlantis Plastic
Films $4,455 8% $2,697 8%
Atlantis Molded
Plastics 1,017 4% 1,868 10%
TOTAL $5,472 7% $4,565 8%
</TABLE>
First quarter 1995 sales of $77.9 million were 44% ahead of
last year's, primarily due to higher selling prices during 1995
resulting from the pass through to customers of increases in resin
prices during 1994 and early 1995, and to increased sales volume
within the film operating units. First quarter 1995 sales also
include incremental sales volume resulting from added capacity
created by the Company's recent capital expansion programs and the
contribution from the May 1994 acquisition of Advanced, an
injection molder located in Warren, Ohio (see Note 4).
The increase in sales posted during the first quarter of 1995
resulted in higher gross profit dollars compared to the same period
last year, but gross profit as a percentage of sales for the first
quarter of 1995 decreased compared to the first quarter of 1994.
During the first quarter of 1995, gross profit equaled $14.2
million, or 18% of sales, compared to last year's first quarter
gross profit of $10.7 million, or 20% of sales.
Atlantis Plastic Films recorded a first quarter 1995 gross
profit percentage of 20%, compared to 21% for the first quarter
1994 period, reflecting margin compression experienced as a result
of the significant increase in resin prices during 1994 and early
1995, partially offset by stronger profitability within the custom
film unit resulting from improved plant efficiencies combined with
lower scrap rates. Looking ahead, film gross profits may be
adversely impacted in the short term by recent declines in film
order backlogs resulting from current resin price stabilization and
industry expectations of possible future resin price declines
during 1995.
The Atlantis Molded Plastics first quarter 1995 gross profit
percentage of 15% decreased compared to last year's first quarter
gross profit percentage of 18%. This decrease reflects lower first
quarter 1995 injection molding profitability resulting from a
variety of factors, including: (i) higher subcontracted and
overtime labor costs due to the shortage of qualified labor
resulting from current low levels of unemployment within the
midwest region, (ii) unfavorable product mix, and (iii) weaker
demand for appliances during early 1995. The 1995 percentage
decrease was also caused by lower blow molding profitability due to
continued competitive pricing pressures within the dairy plastic
container markets, partially offset by stronger profitability in
the profile extrusion unit resulting from increased sales.
First quarter 1995 selling, general and administrative
expenses ("SG&A") of $8.7 million represented 11% of sales,
compared to last year's first quarter SG&A of $6.2 million, also
11% of sales.
The dollar increase in SG&A for the 1995 first quarter period
resulted from: (i) higher commission costs within the stretch film
unit derived from increased sales volume, (ii) the inclusion of
Advanced since May 1994, and (iii) the higher cost base within the
injection molding unit which was required to support this unit's
significant increase in sales during 1994 and 1995. First quarter
1995 SG&A also increased due to certain one-time expenses associat-
ed with recently completed changes in the Company's senior
management, which equaled $746,000, or $462,000 after tax.
First quarter 1995 operating income of $5.5 million was 20%
ahead of last year's operating income of $4.6 million for the same
period. Excluding the expenses associated with the senior manage-
ment changes described above, first quarter 1995 operating income
would have equaled $6.2 million, 36% ahead of last year's first
quarter operating income.
First quarter 1995 income from continuing operations equaled
$943,000, or $.12 per share compared to $797,000, or $.10 per share
for the first quarter of 1994. Excluding the expenses associated
with the senior management changes, first quarter 1995 income from
continuing operations would have equaled $1.4 million, or $.18 per
share, 76% ahead of last year's first quarter income from continu-
ing operations.
First quarter 1995 interest expense of $3.7 million was 20%
higher than the $3.1 million posted for the same period last year.
The increase can be attributed to increased borrowings on the
Company's line of credit in order to fund (i) the May 1994
acquisition of Advanced, (ii) 1994 and 1995 working capital growth
resulting from the previously described resin price increases
during those periods, and (iii) capital expenditures. Higher first
quarter 1995 interest expense can also be attributed to borrowings
in connection with equipment financing programs established during
1994 and 1995.
The Company's effective tax rates during the first quarter
periods of 1995 and 1994 were affected by nondeductible goodwill
amortization.
DISCONTINUED OPERATIONS
Western Pioneer's first quarter 1995 insurance premiums earned
of $5.9 million were 18% higher than for the same period last year.
The increase results primarily from an increase in new policies
written.
Losses and loss adjustment expenses during the first quarter
of 1995 equaled 78% of premiums earned, compared to 73% of premiums
earned for the same period a year ago. Historically, Western
Pioneer has experienced higher loss and loss adjustment expenses as
a percentage of sales during the early part of the year, reflecting
greater losses due to higher accident frequency resulting from
winter weather conditions. However, the early 1994 loss and loss
adjustment expense percentage reflected a lower than normal
accident frequency, with the first quarter 1995 percentage more
representative of historical loss and loss adjustment expenses for
Western Pioneer. Selling, general and administrative expenses were
29% as a percentage of premiums earned during the first quarter of
1995, lower than the 33% expense percentage for the same period
last year. Last year's higher percentage resulted from various one-
time expenses associated with (i) Western Pioneer's 1994 move to a
new office location, and (ii) start-up costs associated with the
conversion to a new data processing system during 1994. (See Note
6 for information regarding the Company's plans to dispose of
Western Pioneer during 1995.)
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at March 31, 1995 totaled
approximately $39.5 million, compared to $33.0 million at December
31, 1994. Cash totaled $1.4 million at March 31, 1995 and at
December 31, 1994, respectively. The increase in working capital
during 1995 was primarily due to an increase in accounts receivable
and inventory, combined with a decrease in accounts payable and
accrued expenses. At March 31, 1995 the Company had approximately
$137.1 million of outstanding indebtedness and had $5.1 million of
additional availability under its revolving credit facility based
on eligible collateral.
Management believes that funds generated from operations and
funds available under the revolving credit facility will be
sufficient to satisfy the Company's debt service obligations and
working capital requirements for the remainder of 1995. In
addition, management expects to utilize an equipment financing
program established during the first quarter of 1995 to finance the
majority of capital expenditures during 1995. To the extent
available, excess funds will be used to reduce outstanding
borrowings under the revolving credit facility.
CASH FLOWS FROM OPERATING ACTIVITIES
For the first quarter of 1995, net cash used in operating
activities was approximately $3.4 million, compared to $5.5 million
for the same period last year. Accounts receivable and inventories
increased during the first three months of 1995, primarily due to
the increase in sales and the effects of the previously described
resin price increases.
Accounts payable and accrued expenses at March 31, 1995
decreased compared with the 1994 year-end balance due to first
quarter 1995 payments of incentive compensation and capital
expenditures accrued at year-end 1994, and due to a decrease in
accrued interest on the Company's $100 million Senior Notes
compared with year-end 1994.
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities, consisting of capital
expenditures, was $4.3 million during the first quarter of 1995,
compared to $3.3 million for the same period last year.
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities was $7.7 million
during both three month periods ended March 31, 1995 and 1994.
Total borrowings equaled $7.9 million, net of principal repayments.
These borrowings were utilized to fund the first quarter 1995
working capital growth and capital expenditures described above,
and to finance certain equipment acquired during 1994. The Company
paid dividends on common and preferred stock of approximately
$215,000.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is, from time to time, involved in routine
litigation. None of such routine litigation in which the
Company is presently involved is material to its finan-
cial position or results of operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(3) Exhibits (An asterisk to the left of an exhibit
number denotes a management contract or compensatory plan or
arrangement required to be filed as an exhibit to this Quarterly
Report on Form 10-Q.)
*10.1 Employment Agreement, dated February 1, 1995, between the
Registrant and Anthony F. Bova.
*10.2 Employment Agreement, dated March 6, 1995, between the
Registrant and Paul Rudovsky.
10.3 Third Amendment to Heller Credit Agreement and Consent,
dated as of March 30, 1995
10.4 Master Security Agreement and Promissory Note between
Cyanede Plastics, Inc. and General Electric Capital
Corporation ("GECC") in the amount of $2,673,919, dated
as of February 23, 1995
10.5 Corporate Guaranty of the Registrant of the obligations
of Cyanede Plastics, Inc. to GECC, dated as of February
23, 1995
10.6 Master Security Agreement and Promissory Note between
Pierce Plastics, Inc. and GECC in the amount of $221,790,
dated as of February 23, 1995
10.7 Corporate Guaranty of the Registrant of the obligations
of Pierce Plastics, Inc. to GECC, dated as of February
23, 1995
10.8 Master Security Agreement and Promissory Note between
Plastic Containers, Inc. and GECC in the amount of
$340,000, dated as of February 23, 1995
10.9 Corporate Guaranty of the Registrant of the obligations
of Plastic Containers, Inc. to GECC, dated as of February
23, 1995
10.10 Master Security Agreement and Promissory Note between
Atlantis Plastic Films, Inc. (as successor by merger to
Linear Films, Inc.) and GECC in the amount of $900,000,
dated as of February 23, 1995
10.11 Promissory Note from Atlantis Plastic Films, Inc. to GECC
in the amount of $650,000, dated as of February 23, 1995
10.12 Corporate Guaranty of the Registrant of the obligations
of Atlantis Plastic Films, Inc. to GECC, dated as of
February 23, 1995
10.13 Loan and Security Agreement by and Among Atlantis Plastic
Films, Inc., Cyanede Plastics, Inc., Pierce Plastics,
Inc., Plastic Containers, Inc. and The CIT/Equipment
Group Financing, Inc. ("CIT"), dated as of 4/13/95
10.14 Promissory Note from Atlantis Plastic Films, Inc.,
Cyanede Plastics, Inc., Pierce Plastics, Inc. and Plastic
Containers, Inc. to CIT in the amount of $15,000,000,
dated as of April 13, 1995
10.15 Guaranty of the Registrant of the obligations of
Atlantis Plastic Films, Inc. to CIT, dated as of April
13, 1995
Exhibit
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
During the quarter for which this Quarterly Report on
Form 10-Q is filed, the Registrant did not file any
Current Reports on Form 8-K.
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 thereunto duly authorized.
ATLANTIS PLASTICS, INC.
Date: May , 1995 /s/ Anthony F. Bova
ANTHONY F. BOVA
President and Chief Executive
Officer
Date: May , 1995 /s/ Paul Rudovsky
PAUL RUDOVSKY
Executive Vice President and
Chief Financial Officer
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of February 1,
1995, by and between ATLANTIS PLASTICS, INC., a Florida corporation
(the "COMPANY"), and ANTHONY F. BOVA (the "EXECUTIVE").
PRELIMINARY STATEMENTS:
A. In view of the Executive's substantial experience,
knowledge and reputation, the Board of Directors of the Company
believes it to be in the best interest of the Company to employ the
Executive on the terms and subject to the conditions hereinafter
set forth.
B. The Executive desires to be employed by the Company on
the terms and subject to the conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties agree as follows:
1. EMPLOYMENT.
1.1 GENERAL. The Company hereby employs the Executive
as the President and Chief Executive Officer of the Company, and
the Executive hereby agrees to provide services to the Company, on
the terms and subject to the conditions set forth herein.
1.2 DUTIES OF EXECUTIVE. During the term of this
Agreement, the Executive shall serve as the President and Chief
Executive Officer of the Company, shall diligently perform all
services, consistent with his title and position, as may be
assigned to him by the Board of Directors of the Company (the
"BOARD") or the Chairman of the Board, and shall exercise such
power and authority as may from time to time be delegated to him by
the Board or the Chairman of the Board. The Executive shall devote
his full business time and attention to the business and affairs of
the Company, render such services to the best of his ability, and
use his best efforts to promote the interests of the Company.
1.3 PLACE OF PERFORMANCE. In connection with the
employment of the Executive by the Company hereunder, the Executive
shall perform his duties and obligations hereunder primarily from
the Company's offices located in Atlanta, Georgia, except for
required travel on the Company's business.
2. TERM.
2.1 INITIAL TERM. The initial term of the employment of
the Executive hereunder shall be for a period of five years
commencing on the effective date hereof and expiring on January 31,
2000 (the "INITIAL TERM"), unless sooner terminated in accordance
with the terms and conditions hereof.
2.2 RENEWAL TERM. The employment of the Executive
hereunder may be renewed and extended for such period or periods as
may be mutually agreed to by the Company and the Executive in a
written supplement to this Agreement signed by the Executive and
the Company (a "WRITTEN SUPPLEMENT"). If this Agreement is not so
renewed and extended prior to the expiration of the Initial Term,
the employment of the Executive hereunder shall automatically
terminate upon the expiration of the Initial Term.
3. COMPENSATION.
3.1 BASE SALARY. As compensation for all services
rendered by the Executive to the Company hereunder, the Executive
shall receive a base salary at the rate of $300,000 per annum (the
"BASE SALARY") during the term of his employment hereunder, which
shall be payable in installments consistent with the Company's
normal payroll schedule, subject to applicable withholding and
other taxes. Commencing on the first anniversary date of this
Agreement, the Base Salary shall be increased annually on each
February 1 during the term of the Executive's employment hereunder
to reflect any increase from the previous year in the Consumer
Price Index (all urban wage earners) for the Atlanta, Georgia
metropolitan area. If the term of this Agreement shall be renewed
and extended as provided in Section 2.2 hereof, then during such
renewal term the Executive shall be paid a Base Salary as set forth
in the Written Supplement.
3.2 INCENTIVE COMPENSATION. In addition to the Base
Salary, during the term of his employment hereunder, the Executive
shall be entitled to receive incentive compensation in accordance
with the provisions set forth on Exhibit A hereto (the "INCENTIVE
COMPENSATION"). If the term of this Agreement shall be renewed and
extended as provided in Section 2.2 hereof, then during such
renewal term the Executive shall be paid Incentive Compensation as
set forth in the Written Supplement.
4. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.
4.1 MOVING AND TRANSITION EXPENSES. The Executive shall
be entitled to reimbursement as set forth in this Section 4.1 in
connection with the relocation of his personal residence from
Winnetka, Illinois to the Atlanta, Georgia metropolitan area:
(a) Upon the receipt of proper substantiation, the
Company shall reimburse the Executive for the amount of any
sales commissions actually paid by him with respect to the
sale of his personal residence located at 1066 Mount Pleasant
Road, Winnetka, Illinois 60093 (the "CHICAGO RESIDENCE").
(b) Upon the receipt of proper substantiation, the
Company shall reimburse the Executive for amounts actually
paid by him in connection with the relocation of the personal
belongings of the Executive and his immediate family from the
Chicago Residence to Atlanta, Georgia. Such amounts shall
include reasonable costs incurred by the Executive and the
members of his immediate family to visit the Atlanta metropol-
itan area for the purpose of locating a permanent residence
there.
(c) The Company shall provide the Executive with
rental living accommodations in the Atlanta metropolitan area,
for a period of up to six months from the date hereof (the
"TRANSITION PERIOD"). Such accommodations shall be selected by
the Executive; however, the rental terms (including, without
limitation, the amount of the periodic lease payments) shall
be reasonably acceptable to the Company. The Company shall be
responsible for any security deposit (and shall be entitled to
any refund thereof), as well as all utility and incidental
expenses in connection therewith.
(d) During the Transition Period, the Company
shall, upon the receipt of proper substantiation and subject
to the Company's travel policy applicable to its executive
employees, reimburse the Executive for amounts actually paid
by him for up to two round trip airline tickets per month
between Chicago and Atlanta, purchased by him for personal
purposes.
4.2 REIMBURSABLE EXPENSES. During the term of the
Executive's employment hereunder, the Company, upon the submission
of proper substantiation by the Executive, shall reimburse the
Executive for all reasonable expenses actually and necessarily paid
or incurred by him in the course of and pursuant to the business of
the Company.
4.3 OTHER BENEFITS. During the term of the Executive's
employment hereunder, the Executive shall be entitled to partici-
pate in all medical and hospitalization, group life insurance, and
any and all other fringe benefit plans as are presently and
hereinafter provided by the Company to its executives. The
Executive shall be entitled to four weeks of vacation annually;
provided, however, that in no event may a vacation be taken at a
time when to do so could, in the reasonable judgment of the Board
or the Chairman of the Board, materially adversely affect the
business of the Company.
4.4 WORKING FACILITIES. During the term of the
Executive's employment hereunder, the Company shall furnish the
Executive with an office, secretarial help and such other facili-
ties and services suitable to his position and adequate for the
performance of his duties hereunder.
4.5 AUTOMOBILE. During the term of the Executive's
employment hereunder, the Company shall provide the Executive with
the use of an automobile, together with the operating expenses
thereof; provided, however, that the Executive shall be responsible
for the purchase or lease costs of any such automobile to the
extent the final invoice price of such automobile exceeds $35,000.
At the Executive's option, any such automobile shall be replaced
after it has been in service for thirty-six months.
4.6 PRIVATE CLUB INITIATION FEE. The Company shall
reimburse the executive for the initiation fee levied by a country
club or other private club of the Executive's choice.
5. TERMINATION.
5.1 TERMINATION FOR CAUSE. The Company shall at all
times have the right, upon written notice to the Executive, to
terminate the Executive's employment hereunder, for cause. For
purposes of this Agreement, the term "cause" shall mean (a) a
willful breach by the Executive of any of the material terms or
provisions of this Agreement which is not cured within 10 days
after notice from the Company to the Executive (which notice shall
specify in reasonable detail the alleged breach), (b) the
Executive's conviction of a felony involving moral turpitude, (c)
commission by the Executive of an act or acts involving fraud,
embezzlement, misappropriation, theft or dishonesty against the
property or personnel of the Company, (d) a willful breach by the
Executive of his fiduciary duty to the Company which either results
in material damage to the Company or is not cured within 10 days
after notice from the Company to the Executive (which notice shall
specify in reasonable detail the alleged breach), or (e) willful or
reckless conduct by the Executive which the Board in good faith
determines is likely to have a material adverse effect on the
business, assets, properties, results of operations, financial
condition or prospects of the Company. Upon any termination
pursuant to this Section 5.1, the Executive shall be entitled to be
paid his Base Salary to the date of termination and the Company
shall have no further liability hereunder (other than for reim-
bursement for reasonable business expenses incurred prior to the
date of termination, subject, however to the provisions of Section
4.2). Any termination pursuant to this Section 5.1 shall be deemed
to constitute a termination of the Executive's employment for
"cause" for the purposes of any stock options granted to him under
any stock option plans maintained by the Company.
5.2 DISABILITY. The Company shall at all times have the
right, upon written notice to the Executive, to terminate the
Executive's employment hereunder, if the Executive shall, as the
result of mental or physical incapacity, illness or disability,
fail to perform his duties and responsibilities provided for herein
for a period of more than 90 consecutive days in any 365-day
period. In the event of any termination pursuant to this Section
5.2, the Executive shall be entitled to be paid his Base Salary to
the date of termination and the Company shall have no further
liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of termination,
subject, however to the provisions of Section 4.2).
5.3 DEATH. In the event of the death of the Executive
during the term of his employment hereunder, the Company shall pay
the estate of the Executive any unpaid amounts of his Base Salary
to the date of his death and the Company shall have no further
liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of termination,
subject, however to the provisions of Section 4.1).
5.4 TERMINATION WITHOUT CAUSE. At any time the Company
shall have the right to terminate the Executive's employment
hereunder by written notice to the Executive; provided, however,
that, the Company shall pay the Executive any unpaid Base Salary
accrued through the effective date of termination specified in such
notice and shall pay the Executive severance payments and provide
him with severance benefits as follows:
(a) In the event the effective date of termination
is prior to February 1, 1996, the Company shall pay the Executive
the sum of $600,000, in twelve equal monthly installments, with the
first such installment commencing on such effective date.
(b) In the event the effective date of termination
is after February 1, 1996, the Company shall pay the Executive the
sum of $300,000, in twelve equal installments, with the first such
installment commencing on such effective date; provided, however,
that in no event shall the Company be obligated to continue such
payments beyond the Initial Term.
The Company shall have no further liability to the Executive
hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.2).
6. RESTRICTIVE COVENANTS.
6.1 NON-COMPETITION. While employed by the Company and
during the Non-competition Period (as hereinafter defined), the
Executive shall not, directly or indirectly, engage in or have any
interest in any sole proprietorship, partnership, corporation or
business or any other person or entity (whether as an employee,
officer, director, partner, agent, security holder, creditor,
consultant or otherwise) that directly or indirectly is engaged in
the business of the Company or its subsidiaries in the contiguous
48 states of the United States; provided, however, that (i) nothing
herein shall be deemed to prevent the Executive from owning an
interest in the equity or debt securities of the Company, and (ii)
nothing herein shall be deemed to prevent the Executive from
acquiring through market purchases and owning, solely as an
investment, less than two percent of the equity securities of any
class of any issuer whose shares are registered under Section 12(b)
or 12(g) of the Securities Exchange Act of 1934, as amended, and
are listed or admitted for trading on any United States national
securities exchange or are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar
system of automated dissemination of quotations of securities
prices in common use, so long as neither of them is a member of any
"control group" (within the meaning of the rules and regulations of
the United States Securities and Exchange Commission) of any such
issuer. For purposes of this Section 6.1, the term "NON-COMPETITION
PERIOD" shall mean (a) in the event the Executive's employment is
terminated pursuant to Section 5.4, the period beginning on the
effective date of such termination and ending on date on which all
severance payments payable pursuant to paragraphs (a) and (b)
thereof have been paid in full, and (b) in the event the
Executive's employment hereunder is terminated for any other
reason, a period of one year following the date his employment is
terminated.
6.2 NONDISCLOSURE. Except as expressly permitted by the
Company or in connection with the performance of his duties
hereunder, the Executive shall not divulge, communicate, use to the
detriment of the Company or for the benefit of any other person or
persons, or misuse in any way, any confidential information
pertaining to the business of the Company or its subsidiaries. Any
confidential information or data heretofore or hereafter acquired
by the Executive with respect to the business of the Company and
its subsidiaries (which shall include, but not be limited to,
information concerning their respective financial condition,
prospects, customers, sources of leads, methods of doing business,
and the manner of design, manufacture, importation, marketing and
distribution of their respective products) shall be deemed a
valuable, special and unique asset of the Company that is received
by the Executive in confidence and as a fiduciary, and the
Executive shall remain a fiduciary to the Company and its subsid-
iaries with respect to all of such information. Notwithstanding any
provision hereof which may be to the contrary, confidential
information shall not include (a) information that is or becomes
generally available to the public other than as a result of a
disclosure by the Executive, or (b) information lawfully acquired
by the Executive from sources other than the Company or its
affiliates who are not bound by any agreement of confidentiality.
6.3 NONSOLICITATION OF EMPLOYEES AND CUSTOMERS. While
employed by the Company and for a period of two years following the
date his employment is terminated hereunder, the Executive shall
not, directly or indirectly, for himself or for any other person,
firm, corporation, partnership, association or other entity, (a)
attempt to employ or enter into any contractual arrangement with
any employee or former employee of the Company or its subsidiaries,
unless such employee or former employee has not been employed by
the Company or a subsidiary of the Company for a period in excess
of six months, or (b) call on or solicit any of the actual or
targeted prospective customers or clients of the Company or its
subsidiaries, nor shall the Executive make known the names and
addresses of such customers or any information relating in any
manner to the trade or business relationships of the Company or its
subsidiaries with such customers.
6.4 BOOKS AND RECORDS. All books, records, and accounts
relating in any manner to the customers or clients of the Company
and its subsidiaries, whether prepared by the Executive or
otherwise coming into the Executive's possession, together with any
Company credit or charge cards, door or file keys, access cards to
Company properties, computer access codes, files, notes, manuals,
memoranda, prints, drawings, formulations, records, software and
any other Company property related to the operation of the business
of the Company and its subsidiaries, shall be the exclusive
property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or
on the Company's request at any time. The Executive shall not
retain copies, extracts or compilations of any such books, records,
accounts or other items.
7. INJUNCTION. It is recognized and hereby acknowledged by
the parties hereto that a breach by the Executive of any of the
covenants contained in Section 6 of this Agreement will cause
irreparable harm and damage to the Company and its subsidiaries,
the monetary amount of which may be virtually impossible to
ascertain. As a result, the Executive recognizes and hereby
acknowledges that the Company shall be entitled to an injunction
from any court of competent jurisdiction enjoining and restraining
any violation of any or all of the covenants contained in Section
6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and
that such right to injunction shall be cumulative and in addition
to whatever other remedies the Company may possess.
8. ASSIGNMENT. Any or all of the rights and interests of
the Company hereunder (i) may be assigned to any purchaser of
substantially all of the assets of the Company, and (ii) may be
assigned as a matter of law to the surviving entity in any merger
of the Company; provided, however, that in any or all such events
the Company shall not be released or discharged from its obliga-
tions hereunder. The Executive shall not delegate his employment
obligations hereunder, or any portion thereof, to any other person.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Florida.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements, understandings
and arrangements, both oral and written, between the parties hereto
with respect to such subject matter. The parties hereto hereby
agree that any and all prior agreements, understandings and
arrangements for the provision of services by the Executive to the
Company and the compensation of the Executive in any form shall be
deemed terminated and of no further force or effect. This Agreement
may not be modified in any way unless by a written instrument
signed by each of the parties hereto.
11. NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and shall be given by personal
delivery, facsimile transmission, Federal Express (or other
equivalent courier service) or by registered or certified mail,
postage prepaid, return receipt requested (a) if to the Company, at
2665 South Bayshore Drive, Eighth Floor, Miami, Florida 33133,
Attention: General Counsel, and (b) if to the Executive, to his
address as reflected on the payroll records of the Company, or to
such other addresses as either party hereto may from time to time
give notice of to the other. Notice by registered or certified mail
will be effective three days after deposit in the United States
mail. Notice by any other permitted means will be effective upon
receipt.
12. BENEFITS; BINDING EFFECT. This Agreement shall be for
the benefit of and binding upon the parties hereto and their
respective heirs, personal representatives, legal representatives,
successors and, where applicable, assigns, including, without
limitation, any successor to the Company, whether by merger,
consolidation, sale of stock, sale of assets or otherwise.
13. SEVERABILITY. The invalidity of any one or more of the
words, phrases, sentences, clauses or sections contained in this
Agreement shall not affect the enforceability of the remaining
portions of this Agreement or any part thereof, all of which are
inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared
invalid, this Agreement shall be construed as if such invalid word
or words, phrase or phrases, sentence or sentences, clause or
clauses, or section or sections had not been inserted. If such
invalidity is caused by length of time or size of area, or both,
the otherwise invalid provision will be considered to be reduced to
a period or area which would cure such invalidity.
14. WAIVERS. The waiver by either party hereto of a breach
or violation of any term or provision of this Agreement shall not
operate nor be construed as a waiver of any subsequent breach or
violation.
15. DAMAGES. Nothing contained herein shall be construed to
prevent any party hereto from seeking and recovering from the other
damages sustained by either or both of them as a result of its or
his breach of any term or provision of this Agreement. In the event
that either party hereto brings suit for the collection of any
damages resulting from, or for the injunction of any action
constituting, a breach of any of the terms or provisions of this
Agreement, then the prevailing party shall pay all reasonable
costs, fees (including reasonable attorneys' fees) and expenses of
the non-prevailing party.
16. SECTION HEADINGS. The section headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
17. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied
in this Agreement is intended, or shall be construed, to confer
upon or give any person other than the parties hereto and their
respective heirs, personal representatives, legal representatives,
successors and assigns, any rights or remedies under or by reason
of this Agreement
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
ATLANTIS PLASTICS, INC.
By:
Earl W. Powell
Chairman of the Board
ANTHONY F. BOVA
EXHIBIT A
INCENTIVE COMPENSATION
(a) For each of the Company's fiscal years ending December
31, 1995, 1996, 1997, 1998 and 1999, the Executive shall (provided
that he is employed by the Company on the last day of any such
fiscal year) be entitled to receive annual Incentive Compensation
based upon the amount of the percentage increase in the Company's
Adjusted Earnings Per Share (as hereinafter defined) for such
fiscal year over the Adjusted Earnings Per Share for the immediate-
ly preceding fiscal year; provided, however, that in no event shall
the Incentive Compensation for any such year exceed the amount of
the Executive's Base Salary for such year, and provided, further,
that the Incentive Compensation, if any, payable to the Executive
in respect of the fiscal year ending December 31, 1995 shall be an
amount equal to 11/12 of the amount otherwise determined hereunder.
(b) For purposes of paragraph (a), above, "ADJUSTED EARNINGS
PER SHARE" means, for any such fiscal year, the consolidated income
(or loss) from continuing operations of the Company and its
subsidiaries for such year, excluding extraordinary items, net of
tax, determined in accordance with generally accepted accounting
principles, consistently applied with prior periods. The determina-
tion of Adjusted Earnings Per Share made by the firm of independent
certified public accountants employed by the Company shall be final
and binding on the Executive and the Company.
(c) For purposes of determining the Executive's Incentive
Compensation for any such fiscal year, if the actual percentage
increase over a prior year's Adjusted Earnings Per Share is not a
whole number, (i) such amount, if one-half of one percent or
greater, shall be rounded up to the nearest whole number, and (ii)
such amount, if less than one-half of one percent, shall be rounded
down to the nearest whole number. The whole percentage number of
any such annual increase in Adjusted Earnings Per Share is referred
to herein as the "ANNUAL INCREASE PERCENTAGE". To the extent that
the Annual Increase Percentage for any such year falls within any
Annual Increase Percentage Range set forth in column (B), below,
the number of whole percentage points included in such Annual
Increase Percentage range shall be multiplied times the dollar
amount set forth opposite each applicable Annual Increase Percent-
age Range in column (A), below, and the sum of the values arrived
at pursuant to such calculation shall equal the Executive's
Incentive Compensation for such year:
<TABLE>
<CAPTION>
<S> <C>
$ PER PERCENTAGE ANNUAL INCREASE
POINT INCREASE PERCENTAGE RANGE
$2,000 0 to 10%
3,000 11% to 15%
7,000 16% and greater
</TABLE>
The foregoing provisions are illustrated by the following example:
EXAMPLE. The Company's Adjusted Earnings Per
Share for 1995 are 20.5% greater than the
Company's Adjusted Earnings Per Share for
1994. Therefore, the Annual Increase Percent-
age for 1995 is 21% (rounded up from 20.5%)
and there are 21 whole percentage points
included in such Annual Increase Percentage.
The Executive's Incentive Compensation for
1995 is the sum of (a) 10 times $3,000, plus
(b) five times $6,000, plus (c) five times
$12,000, plus (d) one times $15,000. Accord-
ingly, the Executive's 1995 Incentive Compen-
sation is 11/12 of $135,000, or $123,750.
(d) For purposes of this Agreement, the amount of Incentive
Compensation payable with respect to any fiscal year of the Company
(net of any tax or other amount properly withheld therefrom) shall
be paid by the Company to Executive within 75 days after the end of
such fiscal year; provided, however, that in the event any
Incentive Compensation is paid prior to the issuance of the
Company's audited financial statements with respect to such year,
any amount paid shall be subject to increase or decrease based upon
the results of such audited financial statements.
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of March 6, 1995,
by and between ATLANTIS PLASTICS, INC., a Florida corporation (the
"COMPANY"), and PAUL RUDOVSKY (the "EXECUTIVE").
PRELIMINARY STATEMENTS:
A. In view of the Executive's substantial experience,
knowledge and reputation, the Board of Directors of the Company
believes it to be in the best interest of the Company to employ the
Executive on the terms and subject to the conditions hereinafter
set forth.
B. The Executive desires to be employed by the Company on
the terms and subject to the conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties agree as follows:
1. EMPLOYMENT.
1.1 GENERAL. The Company hereby employs the Executive
as Executive Vice President, Finance and Planning of the Company,
and the Executive hereby agrees to provide services to the Company,
on the terms and subject to the conditions set forth herein.
1.2 DUTIES OF EXECUTIVE. During the term of this
Agreement, the Executive shall serve as the Executive Vice
President, Finance and Planning of the Company, shall diligently
perform all services, consistent with his title and position, as
may be assigned to him by the Board of Directors of the Company
(the "BOARD") or the Company's Chief Executive Officer (the "CEO"),
and shall exercise such power and authority as may from time to
time be delegated to him by the Board or the CEO. The Executive
shall devote his full business time and attention to the business
and affairs of the Company, render such services to the best of his
ability, and use his best efforts to promote the interests of the
Company.
1.3 PLACE OF PERFORMANCE. In connection with the
employment of the Executive by the Company hereunder, the Executive
shall perform his duties and obligations hereunder primarily from
the Company's offices located in Atlanta, Georgia, except for
required travel on the Company's business.
2. TERM.
2.1 INITIAL TERM. The initial term of the employment of
the Executive hereunder shall be for a period of five years
commencing on the effective date hereof and expiring on March 5,
2000 (the "INITIAL TERM"), unless sooner terminated in accordance
with the terms and conditions hereof.
2.2 RENEWAL TERM. The employment of the Executive
hereunder may be renewed and extended for such period or periods as
may be mutually agreed to by the Company and the Executive in a
written supplement to this Agreement signed by the Executive and
the Company (a "WRITTEN SUPPLEMENT"). If this Agreement is not so
renewed and extended prior to the expiration of the Initial Term,
the employment of the Executive hereunder shall automatically
terminate upon the expiration of the Initial Term.
3. COMPENSATION.
3.1 BASE SALARY. As compensation for all services
rendered by the Executive to the Company hereunder, the Executive
shall receive a base salary at the rate of $185,000 per annum (the
"BASE SALARY") during the term of his employment hereunder, which
shall be payable in installments consistent with the Company's
normal payroll schedule, subject to applicable withholding and
other taxes. Commencing on the first anniversary date of this
Agreement, the Base Salary shall be increased annually on each
March 6 during the term of the Executive's employment hereunder to
reflect any increase from the previous year in the Consumer Price
Index (all urban wage earners) for the Atlanta, Georgia metropoli-
tan area. If the term of this Agreement shall be renewed and
extended as provided in Section 2.2 hereof, then during such
renewal term the Executive shall be paid a Base Salary as set forth
in the Written Supplement.
3.2 INCENTIVE COMPENSATION. In addition to the Base
Salary, during the term of his employment hereunder, the Executive
shall be entitled to receive incentive compensation in accordance
with the provisions set forth on Exhibit A hereto (the "INCENTIVE
COMPENSATION"). If the term of this Agreement shall be renewed and
extended as provided in Section 2.2 hereof, then during such
renewal term the Executive shall be paid Incentive Compensation as
set forth in the Written Supplement.
4. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.
4.1 MOVING AND TRANSITION EXPENSES. The Executive shall
be entitled to reimbursement as set forth in this Section 4.1 in
connection with the relocation of his personal residence from
Purchase, New York, to the Atlanta, Georgia metropolitan area:
(a) Upon the receipt of proper substantiation, the
Company shall reimburse the Executive for the amount of any
sales commissions actually paid by him with respect to the
sale of his personal residence located at 2 Stratton Road,
Purchase, New York (the "NEW YORK RESIDENCE"), in a manner
consistent with the Company's relocation policy.
(b) Upon the receipt of proper substantiation, the
Company shall reimburse the Executive for amounts actually
paid by him in connection with the relocation of the personal
belongings of the Executive and his immediate family from the
New York Residence to Atlanta, Georgia. Such amounts shall
include reasonable costs incurred by the Executive and the
members of his immediate family to visit the Atlanta metropol-
itan area for the purpose of locating a permanent residence
there.
(c) The Company shall provide the Executive with
rental living accommodations in the Atlanta metropolitan area,
for a period of up to five months from the date hereof (the
"TRANSITION PERIOD"). Such accommodations shall be selected by
the Executive; however, the rental terms (including, without
limitation, the amount of the periodic lease payments) shall
be reasonably acceptable to the Company. The Company shall be
responsible for any security deposit (and shall be entitled to
any refund thereof), as well as all utility and incidental
expenses in connection therewith.
(d) During the Transition Period, the Company
shall, upon the receipt of proper substantiation and subject
to the Company's travel policy applicable to its executive
employees, reimburse the Executive for amounts actually paid
by him for up to two round trip airline tickets per month
between New York and Atlanta, purchased by him for personal
purposes.
(e) The Executive shall be entitled to such other
benefits as are customarily provided by the Company to its
executive employees pursuant to the Company's relocation
policy.
4.2 REIMBURSABLE EXPENSES. During the term of the
Executive's employment hereunder, the Company, upon the submission
of proper substantiation by the Executive, shall reimburse the
Executive for all reasonable expenses actually and necessarily paid
or incurred by him in the course of and pursuant to the business of
the Company.
4.3 OTHER BENEFITS. During the term of the Executive's
employment hereunder, the Executive shall be entitled to partici-
pate in all medical and hospitalization, group life insurance, and
any and all other fringe benefit plans as are presently and
hereinafter provided by the Company to its executives. The
Executive shall be entitled to four weeks of vacation annually;
provided, however, that in no event may a vacation be taken at a
time when to do so could, in the reasonable judgment of the CEO,
materially adversely affect the business of the Company.
4.4 WORKING FACILITIES. During the term of the
Executive's employment hereunder, the Company shall furnish the
Executive with an office, secretarial help and such other facili-
ties and services suitable to his position and adequate for the
performance of his duties hereunder.
4.5 PRIVATE CLUB INITIATION FEE. The Company shall
reimburse the executive for the initiation fee levied by a country
club or other private club of the Executive's choice.
5. TERMINATION.
5.1 TERMINATION FOR CAUSE. The Company shall at all
times have the right, upon written notice to the Executive, to
terminate the Executive's employment hereunder, for cause. For
purposes of this Agreement, the term "cause" shall mean (a) a
willful breach by the Executive of any of the material terms or
provisions of this Agreement which is not cured within 10 days
after notice from the Company to the Executive (which notice shall
specify in reasonable detail the alleged breach), (b) the
Executive's conviction of a felony involving moral turpitude, (c)
commission by the Executive of an act or acts involving fraud,
embezzlement, misappropriation, theft or dishonesty against the
property or personnel of the Company, (d) a willful breach by the
Executive of his fiduciary duty to the Company which either results
in material damage to the Company or is not cured within 10 days
after notice from the Company to the Executive (which notice shall
specify in reasonable detail the alleged breach), or (e) willful or
reckless conduct by the Executive which the Board in good faith
determines is likely to have a material adverse effect on the
business, assets, properties, results of operations, financial
condition or prospects of the Company. Upon any termination
pursuant to this Section 5.1, the Executive shall be entitled to be
paid his Base Salary to the date of termination and the Company
shall have no further liability hereunder (other than for (i)
payment of any amounts otherwise payable to him pursuant to Section
4.1, and (ii) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however to the
provisions of Section 4.2). Any termination pursuant to this
Section 5.1 shall be deemed to constitute a termination of the
Executive's employment for "cause" for the purposes of any stock
options granted to him under any stock option plans maintained by
the Company.
5.2 DISABILITY. The Company shall at all times have the
right, upon written notice to the Executive, to terminate the
Executive's employment hereunder, if the Executive shall, as the
result of mental or physical incapacity, illness or disability,
fail to perform his duties and responsibilities provided for herein
for a period of more than 90 consecutive days in any 365-day
period. In the event of any termination pursuant to this Section
5.2, the Executive shall be entitled to be paid his Base Salary to
the date of termination and the Company shall have no further
liability hereunder (other than for (i) payment of any amounts
otherwise payable to him pursuant to Section 4.1, and (ii) reim-
bursement for reasonable business expenses incurred prior to the
date of termination, subject, however to the provisions of Section
4.2).
5.3 DEATH. In the event of the death of the Executive
during the term of his employment hereunder, the Company shall pay
the estate of the Executive any unpaid amounts of his Base Salary
to the date of his death and the Company shall have no further
liability hereunder (other than for (i) payment of any amounts
otherwise payable to him pursuant to Section 4.1, and (ii) reim-
bursement for reasonable business expenses incurred prior to the
date of termination, subject, however to the provisions of Section
4.2).
5.4 TERMINATION WITHOUT CAUSE. At any time the Company
shall have the right to terminate the Executive's employment
hereunder by written notice to the Executive; provided, however,
that, the Company shall pay the Executive any unpaid Base Salary
accrued through the effective date of termination specified in such
notice and shall pay the Executive an amount equal to his annual
Base Salary as then in effect, payable in twelve equal monthly
installments, with the first such installment commencing on such
effective date. The Company shall have no further liability to the
Executive hereunder (other than for (i) payment of any amounts
otherwise payable to him pursuant to Section 4.1, and (ii)
reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of
Section 4.2).
6. RESTRICTIVE COVENANTS.
6.1 NON-COMPETITION. While employed by the Company and
during the Non-competition Period (as hereinafter defined), the
Executive shall not, directly or indirectly, engage in or have any
interest in any sole proprietorship, partnership, corporation or
business or any other person or entity (whether as an employee,
officer, director, partner, agent, security holder, creditor,
consultant or otherwise) that directly or indirectly is engaged in
the business of the Company or its subsidiaries (a "COMPETING
BUSINESS") in the contiguous 48 states of the United States;
provided, however, that (i) nothing herein shall be deemed to
prevent the Executive from owning an interest in the equity or debt
securities of the Company, and (ii) nothing herein shall be deemed
to prevent the Executive from acquiring through market purchases
and owning, solely as an investment, less than two percent of the
equity securities of any class of any issuer whose shares are
registered under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended, and are listed or admitted for trading on
any United States national securities exchange or are quoted on the
National Association of Securities Dealers Automated Quotations
System, or any similar system of automated dissemination of
quotations of securities prices in common use, so long as neither
of them is a member of any "control group" (within the meaning of
the rules and regulations of the United States Securities and
Exchange Commission) of any such issuer. For purposes of this
Section 6.1, the term "NON-COMPETITION PERIOD" shall mean (a) in
the event the Executive's employment is terminated pursuant to
Section 5.4, the period beginning on the effective date of such
termination and ending on date on which all severance payments
payable pursuant to such Section 5.4 have been paid in full, and
(b) in the event the Executive's employment hereunder is terminated
for any other reason, a period of one year following the date his
employment is terminated.
6.2 NONDISCLOSURE. Except as expressly permitted by the
Company or in connection with the performance of his duties
hereunder, the Executive shall not divulge, communicate, use to the
detriment of the Company or for the benefit of any other person or
persons, or misuse in any way, any confidential information
pertaining to the business of the Company or its subsidiaries. Any
confidential information or data heretofore or hereafter acquired
by the Executive with respect to the business of the Company and
its subsidiaries (which shall include, but not be limited to,
information concerning their respective financial condition,
prospects, customers, sources of leads, methods of doing business,
and the manner of design, manufacture, importation, marketing and
distribution of their respective products) shall be deemed a
valuable, special and unique asset of the Company that is received
by the Executive in confidence and as a fiduciary, and the
Executive shall remain a fiduciary to the Company and its subsid-
iaries with respect to all of such information. Notwithstanding any
provision hereof which may be to the contrary, confidential
information shall not include (a) information that is or becomes
generally available to the public other than as a result of a
disclosure by the Executive, or (b) information lawfully acquired
by the Executive from sources other than the Company or its
affiliates who are not bound by any agreement of confidentiality.
6.3 NONSOLICITATION OF EMPLOYEES AND CUSTOMERS. While
employed by the Company and for a period of two years following the
date his employment is terminated hereunder, the Executive shall
not, directly or indirectly, for himself or for any other person,
firm, corporation, partnership, association or other entity, (a)
attempt to employ or enter into any contractual arrangement with
any employee or former employee of the Company or its subsidiaries,
unless such employee or former employee has not been employed by
the Company or a subsidiary of the Company for a period in excess
of six months, or (b) call on or solicit any of the actual or
targeted prospective customers or clients of the Company or its
subsidiaries in connection with any Competing Business, nor shall
the Executive, in connection with any Competing Business, make
known the names and addresses of such customers or any information
relating in any manner to the trade or business relationships of
the Company or its subsidiaries with such customers.
6.4 BOOKS AND RECORDS. All books, records, and accounts
relating in any manner to the customers or clients of the Company
and its subsidiaries, whether prepared by the Executive or
otherwise coming into the Executive's possession, together with any
Company credit or charge cards, door or file keys, access cards to
Company properties, computer access codes, files, notes, manuals,
memoranda, prints, drawings, formulations, records, software and
any other Company property related to the operation of the business
of the Company and its subsidiaries, shall be the exclusive
property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or
on the Company's request at any time. The Executive shall not
retain copies, extracts or compilations of any such books, records,
accounts or other items.
7. INJUNCTION. It is recognized and hereby acknowledged by
the parties hereto that a breach by the Executive of any of the
covenants contained in Section 6 of this Agreement will cause
irreparable harm and damage to the Company and its subsidiaries,
the monetary amount of which may be virtually impossible to
ascertain. As a result, the Executive recognizes and hereby
acknowledges that the Company shall be entitled to an injunction
from any court of competent jurisdiction enjoining and restraining
any violation of any or all of the covenants contained in Section
6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and
that such right to injunction shall be cumulative and in addition
to whatever other remedies the Company may possess.
8. ASSIGNMENT. Any or all of the rights and interests of
the Company hereunder (i) may be assigned to any purchaser of
substantially all of the assets of the Company, and (ii) may be
assigned as a matter of law to the surviving entity in any merger
of the Company; provided, however, that (a) in connection with any
such sale of assets the Company shall cause the purchaser in such
transaction to execute a written acknowledgment that it agrees to
be bound by the provisions of this Agreement as if substituted for
the Seller hereunder, and (b) in any or all such events the Company
shall not be released or discharged from its obligations hereunder.
The Executive shall not delegate his employment obligations
hereunder, or any portion thereof, to any other person.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Florida.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements, understandings
and arrangements, both oral and written, between the parties hereto
with respect to such subject matter. The parties hereto hereby
agree that any and all prior agreements, understandings and
arrangements for the provision of services by the Executive to the
Company and the compensation of the Executive in any form shall be
deemed terminated and of no further force or effect. This Agreement
may not be modified in any way unless by a written instrument
signed by each of the parties hereto.
11. NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and shall be given by personal
delivery, facsimile transmission, Federal Express (or other
equivalent courier service) or by registered or certified mail,
postage prepaid, return receipt requested (a) if to the Company, at
2665 South Bayshore Drive, Eighth Floor, Miami, Florida 33133,
Attention: General Counsel, and (b) if to the Executive, to his
address as reflected on the payroll records of the Company, or to
such other addresses as either party hereto may from time to time
give notice of to the other. Notice by registered or certified mail
will be effective three days after deposit in the United States
mail. Notice by any other permitted means will be effective upon
receipt.
12. BENEFITS; BINDING EFFECT. This Agreement shall be for
the benefit of and binding upon the parties hereto and their
respective heirs, personal representatives, legal representatives,
successors and, where applicable, assigns, including, without
limitation, any successor to the Company, whether by merger,
consolidation, sale of stock, sale of assets or otherwise.
13. SEVERABILITY. The invalidity of any one or more of the
words, phrases, sentences, clauses or sections contained in this
Agreement shall not affect the enforceability of the remaining
portions of this Agreement or any part thereof, all of which are
inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared
invalid, this Agreement shall be construed as if such invalid word
or words, phrase or phrases, sentence or sentences, clause or
clauses, or section or sections had not been inserted. If such
invalidity is caused by length of time or size of area, or both,
the otherwise invalid provision will be considered to be reduced to
a period or area which would cure such invalidity.
14. WAIVERS. The waiver by either party hereto of a breach
or violation of any term or provision of this Agreement shall not
operate nor be construed as a waiver of any subsequent breach or
violation.
15. DAMAGES. Nothing contained herein shall be construed to
prevent any party hereto from seeking and recovering from the other
damages sustained by either or both of them as a result of its or
his breach of any term or provision of this Agreement. In the event
that either party hereto brings suit for the collection of any
damages resulting from, or for the injunction of any action
constituting, a breach of any of the terms or provisions of this
Agreement, then the prevailing party shall pay all reasonable
costs, fees (including reasonable attorneys' fees) and expenses of
the non-prevailing party.
16. SECTION HEADINGS. The section headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
17. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied
in this Agreement is intended, or shall be construed, to confer
upon or give any person other than the parties hereto and their
respective heirs, personal representatives, legal representatives,
successors and assigns, any rights or remedies under or by reason
of this Agreement
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
ATLANTIS PLASTICS, INC.
By:
Anthony F. Bova
President and Chief Executive
Officer
PAUL RUDOVSKY
EXHIBIT A
INCENTIVE COMPENSATION
(a) For each of the Company's fiscal years ending December
31, 1995, 1996, 1997, 1998 and 1999, the Executive shall (provided
that he is employed by the Company on the last day of any such
fiscal year) be entitled to receive annual Incentive Compensation
based upon the amount of the percentage increase in the Company's
Adjusted Earnings Per Share (as hereinafter defined) for such
fiscal year over the Adjusted Earnings Per Share for the immediate-
ly preceding fiscal year; provided, however, that in no event shall
the Incentive Compensation for any such year exceed an amount equal
to 75% of the amount of the Executive's Base Salary for such year,
and provided, further, that the Incentive Compensation, if any,
payable to the Executive in respect of the fiscal year ending
December 31, 1995 shall be an amount equal to 10/12 of the amount
otherwise determined hereunder.
(b) For purposes of paragraph (a), above, "ADJUSTED EARNINGS
PER SHARE" means, for any such fiscal year, the consolidated income
(or loss) from continuing operations of the Company and its
subsidiaries for such year, excluding extraordinary items, net of
tax, determined in accordance with generally accepted accounting
principles, consistently applied with prior periods. The determina-
tion of Adjusted Earnings Per Share made by the firm of independent
certified public accountants employed by the Company shall be final
and binding on the Executive and the Company.
(c) For purposes of determining the Executive's Incentive
Compensation for any such fiscal year, if the actual percentage
increase over a prior year's Adjusted Earnings Per Share is not a
whole number, (i) such amount, if one-half of one percent or
greater, shall be rounded up to the nearest whole number, and (ii)
such amount, if less than one-half of one percent, shall be rounded
down to the nearest whole number. The whole percentage number of
any such annual increase in Adjusted Earnings Per Share is referred
to herein as the "ANNUAL INCREASE PERCENTAGE". To the extent that
the Annual Increase Percentage for any such year falls within any
Annual Increase Percentage Range set forth in column (B), below,
the number of whole percentage points included in such Annual
Increase Percentage range shall be multiplied times the dollar
amount set forth opposite each applicable Annual Increase Percent-
age Range in column (A), below, and the sum of the values arrived
at pursuant to such calculation shall equal the Executive's
Incentive Compensation for such year:
<TABLE>
<CAPTION>
<S> <C>
$ PER PERCENTAGE ANNUAL INCREASE
POINT INCREASE PERCENTAGE RANGE
$2,000 0 to 10%
3,000 11% to 15%
7,000 16% and greater
</TABLE>
The foregoing provisions are illustrated by the following example:
EXAMPLE. The Company's Adjusted Earnings Per
Share for 1995 are 20.5% greater than the
Company's Adjusted Earnings Per Share for
1994. Therefore, the Annual Increase Percent-
age for 1995 is 21% (rounded up from 20.5%)
and there are 21 whole percentage points
included in such Annual Increase Percentage.
The Executive's Incentive Compensation for
1995 is the sum of (a) 10 times $2,000, plus
(b) five times $3,000, plus (c) six times
$7,000. Accordingly, the Executive's 1995
Incentive Compensation is 10/12 of $77,000, or
$64,166.67.
(d) For purposes of this Agreement, the amount of Incentive
Compensation payable with respect to any fiscal year of the Company
(net of any tax or other amount properly withheld therefrom) shall
be paid by the Company to Executive, in cash, within 75 days after
the end of such fiscal year; provided, however, that in the event
any Incentive Compensation is paid prior to the issuance of the
Company's audited financial statements with respect to such year,
any amount paid shall be subject to increase or decrease based upon
the results of such audited financial statements.
EXHIBIT 10.3
THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT
This Third Amendment to Credit Agreement and Consent, dated as
of March 30, 1995 (this "Agreement") is between Atlantis Plastics,
Inc., a Florida corporation ("Borrower") and Heller Financial,
Inc., a Delaware corporation for itself as Agent and as Lender
("Heller").
RECITALS
A. Borrower and Heller are parties to that certain Credit
Agreement dated as of February 22, 1993, as amended by the First
Amendment and Waiver to Credit Agreement dated as of March 28, 1994
and that Second Amendment to Credit Agreement dated August 15,
1994, (with this Third Amendment and Consent, the "Credit Agree-
ment"). Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.
B. Borrower has requested that Heller consent to Borrower
and/or certain Subsidiary Guarantors entering into (i) a supple-
mental equipment financing facility with General Electric Capital
Corporation in an amount not to exceed $5,000,000 and (ii) an
equipment financing facility with the CIT Group/Equipment Financ-
ing, Inc., a copy of which is attached hereto as Exhibit A (the
"CIT Loan Agreement"), in an amount not to exceed $15,000,000, both
hereinafter refined to as the "New Equipment Facilities".
C. In order to accommodate Borrower's request, Heller and
Borrower desire to amend the Credit Agreement, as provided herein.
NOW, THEREFORE, in consideration of the foregoing, the
covenants and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Amendment to the Credit Agreement. The Credit Agreement
is hereby amended as follows:
(a) The definition of "Capital Expenditures" contained
in Section 1.1 of the Credit Agreement is hereby deleted in its
entirety and the following substituted in its place and stead:
"Capital Expenditures" means all expenditures for
(including deposits), or contracts or commitments for expenditures
with respect to any property, plant and equipment or similar fixed
asset accounts required to be capitalized under GAAP, excluding
Investments of the proceeds of Asset Dispositions pursuant to
subsection 7.7.
(b) The definition of "Fixed Charges" contained in
Section 1.1 of the Credit Agreement is hereby deleted in its
entirety and the following substituted in its place and stead:
"Fixed Charges" means, for any period, the following,
each calculated for such period (a) Interest Expenses paid or
accrued by Borrower and the Subsidiary Guarantors; plus (b)
scheduled payments of principal with respect to all Indebtedness of
Borrower and the Subsidiary Guarantors, (c) income and franchise
taxes paid or payable by Borrower and the Subsidiary Guarantors,
(d) the unfinanced portion of Capital Expenditures made or accrued
by Borrower and the Subsidiary Guarantors and (e) cash dividends
paid on preferred stock by Borrower and the Subsidiary Guarantors;
less (f) tax refunds actually received by Borrower and the
Subsidiary Guarantors.
(c) The definition of "Purchase Money Indebtedness"
contained in Section 1.1 of the Credit Agreement is hereby deleted
and the following substituted in its place and stead:
"Purchase Money Indebtedness" means Indebtedness incurred
to finance the purchase of assets (other than assets which
constitute a part of the Collateral on the Closing Date or are
purchased with the Net Proceeds from the disposition of assets
which constitute part of the Collateral), which is not part of an
Investment in assets comprising a business, and which is secured by
a Lien on and only on such assets.
(d) Section 7.1(f) of the Credit Agreement is hereby
deleted and the following substituted in its place and stead:
"(f) Purchase Money Indebtedness not to exceed
$29,000,000 in the aggregate at any time outstand-
ing secured by purchase money Liens, provided that,
at the time of incurrence of any such Purchase
Money Indebtedness, no Event of Default shall have
occurred and be continuing or would occur as a
result of the incurrence of such Purchase Money
Indebtedness;"
(e) Section 5.1(F) of the Credit Agreement is hereby
amended to change the time period of "fifteen (15) Business Days"
in the introductory clause thereof to "twenty (20) Business Days."
2. Consent. In reliance upon the representations and
warrants contained in paragraph 3 of this Agreement, Heller hereby
consents to Borrower and the Subsidiary Guarantors entering into
and performing the New Equipment Facilities. Heller hereby
releases and confirms to Borrower and The CIT Group/Equipment
Financing, Inc., a New York corporation ("CIT"), that, notwith-
standing the filing of any UCC-1 financing statements by Heller
against Borrower or any of the Subsidiaries Guarantors or the
granting by Borrower or any of the Subsidiary Guarantors to Heller
of a lien on the CIT Collateral (as defined below), Heller does not
and will not have (and the definition of "Collateral" in the Credit
Agreement is hereby amended to exclude), whether now existing or
hereafter acquired, any right, title or interest in, or lien on, or
claim to, any of the items included in the definition of
"Collateral" in the CIT Loan Agreement (collectively referred to as
the "CIT Collateral). At Borrower's or CIT's request, Heller will
promptly execute and deliver to CIT UCC-3 partial releases relating
to the CIT Collateral. CIT acknowledges and agrees that the
partial release of Collateral by Heller as described in this
paragraph is limited to the CIT Collateral only and shall not be
deemed by CIT to be a general release of Heller's security interest
in the remaining portion of the Collateral.
3. Representations and Warranties. To include Heller to
enter into this Agreement, Borrower represents and warrants to
Heller that:
(a) Authority and Binding Effect. The execution,
delivery, and performance by Borrower of this Agreement is within
its corporate power, has been duly authorized by all necessary
corporate action (including, without limitation, shareholder
approval), has received all necessary government approvals (if any
shall be required), and does not and will not contravene or
conflict with any provision of law applicable to Borrower, the
Certificate of Incorporation or Bylaws of Borrower, or any order,
judgment or decree of any court or other agency of government or
any agreement, instrument, or document binding upon Borrower; and
the Credit Agreement as heretofore amended and as amended as of the
date hereof is the legal, valid, and binding obligation of Borrower
enforceable against Borrower in accordance with its terms.
(b) No Default. No Default or Event of Default under
the Credit Agreement, as amended hereby, has occurred and is
continuing.
(c) Warranties and Representations. The warranties and
representations of Borrower contained in this Agreement, the Credit
Agreement, as amended hereby, and the Financing Agreements, shall
be true and correct as of the date hereof, with the same effect as
though made on such date except to the extent that such representa-
tions and warranties expressly relate solely to an earlier date, in
which case such representations or warranties were true and correct
as of such earlier date.
4. Miscellaneous.
(a) Captions. Such captions used in this Agreement are
for convenience only, and shall not affect the construction of this
Agreement.
(b) Governing Law. This Agreement shall be a contract
made under and governed by the laws of the State of Illinois,
without regard to conflict of laws principles. Whenever possible,
each provision of this Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if
any provision of this Agreement shall be prohibited by or invalid
under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this
Agreement.
(c) Counterparts. This Agreement may be executed in
counterparts, each of which counterparts shall be deemed to be an
original, but all of such counterparts shall together constitute
but one and the same Agreement.
(d) Successors and Assigns. This Agreement shall be
binding upon Borrower and Heller and their respective successors
and assigns, and shall inure to the sole benefit of Borrower and
Heller and the successors and assigns of Borrower and Heller.
(e) References. Any reference to the Credit Agreement
or the Financing Agreements contained in any notice, request,
certificate, or other document executed concurrently with or after
the execution and delivery of this Agreement shall be deemed to
include this Agreement unless the context shall otherwise require.
(f) Continued Effectiveness. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to
and do not serve to effect a novation as to the Credit Agreement.
The parties hereto expressly do not intend to extinguish the Credit
Agreement. Instead, it is the express intention of the parties
hereto to reaffirm the indebtedness created under the Credit
Agreement which is evidenced by the notes provided for therein and
secured by the Collateral. The Credit Agreement as amended hereby
and each of the Loan Documents remain in full force and effect.
Delivered at Chicago, Illinois, as of the date and year first
above written.
ATLANTIS PLASTICS, INC.
By:
Name Printed:
Title:
HELLER FINANCIAL, INC., for
itself and as Agent for the
Lenders
By:
Name Printed:
Title:
EXHIBIT 10.4
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made as of
("Agreement"), by and between General Electric Capital Corporation,
a New York corporation with an address at 3379 Peachtree Road N.E.
400, Atlanta, GA ("Secured Party"), and CYANEDE PLASTICS, INC., a
corporation organized and existing under the laws of the State of
Kentucky with its chief executive offices located at Industrial
Park, U.S. Hwy. 60 West, Henderson, Kentucky ("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 (all of the foregoing being herein-
after individually and collectively referred to as the "Collater-
al"). 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").
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 whatever 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 applica-
ble 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) There are no suits or proceedings pending or threatened
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 opera-
tions, 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 descrip-
tion, 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, repair-
man'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. At its option, Secured Party
may discharge taxes. liens, security interests or other encum-
brances 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 consti-
tute a portion of the Collateral and shall be subject to the
security interests 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 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 holer 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 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 Collater-
al other than Permitted Liens.
(b) Debtor agrees to furnish its annual financial statements
and such interim statements as Secured Party have and will have
been prepared on a basis of generally accepted accounting princi-
ples, 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 anytime
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, it
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 Debtor 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, or being
threatened with, attachment, execution, levy, seizure or confisca-
tion in any legal proceeding or otherwise;
(g) Any default by Debtor under any other agreement between
Debtor and Secured Party;
(h) Any dissolution, termination of existence, merger,
consolidation, change in controlling ownership, 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;
(i) 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
(j) 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.
8. REMEDIES OF DEFAULT.
(a) Upon the occurrence of an 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 eighteen percent (18%) per annum or the
maximum rate not prohibited by applicable law.
(b) Upon such declaration 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 Collater-
al 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 and all of the
Collateral usable 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', apprai-
sers', 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, endorsor, 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. Debtor and Secured Party agree
that such fees to the extent not in excess of twenty percent (20%)
of subject amount owing after default (if permitted by law, or such
lesser sum as may otherwise be permitted by law) shall be deemed
reasonable.
(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.
(f) DEBTOR 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 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 RELATION-
SHIP 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 AMEND-
MENTS, 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.
9. MISCELLANEOUS.
(a) This Agreement, any Note and/or any of the other Debt
Documents may be assigned, in whole or in party, 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 express mail, 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 patient 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 Indebted-
ness 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).
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 Cyanede Plastics, Inc.
Corporation
By: By:
Title: Title:
PROMISSORY NOTE
(Date)
Industrial Park, U.S. Highway 60 West, Henderson, Kentucky 42420
(Address of Maker)
FOR VALUE RECEIVED, CYANEDE PLASTICS, 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 3379 Peachtree
Road, NE, #400, Atlanta, GA 30326 or at such other place as Payee
or the holder hereof may designate, the principal sum of Two
Million Six Hundred Seventy Three Thousand Nine Hundred Nineteen
and no/100 Dollars ($2,673,919.00), with interest thereon, from the
date hereof through and including the dates of payment, at the
floating per annum simple interest ("Contract Rate") calculated as
hereinafter set forth. The Contract Rate shall be adjusted once
each calendar month, and such adjustment shall be effective during
the adjustment period ("Adjustment Period") as hereinafter defined.
Each Adjustment Period shall commence at the close of business on
the last day of a calendar month and shall continue through the
same day of the next succeeding calendar month. The Contract Rate
for each Adjustment Period shall be equal to the sum of (i) Two and
Fifty Five Hundredths percent (2.55%) per annum plus (ii) a
variable per annum interest rate, which shall be the Libor Rate.
"Libor Rate" shall mean, with respect to any adjustment period
occurring during the term of this Promissory Note, an interest rate
per annum equal to the average of the interbank offered rates for
dollar deposits in the London market based on quotations at five
major banks for thirty (30) day maturities, to the extent the rates
offered by these banks is published in the "Money Rates" column of
the Eastern Edition of the Wall Street Journal (provided, however,
that with respect to the first Adjustment Period, it shall be
determined as of the seventh Business Day next preceding the first
day of such first Adjustment Period).
Subject to the other provisions hereof, the principal on this Note
is payable in lawful money of the United States in Eighty Three
(83) consecutive monthly installments of Twenty Five Thousand Four
Hundred Sixty Six and no/100 Dollars ($25,466.00) each plus
interest at the Contract Rate ("Periodic Installment") and a final
installment which shall be in the amount of the total outstanding
unpaid principal and interest. 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 period (each,
a "Payment Date"). The number of Periodic Installments, and their
due dates, will not change with fluctuations in the Contract Rate.
All payments shall be applied first to interest and then to
principal. 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 a 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.
Interest shall be calculated on the basis of a 360 day year.
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 being herein-
after 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 the applicable 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 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
default under or fails to perform under any term of 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 the Security Agreement, at
the election of Payee, shall immediately become due and payable,
with interest thereon at the lesser of eighteen percent (18%) 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).
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.
General Electric Capital Cyanede Plastics, Inc.
Corporation
/s/ M. James Feeney (L.S.)
(Witness) (Signature)
M. JAMES FEENEY
(Print Name) Print name (and title, if ap-
plicable)
(Address) (Federal tax identification
number)
EXHIBIT 10.5
CORPORATE GUARANTY
Date: , 19
General Electric Capital Corporation
3379 Peachtree Road N.E. 400
Atlanta, Georgia 30326
To induce you to enter into, purchase or otherwise acquire,
now or at any time hereafter, any promissory notes, security
agreements, chattel mortgages, pledge agreements, conditional sale
contracts, lease agreements, and/or any other documents or
instruments evidencing, or relating to, any lease, loan, extension
of credit or other financial accommodation (collectively "Account
Documents" and each an "Account Document") to Cyanede Plastics,
Inc., a corporation organized and existing under the laws of the
State of Kentucky ("Customer"), but without in any way binding you
to do so, the undersigned, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, does
hereby guarantee to you, your successors and assigns, the due
regular and punctual payment of any sum or sums of money which the
Customer may owe to you now or at any time hereafter, whether
evidenced by an Account Document, on open account or otherwise, and
whether it represents principal, interest, rent, late charges,
indemnities, an original balance, an accelerated balance, liquidat-
ed damages, a balance reduced by partial payment, a deficiency
after sale or other disposition of any leased equipment, collateral
or security, or any other type of sum of any kind whatsoever that
the Customer may owe to you now or at any time hereafter, and does
hereby further guarantee to you, your successors and assigns, the
due, regular and punctual performance of any other duty or
obligation of any kind or character whatsoever that the Customer
may owe to you now or at any time hereafter (all such payment and
performance obligations being collectively referred to as "Obliga-
tions"). Undersigned does hereby further guarantee to pay upon
demand all losses, costs, attorneys' reasonable fees and expenses
which may be suffered by you by reason of Customer's default or
default of the undersigned.
This Guaranty is a guaranty of prompt payment and performance
(and not merely a guaranty of collection). Nothing herein shall
require you to first seek or exhaust any remedy against the
Customer, its successors and assigns, or any other person obligated
with respect to the Obligations, or to first foreclose, exhaust or
otherwise proceed against any leased equipment, collateral or
security which may be given in connection with the Obligations. It
is agreed that you may, upon any breach or default of the Customer,
or at any time thereafter, make demand upon the undersigned and
receive payment and performance of the Obligations, with or without
notice or demand for payment or performance by the Customer, its
successors or assigns, or any other person. Suit may be brought
and maintained against the undersigned, at your election, without
joinder of the Customer or any other person as parties thereto.
The obligation of each signatory to this Guaranty shall be joint
and several.
The undersigned agrees that its obligations under this
Guaranty shall be primary, absolute, continuing and unconditional,
irrespective of and unaffected by any of the following actions or
circumstances (regardless of any notice to or consent of the
undersigned): (a) the genuineness, validity, regularity and
enforceability of the Account Documents or any other documents; (b)
any extension, renewal, amendment, change, waiver or other
modification of the Account Documents or any other documents; (c)
the absence of, or delay in, any action to enforce the Account
Documents, this Guaranty or any other document; (d) your failure or
delay in obtaining any other guaranty of the Obligations (includ-
ing, without limitation, your failure to obtain the signature of
any other guarantor hereunder); (e) the release of, extension of
time for payment or performance by, or any other indulgence granted
to the Customer or any other person with respect to the Obligations
by operation of law or otherwise; (f) the existence, value,
condition, loss, subordination or release (with or without
substitution) of, or failure to have title to or perfect and
maintain a security interest in, or the time, place and manner of
any sale or other disposition of any leased equipment, collateral
or security given in connection with the Obligations, or any other
impairment (whether intentional or negligent, by operation of law
or otherwise) of the rights of the undersigned; (g) the Customer's
voluntary or involuntary bankruptcy, assignment for the benefit of
creditors, reorganization, or similar proceedings affecting the
Customer or any of its assets; or (h) any other action or circum-
stances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.
This Guaranty may be terminated upon delivery to you (at your
address shown above) of a written termination notice from the
undersigned. However, as to all Obligations (whether matured,
unmatured, absolute, contingent or otherwise) incurred by the
Customer prior to your receipt of such written termination notice
(and regardless of any subsequent amendment, extension or other
modification which may be made with respect to such Obligations),
this Guaranty shall nevertheless continue and remain undischarged
until all such Obligations are indefeasibly paid and performed in
full.
The undersigned agrees that this Guaranty shall remain in full
force and effect or be reinstated (as the case may be) if at any
time payment or performance of any of the Obligations (or any part
thereof) is rescinded, reduced or must otherwise be restored or
returned by you, all as though such payment or performance has not
been made. If, by reason of any bankruptcy, insolvency or similar
laws effecting the rights of creditors, you shall be prohibited
from exercising any of your rights or remedies against the Customer
or any other person or against any property, then, as between you
and the undersigned, such prohibition shall be of no force and
effect, and you shall have the right to make demand upon, and
receive payment from, the undersigned of all amounts and other sums
that would be due to you upon a default with respect to the
Obligations.
Notice of acceptance of this Guaranty and of any default by
the Customer or any other person is hereby waived. Presentment,
protest demand, and notice of protest, demand and dishonor of any
of the Obligations, and the exercise of possessory, collection or
other remedies for the Obligations, are hereby waived. The
undersigned warrants that it has adequate means to obtain from the
Customer on a continuing basis financial data and other information
regarding the Customer and is not relying upon you to provide any
such data or other information. Without limiting the foregoing,
notice of adverse change in the Customer's financial condition or
of any other fact which might materially increase the risk of the
undersigned is also waived. All settlements, compromises, accounts
stated and agreed balances made in good faith between the Customer,
its successors or assigns, and you shall be binding upon and shall
not affect the liability of the undersigned.
Payment of all amounts now or hereafter owed to the under-
signed by the Customer or any other obligor for any of the
Obligations is hereby subordinated in right of payment to the
indefeasible payment in full to you of all Obligations and is
hereby assigned to you as a security therefor. The undersigned
hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims
against the Customer, any other obligor for any of the Obligations,
any collateral therefor, or any other assets of the Customer or any
such other obligor, for subrogation, reimbursement, exoneration,
contribution, indemnification, setoff or other recourse in respect
of sums paid or payable to you by the undersigned hereunder, and
the undersigned hereby further irrevocably and unconditionally
waives and relinquishes any and all other benefits which it might
otherwise directly or indirectly receive or be entitled to receive
by reason of any amounts paid by, or collected or due from, it, the
Customer or any other obligor for any of the Obligations, or
realized from any of their respective assets.
THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF, DIRECTLY OR INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS
BETWEEN US RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF, AND/OR
THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN US. 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 OR STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
As used in this Guaranty, the word "person" shall include any
individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, or any
government or any political subdivision thereof.
This Guaranty is intended by the parties as a final expression
of the guaranty of the undersigned and is also intended as a
complete and exclusive statement of the terms thereof. No course
of dealing, course of performance or trade usage, nor any paid
evidence of any kind, shall be used to supplement or modify any of
the terms hereof. Nor are there any conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its
provisions may only be waived, modified, varied, released,
terminated or surrendered, in whole or in part, by a duly autho-
rized written instrument signed by you. No failure by you to
exercise your rights hereunder shall give rise to any estoppel
against you, or excuse the undersigned from performing hereunder.
Your waiver of any right to demand performance hereunder shall not
be a waiver of any subsequent or other right to demand performance
hereunder.
This Guaranty shall bind the undersigned's successors and
assigns and the benefits thereof shall extend to and include your
successors and assigns. In the event of default hereunder, you may
at any time inspect undersigned's records, or at your option,
undersigned shall furnish you with a current independent audit
report. Guarantor agrees to furnish its annual 10K financial
statements and quarterly 10Q interim statements to Secured Party.
If any provisions of this Guaranty are in conflict with any
applicable statute, rule or law, then such provisions shall be
deemed null and void to the extent that they may conflict there-
with, but without invalidating any other provisions hereof.
Each signatory on behalf of a corporate guarantor warrants
that he had authority to sign on behalf of such corporation and by
so signing, to bind said guarantor corporation hereunder.
IN WITNESS WHEREOF, the Guaranty is executed the day and year
above written.
Atlantis Plastics, Inc.
By:
(Signature)
Title:
(Officer's title)
ATTEST:
Secretary/Assistant Secretary
STOCKHOLDERS CERTIFICATION
We, the undersigned, being all of the stockholders of Atlantis
Plastics, Inc. ("Guarantor"), the corporation which is about to
execute a guaranty of the obligations of Cyanede Plastics, Inc.
("Customer") in favor of General Electric Capital Corporation (the
"GECC Corporation"), do hereby certify to such GECC Corporation
that it is to the benefit of the Guarantor to execute such
guaranty, that the benefit to be received by the Guarantor from
such guaranty is reasonably worth the obligations thereby guaran-
teed, that the Guarantor is authorized to execute said guaranty,
and that the persons executing the same on behalf of the Guarantor
are duly authorized to do so in their named capacity and to thereby
bind the Guarantor to the terms of said instrument as therein set
forth.
Dated: , 19 (L.S.)
(L.S.)
(L.S.)
(L.S.)
(L.S.)
CERTIFIED RESOLUTION
The undersigned hereby certifies that he is Secretary of
Atlantis Plastics, Inc., that the following resolutions was passed
by unanimous written consent of the Board of Directors of said
corporation effective as of February 23, 1995, that said resolution
has not since been revoked or amended, and that the form of
guaranty referred to therein is the form shown attached hereto:
"RESOLVED that it is to the benefit of this corporation that
it execute a guaranty of the obligations of Cyanede Plastics, Inc.
("Customer") to General Electric Capital Corporation (the "GECC
Corporation") and that the benefit to be received by this corpora-
tion from such guaranty is reasonably worth the obligations thereby
guaranteed, and further that such guaranty shall be substantially
in the form annexed to these minutes, and further that the Vice
President and Controller and Secretary (Title of Officers) of this
corporation are authorized to execute such guaranty on behalf of
this corporation."
WITNESS my hand and seal of this corporation on this day
of , 1995.
[Seal]
Secretary
CERTIFICATION AND REPRESENTATION BY SIGNING OFFICERS
We, the undersigned, Peter Kacer and Peter W. Klein being the
Vice President and Controller and Secretary of Atlantis Plastics,
Inc., the corporation which executed the guaranty attached hereto,
hereby jointly and severally certify and represent to General
Electric Capital Corporation that each of the undersigned executed
the guaranty for and on behalf of said corporation and that in so
executing said instrument the undersigned were duly authorized to
do so in their named capacity as officers and by so executing to
hereby bind said guarantor corporation to the terms of said
instrument as therein set forth.
(L.S.) (L.S.)
Date: Date:
EXHIBIT 10.6
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made as of
("Agreement"), by and between General Electric Capital Corporation,
a New York corporation with an address at 3379 Peachtree Road N.E.
400, Atlanta, GA ("Secured Party"), and PIERCE PLASTICS, INC., a
corporation organized and existing under the laws of the State of
Delaware with its chief executive offices located at 3362 S. Main
Street, Elkhart, Indiana ("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 (all of the foregoing being herein-
after individually and collectively referred to as the "Collater-
al"). 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").
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 whatever 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 applica-
ble 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) There are no suits or proceedings pending or threatened
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 opera-
tions, 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 descrip-
tion, 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, repair-
man'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. At its option, Secured Party
may discharge taxes. liens, security interests or other encum-
brances 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 consti-
tute a portion of the Collateral and shall be subject to the
security interests 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 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 holer 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 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 Col-
lateral other than Permitted Liens.
(b) Debtor agrees to furnish its annual financial statements
and such interim statements as Secured Party have and will have
been prepared on a basis of generally accepted accounting princi-
ples, 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 anytime
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, it
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 Debtor 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, or being
threatened with, attachment, execution, levy, seizure or confisca-
tion in any legal proceeding or otherwise;
(g) Any default by Debtor under any other agreement between
Debtor and Secured Party;
(h) Any dissolution, termination of existence, merger,
consolidation, change in controlling ownership, 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;
(i) 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
(j) 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.
8. REMEDIES OF DEFAULT.
(a) Upon the occurrence of an 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 eighteen percent (18%) per annum or the
maximum rate not prohibited by applicable law.
(b) Upon such declaration 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 Collater-
al 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 and all of the
Collateral usable 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', apprai-
sers', 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, endorsor, 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. Debtor and Secured Party agree
that such fees to the extent not in excess of twenty percent (20%)
of subject amount owing after default (if permitted by law, or such
lesser sum as may otherwise be permitted by law) shall be deemed
reasonable.
(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.
(f) DEBTOR 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 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 RELATION-
SHIP 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 AMEND-
MENTS, 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.
9. MISCELLANEOUS.
(a) This Agreement, any Note and/or any of the other Debt
Documents may be assigned, in whole or in party, 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 express mail, 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 patient 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 Indebted-
ness 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).
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 Pierce Plastics, Inc.
Corporation
By: By:
Title: Title:
PROMISSORY NOTE
(Date)
3362 S. Main Street, Elkhart, Elkhart County, Indiana
(Address of Maker)
FOR VALUE RECEIVED, Pierce Plastics, 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 3379 Peachtree
Road, NE, #400, Atlanta, GA 30326 or at such other place as Payee
or the holder hereof may designate, the principal sum of Two
Hundred Twenty One Thousand Seven Hundred Ninety and no/100 Dollars
($221,790.00), with interest thereon, from the date hereof through
and including the dates of payment, at the floating per annum
simple interest ("Contract Rate") calculated as hereinafter set
forth. The Contract Rate shall be adjusted once each calendar
month, and such adjustment shall be effective during the adjustment
period ("Adjustment Period") as hereinafter defined. Each
Adjustment Period shall commence at the close of business on the
last day of a calendar month and shall continue through the same
day of the next succeeding calendar month. The Contract Rate for
each Adjustment Period shall be equal to the sum of (i) Two and
Fifty Five Hundredths percent (2.55%) per annum plus (ii) a
variable per annum interest rate, which shall be the Libor Rate.
"Libor Rate" shall mean, with respect to any adjustment period
occurring during the term of this Promissory Note, an interest rate
per annum equal to the average of the interbank offered rates for
dollar deposits in the London market based on quotations at five
major banks for thirty (30) day maturities, to the extent the rates
offered by these banks is published in the "Money Rates" column of
the Eastern Edition of the Wall Street Journal (provided, however,
that with respect to the first Adjustment Period, it shall be
determined as of the seventh Business Day next preceding the first
day of such first Adjustment Period).
Subject to the other provisions hereof, the principal on this Note
is payable in lawful money of the United States in Eighty Three
(83) consecutive monthly installments of Two Thousand One Hundred
Twelve and no/100 Dollars ($2,112.00) each plus interest at the
Contract Rate ("Periodic Installment") and a final installment
which shall be in the amount of the total outstanding unpaid
principal and interest. 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 period (each, a "Payment
Date"). The number of Periodic Installments, and their due dates,
will not change with fluctuations in the Contract Rate.
All payments shall be applied first to interest and then to
principal. 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 a 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.
Interest shall be calculated on the basis of a 360 day year.
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 being herein-
after 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 the applicable 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 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
default under or fails to perform under any term of 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 the Security Agreement, at
the election of Payee, shall immediately become due and payable,
with interest thereon at the lesser of eighteen percent (18%) 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).
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.
General Electric Capital Pierce Plastics, Inc.
Corporation
/s/ M. James Feeney (L.S.)
(Witness) (Signature)
M. JAMES FEENEY
(Print Name) Print name (and title, if ap-
plicable)
(Address) (Federal tax identification
number)
EXHIBIT 10.7
CORPORATE GUARANTY
Date: , 19
General Electric Capital Corporation
3379 Peachtree Road N.E. 400
Atlanta, GA 30326
To induce you to enter into, purchase or otherwise acquire,
now or at any time hereafter, any promissory notes, security
agreements, chattel mortgages, pledge agreements, conditional sale
contracts, lease agreements, and/or any other documents or
instruments evidencing, or relating to, any lease, loan, extension
of credit or other financial accommodation (collectively "Account
Documents" and each an "Account Document") to Pierce Plastics,
Inc., a corporation organized and existing under the laws of the
State of Delaware ("Customer"), but without in any way binding you
to do so, the undersigned, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, does
hereby guarantee to you, your successors and assigns, the due
regular and punctual payment of any sum or sums of money which the
Customer may owe to you now or at any time hereafter, whether
evidenced by an Account Document, on open account or otherwise, and
whether it represents principal, interest, rent, late charges,
indemnities, an original balance, an accelerated balance, liquidat-
ed damages, a balance reduced by partial payment, a deficiency
after sale or other disposition of any leased equipment, collateral
or security, or any other type of sum of any kind whatsoever that
the Customer may owe to you now or at any time hereafter, and does
hereby further guarantee to you, your successors and assigns, the
due, regular and punctual performance of any other duty or
obligation of any kind or character whatsoever that the Customer
may owe to you now or at any time hereafter (all such payment and
performance obligations being collectively referred to as "Obliga-
tions"). Undersigned does hereby further guarantee to pay upon
demand all losses, costs, attorneys' (reasonable) fees and expenses
which may be suffered by you by reason of Customer's default or
default of the undersigned.
This Guaranty is a guaranty of prompt payment and performance
(and not merely a guaranty of collection). Nothing herein shall
require you to first seek or exhaust any remedy against the
Customer, its successors and assigns, or any other person obligated
with respect to the Obligations, or to first foreclose, exhaust or
otherwise proceed against any leased equipment, collateral or
security which may be given in connection with the Obligations. It
is agreed that you may, upon any breach or default of the Customer,
or at any time thereafter, make demand upon the undersigned and
receive payment and performance of the Obligations, with or without
notice or demand for payment or performance by the Customer, its
successors or assigns, or any other person. Suit may be brought
and maintained against the undersigned, at your election, without
joinder of the Customer or any other person as parties thereto.
The obligations of each signatory to this Guaranty shall be joint
and several.
The undersigned agrees that its obligations under this
Guaranty shall be primary, absolute, continuing and unconditional,
irrespective of and unaffected by any of the following actions or
circumstances (regardless of any notice to or consent of the
undersigned): (a) the genuineness, validity, regularity and
enforceability of the Account Documents or any other document; (b)
any extension, renewal, amendment, change, waiver or other
modification of the Account Documents or any other document; (c)
the absence of, or delay in, any action to enforce the Account
Documents, this Guaranty or any other document; (d) your failure or
delay in obtaining any other guaranty of the Obligations (includ-
ing, without limitation, your failure to obtain the signature of
any other guarantor hereunder); (e) the release of, extension of
time for payment or performance by, or any other indulgence granted
to the Customer or any other person with respect to the Obligations
by operation of law or otherwise; (f) the existence, value,
condition, loss, subordination or release (with or without
substitution) of, or failure to have title to or perfect and
maintain a security interest in, or the time, place and manner of
any sale or other disposition of any leased equipment, collateral
or security given in connection with the Obligation, or any other
impairment (whether intentional or negligent, by operation of law
or otherwise) of the rights of the undersigned; (g) the Customer's
voluntary or involuntary bankruptcy, assignment for the benefit of
creditors, reorganization, or similar proceedings affecting the
Customer or any of its assets; or (h) any other action or circum-
stances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.
This Guaranty may be terminated upon delivery to you (at your
address shown above) of a written termination notice from the
undersigned. However, as to all Obligations (whether matured,
unmatured, absolute, contingent or otherwise) incurred by the
Customer prior to your receipt of such written termination notice
(and regardless of any subsequent amendment, extension or other
modification which may be made with respect to such Obligations),
this Guaranty shall nevertheless continue and remain undischarged
until all such Obligations are indefeasibly paid and performed in
full.
The undersigned agrees that this Guaranty shall remain in full
force and effect or be reinstated (as the case may be) if at any
time payment or performance of any of the Obligations (or any part
thereof) is rescinded, reduced or must otherwise be restored or
returned by you, all as though such payment or performance had not
been made. If, by reason of any bankruptcy, insolvency or similar
laws effecting the rights of creditors, you shall be prohibited
from exercising any of your rights or remedies against the Customer
or any other person or against any property, then, as between you
and the undersigned, such prohibition shall be of no force and
effect, and you shall have the right to make demand upon, and
receive payment from, the undersigned of all amounts and other sums
that would be due to you upon a default with respect to the
Obligations.
Notice of acceptance of this Guaranty and of any default by
the Customer or any other person is hereby waived. Presentment,
protest demand, and notice of protest, demand and dishonor of any
of the Obligations, and the exercise of possessory, collection or
other remedies for the Obligations, are hereby waived. The
undersigned warrants that it has adequate means to obtain from the
Customer on a continuing basis financial data and other information
regarding the Customer and is not relying upon you to provide any
such data or other information. Without limiting the foregoing,
notice of adverse change in the Customer's financial condition or
of any other fact which might materially increase the risk of the
undersigned is also waived. All settlements, compromises, accounts
stated and agreed balances made in good faith between the Customer,
its successors or assigns, and you shall be binding upon and shall
not affect the liability of the undersigned.
Payment of all amounts now or hereafter owed to the under-
signed by the Customer or any other obligor for any of the
Obligations is hereby subordinated in right of payment to the
indefeasibly payment in full to you of all Obligations and is
hereby assigned to you as a security therefor. The undersigned
hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims
against the Customer, any other obligor for any of the Obligations,
any collateral therefor, or any other assets of the Customer or any
such other obligor, for subrogation, reimbursement, exoneration,
contribution, indemnification, setoff or other recourse in respect
of sums paid or payable to you by the undersigned hereunder, and
the undersigned hereby further irrevocably and unconditionally
waives and relinquishes any and all other benefits which it might
otherwise directly or indirectly receive or be entitled to receive
by reason of any amounts paid by, or collected or due from it, the
Customer or any other obligor for any of the Obligations, or
realized from any of their respective assets.
THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF, DIRECTLY OR INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS
BETWEEN US RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF, AND/OR
THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN US. 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 SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
As used in this Guaranty, the word "person" shall include any
individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, or any
government or any political subdivision thereof.
This Guaranty is intended by the parties as a final expression
of the guaranty of the undersigned and is also intended as a
complete and exclusive statement of the terms thereof. No course
of dealing, course of performance or trade usage, nor any paid
evidence of any kind, shall be used to supplement or modify any of
the terms hereof. Nor are there any conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its
provisions may only be waived, modified, varied, released,
terminated or surrendered, in whole or in part, by a duly autho-
rized written instrument signed by you. No failure by you to
exercise your rights hereunder shall give rise to any estoppel
against you, or excuse the undersigned from performing hereunder.
Your waiver of any right to demand performance hereunder shall not
be a waiver of any subsequent or other right to demand performance
hereunder.
This Guaranty shall bind the undersigned's successors and
assigns and the benefits thereof shall extend to and include your
successors and assigns. In the event of default hereunder, you may
at any time inspect undersigned's records, or at your option,
undersigned shall furnish you with a current independent audit
report. Guarantor agrees to furnish its annual 10K financial
statements and quarterly 10Q interim statements to Secured Party.
If any provisions of this Guaranty are in conflict with any
applicable statute, rule or law, then such provisions shall be
deemed null and void to the extent that they may conflict there-
with, but without invalidating any other provisions hereof.
Each signatory on behalf of a corporate guarantor warrants
that he had authority to sign on behalf of such corporation and by
so signing, to bind said guarantor hereunder.
IN WITNESS WHEREOF, this Guaranty is executed the day and year
first above written.
Atlantis Plastics, Inc.
By:
(Signature)
Title:
(Officer's Title)
ATTEST:
Secretary/Assistant Secretary
Stockholders Certification
We, the undersigned, being all of the stockholders of Atlantis
Plastics, Inc. ("Guarantor"), the corporation which is about to
execute a guaranty of the obligations of Pierce Plastics, Inc.
("Customer") in favor of General Electric Capital Corporation (the
"GECC Corporation"), do hereby certify to such GECC Corporation
that it is to the benefit of the Guarantor to execute such
guaranty, that the benefits to be received by the Guarantor from
such guaranty is reasonably worth the obligations thereby guaran-
teed, that the Guarantor is authorized to execute said guaranty,
and that the persons executing the same on behalf of the Guarantor
are duly authorized to do so in their named capacity and to thereby
bind the Guarantor to the terms of said instrument as therein set
forth.
Dated: 19, (L.S.)
(L.S.)
(L.S.)
(L.S.)
(L.S.)
Certified Resolution
The undersigned hereby certifies that he is Secretary of
Atlantis Plastics, Inc., that the following resolution was passed
by unanimous written consent of the Board of Directors of said
corporation effective as of February 23, 1995, that said resolution
has not since been revoked or amended, and that the form of
guaranty referred to therein is the form shown attached hereto.
"RESOLVED" that it is to the benefit of this corporation that
it execute a guaranty of the obligations of Pierce Plastics, Inc.
("Customer") to General Electric Capital Corporation (the "GECC
Corporation") and that the benefit to be received by this corpora-
tion from such guaranty is reasonably worth the obligations thereby
guaranteed, and further that such guaranty shall be substantially
in the form annexed to these minutes, and further that the Vice
President and Controller and Secretary (Title of Officers) of this
corporation are authorized to execute such guaranty on the behalf
of this corporation.
WITNESS my hand and the seal of this corporation on this
day of , 19 .
[Seal]
Secretary
Certification and Representation by Signing Officers
We, the undersigned, and
being the Vice President and Controller and Secretary of
Atlantis Plastics, Inc., the corporation which executed the
guaranty attached hereto, hereby jointly and severally certify and
represent to General Electric Capital Corporation that each of the
undersigned executed the guaranty for and on behalf of said
corporation and that in so executing said instrument the under-
signed were duly authorized to do so in their named capacity as
officers and by so executing to hereby bind said guarantor
corporation to the terms of said instrument as therein set forth.
(L.S.) (L.S.)
Date: Date:
EXHIBIT 10.8
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made as of
("Agreement"), by and between General Electric Capital Corporation,
a New York corporation with an address at 3379 Peachtree Road N.E.
400, Atlanta, GA ("Secured Party"), and PLASTIC CONTAINERS, INC.,
a corporation organized and existing under the laws of the State of
Alabama with its chief executive offices located at 701 East
Jackson Street, Demopolis, Alabama ("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 (all of the foregoing being herein-
after individually and collectively referred to as the "Collater-
al"). 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").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor hereby represents, warrants and covenants 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 applic-
able 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) There are no suits or proceedings pending or threatened
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 opera-
tions, 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 descrip-
tion, 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, repair-
men'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. At its option, Secured Party
may discharge taxes, liens, security interests or other encum-
brances 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 consti-
tute 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 secured.
(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 Collater-
al other than Permitted Liens.
(b) Debtor agrees to furnish its annual financial statements
and such interim statements 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 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, financing statements, notices of
lien and other documents pertaining to any or all of the Collater-
al. 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 prompt
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 subject to, or being
threatened with, attachment, execution, levy, seizure or confisca-
tion in any legal proceeding or otherwise;
(g) Any default by Debtor under any other agreement between
Debtor and Secured Party;
(h) Any dissolution, termination of existence, merger,
consolidation, change in controlling ownership, 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;
(i) 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
(j) 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.
8. REMEDIES ON DEFAULT.
(a) Upon the occurrence of an 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 eighteen percent (18%) per annum or the
maximum rate not prohibited by applicable law.
(b) Upon such declaration 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 Collater-
al 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 Collater-
al 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', apprai-
sers', 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. Debtor and Secured Party agree
that such fees to the extent not in excess of twenty percent (20%)
of subject amount owing after default (if permitted by law, or such
lesser sum as may otherwise be permitted by law) shall be deemed
reasonable.
(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.
(f) DEBTOR 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 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 RELATION-
SHIP 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 AMEND-
MENTS, 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.
9. 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 express mail, 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, on 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 Indebted-
ness 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).
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 Plastic Containers, Inc.
Corporation
By: By:
Title: Title:
PROMISSORY NOTE
(Date)
701 East Jackson Street, Demopolis, Marengo County, Alabama
(Address of Maker)
FOR VALUE RECEIVED, Plastic Containers, 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 3379 Peachtree
Road, NE, #400, Atlanta, GA 30326 or at such other place as Payee
or the holder hereof may designate, the principal sum of Three
Hundred Forty Thousand and no/100 Dollars ($340,000.00), with
interest thereon, from the date hereof through and including the
dates of payment, at the floating per annum simple interest
("Contract Rate") calculated as hereinafter set forth. The
Contract Rate shall be adjusted once each calendar month, and such
adjustment shall be effective during the adjustment period
("Adjustment Period") as hereinafter defined. Each Adjustment
Period shall commence at the close of business on the last day of
a calendar month and shall continue through the same day of the
next succeeding calendar month. The Contract Rate for each
Adjustment Period shall be equal to the sum of (i) Two and Fifty
Five Hundredths percent (2.55%) per annum plus (ii) a variable per
annum interest rate, which shall be the Libor Rate. "Libor Rate"
shall mean, with respect to any adjustment period occurring during
the term of this Promissory Note, an interest rate per annum equal
to the average of the interbank offered rates for dollar deposits
in the London market based on quotations at five major banks for
thirty (30) day maturities, to the extent the rates offered by
these banks is published in the "Money Rates" column of the Eastern
Edition of the Wall Street Journal (provided, however, that with
respect to the first Adjustment Period, it shall be determined as
of the seventh Business Day next preceding the first day of such
first Adjustment Period).
Subject to the other provisions hereof, the principal on this Note
is payable in lawful money of the United States in Eighty Three
(83) consecutive monthly installments of Three Thousand Two Hundred
Thirty Eight and no/100 Dollars ($3,238.00) each plus interest at
the Contract Rate ("Periodic Installment") and a final installment
which shall be in the amount of the total outstanding unpaid
principal and interest. 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 period (each, a "Payment
Date"). The number of Periodic Installments, and their due dates,
will not change with fluctuations in the Contract Rate.
All payments shall be applied first to interest and then to
principal. 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 a 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.
Interest shall be calculated on the basis of a 360 day year.
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 being herein-
after 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 the applicable 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 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
default under or fails to perform under any term of 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 the Security Agreement, at
the election of Payee, shall immediately become due and payable,
with interest thereon at the lesser of eighteen percent (18%) 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).
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.
General Electric Capital Plastic Containers, Inc.
Corporation
/s/ M. James Feeney (L.S.)
(Witness) (Signature)
M. JAMES FEENEY
(Print Name) Print name (and title, if ap-
plicable)
(Address) (Federal tax identification
number)
EXHIBIT 10.9
CORPORATE GUARANTY
Date: , 19
General Electric Capital Corporation
3379 Peachtree Road N.E. 400
Atlanta, GA 30326
To induce you to enter into, purchase or otherwise acquire,
now or at any time hereafter, any promissory notes, security
agreements, chattel mortgages, pledge agreements, conditional sale
contracts, lease agreements, and/or any other documents or
instruments evidencing, or relating to, any lease, loan, extension
of credit or other financial accommodation (collectively "Account
Documents" and each an "Account Document") to Plastic Containers,
Inc., a corporation organized and existing under the laws of the
State of Alabama ("Customer"), but without in any way binding you
to do so, the undersigned, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, does
hereby guarantee to you, your successors and assigns, the due
regular and punctual payment of any sum or sums of money which the
Customer may owe to you now or at any time hereafter, whether
evidenced by an Account Document, on open account or otherwise, and
whether it represents principal, interest, rent, late charges,
indemnities, an original balance, an accelerated balance, liquidat-
ed damages, a balance reduced by partial payment, a deficiency
after sale or other disposition of any leased equipment, collateral
or security, or any other type of sum of any kind whatsoever that
the Customer may owe to you now or at any time hereafter, and does
hereby further guarantee to you, your successors and assigns, the
due, regular and punctual performance of any other duty or
obligation of any kind or character whatsoever that the Customer
may owe to you now or at any time hereafter (all such payment and
performance obligations being collectively referred to as "Obliga-
tions"). Undersigned does hereby further guarantee to pay upon
demand all losses, costs, attorneys' reasonable fees and expenses
which may be suffered by you by reason of Customer's default or
default of the undersigned.
This Guaranty is a guaranty of prompt payment and performance
(and not merely a guaranty of collection). Nothing herein shall
require you to first seek or exhaust any remedy against the
Customer, its successors and assigns, or any other person obligated
with respect to the Obligations, or to first foreclose, exhaust or
otherwise proceed against any leased equipment, collateral or
security which may be given in connection with the Obligations. It
is agreed that you may, upon any breach or default of the Customer,
or at any time thereafter, make demand upon the undersigned and
receive payment and performance of the Obligations, with or without
notice or demand for payment or performance by the Customer, its
successors or assigns, or any other person. Suit may be brought
and maintained against the undersigned, at your election, without
joinder of the Customer or any other person as parties thereto.
The obligations of each signatory to this Guaranty shall be joint
and several.
The undersigned agrees that its obligations under this
Guaranty shall be primary, absolute, continuing and unconditional,
irrespective of and unaffected by any of the following actions or
circumstances (regardless of any notice to or consent of the
undersigned): (a) the genuineness, validity, regularity and
enforceability of the Account Documents or any other documents; (b)
any extension, renewal, amendment, change, waiver or other
modification of the Account Documents or any other document; (c)
the absence of, or delay in, any action to enforce the Account
Documents, this Guaranty or any other document; (d) your failure or
delay in obtaining any other guaranty of the Obligations (includ-
ing, without limitation, your failure to obtain the signature of
any other guarantor hereunder); (e) the release of, extension of
time for payment or performance by, or any other indulgence granted
to the Customer or any other person with respect to the Obligations
by operation of law or otherwise; (f) the existence, value,
condition, loss, subordination or release (with or without
substitution) of, or failure to have title to or perfect and
maintain a security interest in, or the time, place and manner of
any sale or other disposition of any leased equipment, collateral
or security given in connection with the Obligations, or any other
impairment (whether intentional or negligent, by operation of law
or otherwise) of the rights of the undersigned; (g) the Customer's
voluntary or involuntary bankruptcy, assignment for the benefit of
creditors, reorganization, or similar proceedings affecting the
Customer or any of its assets; or (h) any other action or circum-
stances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.
This Guaranty may be terminated upon delivery to you (at your
address shown above) of a written termination notice from the
undersigned. However, as to all Obligations (whether matured,
unmatured, absolute, contingent or otherwise) incurred by the
Customer prior to your receipt of such written termination notice
(and regardless of any subsequent amendment, extension or other
modification which may be made with respect to such Obligations),
this Guaranty shall nevertheless continue and remain undischarged
until all such Obligations are indefeasibly paid and performed in
full.
The undersigned agrees that this Guaranty shall remain in full
force and effect or be reinstated (as the case may be) if at any
time payment or performance of any of the Obligations (or any part
thereof) is rescinded, reduced or must otherwise be restored or
returned by you, all as though such payment or performance had not
been made. If, by reason of any bankruptcy, insolvency or similar
laws effecting the rights of creditors, you shall be prohibited
from exercising any of your rights or remedies against the Customer
or any other person or against any property, then, as between you
and the undersigned, such prohibition shall be of no force and
effect, and you shall have the right to make demand upon, and
receive payment from, the undersigned of all amounts and other sums
that would be due to you upon a default with respect to the
Obligations.
Notice of acceptance of this Guaranty and of any default by
the Customer or any other person is hereby waived. Presentment,
protest demand, and notice of protest, demand and dishonor of any
of the Obligations, and the exercise of possessory, collection or
other remedies for the Obligations, are hereby waived. The
undersigned warrants that it has adequate means to obtain from the
Customer on a continuing basis financial data and other information
regarding the Customer and is not relying upon you to provide any
such data or other information. Other limiting the foregoing,
notice of adverse change in the Customer's financial condition or
of any other fact which might materially increase the risk of the
undersigned is also waived. All settlements, compromises, accounts
stated and agreed balances made in good faith between the Customer,
its successors or assigns, and you shall be binding upon and shall
not affect the liability of the undersigned.
Payment of all amounts now or hereafter owed to the under-
signed by the Customer or any other obligor for any of the
Obligations is hereby subordinated in right of payment to the
indefeasible payment in full to you of all Obligations and is
hereby assigned to you as a security therefor. The undersigned
hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims
against the Customer, any other obligor for any of the Obligations,
any collateral therefor, or any other assets of the Customer or any
such other obligor, for subrogation, reimbursement, exoneration,
contribution, indemnification, setoff or other recourse in respect
of sums paid or payable to you by the undersigned hereunder, and
the undersigned hereby further irrevocably and unconditionally
waives and relinquishes any and all other benefits which it might
otherwise directly or indirectly receive or be entitled to receive
by reason of any mounts paid by, or collected or due from it, the
Customer or any other obligor for any of the Obligations, or
realized from any of their respective assets.
THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF, DIRECTLY OR INDIRECTLY. THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS
BETWEEN US RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF, AND/OR
THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN US. 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 SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
As used in this Guaranty, the word "person" shall include any
individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, or any
government or any political subdivision thereof.
This Guaranty is intended by the parties as a final expression
of the guaranty of the undersigned and is also intended as a
complete and exclusive statement of the terms thereof. No course
of dealing, course of performance or trade usage, nor any paid
evidence of any kind, shall be used to supplement or modify any of
the terms hereof. Nor are there any conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its
provisions may only be waived, modified, varied, released,
terminated or surrendered, in whole or in part, by a duly autho-
rized written instrument signed by you. No failure by you to
exercise your rights hereafter shall give rise to any estoppel
against you, or excuse the undersigned from performing hereunder.
Your waiver of any right to demand performance hereunder shall not
be a waiver of any subsequent or other right to demand performance
hereunder.
This Guaranty shall bind the undersigned's successors nd
assigns and the benefits thereof shall extend to and include your
successors and assigns. In the event of default hereunder, you may
at any time inspect undersigned's records, or at your option,
undersigned shall furnish you with a current independent audit
report. Guarantor agrees to furnish its annual 10K financial
statements and quarterly 10Q interim statements to Secured Party.
initial.
If any provisions of this Guaranty are in conflict with any
applicable statute, rule or law, then such provisions shall be
deemed null and void to the extent that they may conflict there-
with, but without invalidating any other provisions hereof.
Each signatory on behalf of a corporate guarantor warrants
that he had authority to sign on behalf of such corporation and by
so signing, to bind said guarantor corporation hereunder.
IN WITNESS WHEREOF, this Guaranty is executed the day and year
above written
ATLANTIS PLASTICS, INC.
By:
(Signature)
Title:
(Officer's Title)
Stockholders Certification
We, the undersigned, being all of the stockholders of Atlantis
Plastics, Inc. ("Guarantor"), the corporation which is about to
execute a guaranty of the obligations of Plastic Containers, Inc.
("Customer") in favor of General Electric Capital Corporation (the
"GECC Corporation"), do hereby certify to such GECC Corporation
that it is to the benefit of the Guarantor to execute such
guaranty, that the benefits to be received by the Guarantor from
such guaranty is reasonably worth the obligation thereby guaran-
teed, that the Guarantor is authorized to execute said guaranty,
and that the persons executing the same on behalf of the Guarantor
are duly authorized to do so in their named capacity and to thereby
bind the Guarantor to the terms of said instrument as therein set
forth.
Dated: , 19
(L.S.)
(L.S.)
(L.S.)
(L.S.)
(L.S.)
Certified Resolution
The undersigned hereby certifies that he is Secretary of
Atlantis Plastics, Inc., that the following resolutions was passed
by unanimous written consent at a meeting of the Board of Directors
of said corporation held on effective as of February 23, 1995 duly
called, a quorum being present, that said resolution has not since
been revoked or amended, and that the form of guaranty referred to
therein is the form shown attached hereto:
"RESOLVED that it is to the benefit of this corporation that
it execute a guaranty of the obligation of Plastic Containers,
Inc. ("Customer") to General Electric Capital Corporation (the
"GECC Corporation") and that the benefit to be received by
this corporation from such guaranty is reasonably worth the
obligation thereby guaranteed, and further that such guaranty
shall be substantially in the form annexed to these minutes,
and further that the Vice President and Controller and
Secretary (Title of Officers) of this corporation are autho-
rized to execute such guaranty on the behalf of this corpora-
tion."
WITNESS my hand and seal of this corporation on this
day of , 1995.
[Seal]
Secretary
Certification and Representation by Signing Officers
We, the undersigned, Peter Kacer and Peter W. Klein being the
Vice President and Controller and Secretary of Atlantis Plastics,
Inc., the corporation which executed the guaranty attached hereto,
hereby jointly and severally certify and represent to General
Electric Capital Corporation that each of the undersigned executed
the guaranty for and on behalf of said corporation and that in so
executing said instrument the undersigned were duly authorized to
do so in their named capacity as officers and by so executing to
hereby bind said guarantor corporation to the terms of said
instrument as therein set forth.
(L.S.)
(L.S.)
Date: Date:
EXHIBIT 10.10
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made as of
("Agreement"), by and between General Electric Capital Corporation,
a New York corporation with an address at 3379 Peachtree Road NE,
Suite 400, Atlanta, Georgia ("Secured Party"), and LINEAR FILMS,
INC., a corporation organized and existing under the laws of the
State of Oklahoma with its chief executive offices located at 1870
The Exchange, Suite 200, Atlanta, Georgia ("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 (all of the foregoing being herein-
after individually and collectively referred to as the "Collater-
al"). 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").
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 applica-
ble laws in accordance with their terms, except to the extent that
the enforcement of remedied 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) There are no suits or proceedings pending or threatened
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 opera-
tions, 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 descrip-
tion, 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, mechanics, repair-
men'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. At its option, Secured Party
may discharge taxes, liens, security interests or other encum-
brances 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 consti-
tute 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 Collater-
al other than Permitted Liens.
(b) Debtor agrees to furnish its annual financial statements
and such interim statements 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 princi-
ples,, 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 subordination, 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, notices of
lien and other documents pertaining to any or all of the Collater-
al. 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 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, or being
threatened with, attachment, execution, levy, seizure or confisca-
tion in any legal proceeding or otherwise;
(g) Any default by Debtor under any other agreement between
Debtor and Secured Party;
(h) Any dissolution, termination of existence, merger,
consolidation, change in controlling ownership, 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;
(i) 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
(j) 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.
8. REMEDIES ON DEFAULT.
(a) Upon the occurrence of an 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 eighteen percent (18%) per annum or the
maximum rate not prohibited by applicable law.
(b) Upon such declaration 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 od 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 Collater-
al 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 reasonable convenient to both
parties. Secured Party may also render any or all of the Collater-
al 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.
(f) DEBTOR 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 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 RELATION-
SHIP 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 AMEND-
MENTS, 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.
9. 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 express mail, 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 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. Sections 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 Indebted-
ness 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).
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 LINEAR FILMS, INC.
Corporation
By: By:
Title: Title:
PROMISSORY NOTE
(Date)
1870 The Exchange, Ste. 200, Atlanta, Georgia 30339
(Address of Maker)
FOR VALUE RECEIVED, Atlantis Plastic Films, 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 3379
Peachtree Road, NE, #400, Atlanta, GA 30326 or at such other place
as Payee or the holder hereof may designate, the principal sum of
Nine Hundred Thousand and no/100 Dollars ($900,000.00), with
interest thereon, from the date hereof through and including the
dates of payment, at the floating per annum simple interest
("Contract Rate") calculated as hereinafter set forth. The
Contract Rate shall be adjusted once each calendar month, and such
adjustment shall be effective during the adjustment period
("Adjustment Period") as hereinafter defined. Each Adjustment
Period shall commence at the close of business on the last day of
a calendar month and shall continue through the same day of the
next succeeding calendar month. The Contract Rate for each
Adjustment Period shall be equal to the sum of (i) Two and Fifty
Five Hundredths percent (2.55%) per annum plus (ii) a variable per
annum interest rate, which shall be the Libor Rate. "Libor Rate"
shall mean, with respect to any adjustment period occurring during
the term of this Promissory Note, an interest rate per annum equal
to the average of the interbank offered rates for dollar deposits
in the London market based on quotations at five major banks for
thirty (30) day maturities, to the extent the rates offered by
these banks is published in the "Money Rates" column of the Eastern
Edition of the Wall Street Journal (provided, however, that with
respect to the first Adjustment Period, it shall be determined as
of the seventh Business Day next preceding the first day of such
first Adjustment Period).
Subject to the other provisions hereof, the principal on this Note
is payable in lawful money of the United States in Eighty Three
(83) consecutive monthly installments of Eight Thousand Five
Hundred Seventy One and no/100 Dollars ($8,571.00) each plus
interest at the Contract Rate ("Periodic Installment") and a final
installment which shall be in the amount of the total outstanding
unpaid principal and interest. 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 period (each, a
"Payment Date"). The number of Periodic Installments, and their
due dates, will not change with fluctuations in the Contract Rate.
All payments shall be applied first to interest and then to
principal. 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 a 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.
Interest shall be calculated on the basis of a 360 day year.
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 being
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 the applicable 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 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
default under or fails to perform under any term of 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 the Security Agreement, at
the election of Payee, shall immediately become due and payable,
with interest thereon at the lesser of eighteen percent (18%) 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).
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.
General Electric Capital Atlantis Plastic Films, Inc.
Corporation
/s/ M. James Feeney (L.S.)
(Witness) (Signature)
M. JAMES FEENEY
(Print Name) Print name (and title, if
applicable)
(Address) (Federal tax identification
number)
EXHIBIT 10.11
PROMISSORY NOTE
(Date)
1870 The Exchange, Ste 200, Atlanta, Cobb County, Georgia
(Address of Maker)
FOR VALUE RECEIVED, Atlantis Plastics Films, 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 3379
Peachtree Road, N.E., 400, Atlanta, GA 30326 or at such other place
as Payee or the holder hereof may designate, the principal sum of
Six Hundred Fifty Thousand and no/100 Dollars ($650,000.00), with
interest thereon, from the date hereof through and including the
dates of payment, at the floating per annum simple interest rate
("Contract Rate") calculated as hereinafter set forth. The
Contract Rate shall be adjusted once each calendar month, and such
adjustment shall be effective doing the adjustment period
("Adjustment Period") as hereinafter defined. Each Adjustment
Period shall commence at the close of business on the last day of
a calendar month and shall continue through the same day of the
next succeeding calendar month. The Contract Rate for each
Adjustment Period shall be equal to the sum of (i) Two and Fifty
Five Hundredths percent (2.55%) per annum plus (ii) a variable per
annum interest rate which shall be equal to the rate listed for
"1-Month" Commercial Paper under the column indicating an average
rate as stated in the Federal Reserve Statistical Release H.15
(519) for the second calendar month ("Current CPR") preceding the
calendar month in which the Adjustment Period commences. If, for
any reason whatsoever, the Federal Reserve Statistical Release H.15
(519) is no longer published, the Current CPR shall be equal to the
latest Commercial Paper Rate for high grade unsecured notes of 30
days maturity sold through dealers by major corporation in
multiples of $1,000, as indicated in the "Money Rates" column of
the Wall Street Journal, Eastern Edition, published on the first
Business Day of the calendar month preceding the month in which the
interest payment being adjusted shall be due and payable.
Subject to the other provisions hereof, the principal on this
Note is payable in lawful money of the United States in Eighty
Three (83) consecutive monthly installments of Seven Thousand Seven
Hundred Thirty Eight and no/100 Dollars ($7,738.00) each ("Periodic
Installment") and a final installment which shall be in the amount
of the total outstanding unpaid principal. The first Periodic
Installment shall be due and payable on 4/1/95 and the following
Periodic Installments and the final installment shall be due and
payable on the same day of each succeeding period (each, a "Payment
Date'). In addition to the payments of principal provided above,
interest at the Contract Rate shall be payable on the Payment Date.
All payments shall be applied first to interest and then to
principal. 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.
Interest shall be calculated on the basis of a 365 day year (366
day leap year).
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 being
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 the applicable 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 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 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
interest thereon and any other sum payable under this Note or the
Security Agreement, at the election of Payee, shall immediately
become due and payable, with interest thereon at the lesser of
eighteen percent (18%) 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: zero percent (0%)
Thereafter and prior to the fifth annual
anniversary date of this Note: zero percent (0%)
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 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 the 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 sate 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 waive presentment, demand for
payment, notice of nonpayment, protest, notice or 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 Payee's actual attorneys' fees. Maker and each Obligor
agree that fees not in excess of twenty percent (20%) of the amount
then due shall be deemed reasonable.
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.
Atlantis Plastic Films, Inc.
By: (L.S.)
(Witness) (Signature)
(Print Name) Print name (and title, if
applicable)
(Address)
EXHIBIT 10.12
CORPORATE GUARANTY
Date: , 19
General Electric Capital Corporation
3379 Peachtree Road N.E. 400
Atlanta, Georgia 30326
To induce you to enter into, purchase or otherwise acquire,
now or at any time hereafter, any promissory notes, security
agreements, chattel mortgages, pledge agreements, conditional sale
contracts, lease agreements, and/or any other documents or
instruments evidencing, or relating to, any lease, loan, extension
of credit or other financial accommodation (collectively "Account
Documents" and each an "Account Document") to Atlantis Plastic
Films, Inc., a corporation organized and existing under the laws of
the State of Delaware ("Customer"), but without in any way binding
you to do so, the undersigned, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, does
hereby guarantee to you, your successors and assigns, the due
regular and punctual payment of any sum or sums of money which the
Customer may owe to you now or at any time hereafter, whether
evidenced by an Account Document, on open account or otherwise, and
whether it represents principal, interest, rent, late charges,
indemnities, an original balance, an accelerated balance,
liquidated damages, a balance reduced by partial payment, a
deficiency after sale or other disposition of any leased equipment,
collateral or security, or any other type of sum of any kind
whatsoever that the Customer may owe to you now or at any time
hereafter, and does hereby further guarantee to you, your
successors and assigns, the due, regular and punctual performance
of any other duty or obligation of any kind or character whatsoever
that the Customer may owe now or at any time hereafter (all such
payment and performance obligations being collectively referred to
as "Obligations"). Undersigned does hereby further guarantee to
pay upon demand all losses, costs, attorneys' reasonable fees and
expenses which may be suffered by you by reason of Customer's
default or default of the undersigned.
This Guaranty is a guaranty of prompt payment and performance
(and not merely a guaranty of collection). Nothing herein shall
require you to first seek or exhaust any remedy against the
Customer, its successors and assigns, or any other person obligated
with respect to the Obligations, or to first foreclose, exhaust or
otherwise proceed against any leased equipment, collateral or
security which may be given in connection with the Obligations. It
is agreed that you may, upon any breach or default of the Customer,
or at any time thereafter, make demand upon the undersigned and
receive payment and performance of the Obligations, with or without
notice or demand for payment or performance by the Customer, its
successors or assigns, or any other person. Suit may be brought
and maintained against the undersigned, at your election, without
joinder of the Customer or any other person as parties thereto.
The obligation of each signatory to this Guaranty shall be joint
and several.
The undersigned agrees that its obligations under this
Guaranty shall be primary, absolute, continuing and unconditional,
irrespective of and unaffected by any of the following actions or
circumstances (regardless of any notice to or consent of the
undersigned): (a) the genuineness, validity, regularity and
enforceability of the Account Documents or any other documents; (b)
any extension, renewal, amendment, change, waiver or other
modification of the Account Documents or any other documents; (c)
the absence of, or delay in, any action to enforce the Account
Documents, this Guaranty or any other document; (d) your failure or
delay in obtaining any other guaranty of the Obligations
(including, without limitation, your failure to obtain the
signature of any other guarantor hereunder); (e) the release of,
extension of time for payment or performance by, or any other
indulgence granted to the Customer or any other person with respect
to the Obligations by operation of law or otherwise; (f) the
existence, value, condition, loss, subordination or release (with
or without substitution) of, or failure to have title to or perfect
and maintain a security interest in, or the time, place and manner
of any sale or other disposition of any leased equipment,
collateral or security given in connection with the Obligations, or
any other impairment (whether intentional or negligent, by
operation of law or otherwise) of the rights of the undersigned;
(g) the Customer's voluntary or involuntary bankruptcy, assignment
for the benefit of creditors, reorganization, or similar
proceedings affecting the Customer or any of its assets; or (h) any
other action or circumstances which might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor.
This Guaranty may be terminated upon delivery to you (at your
address shown above) of a written termination notice from the
undersigned. However, as to all Obligations (whether matured,
unmatured, absolute, contingent or otherwise) incurred by the
Customer prior to your receipt of such written termination notice
(and regardless of any subsequent amendment, extension or other
modification which may be made with respect to such Obligations),
this Guaranty shall nevertheless continue and remain undischarged
until all such Obligations are indefeasibly paid and performed in
full.
The undersigned agrees that this Guaranty shall remain in full
force and effect or be reinstated (as the case may be) if at any
time payment or performance of any of the Obligations (or any part
thereof) is rescinded, reduced or must otherwise be restored or
returned by you, all as though such payment or performance has not
been made. If, by reason of any bankruptcy, insolvency or similar
laws effecting the rights of creditors, you shall be prohibited
from exercising any of your rights or remedies against the Customer
or any other person or against any property, then, as between you
and the undersigned, such prohibition shall be of no force and
effect, and you shall have the right to make demand upon, and
receive payment from, the undersigned of all amounts and other sums
that would be due to you upon a default with respect to the
Obligations.
Notice of acceptance of this Guaranty and of any default by
the Customer or any other person is hereby waived. Presentment,
protest demand, and notice of protest, demand and dishonor of any
of the Obligations, and the exercise of possessory, collection or
other remedies for the Obligations, are hereby waived. The
undersigned warrants that it has adequate means to obtain from the
Customer on a continuing basis financial data and other information
regarding the Customer and is not relying upon you to provide any
such data or other information. Without limiting the foregoing,
notice of adverse change in the Customer's financial condition or
of any other fact which might materially increase the risk of the
undersigned is also waived. All settlements, compromises, accounts
stated and agreed balances made in good faith between the Customer,
its successors or assigns, and you shall be binding upon and shall
not affect the liability of the undersigned.
Payment of all amounts now or hereafter owed to the
undersigned by the Customer or any other obligor for any of the
Obligations is hereby subordinated in right of payment to the
indefeasible payment in full to you of all Obligations and is
hereby assigned to you as a security therefor. The undersigned
hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims
against the Customer, any other obligor for any of the Obligations,
any collateral therefor, or any other assets of the Customer or any
such other obligor, for subrogation, reimbursement, exoneration,
contribution, indemnification, setoff or other recourse in respect
of sums paid or payable to you by the undersigned hereunder, and
the undersigned hereby further irrevocably and unconditionally
waives and relinquishes any and all other benefits which it might
otherwise directly or indirectly receive or be entitled to receive
by reason of any amounts paid by, or collected or due from, it, the
Customer or any other obligor for any of the Obligations, or
realized from any of their respective assets.
THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF, DIRECTLY OR INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS
BETWEEN US RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF, AND/OR
THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN US. 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 OR STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY, THE OBLIGATIONS
GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
As used in this Guaranty, the word "person" shall include any
individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, or any
government or any political subdivision thereof.
This Guaranty is intended by the parties as a final expression
of the guaranty of the undersigned and is also intended as a
complete and exclusive statement of the terms thereof. No course
of dealing, course of performance or trade usage, nor any paid
evidence of any kind, shall be used to supplement or modify any of
the terms hereof. Nor are there any conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its
provisions may only be waived, modified, varied, released,
terminated or surrendered, in whole or in part, by a duly
authorized written instrument signed by you. No failure by you to
exercise your rights hereunder shall give rise to any estoppel
against you, or excuse the undersigned from performing hereunder.
Your waiver of any right to demand performance hereunder shall not
be a waiver of any subsequent or other right to demand performance
hereunder.
This Guaranty shall bind the undersigned's successors and
assigns and the benefits thereof shall extend to and include your
successors and assigns. In the event of default hereunder, you may
at any time inspect undersigned's records, or at your option,
undersigned shall furnish you with a current independent audit
report. Guarantor agrees to furnish its annual 10K financial
statements and quarterly 10Q interim statements to Secured Party.
If any provisions of this Guaranty are in conflict with any
applicable statute, rule or law, then such provisions shall be
deemed null and void to the extent that they may conflict
therewith, but without invalidating any other provisions hereof.
Each signatory on behalf of a corporate guarantor warrants
that he had authority to sign on behalf of such corporation and by
so signing, to bind said guarantor corporation hereunder.
IN WITNESS WHEREOF, the Guaranty is executed the day and year
above written.
Atlantis Plastics, Inc.
By:
(Signature)
Title:
(Officer's title)
ATTEST:
Secretary
STOCKHOLDERS CERTIFICATION
We, the undersigned, being all of the stockholders of Atlantis
Plastics, Inc. ("Guarantor"), the corporation which is about to
execute a guaranty of the obligations of Atlantis Plastic Films,
Inc. ("Customer") in favor of General Electric Capital Corporation
(the "GECC Corporation"), do hereby certify to such GECC
Corporation that it is to the benefit of the Guarantor to execute
such guaranty, that the benefit to be received by the Guarantor
from such guaranty is reasonably worth the obligations thereby
guaranteed, that the Guarantor is authorized to execute said
guaranty, and that the persons executing the same on behalf of the
Guarantor are duly authorized to do so in their named capacity and
to thereby bind the Guarantor to the terms of said instrument as
therein set forth.
Dated: , 19 (L.S.)
(L.S.)
(L.S.)
(L.S.)
(L.S.)
CERTIFIED RESOLUTION
The undersigned hereby certifies that he is Secretary of
Atlantis Plastics, Inc., that the following resolutions was passed
by unanimous written consent of the Board of Directors of said
corporation effective as of February 23, 1995, that said resolution
has not since been revoked or amended, and that the form of
guaranty referred to therein is the form shown attached hereto:
"RESOLVED that it is to the benefit of this corporation that
it execute a guaranty of the obligations of Atlantis Plastic Films,
Inc. ("Customer") to General Electric Capital Corporation (the
"GECC Corporation") and that the benefit to be received by this
corporation from such guaranty is reasonably worth the obligations
thereby guaranteed, and further that such guaranty shall be
substantially in the form annexed to these minutes, and further
that the Vice President and Controller and Secretary (Title of
Officers) of this corporation are authorized to execute such
guaranty on behalf of this corporation."
WITNESS my hand and seal of this corporation on this day
of , 1995.
[Seal]
Secretary
CERTIFICATION AND REPRESENTATION BY SIGNING OFFICERS
We, the undersigned, Peter Kacer and Peter W. Klein being the
Vice President and Controller and Secretary of Atlantis Plastics,
Inc., the corporation which executed the guaranty attached hereto,
hereby jointly and severally certify and represent to General
Electric Capital Corporation that each of the undersigned executed
the guaranty for and on behalf of said corporation and that in so
executing said instrument the undersigned were duly authorized to
do so in their named capacity as officers and by so executing to
hereby bind said guarantor corporation to the terms of said
instrument as therein set forth.
(L.S.) (L.S.)
Date: Date:
EXHIBIT 10.13
LOAN AND SECURITY AGREEMENT
by and among
ATLANTIS PLASTICS FILMS, INC.,
CYANEDE PLASTICS, INC.,
PIERCE PLASTICS, INC. and
PLASTIC CONTAINERS, INC.,
as Debtors
and
THE CIT GROUP/EQUIPMENT FINANCING, INC.,
as lender
Dated as of April 13, 1995
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . .
1.1 Defined Terms . . . . . . . . . . . . . . . . . . .
1.2 Accounting Terms. . . . . . . . . . . . . . . . . .
SECTION 2. AMOUNT AND TERMS OF LOAN . . . . . . . . . . . . .
2.1 Commitment. . . . . . . . . . . . . . . . . . . . .
2.2 The Note. . . . . . . . . . . . . . . . . . . . . .
2.3 Prepayment. . . . . . . . . . . . . . . . . . . . .
2.4 Use of Proceeds . . . . . . . . . . . . . . . . . .
2.5 Progress Payments . . . . . . . . . . . . . . . . .
2.6 Joint and Several Obligations. . . . . . . . . . . . .
SECTION 3. CONDITIONS OF BORROWING. . . . . . . . . . . . . . .
3.1 Conditions of Initial Drawdown. . . . . . . . . . . .
3.2 Conditions of Each Drawdown.. . . . . . . . . . . . .
SECTION 4. REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . .
4.1 Organization. . . . . . . . . . . . . . . . . . . . .
4.2 Power and Authority . . . . . . . . . . . . . . . . .
4.3 Consents and Permits. . . . . . . . . . . . . . . . .
4.4 No Legal Bar. . . . . . . . . . . . . . . . . . . . .
4.5 No Defaults . . . . . . . . . . . . . . . . . . . . .
4.6 Enforceability. . . . . . . . . . . . . . . . . . . .
4.7 No Litigation . . . . . . . . . . . . . . . . . . . .
4.8 Title to Equipment. . . . . . . . . . . . . . . . . .
4.9 CIT's Security Interest . . . . . . . . . . . . . . .
4.10 Financial Condition of Guarantor . . . . . . . . . .
4.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . .
4.12 Principal Place of Business. . . . . . . . . . . . .
4.13 No Other Name. . . . . . . . . . . . . . . . . . . .
4.14 Ownership of Debtor and Guarantor. . . . . . . . . .
4.15 Environmental Matters. . . . . . . . . . . . . . . .
SECTION 5. COVENANTS. . . . . . . . . . . . . . . . . . . . . .
5.1 Notices . . . . . . . . . . . . . . . . . . . . . . .
5.2 Laws, Obligations; Operations . . . . . . . . . . . .
5.3 Inspection. . . . . . . . . . . . . . . . . . . . . .
5.4 Books . . . . . . . . . . . . . . . . . . . . . . . .
5.5 Financial Information . . . . . . . . . . . . . . . .
5.6 Further Assurances. . . . . . . . . . . . . . . . . .
5.7 No Disposition of Collateral. . . . . . . . . . . . .
5.8 No Liens. . . . . . . . . . . . . . . . . . . . . . .
5.9 Debtor's Title; CIT's Security Interest;
Personal Property . . . . . . . . . . . . . . . . .
5.10 No Changes in Debtors. . . . . . . . . . . . . . . .
5.11 Use of Equipment; Maintenance; Identification;
Replacement upon Event of Loss. . . . . . . . . . .
5.12 Insurance. . . . . . . . . . . . . . . . . . . . . .
5.13 Hazardous Substances.. . . . . . . . . . . . . . . . . . .
SECTION 6. SECURITY INTEREST. . . . . . . . . . . . . . . . . .
6.1 Grant of Security Interest. . . . . . . . . . . . . .
6.2 CIT Appointed as Attorney-in-Fact . . . . . . . . . .
SECTION 7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . .
SECTION 8. REMEDIES . . . . . . . . . . . . . . . . . . . . . .
8.1 Termination; Acceleration . . . . . . . . . . . . . .
8.2 Additional Remedies . . . . . . . . . . . . . . . . .
8.3 Payment of CIT's Costs. . . . . . . . . . . . . . . .
8.4 Waiver by Debtor. . . . . . . . . . . . . . . . . . .
8.5 Additional Damages. . . . . . . . . . . . . . . . . .
8.6 Condition and Storage of Equipment. . . . . . . . . .
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . .
9.1 No Waiver; Cumulative Remedies. . . . . . . . . . . .
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . .
9.3 Payment of Expenses and Taxes; Indemnity;
Performance by CIT of Debtors' Obligations. . . . .
9.4 Commitment Fee. . . . . . . . . . . . . . . . . . . .
9.5 Survival of Representations and Warranties. . . . . .
9.6 Amendments; Waivers . . . . . . . . . . . . . . . . .
9.7 Counterparts. . . . . . . . . . . . . . . . . . . . .
9.8 Headings. . . . . . . . . . . . . . . . . . . . . . .
9.9 Successors or Assigns . . . . . . . . . . . . . . . .
9.10 Merger Clause. . . . . . . . . . . . . . . . . . . .
9.11 Construction . . . . . . . . . . . . . . . . . . . .
9.12 Jurisdiction . . . . . . . . . . . . . . . . . . . .
9.13 Waiver of Trial by Jury. . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.14 Appointment of Guarantor as Agent.. . . . . .
SCHEDULES AND EXHIBITS
SCHEDULE 1 Equipment, Drawdowns with respect to which are to be
amortized over five years
SCHEDULE 2 Equipment, Drawdowns with respect to which are to be
amortized over seven years
Schedule 4.3 Required Consents
Schedule 4.4 Exception to 4.4 (No Legal Bar)
Schedule 4.12 Debtor's Place of Business
Schedule 4.13 Other Names of Debtor
Schedule 5.12 Debtor's Insurance
EXHIBIT A Form of Contribution Agreement
EXHIBIT B Form of Delivery and Installation Certificate
EXHIBIT C Form of Note
EXHIBIT D Form of Supplement
EXHIBIT E Form of Drawdown Request
EXHIBIT F Form of Progress Payment Purchase Agreement
Assignment
EXHIBIT G Form of Vendor Consent and Agreement
EXHIBIT H Form of Guaranty
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT, dated as of April 13, 1995
among ATLANTIS PLASTIC FILMS, INC., a Delaware corporation
("FILMS"), CYANEDE PLASTICS, INC., a Kentucky corporation
("CYANEDE"), PIERCE PLASTICS, INC., a Delaware corporation
("PIERCE"), and PLASTIC CONTAINERS, INC. ("PCI"), an Alabama
corporation (Films, Cyanede, Pierce and PCI are herein referred to
individually a "DEBTOR" and collectively as "DEBTORS") and THE CIT
GROUP/EQUIPMENT FINANCING, INC. ("CIT"), a New York corporation.
In consideration of the mutual agreements contained herein, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement the following
terms shall have the following defined meanings, unless the context
otherwise requires (such terms to be equally applicable to both
singular and plural forms of the terms defined):
"AFFILIATE" of any specified Person shall mean any
other Person which, directly or indirectly, controls, is
controlled by, or is under common control with, such Person.
For purposes of this definition, "control" of a Person shall
mean the power, direct or indirect, to vote 10% or more of
the securities having voting power for the election of
directors of such Person, or otherwise to direct or cause the
direction of the management and policies of such Person,
whether by contract or otherwise.
"AGREEMENT", "HEREOF", "HERETO", "HEREUNDER" and words
of similar import shall mean this Loan and Security
Agreement, as the same may from time to time be amended,
modified or supplemented.
"BUSINESS DAY" shall mean a day other than a Saturday,
Sunday or legal holiday under the laws of the State of New
York.
"CAPITALIZED LEASE OBLIGATIONS" of Guarantor and its
Subsidiaries shall mean all rental obligations which, under
generally accepted accounting principles, are or will be
required to be capitalized on the books of Guarantor and its
Subsidiaries, in each case taken at the amount thereof
accounted for as indebtedness in accordance with such
principles.
"CASH FLOW COVERAGE RATIO" as to Guarantor, for any
four (4) consecutive fiscal quarters, shall mean the ratio of
EBITDA to the sum of (i) total interest expense due and
payable during such same four (4) fiscal quarters by
Guarantor and its Subsidiaries (regardless of whether or not
it is paid) with respect to all Indebtedness, to the extent
such interest expense was deducted in computing Guarantor's
net income, but exclusive of amortization of original issue
discount and deferred loan costs and (ii) current portion of
the sum of long term debt (excluding any amounts outstanding
under the Credit Agreement dated as of February 22, 1993
between Guarantor and Heller Financial, Inc., as amended, and
excluding any payments due under the Indenture which are
payable on a date more than six months from any date on which
the Cash Flow Coverage Ratio is calculated) and Capitalized
Lease Obligations due and payable by Guarantor and its
Subsidiaries (regardless of whether or not it is paid), in
each case during the four (4) consecutive fiscal quarters
immediately following the last of such four (4) consecutive
fiscal quarters. In the event of Guarantor's direct or
indirect acquisition of any Person or business, the EBITDA
and interest expense for the prior four (4) quarters and the
current portion of long term debt for the subsequent four (4)
quarters of any such acquired Person or business will be
incorporated on a proforma basis in calculating Guarantor's
Cash Flow Coverage Ratio.
"CIT" as defined in the introductory paragraph of this
Agreement.
"CLOSING DATE" shall mean each date on which a
Drawdown is made under the Note pursuant hereto.
"CODE" shall mean the Uniform Commercial Code as from
time to time in effect in any applicable jurisdiction.
"COLLATERAL" shall mean the Equipment and the Proceeds
thereof.
"COMMITMENT" shall mean the obligation of CIT to make
the Loan in the aggregate principal amount specified in
Subsection 2.1 of this Agreement.
"COMMITMENT FEE" as defined in Subsection 9.4 hereof.
"COMMONLY CONTROLLED ENTITY" as to a Person shall mean
any Person, whether or not incorporated, which is under
common control with such Person within the meaning of Section
414 (c) of the Code.
"CONSOLIDATED NET WORTH" as to Guarantor at a
particular date, shall mean all amounts which would, in
conformity with GAAP, be included under stockholders' equity
on a consolidated balance sheet of Guarantor and its
Subsidiaries at such date provided, however, such amounts are
to be net of amounts carried on the books of Guarantor and
its Subsidiaries for (a) any write-up in the book value of
any assets of Guarantor or any of its Subsidiaries resulting
from a voluntary revaluation thereof subsequent to the date
of this Agreement (other than in connection with purchase
accounting adjustments for businesses or Persons acquired
subsequent to the date of this Agreement solely in connection
with any such acquisition) and (b) treasury stock.
"CONTRIBUTION AGREEMENT" shall mean the Contribution
Agreement substantially in the form of EXHIBIT A hereto among
the Debtors and Lender, as the same may from time to time be
amended, modified or supplement.
"COST" shall mean, with respect to any item or Unit of
new Equipment, the manufacturer's or supplier's invoiced
purchase price therefor (after giving effect to any discount
or other reduction) payable by any Debtor, which amount shall
be set forth in the Supplement pertaining to such item or
Unit of Equipment and with respect to any item or Unit of
used Equipment, the fair market value thereof, as determined
by an appraisal satisfactory to CIT, which fair market value
shall be set forth in the Supplement pertaining to such item
or Unit of Equipment.
"DEBTOR" as defined in the introductory paragraph of
this Agreement; as the context may require, "Debtor" may mean
any one or more of the Debtors.
"DEFAULT" shall mean any event which with notice,
lapse of time, and/or any further condition, event or act
would constitute an Event of Default.
"DELIVERY AND INSTALLATION CERTIFICATE" shall mean the
certificate of any Debtor evidencing that the Equipment
specified therein has been physically delivered to and
accepted by such Debtor, in the form attached hereto as
EXHIBIT B.
"DRAWDOWN" shall mean each drawing made by any Debtor
under the Note, as evidenced by CIT's notation on the grid
attached to the Note.
"EBIT" as to Guarantor, shall mean, for any period,
the consolidated net income of Guarantor, less non-operating
income, plus non-operating expenses and before interest
expense and provision for taxes and without giving effect to
any extraordinary gains (or losses) and gains from sales of
assets and income from discontinued operations (other than
sales of inventory in the ordinary course of business) for
such periods.
"EBITDA" as to Guarantor, for any period shall mean
EBIT, adjusted by adding thereto the amount of all
amortization of intangibles and depreciation.
"ENVIRONMENTAL LAWS" means the Resource Conservation
and Recovery Act of 1987, the Comprehensive Environmental
Response, Compensation and Liability Act, any so-called
"Superfund" or "Superlien" laws, the Toxic Substances Control
Act, or any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards
of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter
in effect.
"ENVIRONMENTAL LIEN" shall mean a Lien in favor of any
governmental entity for any liability under any Environmental
Laws, or for damages arising from or costs incurred by such
governmental entity in response to a release of a Hazardous
Material into the environment.
"EQUIPMENT" shall mean any and all items of equipment,
inventory (solely to the extent Equipment constitutes
inventory) or other items of property which are to be
financed by CIT with Drawdowns made hereunder or are listed
on Supplements hereto, together with all accessories, parts,
repairs, replacements, substitutions, attachments,
modifications, renewals, additions, improvements, upgrades
and accessions of, to or upon such items of equipment,
inventory (solely to the extent Equipment constitutes
inventory) or other property, now or at any time hereafter
acquired. SCHEDULES 1 AND 2 hereto contains a general list
of the Equipment intended to be financed hereunder; the
Equipment may include other equipment of a similar
description provided that the condition set forth in
Subsection 3.2(b) hereof is satisfied.
"EVENT OF DEFAULT" as defined in Section 7 of this
Agreement.
"EVENT OF LOSS" shall mean, with respect to any item
of Equipment, the actual or constructive loss of such item of
Equipment or the use thereof, due to theft, destruction,
damage beyond repair or damage from any reason whatsoever, to
an extent which makes repair uneconomical, or rendition
thereof unfit for normal use, or the condemnation,
confiscation or seizure of, or requisition of title to or use
of, such item of Equipment by any governmental authority or
any other person, whether or not acting under color of
governmental authority.
"FILM PRODUCTION LINES" shall mean the film production
lines, the purchase price of which is intended to be financed
with the proceeds of the Loan. Film production lines are
configurations of equipment consisting of one or more
extruders, blenders, a die, a winder, cooling equipment, and
controls and gauging devices that will enable the conversion
of polyethylene pellets into plastic films of varying
thickness, widths, and colors.
"FIXED INTEREST RATE" shall mean the rate per annum
equal to 2.25% above the Treasury Rate.
"FLOATING INTEREST RATE" shall mean the rate per annum
equal to 2.25% above the LIBOR Rate.
"FUNDED DEBT" shall mean Guarantor's Indebtedness less
its accounts payable and accrued expenses.
"FUNDED DEBT TO EBITDA RATIO" shall mean the ratio of
Guarantor's Funded Debt to EBITDA; PROVIDED, HOWEVER, in the
event of Guarantor's direct or indirect acquisition of any
Person or business Guarantor's EBITDA will be calculated on
a proforma basis.
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from
time to time.
"GUARANTY" shall mean the guaranty by Guarantor of all
of Debtors' Obligations hereunder, as the same may from time
to time be amended, modified or supplemented.
"GUARANTOR" shall mean Atlantis Plastics, Inc., a
Florida corporation.
"HAZARDOUS MATERIALS" shall mean any pollutant or
contaminant defined as such in (or for purposes of) any
Environmental Law and shall include, but not be limited to,
petroleum, any radioactive material and asbestos in any form
or condition.
"INDEBTEDNESS" as to any Person, at a particular time,
shall mean (a) indebtedness for borrowed money (including
without limitation any amounts outstanding under revolving
credit agreements) or for the deferred purchase price of
property or services in respect of which such Person is
liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which such Person otherwise
assures a creditor against loss, (b) Capitalized Lease
Obligations in respect of which obligations such Person is
liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person
assures a creditor against loss and (c) any obligations of
such Person or a Commonly Controlled Entity to a
Multiemployer Plan.
"INDENTURE" shall mean the Indenture dated as of
February 22, 1993 pursuant to which Guarantor issued
$100,000,000 Senior Notes due 2003.
"INSTALLMENT PAYMENT DATE" shall mean, with respect to
the Note, during the Interim Period each date on which a
regular installment of interest only is due and thereafter,
each date on which a regular installment of principal and
interest is due on the Note which date shall be the 15th day
of each month.
"INTEREST RATE" with respect to the Loan shall mean
the Floating Interest Rate or, in the event Debtors have
elected to convert to a Fixed Interest Rate pursuant to the
provisions of Subsection 2.2(b) hereof, the Fixed Interest
Rate.
"INTEREST RATE PERIOD" shall mean each successive one-
month period beginning on the 15th day of each month and
ending on the 14th day in the subsequent month; PROVIDED that
the initial Interest Rate Period with respect to each
Drawdown shall begin on the day on which such Drawdown was
made hereunder and end on the 14th day in the next month.
"INTERIM PERIOD" with respect to each Drawdown, shall
mean the period commencing on the Closing Date of such
Drawdown and ending on the date which is the earlier of the
date upon which the all Equipment identified with such
Drawdown has been physically delivered to and accepted by any
Debtor, as evidenced by such Debtor's duly authorized
execution and delivery to CIT of a Delivery and Installation
Certificate, and the date which is six months after the
Closing Date of such Drawdown; PROVIDED, HOWEVER, that the
Interim Period with respect to each of the Drawdowns, the
proceeds of which were paid to the vendor of the Film
Production Lines shall end on the date which is the earlier
of the date upon which such Equipment has been physically
delivered to and accepted by such Debtor, as evidenced by
such Debtor's duly authorized execution and delivery to CIT
of a Delivery and Installation Certificate and the date which
is nine months after the Closing Date with respect to such
Drawdown; PROVIDED, FURTHER, that in the event the aggregate
outstanding principal amount of Drawdowns, the proceeds of
which were used to finance the two Film Production Lines
exceeds $1,500,000 for any six month period, the Interim
Period with respect to such Drawdowns shall terminate upon
the expiration of such six month period with respect to such
Drawdowns which, when the aggregate outstanding amount
thereof is subtracted from the total aggregate outstanding
principal amount of such Drawdowns, and with such Drawdowns
coming due in the order in which they were made, the
remaining outstanding principal amount is $1,500,000 or less.
Only Drawdowns, the proceeds of which are used to fund
progress payments to any Vendor, are intended to have an
Interim Period.
"LATE CHARGE RATE" shall mean a rate per annum equal
to four percent (4%) over the Interest Rate, but not to
exceed the highest rate permitted by applicable law.
"LEVERAGE RATIO" as to any Person shall mean the ratio
of such Person's Total Liabilities to its Consolidated Net
Worth.
"LIBOR RATE" shall mean the rate of interest equal to
the thirty (30)-day London Interbank Offered Rate on United
States Dollars as reported and published in THE WALL STREET
JOURNAL. The LIBOR Rate in effect during any Interest Rate
Period shall be the LIBOR Rate in effect at the close of
business on the latest Rate Determination Date preceding the
Installment Payment Date upon which such Interest Rate Period
commences.
"LIBOR RATE LOAN" shall mean the Loan at such time as
it bear interest at a rate which is based on the LIBOR Rate.
"LIENS" shall mean liens, mortgages, security
interests, pledges, title retentions, charges, financing
statements or other encumbrances of any kind whatsoever,
including, without limitation, any Environmental Liens, but
excluding any Permitted Liens.
"LOAN" shall mean the Loan made by CIT pursuant to
this Agreement.
"MAKE-WHOLE PREMIUM" shall mean in connection with any
prepayment by any Debtor hereunder of any Drawdown at a time
when the Loan bears interest at the Fixed Interest Rate, the
amount of any loss, expense, or liability incurred CIT
arising from the repayment of matched funding loans or
securities or the re-employment of funds (an estimate of
which shall be provided by CIT to Debtors upon reasonable
request) by CIT as a result of any such prepayment by
Debtors; PROVIDED, HOWEVER, CIT shall calculate such Make-
Whole premium in good faith using its standard methods and
shall present Debtors with a certificate of a Vice President
to that effect, but in no event shall CIT be required to
disclose to Debtors the calculation of such Make-Whole
Premium.
"MATERIAL ADVERSE EFFECT" shall mean any fact or
circumstance which (i) materially and adversely effects the
business, operations, property or financial condition of any
Debtor, (ii) has a material adverse effect on the ability of
any Debtor to perform its obligations under this Agreement or
(iii) has a material adverse effect on the value, utility or
marketability of the Collateral or CIT's first (and
exclusive) lien thereon.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of the
Employee Retirement Income Security Act of 1974, as amended.
"NOTE" shall mean the promissory note of Debtors
evidencing the Loan, as described in Subsection 2.2 of this
Agreement substantially in the form of EXHIBIT C hereto.
"OBLIGATIONS" shall mean (i) the aggregate unpaid
principal amount of, and accrued interest on, the Note; and
(ii) all other obligations and liabilities of any Debtor, now
existing or hereafter incurred, under, arising out of or in
connection with this Agreement or the Note.
"OBSOLETE PREPAID PRINCIPAL AMOUNT" shall have the
meaning set forth in Subsection 5.7(ii) hereof.
"OPTIONAL PREPAYMENT PERCENTAGE" shall mean on the
date of the optional prepayment of the Note pursuant to
Subsection 2.3(c) of this Agreement:
(i) 6%, for any prepayment occurring on or before the
twelfth (12th) Installment Payment Date;
(ii) 3%, for any prepayment occurring after the
twelfth (12th) Installment Payment Date and on or
before the twenty-fourth (24th) Installment Payment
Date;
(iii) 2%, for any prepayment occurring after the
twenty-fourth (24th) Installment Payment Date and on
or before the thirty-sixth (36th) Installment Payment
Date; and
(iv) 1%, for any prepayment occurring after the
thirty-sixth (36th) Installment Payment Date and
before the forty-eighth (48th) Installment Payment
Date;
PROVIDED, HOWEVER, that in the event Debtors have converted
the interest rate of the Loan to a Fixed Interest Rate, the
Optional Prepayment Percentage shall be the greater of (i)
the amounts calculated as set forth above as if the Loan had
not been so converted, and (ii) an amount equal to the Make-
Whole Premium.
"PARENT COMPANY" shall mean any Person having
beneficial ownership (directly or indirectly) of 25% or more
of any Debtor's shares of voting stock.
"PCI" shall mean Plastics Containers, Inc.
"PERMITTED LIEN" means (i) liens (other than
Environmental Liens) for taxes, assessments and other
governmental charges not yet due and payable, and (ii)
statutory liens of landlords, carriers, warehouses,
mechanics, material men or other similar liens imposed by
law, which are incurred in the ordinary course of business
for sums not delinquent or which are being contested in good
faith by the applicable Debtor, and if requested by CIT, for
which a bond reasonably satisfactory to CIT has been posted.
"PERSON" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
incorporated association, joint venture, governmental
authority or other entity of whatever nature.
"PREPAID PRINCIPAL AMOUNT" as defined in Subsection
2.3(a) of this Agreement.
"PRIME RATE" with respect to the Loan made hereunder,
shall mean the rate publicly announced from time to time as
the prime rate of Chemical Bank ("CB"). The Prime Rate shall
be determined by CIT for each Interest Rate Period with
respect to each Drawdown at the close of business on the
second preceding Business Day prior to the commencement of
the Interest Rate Period, and shall become effective as of
the first day of the Interest Rate Period and shall continue
in effect to, and including, the last day of said Interest
Rate Period. The Prime Rate is not intended to be the lowest
rate of interest charged by CB in connection with extensions
of credit to debtors.
"PROCEEDS" shall have the meaning assigned to it in
the Code, and in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to any Debtor from time to time
with respect to any of the Equipment; (ii) any and all
payments (in any form whatsoever) made or due and payable to
any Debtor from time to time in connection with any
requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Equipment by any
governmental body, authority, bureau or agency or any other
Person (whether or not acting under color of governmental
authority); (iii) any chattel paper evidencing, any lease of,
and any and all other rents or profits or other amounts from
time to time paid or payable in connection with, any of the
Equipment; and (iv) any and all proceeds of any sale,
transfer or other disposition and any and all other rents or
profits or other amounts from time to time paid or payable in
connection with any of the Equipment.
"PROGRESS PAYMENT" shall mean with respect to any item
of Equipment shall mean any payment made by CIT to any
Vendor, or any payment made by CIT to any Debtor to reimburse
Debtor for any payments made by such Debtor to a Vendor, in
respect of the purchase, installation and/or delivery,
including any taxes, fees, assessments or other charges with
respect thereto, of such item of Equipment pursuant to the
terms of a Purchase Agreement.
"PROHIBITED TRANSACTION" as defined in Subsection
2.3(b) of this Agreement.
"PROHIBITED TRANSACTION FEE" shall mean, on the date
of the required prepayment of the Note pursuant to the
provisions of Subsection 2.3(b) of this Agreement:
(i) 6%, for any prepayment occurring on or before the
twelfth (12th) Installment Payment Date;
(ii) 3%, for any prepayment occurring after the
twelfth (12th) Installment Payment Date and on or
before the twenty-fourth (24th) Installment Payment
Date;
(iii) 2%, for any prepayment occurring after the
twenty-fourth (24th) Installment Payment Date and on
or before the thirty-sixth (36th) Installment Payment
Date; and
(iv) 1%, for any prepayment occurring after the
thirty-sixth (36th) Installment Payment Date and on or
before the forty-eighth (48th) Installment Payment
Date;
PROVIDED, HOWEVER, that in the event the interest rate on the
Loan has been converted to a Fixed Interest Rate, the
Optional Prepayment Percentage shall be the greater of (i)
the amounts calculated as set forth above as if the Loan had
not been so converted, and (ii) an amount equal to the Make-
Whole Premium.
"PURCHASE AGREEMENT" shall mean the purchase
agreements, purchase orders and invoices evidencing the
agreement of any Debtor to purchase any Equipment from any
Vendor.
"RATE DETERMINATION DATE" shall mean with respect to
any Interest Rate Period for any Drawdown made hereunder,
shall mean the third preceding Business Day prior to the
commencement of any Interest Rate Period, or if such day is
not a day on which THE WALL STREET JOURNAL is published (or
if published, does not publish the LIBOR Rate), then on the
next preceding day prior to the day on which THE WALL STREET
JOURNAL is published and reports the LIBOR Rate.
"REPLACEMENT UNIT" as defined in Subsection 5.11
hereof.
"SECTION 8 PERCENTAGE" shall mean, on the date of the
acceleration of the Note pursuant to Section 8 of this
Agreement:
(i) 6%, for any prepayment occurring on or before the
twelfth (12th) Installment Payment Date;
(ii) 3%, for any prepayment occurring after the
twelfth (12th) Installment Payment Date and on or
before the twenty-fourth (24th) Installment Payment
Date;
(iii) 2%, for any prepayment occurring after the
twenty-fourth (24th) Installment Payment Date and on
or before the thirty-sixth (36th) Installment Payment
Date; and
(iv) 1%, for any prepayment occurring after the
thirty-sixth (36th) Installment Payment Date and on or
before the forty-eighth (48th) Installment Payment
Date.
"SUBSIDIARY" as to any Person, shall mean a
corporation of which shares of stock having ordinary voting
power (other than stock having such power only by reason of
the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are
at the time owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.
"SUPPLEMENT" shall mean each Supplement executed and
delivered by a Debtor in substantially the form of EXHIBIT D
attached hereto.
"TOTAL LIABILITIES" as to any Person and its
Subsidiaries, at a particular date, shall mean all items
which would, in conformity with GAAP, be classified as
liabilities on a consolidated balance sheet of such Person
and its Subsidiaries as at such date, but in any event
including ( a) all Indebtedness of such Person and its
Subsidiaries, (b) indebtedness arising under acceptance
facilities and the face amount of all letters of credit
issued for the account of such Person and its Subsidiaries
and, without duplication, all drafts drawn thereunder, (c)
all liabilities secured by any Lien on any property owned by
such Person or its Subsidiaries even though it has not
assumed or otherwise become liable for the payment thereof,
(d) any liability of such Person or its Subsidiaries or a
Commonly Controlled Entity to a Multiemployer Plan or any
other pension plan and (e) deferred taxes.
"TREASURY RATE" shall mean, with respect to the Loan
if Debtors elect a Fixed Interest Rate pursuant to the
provisions of Subsection 2.2(b) hereof, the rate per annum
equal to the yield to maturity for the U.S. Treasury security
having a remaining term to maturity closest to five years as
at the close of business of the third Business Day prior to
the conversion of the interest rate, as reported on page 5
("U.S. Treasury and Money Markets") of the information
provided by Telerate Systems Incorporated.
"UNIT OF EQUIPMENT" shall mean those items of
Equipment described on a particular Supplement and financed
with the same Drawdown.
"VENDOR" shall mean any manufacturer or seller of any
item of Equipment to be purchased by any Debtor with (or for
which Debtor has been reimbursed by) the proceeds of the
Loan.
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally
accepted accounting principles.
SECTION 2. AMOUNT AND TERMS OF LOAN.
2.1 COMMITMENT. Subject to the terms and conditions of this
Agreement, CIT agrees to make one Loan to Debtors in the original
principal amount not to exceed $15,000,000. Drawdowns under the
Note shall be in an amount which is not less than $50,000. No
Debtor shall be permitted more than one (1) Drawdown in any
calendar month, except during the month of April, 1995 during which
two (2) Drawdowns per Debtor shall be permitted; and all Drawdowns
in any calendar month shall be made on the same day of such
calendar month. Debtors shall determine among themselves how the
proceeds of each Drawdown are to be paid; PROVIDED, HOWEVER, that
in all events the proceeds shall be used by each Debtor either to
directly pay a Vendor the purchase price of any item of Equipment
or to reimburse Debtor for its payment of the Cost of any item of
Equipment. Drawdowns under the Note shall not be permitted after
a date one year from the date of the Note. Debtors shall give CIT
at least three Business Days' prior written notice of the date and
amount of each proposed Drawdown, as evidenced by a drawdown
request in the form of EXHIBIT E hereto (a "DRAWDOWN REQUEST"),
duly executed by an officer of Guarantor. Debtors agree that CIT
shall be entitled to rely upon any Drawdown Request signed by the
Guarantor, as agent, as conclusive evidence of all Debtors' drawing
request, and each Debtor hereby agrees to indemnify and hold CIT
harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, claims, actions,
judgments, suits, out-of-pocket costs, expenses (including
reasonable legal expenses) or disbursements of any kind or nature
whatsoever arising as a result of the making by CIT of any Drawdown
in accordance with the provisions of any Drawdown Request delivered
by Guarantor, as agent.
2.2 THE NOTE.
(a) The Note shall be in the original principal amount of
$15,000,000 and shall (i) be dated the date it is executed; (ii)
(x) with respect to any Drawdown, the proceeds of which are to be
used to fund any item of Equipment listed on SCHEDULE 2 hereto, be
stated to mature in eighty-four (84) consecutive monthly
installments of principal plus accrued interest on the unpaid
principal amount of such Drawdown, the first of which installment
shall be payable on the first Installment Payment Date following
the expiration of the Interim Period, if any, applicable to such
Drawdown, with each of the first eighty-three (83) of such
installments to be in an amount equal to 1/120 of the original
principal amount of such Drawdown and the eighty-fourth (84th)
installment to be in an amount equal to the remaining unpaid
principal amount of such Drawdown, all interest accrued on the
outstanding principal of such Drawdown and all other amounts owing
hereunder and under the Note with respect to such Drawdown; and (y)
with respect to any Drawdown, the proceeds of which are to be used
to fund any item of Equipment listed on SCHEDULE 1 hereto, be
stated to mature in sixty (60) equal consecutive monthly
installments of principal plus accrued interest on the unpaid
principal amount of such Drawdown, the first of which installment
shall be payable commencing on the first Installment Payment Date
after the Interim Period, if any, applicable to such Drawdown, and
each of the sixty (60) installments of principal to in an amount
equal to 1/60th of the original principal amount of such Drawdown;
and (z) with respect to Drawdowns, the proceeds of which are to be
used to fund any item of Equipment of a type which is not listed on
either Schedule 1 or Schedule 2 hereto be stated to mature in
either eighty-four consecutive monthly installments of principal
plus accrued interest (if CIT, in its sole discretion, is placing
significant reliance on the collateral value of such item of
Equipment) or sixty (60) months if CIT is not placing a great deal
of collateral reliance on such item of Equipment), the first of
which installment shall be payable on the first Installment Payment
Date following the expiration of the Interim Period, if any,
applicable to such Drawdown, and each of the installments of
principal to be amortized as set forth in clause (x) or (y) of this
Subsection 2.2(a) as would be applicable, with each installment of
principal to be accompanied by a payment of all accrued but unpaid
interest thereon; and in each case payments during the Interim
Period are to be payments of interest only payable on each
Installment Payment Date; (iii) bear interest from the date thereof
on the unpaid principal amount thereof at a rate per annum of 2.25%
above the LIBOR Rate as from time to time in effect until such
amount shall become due and payable (whether at the stated maturity
thereof, by acceleration or otherwise), which interest shall be
payable in consecutive monthly installments, payable on each
Installment Payment Date. Any amount not paid when due under the
Note shall bear late charges thereon, calculated at the Late Charge
Rate, from the due date thereof until such amount shall be paid in
full.
(b) On any Installment Payment Date prior to the twenty-
fourth (24th) Installment Payment Date, Debtors shall have the
option, upon five (5) Business Days prior written notice to CIT and
provided that no Default or Event of Default shall be continuing
hereunder, to convert the rate at which the Loan bears interest to
a Fixed Interest Rate, and from such Installment Payment Date until
paid in full, the then outstanding principal under the Note shall
bear interest until such amount shall become due and payable
(whether at the stated maturity thereof, by acceleration or
otherwise) at a rate per annum rate equal to 2.25% above the
Treasury Rate and the unpaid principal shall continue to be paid as
set forth above together with accrued and unpaid interest at the
Fixed Rate for the remaining number of Installment Payment Dates in
the Note.
(c) CIT shall maintain a loan account (the "LOAN ACCOUNT")
on its books to record: (a) all Drawdowns and payments made by
Debtors hereunder, and (b) all other appropriate debits and credits
as provided in this Agreement. All entries in the Loan Account
shall be made in accordance with CIT's customary accounting
practices as in effect from time to time. The balance in the Loan
Account, as recorded on CIT's most recent printout or other written
statement, shall be presumptive evidence of the amounts due and
owing to CIT by Debtors; PROVIDED that any failure to so record or
any error in so recording shall not limit or otherwise affect
Debtors' obligation to pay the Loan or other obligations arising
hereunder. Not more than twenty (20) days after the last day of
each calendar month during such time as Debtors are making
Drawdowns and thereafter upon written request of Debtors, CIT shall
render to Debtors a statement setting forth the principal balance
of the Loan Account and the calculation of interest due thereon.
Each statement shall be subject to subsequent adjustment by CIT but
shall, absent manifest errors or omissions, be presumed correct and
binding upon Debtors, and shall constitute an account stated.
2.3 Prepayment.
(a) IN THE EVENT OF LOSS. In the event that any item of
Equipment shall suffer an Event of Loss, within 30 days after the
occurrence of such Event of Loss, Debtors shall either replace such
item of Equipment in accordance with Subsection 5.11 or make a
prepayment on the Note in an amount determined (i) by multiplying
(A) the unpaid principal amount of all Drawdowns made to finance
the item(s) of Equipment which suffered the Event of Loss by (B) a
fraction the numerator of which shall be the Cost of the item(s)
Equipment which suffered the Event of Loss and the denominator of
which shall be the original aggregate principal amount of the
Drawdowns made to finance such item(s) of Equipment less the
principal amount of all prior prepayments with respect to such
Drawdowns (the amount obtained by multiplying (i)(A) and (i)(B)
hereof shall be herein referred to as the "PREPAID PRINCIPAL
AMOUNT"), and (ii) by adding interest accrued, with respect to the
Prepaid Principal Amount, to the date of such prepayment. Upon
payment in full of any such prepayment amount, and so long as no
Default or Event of Default has occurred and is continuing, the
item of Equipment subject to such Event of Loss shall be released
from the security interest of this Agreement.
(b) IN THE EVENT OF PROHIBITED TRANSACTION. A Prohibited
Transaction may be consummated only with CIT's prior written
consent other than in connection with the sale of the stock of PCI
or the sale of all or any substantial part of PCI's assets (any
such event being referred to herein as a "PCI PROHIBITED
TRANSACTION"), and with respect to any Prohibited Transaction
involving Pierce or PCI, CIT's consent shall not be unreasonably
withheld. Not less than twenty (20) Business Days prior to the
date the proposed Prohibited Transaction is expected to be
consummated, Debtors shall give CIT written notice of the proposed
Prohibited Transaction. In the event CIT does not consent to the
Prohibited Transaction set forth in the following clauses (iii),
(iv) or (i)(A) or (ii)(A) with respect to Film or Cyanede or the
Guarantor and the Prohibited Transaction is nonetheless to be
consummated, Debtors shall, on or prior to the date the Prohibited
Transaction is to be consummated, prepay the Note in full together
with (1) all interest accrued thereon, and (2) an amount equal to
the product of the Prohibited Transaction Fee and the outstanding
principal amount of the Note. In the event CIT does not consent to
the Prohibited Transaction set forth in the following clauses
(i)(B) or (ii)(B) with respect to Pierce or PCI and the Prohibited
Transaction is nonetheless to be consummated, Debtors shall, on or
prior to the date the Prohibited Transaction is to be consummated,
make a prepayment on the Note in an amount equal to the sum of (i)
the unpaid principal amount of the Drawdowns made by the Debtor(s)
involved in the Prohibited Transaction, (ii) all interest accrued
thereon, and (iii) an amount equal to the product of the Prohibited
Transaction Fee and the outstanding principal amount of the
Drawdowns being prepaid (except in the case of a PCI Prohibited
Transaction where the sum of the outstanding principal amount of
all PCI Drawdowns and the Obsolete Prepaid Principal Amount of all
items of obsolete Equipment sold by Debtors in accordance with the
provisions of Section 5.7 hereof is less than $500,000 in any
calendar year, in which event no Prohibited Transaction Fee is
payable or, to the extent the sum of the Obsolete Prepaid Principal
Amounts and all PCI Drawdowns being prepaid exceeds $500,000 in any
calendar year, Debtors shall pay to CIT an amount equal to the
product of the Prohibited Transaction Fee and all such amounts in
excess of $500,000). Upon payment in full of the applicable
prepayment amount, and so long as no Default or Event of Default
has occurred and is continuing, the items of Equipment owned by the
Debtor involved in the Prohibited Transaction shall be released
from the security interest of this Agreement.
A "PROHIBITED TRANSACTION" shall be one in which:
(i) (A) any of Cyanede or Films or Guarantor or (B)
Pierce or PCI merges or consolidates where (x) it (or
Guarantor or another Debtor) shall not be the
surviving corporation or (y) if it is the surviving
corporation, after giving effect to such merger or
consolidation its net worth does not equal or exceed
that which existed prior to such merger or
consolidation PROVIDED HOWEVER, that with respect to
Guarantor after such merger or consolidation no Event
of Default shall occur if the surviving entity
complies, on a pro forma basis, with the financial
covenants set forth in Section 5.14 hereof and in all
events ; or
(ii) (A) any of Cyanede or Films or Guarantor or (B)
Pierce or PCI sells, transfers or otherwise disposes
of all or any substantial part of its assets (except
for Guarantor's direct or indirect sale of the stock
or all or substantially all of the assets of Western
Pioneer Insurance Company, its joint venture interest
in CKS/Rigal, or PCI); or
(iii) Guarantor fails to own at least 90% of the
issued and outstanding shares of stock of any Debtor
(except in the case of PCI following the sale thereof
but subject to the prepayment premium if any, payable
pursuant to the provision of Subsection 5.7(a)(ii));
or
(iv) in the event the voting stock of (A) Guarantor is
privately held, any shareholder thereof shall transfer
any such shares of stock of Guarantor to a Person
other than those listed in Subsection 4.14 hereof or
members of their immediate families or any grantor
trust of which only the shareholders or their
immediate families are a beneficiary, or (B) Guarantor
or any Parent Company of Guarantor is publicly owned,
any Person or group of Persons (other than the
existing senior management of Guarantor and their
affiliates) acting together for the purpose of
changing or influencing the control of Guarantor or
any Parent Company of Guarantor becomes or agrees to
become the beneficial owner (directly or indirectly)
of 25% or more of Guarantor's or any the shares of
voting stock of any Parent Company of Guarantor.
(c) VOLUNTARY PREPAYMENT. On any Installment Payment Date,
Debtors may, at their option, on at least 15 days' prior written
notice to CIT, prepay all, but not less than all, of the
outstanding principal of any or Drawdown or Drawdowns made by them
(provided the principal amount of such prepayment shall in no event
be less than $200,000) together with (i) all interest accrued
thereon to the date of prepayment, (ii) all other amounts then due
and owing hereunder or with respect to all Drawdowns made by such
Debtor, and (iii) an amount equal to the product of the outstanding
principal of such Drawdown(s) and the applicable Optional
Prepayment Percentage, if applicable; provided, however that upon
Guarantor's sale of the stock of PCI or upon PCI's sale of all or
substantially all of its assets, Debtors shall make a prepayment on
the Note in an amount equal to the sum of (i) all outstanding
Drawdowns made by PCI, (ii) all interest accrued thereon to the
date of such prepayment and (iii) any prepayment premium payable
pursuant to the provisions of Subsection 5.7(a)(ii) hereof. Upon
payment in full of any such prepayment amounts, and so long as no
Default or Event of Default has occurred and is continuing, the
items of Equipment purchased by PCI shall be released from the
security interest of this Agreement.
(d) IN CONNECTION WITH A PERMITTED SALE. In accordance
with, and subject to, the provisions of Subsection 5.7 hereof,
Debtors shall be permitted to sell various items of Equipment. On
the Installment Payment Date following the date of consummation of
such sale, Debtors shall prepay the Note in an amount equal to the
product of the unpaid principal of all Drawdowns, the proceeds of
which were used to finance the purchase of the obsolete Equipment
multiplied by a fraction the numerator of which shall be the Cost
of the obsolete items of Equipment which were sold and the
denominator of which shall be the original aggregate principal
amount of the Drawdowns, the proceeds of which were used to finance
the purchase of the obsolete Equipment (less the sum of all
previous prepayments of principal made hereunder with respect to
such Drawdowns). Each prepayment shall also be accompanied by a
payment of interest accrued with respect to the principal amount
being prepaid and any other amounts then due and owing hereunder
including, without limitation, a prepayment fee if required
pursuant to the provisions of Section 5.7 hereof. Upon payment in
full of any such prepayment amount, and so long as no Default or
Event of Default has occurred and is continuing, the item(s) of
Equipment subject to such permitted sale shall be released from the
security interest of this Agreement, and CIT shall promptly
thereafter deliver such documents to Debtors as it may reasonably
request to evidence CIT's release of lien with respect to the
item(s) of Equipment which were sold.
(e) NO OTHER PREPAYMENTS. Except as provided in paragraphs
(a), (b), (c) and (d) above and in Subsections 2.5(b) and (c), the
Note may not be prepaid in whole or in part.
2.4 USE OF PROCEEDS. The proceeds of each Drawdown shall be
applied by each Debtor solely in payment of the Cost of the Unit of
Equipment identified therewith.
2.5 PROGRESS PAYMENTS.
(a) CIT shall make the Progress Payments to Debtors or to
the applicable Vendor on Debtors' behalf subject to the terms and
conditions of this Agreement. The making of any such Progress
Payment by CIT to any Debtor or to the applicable Vendor shall be
deemed to constitute the acceptance by such Debtor of a Drawdown
under the Note in an equal amount. All such Progress Payments made
to any Vendor shall be made in the amounts, and at the times,
provided for in the Purchase Agreements; PROVIDED, HOWEVER, that no
Debtor shall assert any claims or defenses against CIT by reason of
its remittance of other amounts at other times, provided such
action by CIT shall have been taken in good faith reliance upon
Vendor's claim that it is owed such amounts at such times. The
parties hereto understand and agree that pursuant to the Purchase
Agreements with respect to various items of Equipment, more than
one Progress Payment is required in order to pay in full the
purchase price thereof.
(b) If, at the expiration of any Interim Period with respect
to any item of Equipment such Equipment has not been delivered to
a Debtor or a Debtor has not delivered the Delivery and
Installation Certificate to CIT with respect to such item of
Equipment, Debtors shall prepay an amount equal to the original
principal amount of all Drawdowns representing Progress Payments
with respect to such item of Equipment together with (i) all
interest accrued thereon to the date of prepayment, and (ii) all
other amounts then due and owing hereunder or under the Note. No
prepayment premium shall be due and payable with respect to any
prepayment pursuant to this Subsection 2.5(a).
(c) If any Purchase Agreement is terminated or canceled for
any reason prior to the expiration of the Interim Period with
respect to any item of Equipment, Debtors shall prepay an amount
equal to the original principal amount of all Drawdowns
representing Progress Payments with respect to Equipment to be
purchased pursuant to such Purchase Agreement together with (i) all
interest accrued thereon to the date of prepayment, and (ii) except
for the principal amount and accrued interest applicable to other
Drawdowns, all other amounts then due and owing under the Note and
attributable to Drawdowns, the proceeds of which funded the Cost of
the Equipment subject to the Purchase Agreement being terminated.
No prepayment premium shall be due and payable with respect to any
prepayment pursuant to this Subsection 2.5(c).
(d) With respect to any prepayment of the Note required
pursuant to Subsections 2.5(b) or (c) above, if in CIT's sole
discretion the Equipment identified with such prepayment is fully
operational according to the specifications of the manufacturer
thereof, at CIT's option (and with the consent of Debtors) such
prepayments need not be made and repayment of both principal and
interest on such Drawdowns shall be made as set forth in Subsection
2.2(a) hereof.
2.6 JOINT AND SEVERAL OBLIGATIONS. (a) The obligations and
liabilities of each Debtor hereunder and under the Note are joint
and several, each Debtor being fully liable for the entire amount
of the Obligations.
(b) The obligations of Debtors under this Agreement and the
Note shall be continuing, absolute and unconditional under any and
all circumstances and shall be paid by Debtors regardless of (a)
the validity, regularity, legality or enforceability of this
Agreement, the Note, any of the Obligations or any collateral
security therefor or the Guaranty at any time or from time to time
held by CIT; (b) any defense, offset or counterclaim which may at
any time be available to or be asserted by Debtors or Guarantor
against CIT; or (c) any other event or circumstance whatsoever
which may constitute, or might be construed to constitute, an
equitable or legal discharge of a surety or a guarantor, it being
the purpose and intent of Debtors that this Agreement and the Note
and Debtors' obligations hereunder and thereunder shall remain in
full force and effect and be binding upon each Debtor and its
respective permitted successor until the Obligations shall have
been satisfied by payment in full.
(c) Each Debtor hereby consents that, without the necessity
of any reservation of rights against Debtors and without notice to
or assent by any Debtor, any demand for payment of any of the
Obligations made by CIT may be rescinded by CIT and any of the
Obligations continued, and/or the Obligations, or the liability of
any party upon or for any part thereof, or any collateral security
or guaranty therefor, may, from time to time, in whole or in part,
be renewed, extended, amended (subject to the provisions of Section
9.6 hereof), accelerated, settled, compromised, subordinated,
waived, surrendered or released by CIT, and/or this Agreement, the
Note, any collateral security documents or guaranties or documents
in connection therewith may be amended (subject to the provisions
of Section 9.6), supplemented or terminated, in whole or in part,
as CIT may deem advisable from time to time, and/or any Collateral
at any time securing the payment of the Obligations may be sold,
exchanged, waived, surrendered or released, each Debtor remaining
bound hereunder notwithstanding the occurrence of any of the
foregoing. CIT shall not have any duty to protect, secure, perfect
or insure any Collateral at any time securing the payment of the
Obligations. except as required by the Code. Each Debtor waives
any requirement that CIT make any demand upon any other Debtor,
commence suit or exercise any other right or remedy under this
Agreement prior to enforcing its rights against any Debtor
hereunder. Each Debtor waives diligence, presentment, protest,
demand for payment and/or notice of default (except as expressly
required herein) or nonpayment to or upon Debtor with respect to
the Obligations. Each Debtor waives any right to require CIT to
marshal assets in favor of Debtors or any other Person. When
making any demand hereunder against any Debtor, CIT may, but shall
be under no obligation to, make a similar demand on any other
Debtor or Guarantor, and any failure by CIT to make any such demand
or to collect any payments from any such other Debtor or Guarantor
or any release of such other Debtor or Guarantor or other guarantor
shall not relieve any Debtor of its obligations and liabilities
hereunder and under the Note, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of
CIT against any Debtor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
(d) Each Debtor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice
of or proof of reliance by CIT upon this Agreement or the Note or
acceptance of this Agreement. The Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Agreement and the Note, and all
dealings between Debtors or Guarantor and CIT shall likewise be
conclusively presumed to have been had or consummated in reliance
upon this Agreement and the Note. Each Debtor acknowledges receipt
of a copy of this Agreement and the Note.
(e) Each Debtor hereby waives and relinquishes any duty on
the part of CIT (should any such duty exist) to disclose to any
Debtor any matter, fact or thing related to the business,
operations or condition (financial or otherwise) of any other
Debtor, Guarantor or its respective affiliates or subsidiaries or
their properties, whether now known or hereafter known by CIT
during the life of this Agreement.
(f) Notwithstanding any payment or payments made by any
Debtor hereunder or under the Note, each Debtor expressly waives
any and all rights of subrogation, reimbursement, indemnity,
exoneration, contribution and any other claim which it may now or
hereafter have against any other Debtor or any other person
directly or contingently liable for the Obligations guarantied
hereunder, or against or with respect to any other Debtor's
property (including, without limitation, property collateralizing
the Obligations), arising from the existence or performance of its
obligations hereunder and under the Note until all amounts owing to
CIT by or on account of the Obligations shall have been paid in
full and this Agreement terminated.
SECTION 3. CONDITIONS OF BORROWING.
3.1 CONDITIONS OF INITIAL DRAWDOWN. CIT shall not be
required to make the initial Drawdown hereunder, including without
limitation any payment to any Vendor pursuant to any Purchase
Agreement the making of which is deemed hereunder to be the making
of Drawdown, unless on the Closing Date of such Drawdown:
(a) CERTIFICATE OF INCUMBENCY OF DEBTORS. CIT shall
have received a certificate of incumbency of each Debtor
signed by the Secretary or Assistant Secretary of such
Debtor, which certificate shall certify the names of the
officers of each Debtor authorized to execute any documents
hereunder or under any other related document on behalf of
such Debtor, together with specimen signatures of such
officers, and CIT may conclusively rely on such certificate
until receipt of a further certificate of the Secretary or
Assistant Secretary of any Debtor canceling or amending the
prior certificate and submitting the signatures of the
officers named in such further certificate.
(b) RESOLUTIONS. CIT shall have received a certified
copy of all corporate proceedings of each Debtor evidencing
that all action required to be taken in connection with the
authorization, execution, delivery and performance of this
Agreement and the Note and the transactions contemplated
hereby has been duly taken.
(c) OPINION OF DEBTORS' AND GUARANTORS' COUNSEL. CIT
shall have received the written opinion addressed to it of
counsel for each of Debtors and the Guarantor reasonably
satisfactory to CIT, as to matters contained in Section 4,
Subsection 4.1 through 4.7, inclusive, hereof and as to
matters contained in Section 4(a) - 4(f) and 4(i) of the
Guaranty with respect to each Guarantor and as to such other
matters incident to the transactions contemplated by this
Agreement as CIT may reasonably request.
(d) PROGRESS PAYMENT PURCHASE AGREEMENT ASSIGNMENT.
CIT shall have received a duly executed Progress Payment
Purchase Agreement Assignment substantially in the form of
EXHIBIT F from each Debtor with respect to each Purchase
Agreement.
(e) VENDOR CONSENT AND AGREEMENT. CIT shall have
received a duly executed Vendor Consent and Agreement
substantially in the form of EXHIBIT G from each Debtor and
the applicable Vendor with respect to each Purchase
Agreement.
(f) GUARANTY. The Guaranty shall have been duly
executed and delivered to CIT by Guarantor substantially in
the form attached hereto as EXHIBIT H.
(g) NOTE. The Note evidencing the Loan shall have
been duly executed and delivered to CIT by each Debtor.
(h) INSURANCE. CIT shall have received evidence
satisfactory to it that Debtors have obtained insurance in
accordance with the provisions of this Agreement.
(i) CONTRIBUTION AGREEMENT. CIT shall have received
from each Debtor a duly executed Contribution Agreement.
3.2 CONDITIONS OF EACH DRAWDOWN. No Debtor shall be
permitted to make any Drawdown under the Note (including the
initial Drawdown) unless on the Closing Date of such Drawdown:
(a) SUPPLEMENT. Debtor shall have executed and
delivered to CIT a Supplement describing in a manner
reasonably satisfactory to CIT the Unit of Equipment to be
financed by such Drawdown.
(b) EQUIPMENT DELIVERY; EQUIPMENT SATISFACTORY TO
CIT. Except in the case of a Drawdown to fund a Progress
Payment, the Unit of Equipment being financed by such
Drawdown shall have been duly delivered to and accepted by
the applicable Debtor. CIT shall have inspected and
appraised the Equipment and found it satisfactory in value,
condition and type in its reasonable judgment, assuming that
any item of Equipment is either of the type set forth on
Schedule 1 or Schedule 2 hereto or is of a type similar to
any such items.
(c) INVOICE AND TITLE. If requested by CIT, CIT
shall have received copies of the invoice or invoices
covering the acquisition of the items of Equipment
constituting the Unit of Equipment being financed with such
Drawdown together with copies of the bills of sale, if any,
conveying such items to the applicable Debtor.
(d) PAYMENT OF EQUIPMENT COST. With respect to
Drawdowns other than during an Interim Period, CIT shall be
satisfied that the Cost of each item of Equipment
constituting the Unit of Equipment being financed by such
Drawdown has been, or concurrently with the making of such
Drawdown will be, fully paid. With respect to Drawdowns made
to fund Progress Payments to the applicable Debtor in
reimbursement of amounts previously paid to the applicable
Vendor, with respect to the Equipment, CIT shall be satisfied
that the portion of the Cost of each item of Equipment
constituting the Unit of Equipment being financed by such
Drawdowns as to which such Debtor has requested reimbursement
has been fully paid as evidenced by canceled checks, wire
transfer receipts or confirmation by the vendor.
(e) SECURITY INTEREST. All filings, recordings and
other actions deemed necessary or desirable by CIT in order
to establish, protect, preserve and perfect its security
interest in the Unit of Equipment being financed by such
Drawdown as a valid perfected first (and only) priority
security interest (other than Permitted Liens) shall have
been duly effected, including, without limitation, the filing
of financing statements and the recordation of landlord
and/or mortgagee waivers or disclaimers and/or severance
agreements, all in form and substance reasonably satisfactory
to CIT, and all fees, taxes and other charges relating to
such filings and recordings shall have been paid by Debtors.
(f) REPRESENTATIONS. (i) The representations and
warranties contained in this Agreement shall be true and
correct in all material respects on and as of the date of the
making of such Drawdown with the same effect as if made on
and as of such date; (ii) no Default or Event of Default
shall be in existence on the date of the making of such
Drawdown or shall occur as a result of such Drawdown; and
(iii) the acceptance by the applicable Debtor of each
Drawdown shall constitute a representation by Debtors that
the statements contained in clauses (i) and (ii) above are
true and correct on the date of such Drawdown and (iv) the
making of each Drawdown shall not violate any of the
provisions of the Indenture.
(g) NO MATERIAL ADVERSE CHANGE. In the judgment of
CIT, there shall have been no material adverse change in the
consolidated financial condition, business or operations of
Guarantor from December 31, 1994.
(h) OTHER DOCUMENTS AND INFORMATION. CIT shall have
received from Debtors, in form and substance satisfactory to
CIT, such other documents and information as CIT shall
reasonably request.
(i) LEGAL MATTERS. All legal matters with respect to
and all legal documents executed in connection with the
transactions contemplated by this Agreement shall be
reasonably satisfactory to counsel for CIT.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In order to induce CIT to enter into this Agreement and to
permit Debtors to make each Drawdown, each Debtor represents and
warrants to CIT that:
4.1 ORGANIZATION. Each Debtor is a corporation duly
organized, validly existing and in good standing under the laws of
the jurisdiction set forth in the introductory paragraph of this
Agreement, has the necessary corporate authority and power to own
the Equipment and its other assets and to transact the business in
which it is engaged, and is duly qualified to do business in each
jurisdiction where the Equipment is located and in each other
jurisdiction in which the conduct of its business or the ownership
of its assets requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect.
4.2 POWER AND AUTHORITY. Each Debtor has full power,
authority and legal right to execute and deliver this Agreement,
the Contribution Agreement and the Note, to perform its
obligations hereunder and thereunder, to borrow hereunder and to
grant the security interest created by this Agreement.
4.3 CONSENTS AND PERMITS. Except as set forth in Schedule
4.3 hereof, no consent of any other party (including any
stockholders, trustees or holders of indebtedness), and no consent,
license, approval or authorization of, exemption by, or
registration or declaration with, any governmental body, authority,
bureau or agency is required in connection with (i) the execution,
delivery or performance by each Debtor of this Agreement or the
Note, or (ii) the validity or enforceability of this Agreement, the
Contribution Agreement or the Note.
4.4 NO LEGAL BAR. The execution, delivery and performance
by each Debtor of this Agreement and the Note do not and will not
violate any provision of any applicable law or regulation or of any
judgment, award, order, writ or decree or the like of any court or
governmental instrumentality, will not violate any provision of the
charter or by-laws of each Debtor and, except as set forth in
SCHEDULE 4.4, will not violate any provision of or cause a default
under any mortgage, indenture, contract, agreement or other
undertaking to which any Debtor is a party or which purports to be
binding upon any Debtor or upon any of its assets, including,
without limitation the Indenture, and will not result in the
creation or imposition of any Lien on any of the assets of any
Debtor other than the security interest intended to be created
hereby.
4.5 NO DEFAULTS. No Debtor is in default, and no event or
condition exists which after the giving of notice or lapse of time
or both would constitute an event of default, under the Indenture
or any mortgage, other indenture, contract, agreement, judgment or
other undertaking to which any Debtor is a party or which purports
to be binding upon any Debtor or upon any of its assets, except for
any such default, event or condition which, individually or in the
aggregate, would not affect any Debtor's ability to perform its
obligations under the Agreement or any such mortgage, indenture,
contract, agreement, judgment or other undertaking.
4.6 ENFORCEABILITY. This Agreement and the Contribution
Agreement have been duly authorized, executed and delivered by
Debtors and constitutes a legal, valid and binding obligation of
each Debtor enforceable in accordance with its terms, except to the
extent enforceability is limited by (i) applicable bankruptcy,
reorganization, insolvency and similar laws affecting the
enforceability of creditors rights generally, and (ii) general
principles of equity which may limit the availability of equitable
remedies (whether in a proceeding at law or in equity). When
executed and delivered, the Note shall have been duly authorized,
executed and delivered by each Debtor and shall constitute a legal,
valid and binding obligation of each Debtor enforceable in
accordance with its terms, and except to the extent enforceability
is limited by (i) applicable bankruptcy, reorganization, insolvency
and similar laws affecting the enforceability of creditors rights
generally, and (ii) general principles of equity which may limit
the availability of equitable remedies (whether in a proceeding at
law or in equity).
4.7 NO LITIGATION. There is no action, suit, investigation
or proceeding (whether or not purportedly on behalf of any Debtor)
pending or threatened against or affecting any Debtor or any of its
assets (a) which involves any of the Equipment or any of the
transactions contemplated by this Agreement; or (b) which, if
adversely determined, would have a Material Adverse Effect.
4.8 TITLE TO EQUIPMENT. Upon the making of the final
Progress Payment with respect to any item of Equipment, the
applicable Debtor shall have good and marketable title to the Unit
of Equipment being financed, subject to no Liens except the
security interest created hereby in favor of CIT.
4.9 CIT'S SECURITY INTEREST. Upon the making of the final
Progress Payment with respect to any item of Equipment, CIT shall
have a legal, valid and continuing first priority security interest
in the Unit of Equipment being financed on such Date, subject to no
other Liens, and all filings, recordings or other actions necessary
or desirable in order to establish, protect and perfect such
security interest in favor of CIT as a perfected first (and
exclusive) priority security interest (other than Permitted Liens)
in such Equipment will have been duly effected, and all taxes, fees
and other charges in connection therewith shall have been duly
paid.
4.10 FINANCIAL CONDITION OF GUARANTOR. The consolidated
financial statements of Guarantor as at and for the fiscal year
ended December 31, 1994 audited by Coopers & Lybrand, copies of
which have been heretofore delivered to CIT, are complete and
correct, have been prepared in accordance with generally accepted
accounting principles consistently applied, and present fairly in
all material respects the consolidated financial position of
Guarantor as at said date and the results of its operations for the
period ended on said date, and there has been no material adverse
change in the consolidated financial condition, business or
operations of Guarantor since said date.
4.11 TAXES. Each Debtor has filed all Federal, state and
local income tax returns that are required to be filed, and has
paid all taxes as shown on said returns and all assessments
received by it to the extent that such taxes and assessments have
become due, and Debtors do not have any knowledge of any actual or
proposed deficiency or additional assessment in connection
therewith. The charges, accruals and reserves on the books of
Debtors in respect of Federal, state and local taxes for all open
years, and for the current fiscal year, make adequate provision for
all unpaid tax liabilities for such periods.
4.12 PRINCIPAL PLACE OF BUSINESS. The principal place of
business of each Debtor is located at the locations set forth on
SCHEDULE 4.12.
4.13 NO OTHER NAME. Except as set forth on SCHEDULE 4.13,
during the past five (5) years, no Debtor has changed its name and
has not done business in any name other than that set forth in the
introductory paragraph of this Agreement.
4.14 OWNERSHIP OF DEBTOR AND GUARANTOR. All of the issued
and outstanding shares of voting stock of each Debtor are presently
held by Guarantor. The issued and outstanding voting stock of
Guarantor is registered under the Securities Exchange Act of 1934,
as amended.
4.15 ENVIRONMENTAL MATTERS. (a) The operations of each
Debtor comply in all material respects with all applicable
Environmental Laws; (b) none of the operations of any Debtor is
subject to any judicial or administrative proceeding alleging the
violation of any Environmental Laws; (c) none of the operations of
any Debtor is the subject of a federal or state investigation to
determine whether any remedial action is needed to respond to a
release of any Hazardous Material into the environment; and (d) no
Debtor has any known material contingent liability in connection
with any release of any Hazardous Material into the environment.
SECTION 5. COVENANTS.
Each Debtor covenants and agrees that from and after the date
hereof and so long as the Commitment or any of the Note is
outstanding:
5.1 NOTICES. Each Debtor will promptly give written notice
to CIT of (i) the occurrence of any Default or Event of Default;
(ii) the occurrence of any Event of Loss; (iii) the commencement or
threat of any material litigation or proceedings affecting any
Debtor or the Equipment; (iv) any dispute between Debtor and any
governmental regulatory body or other party that involves any of
the Equipment or that could reasonably be expected to materially
interfere with the normal business operations of Debtor; and (v)
Debtor's receipt of any notice that (A) the operations of Debtor
are not in material compliance with the requirements of applicable
Environmental Laws, (B) Debtor is subject to a federal or state
investigation to determine whether any remedial action is needed to
respond to the release of any Hazardous Material into the
environment, or (C) any properties or assets of Debtor are subject
to an Environmental Lien.
5.2 LAWS, OBLIGATIONS; OPERATIONS. Each Debtor will (i) in
all material respects duly observe and conform to all requirements
of any governmental authorities relating to the conduct of its
business, to the performance of its obligations hereunder, to the
use, operation, or ownership of the Equipment, or to its properties
or assets; (ii) maintain its existence as a legal entity and obtain
and keep in full force and effect all rights, franchises, licenses
and permits which are necessary to the proper conduct of its
business; (iii) obtain or cause to be obtained as promptly as
possible any governmental, administrative or agency approval and
make any filing or registration therewith which at the time shall
be required with respect to the performance of its obligations
under this Agreement or the operation of its business; and (iv) pay
all fees, taxes, assessments and governmental charges or levies
imposed upon any of the Equipment.
5.3 INSPECTION. CIT or its authorized representative may
upon prior notice and at any reasonable time or times inspect the
Equipment and, following the occurrence and during the continuation
of an Event of Default, may upon prior notice and at any reasonable
time or times inspect the books and records of Debtors.
5.4 BOOKS. Each Debtor will keep proper books of record and
account in which full, true and correct entries in accordance with
generally accepted accounting principles will be made of all
dealings or transactions in relation to its business and
activities.
5.5 FINANCIAL INFORMATION. Debtors will cause to be
furnished furnish to CIT (a) as soon as available, but in any event
not later than 120 days after the end of each fiscal year of
Guarantor, a consolidated balance sheet of Guarantor as at the end
of such fiscal year, and consolidated statement of income and
consolidated statement of cash flow of Guarantor for such fiscal
year, all in reasonable detail, prepared in accordance with
generally accepted accounting principles applied on a basis
consistently maintained throughout the period involved and audited
by certified public accountants reasonably acceptable to CIT; (b)
as soon as available, but in any event not later than 90 days after
the end of each of the first three quarterly periods of each fiscal
year of Guarantor, a consolidated balance sheet of as at the end of
such quarterly period and a consolidated statement of income and
consolidated statement of cash flow of Guarantor for such quarterly
period and for the portion of the fiscal year then ended, or a copy
of Guarantor's Quarterly Report on Form 10-Q filed with the United
States Securities and Exchange Commission containing such balance
sheet and statements, all in reasonable detail, prepared in
accordance with generally accepted accounting principles applied on
a basis consistently maintained throughout the period involved and
certified by the chief financial officer of Guarantor; (c) furnish
to CIT, together with the financial statements described in clauses
5.5(a) and 5.5(b) above, a statement signed by Guarantor's chief
financial officer certifying that Guarantor is in compliance with
all financial covenants contained in the Indenture and any credit
agreement between Guarantor and Heller Financial, Inc. or any other
lender who supplies Guarantor with a revolving line of credit and
every other material financing agreement of Guarantor, or if
Guarantor is not in compliance, the nature of such noncompliance or
default, and the status thereof (such statement shall set forth the
actual calculations of any financial covenants and the details of
any amendments or modifications of any financial covenants); and
(d) promptly, such additional financial and other information as
CIT may from time to time reasonably request.
5.6 FURTHER ASSURANCES. Each Debtor will promptly, at any
time and from time to time, at its sole expense, execute and
deliver to CIT such further instruments and documents, and take
such further action, as CIT may from time to time reasonably
request in order to further carry out the intent and purpose of
this Agreement and to establish and protect the rights, interests
and remedies created, or intended to be created, in favor of CIT
hereby, including, without limitation, the execution, delivery,
recordation and filing of financing statements and continuation
statements. Each Debtor hereby authorizes CIT, in such
jurisdictions where such action is authorized by law, to effect any
such recordation or filing of financing statements without the
signature of Debtor thereon and to file as valid financing
statements in the applicable financing statement records,
photocopies hereof and of any other financing statement executed in
connection herewith. Each Debtor will pay, or reimburse CIT for,
any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation and
protection of CIT's security interest in the Equipment, including,
without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices,
payments or discharge of any taxes or Liens upon or in respect of
the Equipment, premiums for insurance with respect to the Equipment
(if not insured by Debtors in accordance with the terms hereof) and
all other fees, costs and expenses in connection with protecting,
maintaining or preserving the Equipment and CIT's interests
therein, whether through judicial proceedings or otherwise, or in
connection with defending or prosecuting any actions, suits or
proceedings arising out of or related to the Equipment; and all
such amounts that are paid by CIT shall, until reimbursed by
Debtors, constitute Obligations of Debtors secured by the
Collateral.
5.7 NO DISPOSITION OF COLLATERAL. Debtors will not sell,
convey, transfer, exchange, lease or otherwise relinquish
possession or dispose of any of the Collateral or attempt or offer
to do any of the foregoing, except that Debtors may sell Equipment
which any Debtor in its reasonable judgment believes to be obsolete
provided that with respect to, or at the time of, any such sale all
of the following conditions are satisfied:
(i) No Event of Default or Default shall have
occurred and be continuing;
(ii) The Obsolete Prepaid Principal Amount, as defined
below, required to be prepaid by Debtors with respect to all
such obsolete Equipment sold hereunder including, without
limitation, any items of Equipment owned by PCI which have
been sold in connection with the provisions of Section
2.3(b)(ii) hereof or are sold as a result of the sale of the
stock of PCI as permitted by the provisions of Section
2.3(b)(iii) hereof, is less than $500,000 in the aggregate in
any calendar year (or, to the extent the Obsolete Prepaid
Principal Amount exceeds $500,000 in any calendar year,
Debtors pay to CIT, in addition to the amounts specified in
Section 2.3(d) hereof, an amount equal to the product of all
amounts in excess of $500,000 and the Optional Prepayment
Percentage). "OBSOLETE PREPAID PRINCIPAL AMOUNT" with
respect to (x) any item of obsolete Equipment to be sold by
a Debtor hereunder, shall be deemed to be the product of (A)
the unpaid principal amount of all Drawdowns, the proceeds of
which were used to finance the purchase of the obsolete
Equipment multiplied by (B) a fraction the numerator of which
shall be the Cost of the item(s) of obsolete Equipment and
the denominator of which shall be the original aggregate
principal amount of the Drawdowns under the Note, the
proceeds of which were used to finance the purchase of the
obsolete Equipment and (y) with respect to Equipment owned by
PCI after the occurrence of a PCI Prohibited Transaction, the
outstanding principal of all Drawdowns made by PCI.
(iii) Such sale is on an arm's length basis for a sale
price paid in cash.
Debtors shall give CIT prior written notice of any such sale
promptly but in any event no later than five (5) Business Days
prior to the date on which such sale is to be consummated. Debtors
further covenant and agree that concurrently with the consummation
of any such sale, Debtors shall comply with the provisions of
Subsection 2.3(d) hereof.
5.8 NO LIENS. Debtors will not create, assume or suffer to
exist any Lien of any kind upon the Collateral except for the
security interest created hereby.
5.9 DEBTOR'S TITLE; CIT'S SECURITY INTEREST; PERSONAL
PROPERTY. Debtors will warrant and defend its good and marketable
title to the Equipment, and CIT's perfected first priority security
interest in the Collateral, against all claims and demands
whatsoever. Each Debtor agrees that the Equipment shall be and at
all times remain separately identifiable personal property.
Debtors shall, at its expense, take such action (including the
obtaining and recording of waivers) as may be necessary to prevent
any third party from acquiring any right to or interest in the
Equipment by virtue of the Equipment being deemed to be real
property or a part of real property or a part of other personal
property, and if at any time any person shall claim any such right
or interest, Debtors shall, at its expense, cause such claim to be
waived in writing or otherwise eliminated to CIT's satisfaction
within 30 days after such claim shall have first become known to
Debtors.
5.10 NO CHANGES IN DEBTORS. No Debtor shall: (a) enter into
any Prohibited Transaction except as provided in Subsection 2.3(b)
hereof; or (b) liquidate or dissolve; or (c) change the form of
organization of its business; or (d) without thirty (30) days prior
written notice to CIT, change its name or its chief place of
business.
5.11 USE OF EQUIPMENT; MAINTENANCE; IDENTIFICATION;
REPLACEMENT UPON EVENT OF LOSS.
(a) Debtors will not move any of the Equipment from the
location specified on the Supplement relating thereto without the
prior written consent of CIT, which consent shall not be
unreasonably withheld.
(b) Debtors will use the Equipment in a careful and proper
manner, will in all material respects comply with and conform to
all governmental laws, rules and regulations relating thereto, and
will cause the Equipment to be operated in all material respects in
accordance with the manufacturer's or supplier's instructions or
manuals and only by competent and duly qualified personnel.
(c) Each Debtor will, at its own expense, keep and maintain
the Equipment in good repair, condition and working order and
furnish all parts, replacements, mechanisms, devices and servicing
required therefor so that the value, condition and operating
efficiency thereof will at all times be maintained and preserved,
normal wear and tear excepted. All such repairs, parts,
mechanisms, devices and replacements shall immediately, without
further act, become part of the Equipment and subject to the
security interest created by this Agreement.
(d) Debtors will not make or authorize any improvement,
change, addition or alteration to the Equipment if such
improvement, change, addition or alteration will impair the
originally intended function or use of the Equipment or impair the
value of the Equipment as it existed immediately prior to such
improvement, change, addition or alteration. Any part added to the
Equipment in connection with any improvement, change, addition or
alteration shall immediately, without further act, become part of
the Equipment and subject to the security interest created by this
Agreement.
(e) If requested by CIT in writing, Debtors shall, at its
expense, attach to each item of Equipment a notice reasonably
satisfactory to CIT disclosing CIT's security interest in such item
of Equipment.
(f) In the event that any item of Equipment shall suffer an
Event of Loss, Debtors shall make a prepayment on the Note
identified with such item of Equipment as set forth in Subsection
2.3(a) or, at Debtors' option and provided no Event of Default
shall have occurred and be continuing, Debtors may replace such
item with another item of similar description having a value,
utility and remaining useful life at least equal to, and being in
as good operating and mechanical condition as, that which the item
being replaced would have had and been in if no such Event of Loss
had occurred (assuming that such replaced item was in the condition
required pursuant to the terms hereof) (a "REPLACEMENT UNIT") and
such Replacement Unit shall be deemed part of the Equipment
hereunder and all provisions of this Agreement shall be applicable
to such Replacement Unit to the same extent as the item it replaced.
As a further condition to any replacement of any item of
Equipment hereunder, Debtors shall, at their own expense, prior to
or simultaneously with such replacement (i) furnish CIT with a
warranty (as to title) bill of sale with respect to such
Replacement Unit from the vendor thereof conveying to the
applicable Debtor good and marketable title to such Replacement
Unit free and clear of all Liens, (ii) assign to CIT all of the
applicable Debtor's rights under any agreement to purchase a
Replacement Unit except for Debtor's rights to be indemnified by
the vendor thereof in connection with claims of patent
infringement, personal injury and property damage (provided,
notwithstanding the foregoing assignment, Debtors shall remain
liable to the vendor thereunder to perform all the duties and
obligations of the purchaser thereunder to the same extent as if no
such assignment had occurred, and CIT shall not have any obligation
thereunder), and (iii) furnish CIT with an officer's certificate of
the applicable Debtor containing a description of such Replacement
Unit and certifying that such Replacement Unit satisfies the
requirements for a Replacement Unit set forth in this Section 5.11.
5.12 INSURANCE.
Debtors shall obtain and maintain at all times on the
Collateral, at its expense, "All-Risk" physical damage and, if
required by CIT, liability (including bodily injury and property
damage) insurance in such amounts, against such risks, in such form
and with such insurers as shall be satisfactory to CIT (it being
agreed that the existing insurance coverage described on Schedule
5.12 hereto is satisfactory to CIT); provided, however, that the
amount of physical damage insurance shall not be less than the
greater of the full replacement value of the Collateral or 100% of
the then aggregate outstanding principal amount of the Note. All
physical damage insurance policies shall be made payable to CIT as
its interest may appear; if liability insurance is required by CIT,
the liability insurance policies shall name CIT as additional
insured. All such insurance policies will be in form, amount and
substance acceptable to CIT (it being agreed that the existing
insurance coverage described on Schedule 5.12 hereto is
satisfactory to CIT). Debtors shall deliver the certificates of
insurance thereof to CIT prior to policy expiration or upon CIT's
request but CIT shall bear no duty or liability to ascertain the
existence or adequacy of such insurance. Each insurance policy
shall, among other things, require that the insurer give CIT at
least 30 days' prior written notice of any alteration in the terms
of such policy or of the cancellation thereof and that the
interests of CIT be continued insured regardless of any breach of
or violation by Debtors of any warranties, declarations or
conditions contained in such insurance policy. The insurance
maintained by the Debtors shall be primary with no other insurance
maintained by CIT (if any) contributory.
5.13 HAZARDOUS SUBSTANCES.
(a) Debtors shall not generate, store, treat, discharge,
refine, handle, release or dispose of any Hazardous Substances,
except in material compliance with Applicable Laws.
(b) Should a release of Hazardous Substances occur which is
reasonably likely to require an expenditure by Debtors for
investigation and cleanup in excess of $100,000, Debtors shall
provide a report to CIT describing the nature of the release and
the remedial action proposed to be taken. If Debtors shall fail to
provide such a report, or if the proposed action shall not be
reasonably satisfactory to CIT, CIT may require that Debtors retain
a qualified and licensed engineer to conduct, at Debtors' expense,
an investigation of that release. Any report of the investigation
shall be delivered simultaneously to Debtors and CIT. Debtors
shall expeditiously proceed to implement any cleanup required and
shall provide a report to CIT upon the completion of such work.
SECTION 6. SECURITY INTEREST.
6.1 GRANT OF SECURITY INTEREST. As collateral security for
the prompt and complete payment and performance when due of all the
Obligations and in order to induce CIT to enter into this Agreement
and make the Loan in accordance with the terms here. Each Debtor
hereby assigns, conveys, mortgages, pledges, hypothecates and
transfers to CIT, and hereby grants to CIT a first priority
security interest in, all each Debtor's right, title and interest
in, to and under the Collateral.
6.2 CIT APPOINTED AS ATTORNEY-IN-FACT.
(a) Each Debtor hereby irrevocably constitutes and appoints
CIT and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such
Debtor and in the name of Debtor or in its own name, from time to
time in CIT's discretion following and during the continuance of an
Event of Default, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement. Each
Debtor hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
(b) The powers conferred on CIT hereunder are solely to
protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. CIT shall be accountable
only for amounts that it actually receives as a result of the
exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to Debtors for
any act or failure to act.
SECTION 7. EVENTS OF DEFAULT.
The following events shall each constitute an event of
default (herein called "Event of Default") under this Agreement:
(a) Any Debtor shall fail to pay any Obligation within 10
days after the same becomes due (whether at the stated maturity, by
acceleration or otherwise); or
(b) Any representation or warranty made by any Debtor in
this Agreement or in connection with the Loan or by Guarantor in
the Guaranty or by Guarantor or any Debtor in any document,
certificate or financial or other statement now or hereafter
furnished by any Debtor or Guarantor in connection with this
Agreement or the Guaranty shall at any time prove to be untrue or
misleading in any material respect as of the time when made; or
(c) Any Debtor shall fail to observe any covenant, condition
or agreement contained in Subsections 2.3(b), 2.4, 5.7, 5.8, 5.10,
5.11(a), 5.11(d), 5.12 or 5.14 hereof and, in the case of breaches
of Sections 5.8, 5.11(a) or 5.11(d) such failure continues for a
period of 10 days after notice thereof is received from CIT, or is
otherwise actually known to any Debtor; or
(d) Any Debtor shall fail to observe or perform any other
covenant, condition or agreement contained in this Agreement, and
such failure shall continue unremedied for a period of 30 days
after the earlier of (i) the date on which any Debtor obtains
knowledge of such failure; or (ii) the date on which notice thereof
shall be given by CIT to Debtors; or
(e) Any Debtor, Guarantor or any Affiliate of any Debtor or
Guarantor shall (i) default in the payment or performance of any
obligation to CIT or to any of CIT's subsidiaries or other
Affiliates, whether such obligation is for borrowed money, under
any lease, under any guarantee or similar accommodation, or for the
deferred purchase price of property including interest thereon,
beyond the period of grace, if any, provided with respect thereto,
(ii)(x) default in the payment of any obligation to any third party
or any Affiliate or subsidiary of any Debtor or Guarantor in an
original principal amount equal to or in excess of $500,000,
whether such obligation is for borrowed money, under any lease,
under any guarantee or similar accommodation, or for the deferred
purchase price of property including interest thereon, beyond the
period of grace, if any, provided with respect thereto, or (y)
default in the performance or observance of any other term,
condition or agreement contained in any such obligation or in any
agreement relating thereto, if the effect of such default is to
cause such obligation to become due prior to its stated maturity or
to realize upon any collateral given as security therefor; or
(f) The institution by any Debtor or Guarantor of
proceedings to be adjudicated a bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the commencement by any Debtor or
Guarantor of a voluntary proceeding or case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or
other similar law, or the consent by any of them to the filing of
any such petition or to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian or
sequestrator (or other similar official) of any Debtor or Guarantor
or of any substantial part of their property, or the making by any
of them of an assignment for the benefit of creditors or the
admission by any them of its inability to pay its debts generally
as they become due or its willingness to be adjudicated a bankrupt
or the failure of any Debtor or Guarantor generally to pay its
respective debts as they become due or the taking of corporate
action by any Debtor or Guarantor in furtherance of any of the
foregoing; or
(g) The entry of a decree or order for relief by a court
having jurisdiction in respect of any Debtor or Guarantor,
adjudging any Debtor or Guarantor a bankrupt or insolvent, or
approving as properly filed a petition seeking a reorganization,
arrangement, adjustment or composition of or in respect of any
Debtor or Guarantor in an involuntary proceeding or case under the
Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state or foreign bankruptcy, insolvency
or other similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or other similar
official) of any Debtor or Guarantor or of any substantial part of
its respective property, or ordering the winding-up or liquidation
of any of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 30 days; or
(h) Any Debtor shall fail to observe any covenant, condition
or agreement contained in any Progress Payment Purchase Agreement
Assignment or any Vendor Consent and Agreement and such failure
shall continue for a period of 30 days after the earlier of the
date on which (i) any Debtor has knowledge thereof or (ii) CIT
sends Debtors written notice thereof; or
(i) Any Vendor shall fail to observe any material covenant
or agreement contained in any Vendor Consent and Agreement and
such failure shall continue for a period of 30 days after the
earlier of the date on which (i) any Debtor has knowledge thereof
or (ii) CIT sends Debtors written notice thereof; or
(j) Guarantor shall fail to observe any covenant, condition
or agreement contained in the Guaranty contained in Section 5 or
shall fail to observe any other covenant, condition or agreement
contained in the Guaranty and with respect to any such failure
shall continue for a period of 30 days after the earlier of such
date (i) on which Guarantor has knowledge thereof or (ii) CIT gives
notice thereof to Debtors; or
(k) Guarantor's Cash Flow Coverage Ratio on a rolling four
quarter basis shall be less than 1.4 to 1.0 as at the end of any
such fiscal quarter from the date of this Agreement through March
31, 1997 or thereafter shall be less than 1.5 to 1.0 as at the end
any such fiscal quarter; or
(l) Guarantor's Funded Debt to EBITDA Ratio on a rolling
four quarter basis shall exceed the following:
(i) on or prior to December 31, 1995, 5.25 to 1.0 as
at the end of any such fiscal quarter;
(ii) on or prior to December 31, 1996, 5.0 to 1.0 as
at the end of any such fiscal quarter;
(ii) after December 31, 1996, 4.75 to 1.0 as at the
end of any such fiscal quarter; or
(m) Guarantor's Leverage Ratio shall exceed 5.0 to 1.0 at
any time.
SECTION 8. REMEDIES.
8.1 TERMINATION; ACCELERATION. If an Event of Default
specified in Subsections 7(f) or (g) above shall occur, then, and
in any such event, the Commitment shall immediately terminate and
the principal amount of the Note, together with accrued interest
thereon and all other amounts owing under or with respect to this
Agreement shall become immediately due and payable without any
notice or other action by CIT, and if any other Event of Default
shall occur and be continuing, then, and in any such event, CIT
may, by notice of default given to Debtors, (a) terminate forthwith
the Commitment and/or (b) declare the Note and all other amounts
owing under or with respect to this Agreement to be forthwith due
and payable, whereupon the principal amount of the Note, together
with accrued interest thereon and all other amounts owing under or
with respect to this Agreement shall become immediately due and
payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived. During the
continuance of any Event of Default hereunder, CIT shall have the
right to pursue and enforce any of its rights and remedies under
this Section 8.
8.2 ADDITIONAL REMEDIES. If an Event of Default shall occur
and be continuing, CIT may exercise in addition to all other rights
and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of secured parties under the
Code or under any other applicable law. Without limiting the
generality of the foregoing, each Debtor agrees that in any such
event, CIT, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon
Debtors or any other person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may
forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase or otherwise dispose of
and deliver the Collateral (or contract to do so), or any part
thereof, in one or more parcels at public or private sale or sales,
at any exchange or broker's board or at any of CIT's offices or
elsewhere at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. CIT
shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in Debtors, which right or
equity is hereby expressly released. CIT shall apply the net
proceeds of any such collection, recovery, receipt, appropriation,
realization or sale (after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care,
safekeeping or otherwise of any or all of the Collateral or in any
way relating to the rights of CIT hereunder, including attorneys'
fees and legal expenses) to the payment in whole or in part of the
Obligations, in such order as CIT may elect and only after so
applying such net proceeds and after the payment by CIT of any
other amount required by any provision of law (including Section 9-
504(1)(c) of the Code), need CIT account for the surplus, if any,
to Debtors. To the extent permitted by applicable law, Each Debtor
waives all claims, damages, and demands against CIT arising out of
the repossession, retention or sale of the Collateral. Debtor
agrees that CIT need not give more than 10 days' notice (which
notification shall be deemed given when mailed, postage prepaid,
addressed to Debtors care of the Guarantor at the address set forth
in Subsection 9.2 hereof) of the time and place of any public sale
or of the time after which a private sale may take place and that
such notice is reasonable notification of such matters. Each
Debtor shall be jointly and severally liable for any deficiency if
the proceeds of any sale or disposition of the Collateral are
insufficient to pay all amounts to which CIT is entitled.
Each Debtor further agrees, at CIT's request following and
during the continuance of an Event of Default, to assemble (at
Debtors' expense) the Collateral, and make it available to CIT at
places which CIT shall select, whether at Debtors' premises or
elsewhere. CIT in its sole discretion to the extent permitted by
applicable law then in effect may demand that Debtors, and Debtors,
at their joint and several expense upon such demand shall, return
the Equipment promptly to CIT at such place in the continental
United States of America as CIT shall specify, or CIT, at its
option, may enter upon the premises where the Equipment is located
and take immediate possession of the Equipment and remove the same
by summary proceedings or otherwise, all without liability for or
by reason of such entry or taking of possession, whether for the
restoration of damage to property caused by such taking or
otherwise. Upon CIT's taking of possession of the Equipment, each
Debtor agrees that each item of Equipment shall be capable of
passing performance tests according to the specifications of the
manufacturer thereof, all peripheral equipment and additional
systems related to each item of Equipment must be intact and fully
operational, and all pneumatic, electrical, hydraulic and
mechanical systems contained in such item of Equipment must be
fully operational according to the specifications of the
manufacturer thereof. Each Debtor agrees at its expense to use its
best efforts to make available to CIT a representative of the
manufacturer of each item of Equipment for the purposes of
disassembly of such item of Equipment.
Notwithstanding anything to the contrary in the event an
Event of Default under Subsection 7(h) or 7(i) shall occur, CIT
agrees that it shall be entitled to all of the remedies set forth
in this Section 8 but CIT limit such remedies to acceleration of
the Drawdowns the proceeds of which were paid to the Vendor (or to
Debtors in reimbursement of such Vendor) with respect to which such
Event of Default related and to the Equipment being purchased from
such Vendor.
8.3 PAYMENT OF CIT'S COSTS. Each Debtor agrees to pay all
costs of CIT, including attorneys' fees, incurred with respect to
the collection of any of the Obligations and the enforcement of any
of its respective rights hereunder.
8.4 WAIVER BY DEBTOR. Each Debtor hereby waives
presentment, demand, protest or any notice, except as hereinabove
provided in Section 8 (to the extent permitted by applicable law)
of any kind in connection with this Agreement or any Collateral.
8.5 ADDITIONAL DAMAGES. At the time of the acceleration of
the Note pursuant to this Section, there shall be due and payable,
in addition to the accelerated amounts set forth herein and all
other amounts set forth herein, without notice or demand of any
kind, as liquidated damages for loss of a bargain and not as a
penalty, a lost transaction fee equal to the full outstanding
principal amount of the Note being accelerated multiplied by the
Section 8 Percentage.
8.6 CONDITION AND STORAGE OF EQUIPMENT. During any period
in which an Event of Default has occurred and is continuing,
Debtors shall not move, disassemble or dismantle any item of
Equipment, or detach or move to another location, whether or not
part of any Debtor's premises, any auxiliary item of equipment
which is required for normal or customary operation of any item of
Equipment. During any period in which an Event of Default has
occurred and is continuing and following any termination of this
Agreement pursuant to the terms hereof, CIT and any prospective
purchasers of the Equipment may at any reasonable time inspect the
Equipment. Following any termination of this Agreement pursuant to
the terms hereof, CIT shall be entitled to store the Equipment in
such condition at Debtor's premises at no cost to CIT for six
months.
SECTION 9. MISCELLANEOUS.
9.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on
the part of CIT in exercising any right, remedy, power or privilege
hereunder or under the Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power or
privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power
or privilege. No right or remedy in this Agreement is intended to
be exclusive but each shall be cumulative and in addition to any
other remedy referred to herein or otherwise available to CIT at
law or in equity; and the exercise by CIT of any one or more of
such remedies shall not preclude the simultaneous or later exercise
by CIT of any or all such other remedies. The acceptance by CIT of
any regular installment payment or any other sum owing hereunder
shall not (a) constitute a waiver of any Event of Default in
existence at the time, regardless of Lender's knowledge or lack of
knowledge thereof at the time of such acceptance, and (b)
constitute a waiver of any Event of Default unless CIT shall have
agreed in writing to waive the Event of Default. To the extent
permitted by law, each Debtor waives any rights now or hereafter
conferred by statute or otherwise which limit or modify any of
CIT's rights or remedies under this Agreement.
9.2 NOTICES. All notices, requests and demands to or upon
any party hereto shall be deemed to have been duly given or made
when deposited in the United States mail, first class postage
prepaid, or when sent by telecopier with telephonic confirmation of
receipt thereof, addressed to such party as follows, or to such
other address as may be hereafter designated in writing by such
party to the other party hereto:
If to Debtors: Atlantis Plastics, Inc.
1870 The Exchange, Suite 200
Atlanta, GA 30339
Attention: Chief Financial Officer
Telecopier: (404) 618-7080
WITH
A COPY TO: Trivest Group, Inc.
2665 South Bayshore Drive, 8th floor
Miami, Florida 33133
Attention: Peter W. Klein
Telecopier No. (305) 285-0102
CIT: The CIT Group/Equipment Financing, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attention: Senior Vice President -
Credit
Telecopier No. (212) 536-1385
WITH
A COPY TO: The CIT Group/Equipment Financing, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attention: General Counsel/CEF
Telecopier No. (212) 536-1388
9.3 PAYMENT OF EXPENSES AND TAXES; INDEMNITY; PERFORMANCE BY
CIT OF DEBTORS' OBLIGATIONS.
(a) Each Debtor agrees, whether or not the transactions
contemplated by this Agreement shall be consummated, to pay (i) all
reasonable costs and expenses of CIT in connection with the
negotiation, preparation, execution and delivery of this Agreement,
and the other documents relating hereto; (ii) all fees, taxes and
other reasonable expenses of whatever nature incurred in connection
with the recording of this Agreement or any other document or
instrument required hereby, or in connection with the creation,
preservation and protection of CIT's security interest in the
Equipment, including, without limitation, all filing and Lien
search fees, payment or discharge of any taxes or Liens upon, or in
respect to, the Equipment, and all other reasonable fees and
expenses in connection with protecting or maintaining the Equipment
or in connection with defending or prosecuting any actions, suits
or proceedings arising out of, or related to, the Equipment; and
(iii) all costs and expenses of CIT in connection with the
enforcement of this Agreement and the Note, including all legal
fees and disbursements arising in connection therewith; PROVIDED,
HOWEVER, that Debtors shall not be liable for any expenses or fees
of CIT's in-house legal department in connection with the
preparation and negotiation of this Agreement and the documents
contemplated hereby. Each Debtor also agrees to pay, and to
indemnify and save CIT harmless from any delay in paying, all
taxes, including, without limitation, sales, use, stamp and
personal property taxes (other than any corporate income, capital,
franchise or similar taxes payable by CIT with respect to the
payments made to CIT hereunder or thereunder) and all license,
filing, and registration fees and assessments and other charges, if
any, which may be payable or determined to be payable in connection
with the execution, delivery and performance of this Agreement or
the Note or any modification thereof.
(b) Each Debtor hereby further agrees, whether or not the
transactions contemplated by this Agreement shall be consummated to
pay, indemnify, and hold CIT harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, out-of-pocket costs, expenses (including
reasonable legal expenses) or disbursements of any kind or nature
whatsoever arising out of or with respect to this Agreement, the
Equipment or CIT's interest therein, including, without limitation,
as a direct or indirect result of the violation or alleged
violation by any Debtor of any Environmental Law or any law or
regulation relating to Hazardous Material treatment, storage,
disposal, generation and transportation, air, water and noise
pollution, soil or ground water contamination, the handling,
storage or release into the environment of Hazardous Materials, or
with respect to, or as a direct or indirect result of the presence
on or under, or the escape, seepage, leakage, spillage, discharge,
emission or release from, properties utilized by any Debtor in the
conduct of its business into or upon any land, the atmosphere, or
any watercourse, body of water or wetland, of any Hazardous
Materials, the execution, delivery, enforcement, performance or
administration of this Agreement and the Note and the manufacture,
purchase, ownership, possession, use, selection, operation or
condition of the Equipment or any part thereof (the foregoing being
referred to as the "indemnified liabilities"), PROVIDED, that
Debtors shall have no obligation hereunder with respect to
indemnified liabilities arising from the gross negligence or wilful
misconduct of CIT.
(c) If Debtors fail to perform or comply with any of their
agreements contained herein and following at least 10 days prior
written notice thereof, CIT shall itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the
reasonable expenses of CIT incurred in connection with such
performance or compliance together with interest thereon at the
rate provided for in the Note shall be payable by Debtors to CIT on
demand and until such payment shall constitute Obligations secured
hereby.
9.4 COMMITMENT FEE. CIT acknowledges receipt from Guarantor
of a commitment fee in the amount of $75,000 (the "Commitment
Fee"). CIT agrees to refund to Guarantor after the expiration of
the commitment period hereunder and completion by CIT of all
follow-up matters related to the transactions contemplated hereby,
as the refundable portion of the Commitment Fee, an amount which
bears the same relationship to $75,000 as the aggregate principal
amount of all Drawdowns made under the Note (but in no event to
exceed $15,000,000) bears to $15,000,000 (such refund shall be net,
however, of any out-of-pocket fees, costs, disbursements and
expenses incurred by CIT in connection with the transactions
contemplated hereby). Debtors and Guarantor agree that the
difference, if any, between $75,000 and the amount determined in
accordance with the foregoing sentence shall be retained by CIT.
In the event the Loan is not made hereunder, CIT shall retain the
entire Commitment Fee provided that the failure of CIT to make the
Loan is as result of any Debtor's failure to comply with any of the
conditions precedent set forth in Section 3 hereof or Debtors'
decision not to proceed with the Loan for whatever reason.
9.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement and any
certificates delivered pursuant hereto or thereto shall survive the
execution and delivery of this Agreement and the making of the Loan
hereunder, and the agreements contained in Subsection 9.3 hereof
shall survive payment of the Note.
9.6 AMENDMENTS; WAIVERS. No provision of this Agreement,
the Note, or any related agreements, may be amended or modified in
any way, nor may noncompliance therewith be waived, except
pursuant to a written instrument executed by CIT and Debtors. In
the case of any waiver, CIT and Debtors shall be restored to their
former position and rights hereunder, under the outstanding Note,
and under any related agreements, and any Default or Event of
Default waived shall be deemed to be cured and not continuing, but
no such waiver shall in any way be, or be construed to be, a waiver
of any other or subsequent Default or Event of Default, or impair
any right consequent thereon.
9.7 COUNTERPARTS. This Agreement may be executed by the
parties hereto on any number of separate counterparts, each of
which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same
instrument.
9.8 HEADINGS. The headings of the Sections and paragraphs
are for convenience only, are not part of this Agreement and shall
not be deemed to affect the meaning or construction of any of the
provisions hereof.
9.9 SUCCESSORS OR ASSIGNS. THIS AGREEMENT SHALL BE BINDING
UPON AND INURE TO THE BENEFIT OF DEBTORS AND CIT AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS, EXCEPT THAT NO DEBTOR MAY ASSIGN
OR TRANSFER ITS RIGHTS HEREUNDER OR ANY INTEREST HEREIN WITHOUT THE
PRIOR WRITTEN CONSENT OF CIT. Notwithstanding anything to the
contrary contained in the foregoing, CIT agrees to assign no more
than 49% of its interest in the Note and its interest in this
Agreement.
9.10 MERGER CLAUSE. This Agreement contains the complete,
final and exclusive statement of the terms of the agreement between
CIT and Debtors relating to the transactions hereby contemplated.
9.11 CONSTRUCTION. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability shall not
invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by law, each Debtor hereby
waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect. THIS AGREEMENT AND THE
NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
9.11 JURISDICTION. EACH DEBTOR HEREBY IRREVOCABLY CONSENTS
AND AGREES THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT
OF OR IN ANY WAY IN CONNECTION WITH THIS AGREEMENT MAY BE
INSTITUTED OR BROUGHT IN THE COURTS OF THE STATE OF NEW YORK, IN
THE COUNTY OF NEW YORK, OR THE UNITED STATES COURTS FOR THE
SOUTHERN DISTRICT OF NEW YORK, AS CIT MAY ELECT, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH DEBTOR HEREBY IRREVOCABLY
ACCEPTS AND SUBMITS TO, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF
ANY SUCH COURT, AND TO ALL PROCEEDINGS IN SUCH COURTS. EACH DEBTOR
IRREVOCABLY CONSENTS TO SERVICE OF ANY SUMMONS AND/OR LEGAL PROCESS
BY REGISTERED OR CERTIFIED UNITED STATES AIR MAIL, POSTAGE PREPAID,
TO DEBTORS CARE OF THE GUARANTOR AT THE ADDRESS SET FORTH IN
SUBSECTION 9.2 HEREOF, SUCH METHOD OF SERVICE TO CONSTITUTE, IN
EVERY RESPECT, SUFFICIENT AND EFFECTIVE SERVICE OF PROCESS IN ANY
SUCH LEGAL ACTION OR PROCEEDING. NOTHING IN THIS AGREEMENT SHALL
AFFECT THE RIGHT TO SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR LIMIT THE RIGHT OF CIT TO BRING ACTIONS, SUITS
OR PROCEEDINGS IN THE COURTS OF ANY OTHER JURISDICTION. EACH
DEBTOR FURTHER AGREES THAT FINAL JUDGMENT AGAINST IT IN ANY SUCH
LEGAL ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION, WITHIN OR OUTSIDE THE UNITED
STATES OF AMERICA, BY SUIT ON THE JUDGMENT, A CERTIFIED OR
EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT
AND THE AMOUNT OF THE LIABILITY.
9.13 WAIVER OF TRIAL BY JURY. THE PARTIES TO THIS AGREEMENT
ACKNOWLEDGE THAT JURY TRIALS OFTEN ENTAIL ADDITIONAL EXPENSES AND
DELAYS NOT OCCASIONED BY NONJURY TRIALS. THE PARTIES TO THIS
AGREEMENT AGREE AND STIPULATE THAT A FAIR TRIAL MAY BE HAD BEFORE
A STATE OR FEDERAL JUDGE IN A COURT LOCATED IN NEW YORK COUNTY BY
MEANS OF A BENCH TRIAL WITHOUT A JURY. IN VIEW OF THE FOREGOING,
AND AS A SPECIFICALLY NEGOTIATED PROVISION OF THIS AGREEMENT, EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
9.14 APPOINTMENT OF GUARANTOR AS AGENT. Each Debtor hereby
appoints Guarantor as its agent for the purpose of giving and
receiving all notices, including Drawdown Requests and requests for
consent to be given or received hereunder.
[Remainder of page intentionally deleted]
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
ATLANTIS PLASTIC FILMS, INC.
By:
Title:
CYANEDE PLASTICS, INC.
By:
Title:
PIERCE PLASTICS, INC.
By:
Title:
PLASTIC CONTAINERS, INC.
By:
Title:
THE CIT GROUP/EQUIPMENT
FINANCING, INC.
By:
Title:
EXHIBIT 10.14
PROMISSORY NOTE
New York, New York
$15,000,000.00 April 13, 1995
FOR VALUE RECEIVED, EACH OF ATLANTIS PLASTIC FILMS, INC.,
CYANEDE PLASTICS, INC., PIERCE PLASTICS, INC. AND PLASTIC
CONTAINERS, INC. (collectively referred to as "Debtors") jointly
and severally promises to pay to the order of THE CIT
GROUP/EQUIPMENT FINANCING, INC. ("CIT"), at such address as CIT may
designate, in lawful money of the United States, the principal sum
of FIFTEEN AND NO/100 MILLION DOLLARS ($15,000,000), or if less,
the aggregate unpaid and outstanding principal amount of all
Drawdowns made pursuant to Section 2.1 of the Agreement (as defined
below) in lawful money of the United Sates, together with interest
in like money, from the date hereof on the unpaid principal amount
hereof from time outstanding at a rate per annum equal to 2.25%
above the LIBOR Rate from time to time in effect, but in no event
shall such interest rate exceed the maximum rate permitted by
applicable law or, if Debtors so elects pursuant to the provisions
of Section 2.2(b) of Agreement (as defined below), at a rate per
annum equal to the Fixed Interest Rate. At such time as this Note
bears interest at the Floating Interest Rate, interest shall be
calculated on the basis of a 360-day year and actual number of days
elapsed. At such time as this Note bears interest at the Fix Rate,
interest shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months. Any amount not paid when due
under this Note shall bear late charges thereon, calculated at the
Late Charge Rate, from the due date thereof until such amount shall
be paid in full. Each payment shall be applied first to the
payment of any unpaid late charges (of which Debtors have notice),
second to the payment of any unpaid interest on the principal sum,
and third to the payment of principal.
During the Interim Period of each Drawdown hereunder,
interest only shall be payable and shall be payable on the 15th day
of each month. Upon expiration of each Interim Period with respect
to each Drawdown the principal and interest shall be payable on
each Installment Payment Date as set forth in Section 2.2(a) of the
Agreement.
This Note is the Note referred to in the Loan and Security
Agreement, dated as of April 13, 1995 among Debtors and CIT
(herein, as the same may from time to time be amended, supplemented
or otherwise modified, called the "Agreement"), is secured as
provided in the Agreement and is subject to prepayment only as
provided therein, and the holder hereof is entitled to the benefits
thereof.
CIT shall maintain a loan account (the "LOAN ACCOUNT") on its
books to record: (a) all Drawdowns and payments made by Debtors
hereunder, and (b) all other appropriate debits and credits as
provided in this Agreement. All entries in the Loan Account shall
be made in accordance with CIT's customary accounting practices as
in effect from time to time. The balance in the Loan Account, as
recorded on CIT's most recent printout or other written statement,
shall be presumptive evidence of the amounts due and owing to CIT
by Debtors; PROVIDED that any failure to so record or any error in
so recording shall not limit or otherwise affect Debtors'
obligation to pay the Loan or other obligations arising hereunder.
Not more than twenty (20) days after the last day of each calendar
month during such time as Debtors are making Drawdowns and
thereafter upon written request of Debtors, CIT shall render to
Debtors a statement setting forth the principal balance of the Loan
Account and the calculation of interest due thereon. Each
statement shall be subject to subsequent adjustment by CIT but
shall, absent manifest errors or omissions, be presumed correct and
binding upon Debtors, and shall constitute an account stated.
Terms defined in the Agreement shall have the same meaning
when used in this Note, unless the context shall otherwise require.
Each Debtor hereby waives presentment, demand for payment,
notice of dishonor and any and all other notices or demands in
connection with the delivery, acceptance, performance, default or
enforcement of this Note and hereby consents to any extensions of
time, renewals, releases of any party to this Note, waivers or
modifications that may be granted or consented to by the holder of
this Note.
Upon the occurrence of any one or more of the Events of
Default specified in the Agreement, the amounts then remaining
unpaid on this Note, together with any interest accrued, may be
declared to be (or, with respect to certain Events of Default,
automatically shall become), immediately due and payable as
provided therein.
In the event that any holder shall institute any action for
the enforcement or the collection of this Note, there shall be
immediately due and payable, in addition to the unpaid balance
hereof, all late charges, and all costs and expenses of such
action, including attorneys' fees, all as described and permitted
in the Agreement. DEBTORS AND CIT in any litigation relating to or
in connection with this Note in which they shall be adverse
parties, WAIVE TRIAL BY JURY, and each Debtor waives the right to
interpose any setoff, counterclaim or defense of any nature or
description whatsoever but Debtors shall have the right to assert
in an independent action against CIT any such defense, offset or
counterclaim (including any compulsory counterclaim) which it may
have which has not otherwise been expressly waived pursuant hereto
or to the Agreement.
Each Debtor agrees that its liability hereunder is joint and
several, absolute and unconditional without regard to the liability
of any party and that no delay on the part of the holder hereof in
exercising any power or right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any power or
right hereunder preclude other or further exercise thereof or the
exercise of any other power or right.
If at any time this transaction would be usurious under
applicable law, then regardless of any provision contained in the
Agreement, in this Note or in any other agreement made in
connection with this transaction, it is agreed that (a) the total
of all consideration which constitutes interest under applicable
law that is contracted for, charged or received upon the Agreement,
this Note or any such other agreement shall under no circumstances
exceed the maximum rate of interest authorized by applicable law
and any excess shall be credited to Debtors and (b) if CIT elects
to accelerate the maturity of, or if CIT permits Debtors to prepay
the indebtedness described in this Note,any amounts which because
of such action would constitute interest may never include more
than the maximum rate of interest authorized by applicable law and
any excess interest, if any, provided for in the Agreement, in this
Note or otherwise, shall be credited to Debtors automatically as of
the date of acceleration or prepayment.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ATLANTIS PLASTIC FILMS, INC.
By:
Title:
CYANEDE PLASTICS, INC.
By:
Title:
PIERCE PLASTICS, INC.
By:
Title:
PLASTIC CONTAINERS, INC.
By:
Title:
EXHIBIT 10.15
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty"), dated as of the 13th day
of April, 1995, is made by ATLANTIS PLASTICS, INC., a Florida
corporation ("Guarantor"), in favor of THE CIT GROUP/EQUIPMENT
FINANCING, INC., a New York corporation ("CIT").
A. Pursuant to a Loan and Security Agreement dated as of
April , 1995 (herein, as the same may from time to time be
amended, modified or supplemented, called the "Agreement") between
Atlantis Plastic Films, Inc., Cyanede Plastics, Inc., Pierce
Plastics, Inc. and Plastic Containers, Inc. (individually, a
"Debtor", and collectively, "Debtors") and CIT, CIT has agreed to
make a loan to Debtors in the original principal amount not to
exceed $15,000,000, such loan to be evidenced by a promissory note
of Debtors ("Note");
B. Guarantor is the holder of all of the issued and
outstanding shares of stock of each Debtor, and Guarantor will
derive substantial economic benefits from the extension of credit
to Debtors for which the Agreement provides; and
C. CIT is willing to make the loan for which the Agreement
provides but only upon the condition, among other things, that
Guarantor execute and deliver to CIT this Guaranty.
In consideration of the foregoing facts and in order to induce
CIT to enter into the Agreement and to make the loans contemplated
thereunder, Guarantor hereby agrees as follows:
1. DEFINITIONS. a. For all purposes of this Guaranty,
unless otherwise defined herein or unless the context otherwise
requires, all terms used herein which are defined in the Agreement
or the Notes shall have the respective meanings given them in the
Agreement or the Notes, as the case may be.
b. As used in this Guaranty the following terms shall have
the following defined meanings, unless the context otherwise
requires (such terms to be equally applicable to both singular and
plural forms of the terms defined):
2. GUARANTY.
2.1 Guarantor, as primary obligor and not merely as a surety,
hereby unconditionally and irrevocably guarantees to CIT and its
successors, endorsees, transferees and assigns, (a) the prompt and
complete payment when due (whether at the stated maturity, by
acceleration or otherwise) of the aggregate unpaid principal amount
of, and accrued interest on, the Note and all other obligations and
liabilities of Debtors to CIT now existing or hereafter incurred
arising out of or in connection with the Agreement or the Note (all
such indebtedness, obligations and liabilities being hereinafter
called the "Obligations"), and (b) the due and punctual performance
and observance, strictly in accordance with the terms of the
Agreement, of each of the terms, conditions, covenants, agreements
and indemnities of Debtors under the Agreement, and if for any
reason whatsoever any Debtor shall fail to do so, Guarantor shall
promptly perform and observe the same. Guarantor further agrees to
pay any and all expenses which may be paid or incurred by CIT in
collecting from Guarantor any or all of the Obligations and/or in
enforcing any rights hereunder.
2.2 The obligations of Guarantor under this Guaranty shall be
continuing, absolute and unconditional under any and all
circumstances and shall be paid by Guarantor regardless of (a) the
validity, regularity, legality or enforceability of the Agreement,
any Note, any of the Obligations or any collateral security or
other guaranty therefor at any time or from time to time held by
CIT; (b) any defense, offset or counterclaim which may at any time
be available to or be asserted by any Debtor or Guarantor against
CIT; or (c) any other event or circumstance whatsoever which may
constitute, or might be construed to constitute, an equitable or
legal discharge of a surety or a guarantor, it being the purpose
and intent of Guarantor that this Guaranty and Guarantor's
obligations hereunder shall remain in full force and effect and be
binding upon Guarantor and its successors until the Obligations and
the obligations of Guarantor under this Guaranty shall have been
satisfied by payment in full.
2.3 Guarantor hereby consents that, without the necessity of
any reservation of rights against Guarantor and without notice to
or assent by Guarantor, any demand for payment of any of the
Obligations made by CIT may be rescinded by CIT and any of the
Obligations continued, and/or the Obligations, or the liability of
any party upon or for any part thereof, or any collateral security
or guaranty therefor, may, from time to time, in whole or in part,
be renewed, extended, amended, modified, accelerated, settled,
compromised, subordinated, waived, surrendered or released by CIT,
and/or the Agreement, any Note, any collateral security documents
or other guaranties or documents in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part,
as CIT may deem advisable from time to time, and/or any collateral
security at any time securing the payment of the Obligations may be
sold, exchanged, waived, surrendered or released, Guarantor
remaining bound hereunder notwithstanding the occurrence of any of
the foregoing. Except as required by the Code, CIT shall not have
any duty to protect, secure, perfect or insure any collateral
security at any time securing the payment of the Obligations. This
is a guaranty of performance and payment and not merely of
collection. Guarantor waives any requirement that CIT make any
demand, commence suit or exercise any other right or remedy under
the Agreement prior to enforcing its rights against Guarantor
hereunder. Guarantor waives diligence, presentment, protest,
demand for payment and/or notice of default or nonpayment to or
upon any Debtor or Guarantor with respect to the Obligations.
Guarantor waives any right to require CIT to marshal assets in
favor of Debtor, Guarantor or any other Person. When making any
demand hereunder against Guarantor, CIT may, but shall be under no
obligation to, make a similar demand on any other guarantor, and
any failure by CIT to make any such demand or to collect any
payments from any such other guarantor or any release of such other
guarantor shall not relieve Guarantor of its obligations and
liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of CIT
against Guarantor. For the purposes hereof "demand" shall include
the commencement and continuance of any legal proceedings.
2.4 Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice
of or proof of reliance by CIT upon this Guaranty or acceptance of
this Guaranty. The Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred
in reliance upon this Guaranty, and all dealings between Debtor or
Guarantor and CIT shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guaranty. Guarantor
acknowledges receipt of a copy of the Agreement and the form of the
Note.
2.5 Guarantor hereby waives and relinquishes any duty on the
part of CIT (should any such duty exist) to disclose to Guarantor
any matter, fact or thing related to the business, operations or
condition (financial or otherwise) of Debtors or their affiliates
or subsidiaries or their properties, whether now known or hereafter
known by CIT during the life of this Guaranty.
2.6 This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time, payment, or any
part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by CIT upon the insolvency,
bankruptcy or reorganization of Debtor, or otherwise, all as though
such payment had not been made.
3. NO SUBROGATION. Notwithstanding any payment or payments
made by any Guarantor hereunder each Guarantor expressly waives any
and all rights of subrogation, reimbursement, indemnity,
exoneration, contribution and any other claim which it may now or
hereafter have against Debtor or any other person directly or
contingently liable for the Obligations guarantied hereunder, or
against or with respect to Debtor's property (including, without
limitation, property collateralizing the Obligations), arising from
the existence or performance of this Guaranty until all amounts
owing to CIT by or on account of the Obligations shall have been
paid in full and the Agreement terminated.
4. REPRESENTATIONS AND WARRANTIES. Guarantor hereby
represents and warrants that (a) Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of
Florida; (b) Guarantor has full power, authority and legal right to
execute, deliver and perform this Guaranty and Guarantor has taken
all necessary corporate action to authorize such execution,
delivery and performance; (c) this Guaranty has been duly
authorized, executed and delivered by Guarantor and constitutes a
legal, valid and binding obligation of Guarantor enforceable in
accordance with its terms except to the extent enforceability is
limited by (i) applicable bankruptcy, reorganization, insolvency
and similar laws affecting the enforceability of creditors rights
generally and (ii) general principles of equity which may limit the
availability of equitable remedies (whether in a proceeding at law
or in equity ); (d) except as set forth on Schedule 4.3 to the
Agreement, no consent of any person (including stockholders or any
trustee or holder of any obligation of Guarantor), and no consent,
license, approval or authorization of, or registration or filing
with, any governmental authority, bureau or agency is required in
connection with the execution, delivery and performance of, and
payment under, this Guaranty; (e) the execution, delivery,
performance and payment of this Guaranty does not and will not
contravene any applicable law, regulation, order or decree, the
certificate of incorporation or by-laws of Guarantor or any
provision of any indenture, mortgage, contract or other agreement
to which Guarantor, or any person controlled by, controlling, or
under common control with Guarantor, is a party or by which any of
the same or any of their respective assets may be bound except as
set forth in Schedule 4.4 to the Agreement; (f) there is no action,
suit, investigation or proceeding by or before any court,
arbitrator, administrative agency or other governmental authority
pending or threatened against or affecting Guarantor (A) which
involves the transactions contemplated by this Guaranty, or (B)
which if adversely determined, would have a material adverse effect
on the consolidated financial condition, business or operations of
Guarantor; (g) all financial statements of Guarantor heretofore
furnished CIT are complete and correct and fairly present in all
material respects the consolidated financial condition of Guarantor
and the results of its operations for the respective periods
covered thereby, and there are no known contingent liabilities or
liabilities for taxes of Guarantor required to be included on
Guarantor's financial statements in accordance with generally
accepted accounting principles which are not reflected in said
financial statements; (h) since the date of the most recent
financial statements of Guarantor furnished to CIT, there has been
no material adverse change in the financial condition, business or
operations of Guarantor; and (i) Guarantor is not in default under
any indenture, mortgage, contract or other agreement to which it is
a party or by which Guarantor or any of its assets may be bound the
violation of which would (i) materially and adversely effects the
consolidated business, operations, property or financial condition
of Guarantor, (ii) have a material adverse effect on the ability of
Guarantor to perform its obligations hereunder or (iii) have a
material adverse effect on the value, utility or marketability of
the Collateral or CIT's first (and exclusive) lien thereon (any
fact or circumstance which could result in any of the foregoing
being referred to herein as a "MATERIAL ADVERSE EFFECT").
5. NO CHANGES IN GUARANTOR. Guarantor covenants and agrees
that from and after the date hereof and so long as any of the
Obligations remain outstanding, it will not (a) engage in a
Prohibited Transaction unless Debtors shall prepay the Note as
required pursuant to the provisions of Section 2.3(b) of the
Agreement; or (b) liquidate or dissolve.
6. ADDITIONAL COVENANTS OF GUARANTOR; FINANCIAL COVENANTS.
a. Guarantor covenants and agrees that from and after the date
hereof and so long as any of the Obligations remain outstanding, it
will: (1) promptly give written notice to CIT of (i) the
occurrence of any Default or Event of Default of which it is aware;
(ii) the commencement or threat of any material litigation or
proceedings affecting it; and (iii) any dispute between it and any
governmental regulatory body or other party that could reasonably
be expected to materially interfere with its normal business
operations; (2)(i) duly observe and conform in all material
respects to all requirements of any governmental authorities
relating to the conduct of its business or to its properties or
assets; (ii) maintain its existence as a legal entity and obtain
and keep in full force and effect all rights, franchises, licenses
and permits which are necessary to the proper conduct of its
business; and (iii) obtain or cause to be obtained as promptly as
possible any governmental, administrative or agency approval and
make any filing or registration therewith which at the time shall
be required with respect to the performance of its obligations
under this Guaranty or the operation of its business except when
such failure shall not have a Material Adverse Effect; (3) permit
CIT or its authorized representative at any reasonable time or
times upon prior notice and following the occurrence and during the
continuation of an Event of Default to inspect its books and
records; (4) keep proper books of record and account in which full,
true and correct entries in accordance with generally accepted
accounting principles will be made of all dealings or transactions
in relation to its business and activities; (5) furnish to CIT the
following financial statements, all in reasonable detail, prepared
in accordance with generally accepted accounting principles applied
on a basis consistently maintained throughout the period involved:
(a) as soon as available, but no later than 120 days after each
fiscal year end, its consolidated balance sheet as at the end of
such fiscal year, and its consolidated statements of income and
changes in cash flow for such fiscal year, audited by nationally
recognized certified public accountants; (b) as soon as available,
but no later than 90 days after the end of each of the first three
quarterly periods of each fiscal year, its consolidated balance
sheet as at the end of such quarterly period and its consolidated
statements of income and changes in cash flow for such quarterly
period and for the portion of the fiscal year then ended, certified
by its chief financial officer; and (c) simultaneously with the
delivery of the financial statements set forth in 5(a) and 5(b)
above, a Compliance Certificate in the form of EXHIBIT A hereto
duly executed by Guarantor's Chief Financial Officer; or Chief
Operating Officer; and (d) promptly, such additional financial and
other information as CIT may from time to time reasonably request.
b. Guarantor covenants and agrees that from and after the
date hereof and so long as any of the Obligations remain
outstanding:
(i) Guarantor's Cash Flow Coverage Ratio on a rolling four
quarter basis shall not be less than 1.4 to 1.0 as at the end
of any such fiscal quarter from the date of this Guaranty
through March 31, 1997 and thereafter shall not be less than
1.5 to 1.0 as at the end any such fiscal quarter;
(ii) Guarantor's Funded Debt to EBITDA Ratio on a rolling
four quarter basis shall not exceed the following:
(x) on or prior to December 31, 1995, 5.25 to 1.0 as at
the end of any such fiscal quarter;
(y) on or prior to December 31, 1996, 5.0 to 1.0 as at
the end of any such fiscal quarter; and
(z) after December 31, 1996, 4.75 to 1.0 as at the end of
any such fiscal quarter; and
(iii) Guarantor's Leverage Ratio shall not exceed 5.0 to 1.0
at any time.
7. NOTICES. All notices, requests and demands to or upon
Guarantor, and all notices or requests to CIT, shall be in writing
and shall be deemed to have been duly given or made, in the case of
telegraphic notice, when delivered to the telegraph company, or, in
the case of telex or cable notice, when sent, or, in the case of
notice sent by telecopier, by hand, by overnight mail or courier or
by United States Mail, first class postage prepaid, when delivered
to the party to whom it is addressed as follows or to such other
address as may be hereafter designated in writing by the respective
parties thereto:
If to Guarantor: Atlantis Plastics, Inc.
1870 The Exchange, Suite 200
Atlanta, GA 30339
ATTENTION: Chief Financial Officer
Telecopier No. (404) 618-7080
If to CIT: The CIT Group/Equipment Financing, Inc.
1211 Avenue of the Americas, 21st Floor
New York, NY 10036
ATTENTION: Vice President/Credit
Telecopier No. (212) 536-1385
WITH A
COPY TO: The CIT Group/Equipment Financing, Inc.
1211 Avenue of the Americas, 21st Floor
New York, NY 10036
ATTENTION: General Counsel/CEF
Telecopier No. (212) 536-1388
8. GOVERNMENTAL APPROVALS. Guarantor will obtain from time
to time all permits, licenses, approvals and authorizations of, and
will file all registrations and declarations with, all governmental
authorities, bureaus and agencies required in connection with its
execution, delivery, performance, validity or enforceability of
this Guaranty (including without limitation, the payment to CIT at
its office address referred to in the Agreement, in lawful money of
the United States of America, of the obligations of Guarantor under
this Guaranty) and will take all action necessary to maintain each
such permit, license, approval or authorization, or registration or
declaration, in full force and effect.
9. NO WAIVER; CUMULATIVE REMEDIES. A waiver by CIT of any
right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which CIT would otherwise
have had on any future occasion. No failure to exercise nor any
delay in exercising on the part of CIT 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
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised singly
or concurrently, and are not exclusive of any rights and remedies
provided by law.
10. MISCELLANEOUS.
10.1 None of the terms or provisions of this Guaranty may be
amended, waived, altered, modified, or terminated except by an
instrument in writing signed by the party against which enforcement
of such amendment, waiver, alteration, modification or termination
is sought. THIS WRITING CONTAINS THE COMPLETE, FINAL AND EXCLUSIVE
STATEMENT OF THE TERMS OF THE AGREEMENT BETWEEN GUARANTOR AND CIT
RELATING TO THIS GUARANTY. No course of prior dealings between the
parties, no usage of the trade, and no parole or extrinsic evidence
of any nature, shall be used or be relevant to supplement or
explain or modify any term used in this Guaranty. This Guaranty
and all obligations of Guarantor hereunder shall be binding upon
the successors and assigns of Guarantor, and shall, together with
the rights and remedies of CIT hereunder, inure to the benefit of
CIT and its successors and assigns. The invalidity, illegality or
unenforceability of any provision of this Guaranty shall not affect
the validity, legality or enforceability of any other provision of
this Guaranty.
10.2 Guarantor hereby irrevocably consents and agrees that
any legal action, suit, or proceeding arising out of or in any way
in connection with this Guaranty may be instituted or brought in
the courts of the State of New York, in the County of New York, or
the United States District Courts for the Southern District of New
York, or as CIT may elect, and by execution and delivery of this
Guaranty, Guarantor hereby irrevocably accepts and submits to, for
itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of any such court,
and to all proceedings in such courts. In the case of the courts
for the State of New York and of the County of New York and the
United States District Courts for the Southern District of New
York. Guarantor irrevocably consents to service of any summons
and/or legal process by registered or certified United States air
mail, postage prepaid, to Guarantor at the address set forth in
Section 7 hereof, such method of service to constitute, in every
respect, sufficient and effective service of process in any such
legal action or proceeding. Nothing in this Guaranty shall affect
the right to service of process in any other manner permitted by
law or limit the right of CIT to bring actions, suits or
proceedings in the courts of any other jurisdiction. Guarantor
further agrees that final judgment against it in any such legal
action, suit or proceeding shall be conclusive and may be enforced
in any other jurisdiction, within or outside the United States of
America, by suit on the judgment, a certified or exemplified copy
of which shall be conclusive evidence of the facts and the amount
of its liability.
10.3 THIS GUARANTY SHALL BE GOVERNED BY, AND BE CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
CIT AND GUARANTOR WAIVE TRIAL BY JURY IN ANY LITIGATION RELATING
TO, OR IN CONNECTION WITH, THIS GUARANTY IN WHICH THEY SHALL BE
ADVERSE PARTIES.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty
to be duly executed and delivered by its duly authorized officer as
of the day and year first above written.
ATLANTIS PLASTICS, INC.
By:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Atlantis Plastics, Inc. - Form 10-Q - Financial Data Schedule - March 31, 1995
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 1,366,714
<SECURITIES> 0
<RECEIVABLES> 38,146,200
<ALLOWANCES> 878,500
<INVENTORY> 26,711,137
<CURRENT-ASSETS> 70,644,109
<PP&E> 108,974,924
<DEPRECIATION> 45,606,108
<TOTAL-ASSETS> 216,899,109
<CURRENT-LIABILITIES> 31,190,938
<BONDS> 134,663,232
<COMMON> 708,480
0
2,000,000
<OTHER-SE> 41,669,865
<TOTAL-LIABILITY-AND-EQUITY> 216,899,109
<SALES> 77,857,353
<TOTAL-REVENUES> 77,857,353
<CGS> 63,687,318
<TOTAL-COSTS> 63,687,318
<OTHER-EXPENSES> 8,697,853
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,604,564
<INCOME-PRETAX> 1,867,618
<INCOME-TAX> 924,793
<INCOME-CONTINUING> 942,825
<DISCONTINUED> 8,086
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 950,911
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
