Exhibit 10.13
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement"), dated as of the 27th day of
September, 1996, is made and entered into on the terms and conditions
hereinafter set forth, by and between AB PLASTICS HOLDING CORPORATION, a
Delaware corporation ("Holding"), and AB PLASTICS CORPORATION, a California
corporation ("Plastics") (individually, a "Borrower" and collectively, the
"Borrowers"), and SIRROM INVESTMENTS, INC., a Tennessee corporation ("Lender").
RECITALS:
WHEREAS, Borrowers have requested that Lender make available to
Borrowers a term loan in the original principal amount of Four Million and
No/100ths Dollars ($4,000,000) (the "Loan") on the terms and conditions
hereinafter set forth, and for the purpose(s) hereinafter set forth; and
WHEREAS, in order to induce Lender to make the Loan to Borrowers,
Borrowers have made certain representations to Lender; and
WHEREAS, Lender, in reliance upon the representations and inducements
of Borrowers, has agreed to make the Loan upon the terms and conditions
hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the agreement of Lender to make the
Loan, the mutual covenants and agreements hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrowers and Lender hereby agree as follows:
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ARTICLE 1
THE LOAN
1.1 Evidence of Loan Indebtedness and Repayment. Subject to the terms
and conditions hereof, the Lender shall make the Loan to Borrowers by wire
transfer in immediately available funds. The Loan shall be evidenced by a
Secured Subordinated Promissory Note in the original principal amount of Four
Million and No/100ths Dollars ($4,000,000.00), substantially in the form of
Exhibit A attached hereto and incorporated herein by this reference (the
"Note"), dated as of the date hereof, executed by Borrowers, in favor of Lender.
The Loan shall be payable in accordance with the terms of the Note. The Note,
this Agreement and any other instruments and documents executed by Borrowers or
any shareholder of either Borrower, now or hereafter evidencing, securing or in
any way related to the indebtedness evidenced by the Note are herein
individually referred to as a "Loan Document" and collectively referred to as
the "Loan Documents."
1.2 Processing Fee. Borrowers shall pay Lender a processing fee of One
Hundred Twenty Thousand Dollars ($120,000.00), Fifteen Thousand ($15,000) of
which has previously been paid and the balance of which shall be paid on the
date the Loan is funded.
1.3 Partial Prepayment. Borrowers may prepay the indebtedness evidenced
by the Note in whole or in part at any time and from time to time, without
penalty.
1.4 Purposes of Loan and Use of Proceeds. The purpose of the loan shall
be to finance the acquisition of Plastics and to provide additional working
capital to Borrowers.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Borrower's Representations. Each Borrower hereby represents and
warrants to Lender as follows:
(a) Corporate Status. Each Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
State of its incorporation; and has the corporate power to own and
operate its properties, to carry on its business as now conducted and
to enter into and to perform its obligations under this Agreement and
the other Loan Documents to which it is a party. Each Borrower is duly
qualified to do
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business and in good standing in each state in which a failure to be so
qualified would have a material adverse effect on Borrowers'
consolidated financial position or its ability to conduct its business
in the manner now conducted (a "Material Adverse Effect").
(b) Subsidiaries. Except for the 100% ownership of Plastics by
Holding, neither Borrower owns nor has an interest in, directly or
indirectly, any other corporation, partnership, joint venture or other
business organization ("Subsidiaries").
(c) Authorization. Each Borrower has full legal right, power
and authority to conduct its business and affairs. Each Borrower has
full legal right, power and authority to enter into and perform its
obligations hereunder, without the consent or approval of any other
person, firm, governmental agency or other legal entity. The execution
and delivery of this Agreement, the borrowing hereunder, the execution
and delivery of each Loan Document to which each Borrower is a party,
and the performance by each Borrower of its obligations thereunder are
within the corporate powers of each Borrower and have been duly
authorized by all necessary corporate action properly taken, have
received all necessary governmental approvals, if any were required,
and do not and will not contravene or conflict with any provision of
law, any applicable judgment, ordinance, regulation or order of any
court or governmental agency, the charter or bylaws of each Borrower,
or any agreement binding upon each Borrower or its properties in which
such contravention or conflict would have a Material Adverse Effect.
The officer(s) executing this Agreement, the Note and all of the other
Loan Documents to which each Borrower is a party are duly authorized to
act on behalf of each Borrower.
(d) Validity and Binding Effect. This Agreement and the other
Loan Documents are the legal, valid and binding obligations of each
Borrower, enforceable in accordance with their respective terms,
subject to limitations imposed by bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors generally or the
application of general equitable principles.
(e) Capitalization. As of the date hereof, the authorized
capital stock of Holding consists solely of 5,000,000 shares of common
stock, $.0001 par value per share ("Common Stock"), of which 500,000
shares shall be issued and outstanding (the "Shares") and 200,000
shares of which shall be reserved for issuance upon exercise of the
Stock Purchase Warrant dated as of the date hereof and issued to Lender
(the "Warrant") and 1,000,000 shares of preferred stock, $.0001 par
value per share, none of which is outstanding; provided, however, that
the number of shares reserved for issuance upon
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exercise of the Warrant shall be subject to adjustment, from time to
time, in accordance with the antidilution provisions of the Warrant. As
of the date hereof, Holding does not have outstanding any stock or
securities convertible or exchangeable for any shares of its Common
Stock or containing any profit participation features, nor shall it
have outstanding any rights or options to subscribe for or to purchase
its Common Stock or any stock appreciation rights or phantom stock
plans, except (i) as set forth on Schedule 2.1(e) and (ii) in the
Warrant. Schedule 2.1(e) accurately sets forth the following with
respect to all outstanding options and rights to acquire the Holding's
Common Stock from Holding: (i) the total number of shares issuable upon
exercise of all outstanding options, (ii) the range of exercise prices
for all such outstanding options, (iii) the number of shares issuable,
the exercise price and the expiration date for each such outstanding
option and (iv) with respect to all outstanding options, warrants and
rights to acquire Holding's capital stock other than the Warrant, the
holder, the number of shares covered, the exercise price and the
expiration date. As of the date hereof, Holding is not subject to any
obligation (contingent or otherwise) to repurchase, redeem, retire or
otherwise acquire any shares of its capital stock or any warrants,
options or other rights to acquire its capital stock, except as set
forth in the Warrant or on Schedule 2.1(e). As of the date hereof, all
of the outstanding shares of Holding's capital stock shall be validly
issued, fully paid and nonassessable. Except as set forth on Schedule
2.1(e), there are no statutory or contractual preemptive rights, rights
of first refusal, anti-dilution rights or any similar rights, held by
stockholders or option holders of Holding, with respect to the issuance
of the Warrant or the issuance of the Common Stock upon exercise of the
Warrant. All such rights granted in the documents listed on Schedule
2.1(e) have been effectively waived with regard to the issuance of the
Warrant, the exercise of the Warrant and the issuance of the Common
Stock upon exercise of the Warrant. Holding has not violated any
applicable federal or state securities laws in connection with the
offer, sale or issuance of any of its capital stock, and the offer,
sale and issuance of the Warrant hereunder do not require registration
under the Securities Act or any applicable state securities laws. To
the best of Holding's knowledge, there are no agreements among
Holding's stockholders with respect to any other aspect of Holding's
affairs, except as set forth on Schedule 2.1(e). Except as set forth on
Schedule 2.1(e), Holding owns all of the issued and outstanding capital
stock of Plastics free and clear of all liens, claims, charges,
restrictions, security interests, pledges or encumbrances of any kind.
(f) Trademarks, Patents, Etc. Schedule 2.1(f) is an accurate
and complete list of all patents, trademarks, tradenames, trademark
registrations, service names, service marks, copyrights, licenses,
formulas and applications therefor owned by or used or
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required by each Borrower in the operation of such Borrower's business;
title to each of which is, except as set forth in Schedule 2.1(f)
hereto, held by such Borrower free and clear of all adverse claims,
liens, security agreements, restrictions or other encumbrances. Except
as set forth on Schedule 2.1(f) is no infringement action, lawsuit,
claim or complaint which asserts that a Borrower's operations violate
or infringe the rights or the trade names, trademarks, trademark
registration, service name, service xxxx or copyright of others with
respect to any apparatus or method of such Borrower or any adversely
held trademark, trade name, trademark registration, service name,
service xxxx or copyright, and neither Borrower is in any way making
use of any confidential information or trade secrets of any person
except with the consent of such person.
(g) No Conflicts. Except as contemplated by loan or credit
agreements listed on Schedule 2.1(l) which shall be refinanced and
terminated as of the Closing Date, consummation of the transactions
hereby contemplated and the performance of the obligations of Borrowers
under and by virtue of the Loan Documents will not result in any breach
of, or constitute a default under, any mortgage, security deed or
agreement, deed of trust, lease, bank loan or credit agreement,
corporate charter or bylaws, agreement or certificate of limited
partnership, partnership agreement, license, franchise or any other
instrument or agreement to which any Borrower is a party or by which
any Borrower or its respective properties may be bound or affected or
to which any Borrower has not obtained an effective waiver.
(h) Litigation. Except as discussed on Schedule 2.1(h), there
are no actions, suits or proceedings pending, or, to the knowledge of
Borrowers threatened, against or affecting Borrowers or involving the
validity or enforceability of any of the Loan Documents at law or in
equity, or before any governmental or administrative agency; and to
each Borrower's knowledge, such Borrower is not in default with respect
to any order, writ, injunction, decree or demand of any court or any
governmental authority.
(i) Financial Statements. The financial statements of
Borrowers dated ____________________, 19___, which are attached hereto
as Schedule 2.1(i)(A), are true and correct in all material respects
have been prepared on the basis of accounting principles consistently
applied, and fairly present the financial condition of the Borrower as
of the date(s) thereof. No material adverse change has occurred in the
financial condition of any Borrower since the date(s) thereof, and no
additional borrowings have been made by any Borrower since the date(s)
thereof other than as set forth on Schedule 2.1(i)(B).
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(j) Other Agreements; No Defaults. Neither Borrower is a party
to any indenture, loan or credit agreement, lease or other agreement or
instrument, or subject to any charter or corporate restriction, that
could have a material adverse effect on the business, properties,
assets, operations or conditions, financial or otherwise, of such
Borrower, or the ability of such Borrower to carry out its obligations
under the Loan Documents to which it is a party. Neither Borrower is in
default in any respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a
party, including but not limited to this Agreement and the other Loan
Documents, and no other default or event has occurred and is continuing
that with notice or the passage of time or both would constitute a
default or event of default under any of same.
(k) Compliance With Law. Except to the extent that
noncompliance, in the aggregate, cannot reasonably be expected to have
a Material Adverse Effect and will not materially adversely affect each
Borrower's ability to perform its obligations under the Loan Documents,
each Borrower (i) has obtained all necessary licenses, permits and
approvals and authorizations necessary or required in order to conduct
its business and affairs as heretofore conducted and as hereafter
intended to be conducted; and (ii) to each Borrower's knowledge, such
Borrower is in compliance with all laws, regulations, decrees and
orders applicable to it (including but not limited to laws,
regulations, decrees and orders relating to environmental, occupational
and health standards and controls, antitrust, monopoly, restraint of
trade or unfair competition).
(l) Debt. Schedule 2.1(l) is a complete and correct list of
all credit agreements, indentures, purchase agreements, promissory
notes and other evidences of indebtedness, guaranties, capital leases
and other instruments, agreements and arrangements presently in effect
providing for or relating to extensions of credit (including agreements
and arrangements for the issuance of letters of credit or for
acceptance financing) in respect of which the Borrowers or any of the
properties thereof is in any manner directly or contingently obligated;
and the maximum principal or face amounts of the credit in question
that are outstanding and that can be outstanding are correctly stated,
and all liens of any nature given or agreed to be given as security
therefore are correctly described or indicated in such Schedule.
(m) Taxes. Except as disclosed on Schedule 2.1(m): (i) each
Borrower has filed or caused to be filed all tax returns that to its
knowledge are required to be filed (except for returns that have been
appropriately extended), and has paid, or will pay when
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due, all taxes shown to be due and payable on said returns and all
other taxes, impositions, assessments, fees or other charges imposed on
them by any governmental authority, agency or instrumentality, prior to
any delinquency with respect thereto (other than taxes, impositions,
assessments, fees and charges currently being contested in good faith
by appropriate proceedings, for which appropriate amounts have been
reserved); and (ii) no tax liens have been filed against either
Borrower or any of the property thereof.
(n) Small Business Concern. Borrowers, together with their
"affiliates" (as that term is defined in Title 13, Code of Federal
Regulations, ss. 121.103), are a "small business concern" within the
meaning of the Small Business Investment Act of 1958, as amended, and
the regulations promulgated thereunder. The information set forth in
the Small Business Administration Forms 480, 652 and Parts A and B of
Form 1031 regarding Borrowers upon delivery, pursuant to Section 4.1
hereof, will be accurate and complete. Borrowers do not presently
engage in, and will not hereafter engage in, any activities, and
Borrowers will not use directly or indirectly, the proceeds from the
Loan, for any purpose for which a Small Business Investment Company is
prohibited from providing funds by the Small Business Investment Act
and the regulations thereunder, including Title 13, Code of Federal
Regulations Section 107.720.
(o) Certain Transactions. Except as set forth on Schedule
2.1(o) hereto, neither Borrower is indebted, directly or indirectly, to
any of its officers or directors or to their respective spouses or
children, in any amount whatsoever; none of said officers or directors
or any members of their immediate families, are indebted to any
Borrower or have any direct or indirect ownership interest in any firm
or corporation with which such Borrower has a business relationship, or
any firm or corporation which competes with Borrower, except that
officers and/or directors of each Borrower may own no more than 4.9% of
outstanding stock of publicly traded companies which may compete with
any Borrower. Except as disclosed on Schedule 2.1(o), no officer or
director or any member of their immediate families, is, directly or
indirectly, interested in any material contract with Borrowers. Neither
Borrower is a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
(p) Statements Not False or Misleading. No representation or
warranty given as of the date hereof by Borrowers contained in this
Agreement or any schedule attached hereto or any statement in any
document, certificate or other instrument furnished or to be furnished
to Lender pursuant hereto, taken as a whole, contains or will (as of
the time so furnished) contain any untrue statement of a material fact,
or omits or will (as of the
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time so furnished) omit to state any material fact which is necessary
in order to make the statements contained therein not misleading.
(q) Margin Regulations. Neither Borrower is engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stock. No proceeds received pursuant to this Agreement will be
used to purchase or carry any equity security of a class which is
registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended.
(r) Significant Contracts. Schedule 2.1(r) is a complete and
correct list of all contracts, agreements and other documents pursuant
to which Borrowers receive revenues in excess of $100,000 per year.
Each such contract, agreement and other document is in full force and
effect as of the date hereof and Borrowers know of no reason why such
contracts, agreements and other documents would not remain in full
force and effect pursuant to the terms thereof.
(s) Environment. Each Borrower has duly complied with, and its
business, operations, assets, equipment, property, leaseholds or other
facilities are in compliance with, the provisions of all federal, state
and local environmental, health, and safety laws, codes and ordinances,
and all rules and regulations promulgated thereunder, except which such
non-compliance would have a Material Adverse Effect. Each Borrower has
been issued and will maintain all required federal, state and local
permits, licenses, certificates and approvals relating to (1) air
emissions; (2) discharges to surface water or groundwater; (3) noise
emissions; (4) solid or liquid waste disposal; (5) the use, generation,
storage, transportation or disposal of toxic or hazardous substances or
wastes (which shall include any and all such materials listed in any
federal, state or local law, code or ordinance and all rules and
regulations promulgated thereunder as hazardous or potentially
hazardous); or (6) other environmental, health or safety matters,
except where non-issuance or non-maintenance of any of the foregoing
would note have a Material Adverse Effect. Except as disclosed on
Schedule 2.1(s), neither Borrower has received notice of, or knows of,
or suspects facts which might constitute any violations of any federal,
state or local environmental, health or safety laws, codes or
ordinances, and any rules or regulations promulgated thereunder with
respect to its businesses, operations, assets, equipment, property,
leaseholds, or other facilities. To the best knowledge of Borrower,
except in accordance with a valid governmental permit, license,
certificate or approval, there has been no emission, spill, release or
discharge into or upon (1) the air; (2) soils, or any improvements
located thereon; (3) surface water or groundwater; or (4) the sewer,
septic
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system or waste treatment, storage or disposal system servicing the
premises, of any toxic or hazardous substances or wastes at or from the
premises; and accordingly the premises of Borrower are free of all such
toxic or hazardous substances or wastes. Except as disclosed on
Schedule 2.1(s), there has been no complaint, order, directive, claim,
citation or notice by any governmental authority or any person or
entity with respect to (1) air emissions; (2) spills, releases or
discharges to soils or improvements located thereon, surface water,
groundwater or the sewer, septic system or waste treatment, storage or
disposal systems servicing the premises; (3) noise emissions; (4) solid
or liquid waste disposal; (5) the use, generation, storage,
transportation or disposal of toxic or hazardous substances or waste;
or (6) other environmental, health or safety matters affecting Borrower
or its business, operations, assets, equipment, property, leaseholds or
other facilities. Borrower does not have knowledge of any indebtedness,
obligation or liability (absolute or contingent, matured or not
matured), with respect to the storage, treatment, cleanup or disposal
of any solid wastes, hazardous wastes or other toxic or hazardous
substances (including without limitation any such indebtedness,
obligation, or liability with respect to any current regulation, law or
statute regarding such storage, treatment, cleanup or disposal), except
as disclosed on Schedule 2.1(s) hereto.
(t) ERISA. Borrower is in compliance in all material respect
with all applicable provisions of ERISA as defined in Section 3.11
hereof). Neither a reportable event nor a prohibited transaction (as
defined in ERISA) has occurred and is continuing with respect to any
Plan (as defined in Section 3.11 hereof); no notice of intent to
terminate a Plan has been filed nor has nay Plan been terminated; no
circumstances exist which constitute grounds entitling the Pension
Benefit Guaranty Corporation (together with any entity succeeding to or
all of its functions, the "PBGC") to institute proceedings to
terminate, or appoint a trustee to administer, a Plan, nor has the PBGC
instituted any such proceedings; neither Borrower nor any commonly
controlled entity (as defined in ERISA) has completely or partially
withdrawn from a multiemployer plan(as defined in ERISA); each Borrower
and each commonly controlled entity has met its minimum funding
requirements under ERISA with respect to all of its Plans and the
present fair market value of all Plan property exceeds the present
value of all vested benefits under each Plan, as determined on the most
recent valuation date of the Plan and in accordance with the provisions
of ERISA and the regulations thereunder for calculating the potential
liability of such Borrower or any commonly controlled entity to the
PBGC or the Plan under Title IV or ERISA; and neither Borrower nor any
commonly controlled entity has incurred any liability to the PBGC under
ERISA.
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(u) Title to Properties. Each Borrower has good, indefeasible
and insurable title to, or valid leasehold interests in, all its real
properties and good title to its other assets, free and clear of all
liens other than Permitted Liens (as defined in Section 3.15 hereof).
(v) Limited Offering of Note and Warrant. Neither Borrower nor
anyone acting on its behalf has offered the Note, the Warrant or any
similar securities for sale to, or solicited any offer to buy any of
the same from, or otherwise approached or negotiated in respect
thereof, with, any person other than Lender and not more than 35 other
institutional investors. Neither Borrower nor anyone acting on its
behalf has taken, or will take, any action which would subject the
issuance or sale of the Note and Warrant to Section 5 of the Securities
Act of 1933, as amended, or the registration or qualification
provisions of the blue sky laws of any state.
(w) Registration Rights. Except as described in the Warrant,
Holding is not under any obligation to register under the Securities
Act of 1933, as amended, or the Trust Indenture Act of 1939, as
amended, any of its presently outstanding securities or any of its
securities that may subsequently be issued.
(x) Employees. Neither Borrower has any current labor problems
or disputes which have resulted or either Borrower reasonably believes
could be expected to have a Material Adverse Effect.
(y) Issuance Taxes. All taxes imposed on Borrowers in
connection with the issuance, sale and delivery of the Note, the
Warrant and the capital stock issuable upon exercise of the Warrant
have been or will be fully paid, and all laws imposing such taxes have
been or will be fully satisfied by Borrowers.
ARTICLE 3
COVENANTS AND AGREEMENTS
Borrowers covenant and agree, jointly and severally, that during the
term of this Agreement:
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3.1 Payment of Obligations. Borrowers shall pay the indebtedness
evidenced by the Note according to the terms thereof, and shall timely pay or
perform, as the case may be, all of the other obligations of Borrowers to
Lender, direct or contingent, however evidenced or denominated, and however and
whenever incurred, including but not limited to indebtedness incurred pursuant
to any present or future commitment of Lender to Borrowers, together with
interest thereon, and any extensions, modifications, consolidations and/or
renewals thereof and any notes given in payment thereof.
3.2 Financial Statements and Reports. Holding shall furnish to Lender
(i) as soon as practicable and in any event within ninety (90) days after the
end of Holding's fiscal year, an audited consolidated and consolidating balance
sheet of Borrowers as of the close of such fiscal year, an audited consolidated
and consolidating statement of earnings and retained earnings of Borrowers as of
the close of such fiscal year and an audited consolidated and consolidating
statement of cash flows for Borrowers for such fiscal year, prepared in
accordance with generally accepted accounting principles consistently applied
and accompanied by an unqualified audit report prepared by an independent
certified public accountant reasonably acceptable to Lender showing the
financial condition of Borrowers at the close of such year and the results of
its operations during such year and accompanied by a certificate of the
President of Holding, stating that to the best of the knowledge of such officer,
such Borrower has kept, observed, performed and fulfilled each covenant, term
and condition of this Agreement and the other Loan Documents during the
preceding fiscal year and that no Event of Default has occurred and is
continuing (or if an Event of Default has occurred and is continuing, specifying
the nature of same, the period of existence of same and the action such
Borrowers propose to take in connection therewith), (ii) within twenty (20) days
of the end of each calendar month, a status report indicating the financial
performance of each Borrower during such month and the financial position of
each Borrower as of the end of such month, (iii) within forty-five (45) days of
the end of each quarter, a consolidated and consolidating balance sheet of
Borrowers as of the close of such quarter and a consolidated and consolidating
statement of earnings and retained earnings of Borrowers as of the close of such
quarter, all in reasonable detail, and prepared substantially in accordance with
generally accepted accounting principles consistently applied (except for the
absence of footnotes and subject to year-end adjustments), and (iv) with
reasonable promptness, such other financial data as Lender may reasonably
request.
3.3 Maintenance of Books and Records; Inspection. Each Borrower shall
maintain its books, accounts and records in accordance with generally accepted
accounting principles consistently applied, and permit Lender, its officers and
employees and any professionals designated by Lender in writing, at Lender's
expense, to visit and inspect any of its properties,
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corporate books and financial records, and to discuss its accounts, affairs and
finances with such Borrower or the principal officers of such Borrower during
reasonable business hours, all at such times as Lender may reasonably request;
provided that no such inspection shall materially interfere with the conduct of
such Borrower's business.
3.4 Insurance. Without limiting any of the requirements of any of the
other Loan Documents, Borrowers shall maintain, in amounts customary for
entities engaged in comparable business activities, (i) to the extent required
by applicable law, worker's compensation insurance (or maintain a legally
sufficient amount of self insurance against worker's compensation liabilities,
with adequate reserves, under a plan approved by Lender, such approval not to be
unreasonably withheld or delayed), and (ii) fire and "all risk" casualty
insurance on its properties against such hazards and in at least such amounts as
are customary in Borrowers' business. Borrowers will make reasonable efforts to
obtain and maintain public liability insurance in an amount, and at a cost,
deemed reasonable to the Borrowers' Board of Directors. At the request of
Lender, Borrowers will deliver forthwith a certificate specifying the details of
such insurance in effect.
3.5 Taxes and Assessments. Each Borrower shall (i) file all tax returns
and appropriate schedules thereto that are required to be filed under applicable
law, prior to the date of delinquency, (ii) pay and discharge all taxes,
assessments and governmental charges or levies imposed upon such Borrower upon
its income and profits or upon any properties belonging to it, prior to the date
on which penalties attach thereto, and (iii) pay all taxes, assessments and
governmental charges or levies that, if unpaid, might become a lien or charge
upon any of its properties; provided, however, that a Borrower in good faith may
contest any such tax, assessment, governmental charge or levy described in the
foregoing clauses (ii) and (iii) so long as appropriate reserves are maintained
with respect thereto.
3.6 Corporate Existence. Each Borrower shall maintain its corporate
existence and good standing in the state of its incorporation, and its
qualification and good standing as a foreign corporation in each jurisdiction in
which such qualification is necessary pursuant to applicable law.
3.7 Compliance with Law and Other Agreements. Except where the failure
to do so would not materially adversely affect a Borrower's operations or its
ability to fulfill its obligations under the Loan Documents, each Borrower shall
maintain its business operations and property owned or used in connection
therewith in compliance with (i) all applicable federal, state and local laws,
regulations and ordinances governing such business operations and the use and
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ownership of such property, and (ii) all agreements, licenses, franchises,
indentures and mortgages to which each Borrower is a party or by which each
Borrower or any of its properties is bound. Without limiting the foregoing, each
Borrower shall pay all of its indebtedness promptly in accordance with the terms
thereof.
3.8 Notice of Default. Borrowers shall give written notice to Lender of
the occurrence of any default, event of default or Event of Default under this
Agreement or any other Loan Document promptly upon the occurrence thereof.
3.9 Notice of Litigation. Borrowers shall give notice, in writing, to
Lender of (i) any actions, suits or proceedings wherein the amount at issue is
in excess of Twenty-Five Thousand and No/100ths Dollars ($25,000.00) instituted
by any persons whomsoever against either Borrower or affecting any of the assets
of either Borrower, and (ii) any dispute, not resolved within sixty (60) days of
the commencement thereof, between a Borrower on the one hand and any
governmental regulatory body on the other hand, which dispute might materially
interfere with the normal operations of a Borrower.
3.10 Conduct of Business. Borrowers will continue to engage in a
business of the same general type and manner as conducted by it on the date of
this Agreement.
3.11 ERISA Plan. If either Borrower has in effect, or hereafter
institutes, a pension plan that is subject to the requirements of Title IV of
the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406,
September 2, 1974, 88 Stat. 829, 29 U.S.C.A. Section 1001 et seq. (1975), as
amended from time to time ("ERISA"), then the following warranty and covenants
shall be applicable during such period as any such plan (the "Plan") shall be in
effect: (i) Borrower hereby warrants that no fact that might constitute grounds
for the involuntary termination of the Plan, or for the appointment by the
appropriate United States District Court of a trustee to administer the Plan,
exists at the time of execution of this Agreement, (ii) Borrower hereby
covenants that throughout the existence of the Plan, Borrower's contributions
under the Plan will meet the minimum funding standards required by ERISA and
Borrower will not institute a distress termination of the Plan, and (iii)
Borrower covenants that it will send to Lender a copy of any notice of a
reportable event (as defined in ERISA) required by ERISA to be filed with the
Labor Department or the Pension Benefit Guaranty Corporation, at the time that
such notice is so filed.
13
3.12 Dividends, Stock Rights, etc. Neither Borrower shall declare or
pay any dividend of any kind (other than stock dividends payable to all holders
of any class of capital stock), in cash or in property, on any class of its
capital stock, or purchase, redeem, retire or otherwise acquire for value any
shares of such stock, nor make any distribution of any kind in cash or property
in respect thereof, nor make any return of capital of shareholders, nor make any
payments in cash or property in respect of any stock options, stock bonus or
similar plan (except as required or permitted hereunder), nor grant any
preemptive rights with respect to its capital stock, without the prior written
consent of Lender.
3.13 Guaranties; Loans; Payment of Debt. Neither Borrower shall,
without Lender's prior express written consent, guarantee nor be liable in any
manner, whether directly or indirectly, or become contingently liable after the
date of this Agreement in connection with the obligations or indebtedness of any
person or entity whatsoever, except for the endorsement of negotiable
instruments payable to a Borrower for deposit or collection in the ordinary
course of business. Neither Borrower shall, without Lender's prior express
written consent, which shall not be unreasonably withheld, (i) make any loan,
advance or extension of credit to any person other than in the normal course of
its business, or (ii) make any payment on any indebtedness for money borrowed
expressly subordinated by its terms to the Notes.
3.14 Debt. Without the express prior written consent of Lender, neither
Borrower shall create, incur, assume or suffer to exist indebtedness of any
description whatsoever, excluding:
(a) the indebtedness evidenced by the Note;
(b) indebtedness in the aggregate maximum amount of $12,000,000 to
Sumitomo Bank of California ("Sumitomo") or any other bank,
commercial finance company, insurance company or other
institutional lender, the lending activities of which are
regulated by Federal or state law (with Sumitomo a "Senior
Lender") on terms and conditions substantially the same as those
set forth in the loan documents evidencing and securing on the
date hereof the indebtedness owing to Sumitomo;
(c) the endorsement of negotiable instruments payable to Borrowers
for deposit or collection in the ordinary course of business;
(d) purchase money or installment indebtedness incurred in the
ordinary course of business in accordance with Borrowers' annual
capital expenditure budget approved by Lender,or other similar
indebtedness (each of which, individually, does not exceed
$100,000 or $500,000 in the aggregate); and
(e) the other indebtedness listed on Schedule 2.1(l) hereto.
14
3.15 No Liens. Neither Borrower shall create, incur, assume or suffer
to exist any lien, security interest, security title, mortgage, deed of trust or
other encumbrance upon or with respect to any of its properties, now owned or
hereafter acquired, except the following permitted liens (the "Permitted
Liens"):
(a) liens in favor of Lender;
(b) liens for taxes or assessments or other governmental charges or
levies if not yet due and payable;
(c) liens in connection with the leasing of equipment in favor of the
lessor of such equipment;
(d) liens in favor of a Senior Lender;
(e) liens incurred in connection with permitted indebtedness
described in Section 3.14; and
(f) liens described on Schedule 2.1(l) hereto.
3.14 Mergers, Consolidations, Acquisitions and Sales. Without the prior
written consent of Lender, neither Borrower shall (a) be a party to any merger,
consolidation or corporate reorganization, nor (b) purchase or otherwise acquire
all or substantially all of the assets or stock of, or any partnership or joint
venture interest in, any other person, firm or entity, nor (c) sell, transfer,
convey, grant a security interest in or lease all or any substantial part of its
assets, nor (d) create any Subsidiaries nor convey any of its assets to any
Subsidiary.
3.15 Transactions With Affiliates. Neither Borrower shall enter into
any transaction, including, without limitation, the purchase, sale or exchange
of property or the rendering of any service, with any affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of a Borrower's
business and upon fair and reasonable terms no less favorable to such Borrower
than such Borrower would obtain in a comparable arm's length transaction with a
person not an affiliate. For the purposes of this Section 3.17, "affiliate"
shall mean a person, corporation, partnership or other entity controlling,
controlled by or under common control with Borrower.
3.16 Environment. Each Borrower shall be and remain in compliance with
the provisions of all federal, state and local environmental, health, and safety
laws, codes and ordinances, and all rules and regulations issued thereunder;
notify Lender immediately of any notice of a hazardous discharge or
environmental complaint received from any governmental agency or any other
party; notify Lender immediately of any hazardous discharge from or affecting
its premises; immediately contain and remove the same, in compliance with all
15
applicable laws; promptly pay any fine or penalty assessed in connection
therewith; permit Lender to inspect the premises, to conduct tests thereon, and
to inspect all books, correspondence, and records pertaining thereto; and at
Lender's request, and at Borrowers' expense, provide a report of a qualified
environmental engineer, satisfactory in scope, form, and content to Lender, and
such other and further assurances reasonably satisfactory to Lender that the
condition has been corrected.
ARTICLE 4
CONDITIONS TO CLOSING
4.1 Closing of the Loan. The obligation of Lender to fund the Loan on
the date hereof (the "Closing Date") is subject to the fulfillment, on or prior
to the Closing Date, of each of the following conditions:
(a) Borrowers shall have performed and complied in all
material respects with all of the covenants, agreements, obligations
and conditions required by this Agreement.
(b) Lender shall have received an opinion of the Borrowers'
counsel, Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Xxxxxxx, dated
the Closing Date, in form and substance satisfactory to Lender's
counsel, Xxxxxxxx & Xxxxxxxx, P.C.
(c) Borrowers shall have delivered to Lender a Note executed
by Borrowers, substantially in the form of Exhibit A attached hereto
and incorporated herein by this reference.
(d) Borrowers shall have delivered to Lender a Stock Purchase
Warrant executed by Holding, substantially in the form of Exhibit B
attached hereto and incorporated herein by this reference.
(e) Borrowers shall have delivered to Lender a Security
Agreement executed by Borrowers and a related UCC-1 Financing
Statements executed by Borrowers, each of which is substantially in the
form of Exhibit C attached hereto and incorporated herein by this
reference.
16
(f) Holding shall have delivered to Lender a Pledge and
Security Agreement and related stock certificates and stock powers,
executed by Holding, substantially in the form of Exhibit D attached
hereto and incorporated herein by this reference.
(g) Borrowers shall have delivered to Lender the Small
Business Administration Forms 480, 652 and 1031 (Parts A and B)
completed by Borrowers.
(h) Borrowers shall have delivered to Lender the Small
Business Administration Economic Impact Assessment completed by
Borrowers, a form of which is attached hereto as Exhibit F and
incorporated herein by this reference.
(i) Lender shall have received copies of the corporate charter
and other publicly filed organizational documents of Borrowers,
certified by the Secretary of State or other appropriate public
official in the jurisdiction in which Borrowers are incorporated.
(j) Lender shall have received certified (as of the date of
this Agreement) copies of all corporate action taken by Borrowers,
including resolutions of their Boards of Directors, authorizing the
execution, delivery and performance of the Loan Documents.
(k) Lender shall have received a certificate as to the legal
existence and good standing of the Borrowers, issued by the Secretary
of State or other appropriate public official in the jurisdiction in
which the Borrowers are incorporated.
(l) Lender shall have received certificates of the Secretaries
of State or other appropriate public officials as to Borrowers'
qualification to do business and good standing in each jurisdiction in
which a failure to be so qualified would have a material adverse effect
on their financial position or its ability to conduct their business in
the manner now conducted and as hereafter intended to be conducted.
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ARTICLE 5
DEFAULT AND REMEDIES
5.1 Events of Default. The occurrence of any of the following shall
constitute an Event of Default hereunder:
(a) Default in the payment of the principal of or interest on
the indebtedness evidenced by the Note in accordance with the terms of
the Note, which default is not cured within ten (10) days;
(b) Any misrepresentation by Borrowers as to any material
matter hereunder or under any of the other Loan Documents, or delivery
by Borrowers of any schedule, statement, resolution, report,
certificate, notice or writing to Lender that is untrue in any material
respect on the date as of which the facts set forth therein are stated
or certified;
(c) Failure of Borrowers to perform any of their obligations,
covenants or agreements under this Agreement, the Note or any of the
other Loan Documents;
(d) Either Borrower (i) shall generally not pay or shall be
unable to pay its debts as such debts become due; or (ii) shall make an
assignment for the benefit of creditors or petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it
or a substantial part of its assets; or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (iv) shall have
had any such petition or application filed or any such proceeding
commenced against it in which an order for relief is entered or an
adjudication or appointment is made; or (v) shall indicate, by any act
or intentional and purposeful omission, its consent to, approval of or
acquiescence in any such petition, application, proceeding or order for
relief or the appointment of a custodian, receiver or trustee for it or
a substantial part of its assets; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for
a period of sixty (60) days or more;
(e) Either Borrower shall be liquidated, dissolved,
partitioned or terminated, or the charter thereof shall expire or be
revoked;
(f) A default or event of default shall occur under any of the
other Loan Documents and, if subject to a cure right, such default or
event of default shall not be
18
cured within the applicable cure period, provided that if such default
shall be subsequently waived by the Senior Lender under any other Loan
Document, such waiver shall be deemed to cure such default or event of
default hereunder;
(g) Borrowers shall default in the timely payment or
performance of any obligation now or hereafter owed to Lender in
connection with any other indebtedness of Borrowers now or hereafter
owed to Lender;
(h) Either Borrower shall have defaulted and continue to be in
default in the timely payment or performance of any other indebtedness
or obligation, which in the aggregate exceeds One Hundred Thousand and
No/100ths Dollars ($100,000.00);
(i) Any two of Xxxxx Xxxxx, Xxxxxxx Xxxxx and Xxxx Xxxxxx
shall no longer be employed in an executive management position by
Plastics; or
(j) Borrowers shall enter into an agreement with a Senior
Lender extending the maturity date of the indebtedness owed to the
Senior Lender beyond the Maturity Date (as defined in the Note) of the
Note, without Lender's prior written consent.
With respect to any Event of Default described above that is capable of
being cured and that does not already provide its own cure procedure (a "Curable
Default"), the occurrence of such Curable Default shall not constitute an Event
of Default hereunder if such Curable Default is fully cured and/or corrected
within thirty (30) days (ten (10) days, if such Curable Default may be cured by
payment of a sum of money) of notice thereof to Borrowers given in accordance
with the provisions hereof.
5.2 Acceleration of Maturity; Remedies. Upon the occurrence and during
the continuance of any Event of Default described in subsection 5.1(d), the
indebtedness evidenced by the Note as well as any and all other indebtedness of
Borrowers to Lender shall be immediately due and payable in full; and upon the
occurrence and during the continuance of any other Event of Default described
above, Lender at any time thereafter may at its option accelerate the maturity
of the indebtedness evidenced by the Note as well as any and all other
indebtedness of Borrowers to Lender; all without notice of any kind. Upon the
occurrence and during the continuance of any such Event of Default and the
acceleration of the maturity of the indebtedness evidenced by the Note:
(a) Lender shall be immediately entitled to exercise any and
all rights and remedies possessed by Lender pursuant to the terms of
the Note and all of the other Loan Documents; and
(b) Lender shall have any and all other rights and remedies
that Lender may now or hereafter possess at law, in equity or by
statute.
5.3 Remedies Cumulative; No Waiver. No right, power or remedy conferred
upon or reserved to Lender by this Agreement or any of the other Loan Documents
is intended to be exclusive of any other right, power or remedy, but each and
every such right, power and remedy shall be cumulative and concurrent and shall
be in addition to any other right, power and remedy given hereunder, under any
of the other Loan Documents or now or hereafter existing at law, in
19
equity or by statute. No delay or omission by Lender to exercise any right,
power or remedy accruing upon the occurrence of any Event of Default shall
exhaust or impair any such right, power or remedy or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein, and every right,
power and remedy given by this Agreement and the other Loan Documents to Lender
may be exercised from time to time and as often as may be deemed expedient by
Lender.
5.4 Proceeds of Remedies. Any or all proceeds resulting from the
exercise of any or all of the foregoing remedies shall be applied as set forth
in the Loan Document(s) providing the remedy or remedies exercised; if none is
specified, or if the remedy is provided by this Agreement, then as follows:
First, to the costs and expenses, including reasonable
attorney's fees, incurred by Lender in connection with the exercise of
its remedies;
Second, to the expenses of curing the default that has
occurred, in the event that Lender elects, in its sole discretion, to
cure the default that has occurred;
Third, to the payment of the obligations of Borrower under the
Loan Documents (the "Obligations"), including but not limited to the
payment of the principal of and interest on the indebtedness evidenced
by the Note, in such order of priority as Lender shall determine in its
sole discretion; and
Fourth, the remainder, if any, to Borrowers or to any other
person lawfully thereunto entitled.
ARTICLE 6
TERMINATION
6.1 Termination of this Agreement. This Agreement shall remain in full
force and effect until the later of (i) the Maturity Date (as defined in the
Note), or (ii) the payment by Borrowers of all amounts owed to Lender, at which
time Lender shall cancel the Note and deliver it to Borrowers; provided,
however, that if at any time Borrowers have satisfied all obligations to Lender,
Borrowers may terminate this Agreement by providing written notice to Lender.
ARTICLE 7
SUBORDINATION AGREEMENT
7.1 Simultaneously with its execution of this Agreement, Lender has
entered into a Subordination Agreement with Sumitomo in the form of Exhibit G
hereto, pursuant to which inter alia Lender's security interests and rights
under the Security Agreement with Borrowers are
20
expressly subordinated to the security interests and rights of Sumitomo securing
indebtedness owed to Sumitomo.
7.2 In the event Borrowers shall subsequently refinance the
indebtedness owed to Sumitomo or otherwise incur indebtedness permitted under
Section 3.14(b) above, to another Senior Lender, the Lender shall enter into a
related subordination agreement with such other Senior Lender with respect to
such indebtedness consistent with Exhibit G hereto.
ARTICLE 8
MISCELLANEOUS
8.1 Performance By Lender. If Borrowers shall default in the payment,
performance or observance of any covenant, term or condition of this Agreement,
which default is not cured within the applicable cure period, then Lender may,
at its option, pay, perform or observe the same, and all payments made or costs
or expenses incurred by Lender in connection therewith (including but not
limited to reasonable attorney's fees), with interest thereon at the highest
default rate provided in the Note (if none, then at the maximum rate from time
to time allowed by applicable law), shall be immediately repaid to Lender by
Borrowers and shall constitute a part of the Obligations. Lender shall be the
sole judge of the necessity for any such actions and of the amounts to be paid.
8.2 Successors and Assigns Included in Parties. Whenever in this
Agreement one of the parties hereto is named or referred to, the heirs, legal
representatives, successors, successors-in-title and assigns of such parties
shall be included, and all covenants and agreements contained in this Agreement
by or on behalf of Borrowers or by or on behalf of Lender shall bind and inure
to the benefit of their respective heirs, legal representatives,
successors-in-title and assigns, whether so expressed or not.
8.3 Costs and Expenses. Borrowers agree, jointly and severally, to pay
all reasonable costs and expenses incurred by Lender in connection with the
making of the Loan, including but not limited to filing fees, recording taxes
and reasonable attorneys' fees, promptly upon demand of Lender. Borrowers
further agree, jointly and severally, to pay all premiums for insurance required
to be maintained by Borrowers pursuant to the terms of the Loan Documents and
all of the out-of-pocket costs and expenses incurred by Lender in connection
with the collection of the Loan, amendment to the Loan Documents, or prepayment
of the Loan, including but not limited to reasonable attorneys' fees, promptly
upon demand of Lender.
8.4 Assignment. The Note, this Agreement and the other Loan Documents
may be endorsed, assigned and/or transferred in whole or in part by Lender, and
any such holder and/or assignee of the same shall succeed to and be possessed of
the rights and powers of Lender under all of the same to the extent transferred
and assigned. Lender may grant participations in all or any portion of its
interest in the indebtedness evidenced by the Note, and in such event Borrowers
shall continue to make payments due under the Loan Documents to Lender and
Lender shall have the sole responsibility of allocating and forwarding such
payments in the appropriate manner and
21
amounts. Borrowers shall not assign any of their rights nor delegate any of
their duties hereunder or under any of the other Loan Documents without the
prior express written consent of Lender.
8.5 Time of the Essence. Time is of the essence with respect to each
and every covenant, agreement and obligation of Borrowers hereunder and under
all of the other Loan Documents.
8.6 Severability. If any provision(s) of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
8.7 Interest and Loan Charges Not to Exceed Maximum Allowed by Law.
Anything in this Agreement, the Note or any of the other Loan Documents to the
contrary notwithstanding, in no event whatsoever, whether by reason of
advancement of proceeds of the Loan, acceleration of the maturity of the unpaid
balance of the Loan or otherwise, shall the interest and loan charges agreed to
be paid to Lender for the use of the money advanced or to be advanced hereunder
exceed the maximum amounts collectible under applicable laws in effect from time
to time. It is understood and agreed by the parties that, if for any reason
whatsoever the interest or loan charges paid or contracted to be paid by
Borrowers in respect of the indebtedness evidenced by the Note shall exceed the
maximum amounts collectible under applicable laws in effect from time to time,
then ipso facto, the obligation to pay such interest and/or loan charges shall
be reduced to the maximum amounts collectible under applicable laws in effect
from time to time, and any amounts collected by Lender that exceed such maximum
amounts shall be applied to the reduction of the principal balance of the
indebtedness evidenced by the Note and/or refunded to Borrowers so that at no
time shall the interest or loan charges paid or payable in respect of the
indebtedness evidenced by the Note exceed the maximum amounts permitted from
time to time by applicable law.
8.8 Article and Section Headings; Defined Terms. Numbered and titled
article and section headings and defined terms are for convenience only and
shall not be construed as amplifying or limiting any of the provisions of this
Agreement.
8.9 Notices. Any and all notices, elections or demands permitted or
required to be made under this Agreement shall be in writing, signed by the
party giving such notice, election or demand and shall be delivered personally,
telecopied, telexed, or sent by certified mail or overnight via nationally
recognized courier service (such as Federal Express), to the other party at the
address set forth below, or at such other address as may be supplied in writing
and of which receipt has been acknowledged in writing. The date of personal
delivery, telecopy or telex or two (2) business days after the date of mailing
(or the next business day after delivery to such courier service), as the case
may be, shall be the date of such notice, election or demand. For the purposes
of this Agreement:
22
The Address of Lender is: Sirrom Investments, Inc.
Xxxxx 000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
with a copy to: Xxxxxxxx & Xxxxxxxx, P.C.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx-Xxxx Xxxxxxxx, Esq.
The Address of Borrowers is: AB Plastics Corporation
00000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
with a copy to: Greenberg, Traurig, Hoffman, Lipoff,
Xxxxx & Quentel
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
8.10 Entire Agreement. This Agreement and the other written agreements
between Borrowers and Lender represent the entire agreement between the parties
concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein; provided, if there is a conflict between this
Agreement and any other document executed contemporaneously herewith with
respect to the Obligations, the provision of this Agreement shall control. The
execution and delivery of this Agreement and the other Loan Documents by the
Borrowers were not based upon any fact or material provided by Lender, nor were
the Borrowers induced or influenced to enter into this Agreement or the other
Loan Documents by any representation, statement, analysis or promise by Lender.
8.11 Governing Law and Amendments. This Agreement shall be construed
and enforced under the laws of the State of Tennessee applicable to contracts to
be wholly performed in such State. No amendment or modification hereof shall be
effective except in a writing executed by each of the parties hereto.
8.12 Survival of Representations and Warranties. All representations
and warranties contained herein or made by or furnished on behalf of the
Borrowers in connection herewith shall survive the execution and delivery of
this Agreement and all other Loan Documents.
8.13 Jurisdiction and Venue. Each Borrower hereby consents to the
jurisdiction of the courts of the State of Tennessee and the United States
District Court for the Middle District of Tennessee, as well as to the
jurisdiction of all courts from which an appeal may be taken from such courts,
for the purpose of any suit, action or other proceeding arising out of any of
its obligations arising under this Agreement or any other Loan Documents or with
respect to the
23
transactions contemplated hereby, and expressly waives any and all objections it
may have as to venue in any of such courts.
8.14 Waiver of Trial by Jury. LENDER AND BORROWERS HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN
CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO
THIS AGREEMENT OR THE LOAN DOCUMENTS.
8.15 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
8.16 Construction and Interpretation. Should any provision of this
Agreement require judicial interpretation, the parties hereto agree that the
court interpreting or construing the same shall not apply a presumption that the
terms hereof shall be more strictly construed against one party by reason of the
rule of construction that a document is to be more strictly construed against
the party that itself or through its agent prepared the same, it being agreed
that the Borrower, Lender and their respective agents have participated in the
preparation hereof.
24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be executed by their duly authorized officers, as
of the day and year first above written.
LENDER:
SIRROM INVESTMENTS, INC., a Tennessee
corporation
By: /s/ Xxxxx Xxxxxx
-------------------------
Title: Vice President
BORROWERS:
AB PLASTICS HOLDING CORPORATION,
a Delaware corporation
By: /s/Xxxxxxxx Xxxxxx
-------------------------
Title: Chairman
AB PLASTICS CORPORATION,
a California corporation
By: /s/Xxxxxxxx Xxxxxx
-------------------------
Title: Vice President and Chairman
25
