AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into at
Rochester, New York, as of June 27, 2019, between Premier Packaging Corporation,
a New York corporation, with its chief executive office located at 6 Framark
Drive, Victor, New York 14564 (the “Borrower”) and Citizens Bank, N.A., a
national banking association, with an address of 833 Broadway, Albany, New York
12207 (the “Bank”).

 

FOR VALUE RECEIVED, and in consideration of the granting by the Bank of
financial accommodations to or for the benefit of the Borrower, including
without limitation respecting the Obligations (as hereinafter defined), the
Borrower represents to and agrees with the Bank as follows:

 

1. THE LOAN

 

1.1 Term Loan. Subject to the terms and conditions of this Agreement, the Bank
hereby agrees to make a loan to Borrower in the original principal amount of
$1,156,741.69 (the “Loan”). The Loan shall be evidenced by that certain
Consolidated Term Note, of even date herewith (the “Note”) made by Borrower in
favor of the Bank in the original principal amount of $1,156,741.69. Any payment
or other amounts received by the Bank on account of any Obligations (as
hereinafter defined), whether before or after the maturity date of the Note,
whether as scheduled or as accelerated in accordance with the terms of the Loan
Documents or applicable law, shall be applied in such order of priority as the
Bank may elect. This Agreement, the Note, all agreements, documents and
instruments related to Bank Product Obligations and all Hedging Contracts (each
as hereinafter defined), and any and all other documents, amendments or renewals
executed and delivered in connection with any of the foregoing, if any, are
collectively hereinafter referred to as the “Loan Documents.” For the avoidance
of doubt, each Loan Document or other agreement or instrument referred to herein
or in any other Loan Document means such agreement or instrument as amended,
modified and supplemented from time to time.

 

1.2 Interest. Interest respecting the Loan will be charged to Borrower on the
principal amount from time to time outstanding at the applicable interest rates
specified in the Note, and Borrower agrees to pay such interest, as well as all
other amounts coming due under the Loan Documents, in accordance with the terms
of this Agreement, the Note and the other Loan Documents.

 

1.3 Repayment. The Loan shall be payable to Bank on or before the maturity date
of the Note. Any payment or other amounts received by the Bank on account of any
Obligations (as hereinafter defined), whether before or after the maturity date
of the Note, whether as scheduled or as accelerated in accordance with the terms
of the Loan Documents or applicable law, shall be applied in such order of
priority as the Bank may elect.

 

2. GRANT OF SECURITY INTEREST

 

2.1 Grant of Security Interest. The Borrower hereby grants to the Bank (for its
own account and as agent on behalf of each Bank Affiliate to the extent an
Obligation is owed to such Bank Affiliate at any time) a security interest in, a
lien on and pledge and assignment of the Collateral. The security interest
granted by this Agreement is given to and shall be held by the Bank as security
for the payment and performance of all Obligations, including, without
limitation, all amounts outstanding pursuant to the Loan Documents.

 

 

 

 

2.2 Definitions. The following definitions shall apply:

 

  (a) “Bank Affiliate” shall mean any “Affiliate” of the Bank and “Affiliate”
shall mean with respect to any person, (a) any person which, directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such person, or (b) any person who is a director
or officer (i) of such person, (ii) of any subsidiary of such person, or (iii)
any person described in clause (a) above. For purposes of this definition,
control of a person shall mean the power, direct or indirect, (x) to vote 5% or
more of the Capital Stock having ordinary voting power for the election of
directors (or comparable equivalent) of such person, or (y) to direct or cause
the direction of the management and policies of such person whether by contract
or otherwise. Control may be by ownership, contract, or otherwise.         (b)
“Bank Product Obligation” shall mean each obligation and liability of Borrower,
absolute or contingent, due or to become due, now existing or hereafter arising
or contracted, under each agreement to which Borrower and Bank and/or any Bank
Affiliate are parties, relating to any of the following products, services or
facilities extended by Bank or any Bank Affiliate to Borrower: (i) cash
management services; (ii) swaps, caps, floors, collars, options, forwards, cross
rights or obligations, or combination thereof or similar transaction, with
respect to interest rate, foreign exchange, currency, commodity, index, credit
or equity risks or similar products, including, without limitation, all
products, services and facilities under each Hedging Contract in effect from
time to time (including, without limitation, all regularly occurring payment
obligations thereunder and all amounts due upon termination thereof), (iii)
letters of credit; (iv) commercial credit card and merchant card services; and
(v) other banking products and services as may be requested by Borrower from
time to time from Bank or any Bank Affiliate.         (c) “Code” shall mean the
New York Uniform Commercial Code, as amended from time to time or, in connection
with any lien as to which the laws of another jurisdiction govern perfection or
enforcement thereof, the Uniform Commercial Code of that jurisdiction.        
(d) “Collateral” shall mean all of the Borrower’s present and future right,
title and interest in and to any and all of the personal property of the
Borrower whether such property is now existing or hereafter created, acquired or
arising and wherever located from time to time, including without limitation:

 

  (i) accounts;         (ii) chattel paper;         (iii) goods;         (iv)
inventory;         (v) equipment;         (vi) fixtures;         (vii) farm
products;         (viii) instruments;         (ix) investment property;        
(x) documents;         (xi) commercial tort claims;

 

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  (xii) deposit accounts;         (xiii) letter-of-credit rights;         (xiv)
general intangibles;         (xv) supporting obligations; and         (xvi)
records of, accession to and proceeds and products of the foregoing.

 

  (e) “Debtors” shall mean the Borrower’s customers who are obligated to the
Borrower.         (f) “Hedging Contract” shall mean each agreement to which
Borrower and Bank and/or any Bank Affiliate are parties relating to any swap,
cap, floor, collar, option, forward, cross right or obligation, or combination
thereof or similar transaction, with respect to interest rate, foreign exchange,
currency, commodity, index, credit or equity risk.         (g) “Obligation(s)”
shall mean, without limitation, all loans, advances, indebtedness, notes,
liabilities, Bank Product Obligations and amounts, liquidated or un-liquidated,
owing by the Borrower to the Bank or any Bank Affiliate at any time, of each and
every kind, nature and description, whether arising under this Agreement or any
of the other Loan Documents or otherwise, and whether secured or unsecured,
direct or indirect (that is, whether the same are due directly by the Borrower
to the Bank or any Bank Affiliate, or are due indirectly by the Borrower to the
Bank or any Bank Affiliate as endorser, guarantor or other surety, or as
borrower of obligations due third persons which have been endorsed or assigned
to the Bank or any Bank Affiliate, or otherwise), absolute or contingent, due or
to become due, now existing or hereafter arising or contracted, including,
without limitation, payment when due of all amounts outstanding from time to
time under the Loan Documents. Said term shall also include all interest and
other charges chargeable to the Borrower or due from the Borrower to the Bank or
any Bank Affiliate from time to time and all costs and expenses referred to in
this Agreement or any of the other Loan Documents.         (h) “Person” or
“party” shall mean individuals, partnerships, corporations, limited liability
companies and all other entities.

 

All words and terms used in this Agreement other than those specifically defined
herein shall have the meanings accorded to them, if any, in the Code.

 

2.3 Ordinary Course of Business. Subject to the Bank’s rights and remedies
hereunder and as provided by law or in equity, the parties agree that (a) the
Borrower will hold, process, sell, use or consume in the manufacture or
processing of finished goods, or otherwise dispose of inventory for fair
consideration, all in the ordinary course of the Borrower’s business, but not,
without limitation, by way, directly or indirectly, of sales to creditors or in
bulk or sales or other dispositions occurring under circumstances which would or
could create any lien or interest adverse to the Bank’s security interest in the
inventory or other right hereunder in the proceeds resulting therefrom, and (b)
the Borrower may receive from the Debtors all amounts due as proceeds of the
Collateral at the Borrower’s own cost and expense, and also liability, if any;
provided, however, that the Bank may at any time, without cause or notice, and
whether or not an Event of Default has occurred or DEMAND has been made,
terminate all or any part of the Borrower’s rights described in the preceding
sentence or elsewhere in this Agreement in respect of the Collateral, and,
without limitation, notify Debtors to make all payments due as proceeds of the
Collateral to the Bank. Until Bank shall otherwise notify Borrower, all proceeds
of and collections of Collateral shall be retained by Borrower and used solely
for the ordinary and usual operation of Borrower’s business. From and after
notice by Bank to Borrower, all proceeds of and collections of the Collateral
shall be held in trust by Borrower for Bank and shall not be commingled with
Borrower’s other funds or deposited in any account of Borrower at any bank other
than the Bank, and Borrower agrees to deliver to Bank on the dates of receipt
thereof by Borrower, duly endorsed to Bank or to bearer, or assigned to Bank, as
may be appropriate, all proceeds of the Collateral in the identical form
received by Borrower.

 

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2.4 Allowances. Absent an Event of Default the Borrower may grant such
allowances or other adjustments to Debtors (exclusive of extending the time for
payment of any item which shall not be done without first obtaining the Bank’s
written consent in each instance) as the Borrower may reasonably deem to accord
with sound business practice, including, without limiting the generality of the
foregoing, accepting the return of all or any part of the inventory (subject to
the provisions set forth in this Agreement with reference to returned
inventory).

 

2.5 Records. The Borrower shall deliver to the Bank from time to time promptly
at the Bank’s request all invoices, original documents of title, contracts,
chattel paper, instruments and any other writings relating thereto, and other
evidence of performance of contracts, or evidence of shipment or delivery of the
merchandise or of the rendering of services; and the Borrower will deliver to
the Bank promptly at the Bank’s request from time to time additional copies of
any or all of such papers or writings, and such other information with respect
to any of the Collateral and such schedules of inventory, schedules of accounts
and such other writings as the Bank may in its sole discretion deem to be
necessary or effectual to evidence any loan hereunder or the Bank’s security
interest in the Collateral.

 

2.6 Legends. The Borrower shall promptly make, stamp or record such entries or
legends on the Borrower’s books and records or on any of the Collateral
(including, without limitation, chattel paper) as Bank shall request from time
to time, to indicate and disclose that Bank has a security interest in such
Collateral.

 

2.7 Inspection. The Bank, or its representatives, at any time and from time to
time but not to exceed more than 2 times in any calendar year provided an event
of default occurred and is continuing, shall have the right at the sole cost and
expense of Borrower, and the Borrower will permit the Bank and/or its
representatives: (a) to examine, check, make copies of or extracts from any of
the Borrower’s books, records and files (including, without limitation, orders
and original correspondence); (b) to perform field exams or otherwise inspect
and examine the Collateral and to check, test or appraise the same as to
quality, quantity, value and condition; and (c) to verify the Collateral or any
portion or portions thereof or the Borrower’s compliance with the provisions of
this Agreement.

 

2.8 Search Reports. Bank shall receive prior to the date of this Agreement UCC
search results under all names used by the Borrower during the prior five (5)
years, from each jurisdiction where any Collateral is located, from the State,
if any, where the Borrower is organized and registered (as such terms are used
in the Code), and the State where the Borrower’s chief executive office is
located. The search results shall confirm that the security interest in the
Collateral granted Bank hereunder is prior to all other security interests in
favor of any other person and the Borrower hereby authorizes the Bank to file
UCC financings statements and any other records or writings in each jurisdiction
the Bank shall deem necessary or advisable in order to perfect and protect the
security interest in the Collateral granted to Bank hereunder.

 

3. REPRESENTATIONS AND WARRANTIES

 

The Borrower hereby represents and warrants to the Bank as of the date of this
Agreement and, as applicable, covenants to the Bank, that:

 

3.1 Organization and Qualification. Borrower is a duly organized and validly
existing corporation under the laws of the State of its incorporation with the
exact legal name set forth in the first paragraph of this Agreement. Borrower is
in good standing under the laws of said State, has the power to own its property
and conduct its business as now conducted and as currently proposed to be
conducted, and is duly qualified to do business under the laws of each state
where the nature of the business done or property owned requires such
qualification.

 

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3.2 Subsidiaries. Borrower has no subsidiaries other than as specifically
disclosed to the Bank in writing prior to the date this representation and
warranty is deemed made and the Borrower has never consolidated, merged or
acquired substantially all of the assets of any other entity or person other
than as previously specifically disclosed to the Bank in writing prior to the
date this representation and warranty is deemed made.

 

3.3 Corporate Records. Borrower’s corporate charter, articles or certificate of
organization or incorporation and all amendments thereto, as well as Borrower’s
bylaws, operating agreement, partnership agreement and all other organizational
documents, as applicable, have been duly filed and are in proper order. All
outstanding capital stock or other evidence of ownership issued by the Borrower
was and is properly issued and all books and records of the Borrower, including
but not limited to its minute books, bylaws and books of account, are accurate
and up to date and will be so maintained.

 

3.4 Title to Properties; Absence of Liens. Borrower has good and clear record
and marketable title to all of its properties and assets, and all of its
properties and assets including the Collateral are free and clear of all
mortgages, liens, pledges, charges, encumbrances and setoffs, other than the
security interest therein granted to the Bank and those mortgages, deeds of
trust, leases of personal property and security interests previously
specifically consented to in writing by the Bank.

 

3.5 Places of Business. The location of Borrower’s chief executive office is
correctly stated in the preamble to this Agreement, and Borrower shall, during
the term of this Agreement, keep the Bank currently and accurately informed in
writing of each of its other places of business, and shall not change the
location of such chief executive office or open or close, move or change any
material existing or new place of business without giving the Bank at least
thirty (30) days prior written notice thereof.

 

3.6 Valid Obligations. The execution, delivery and performance of the Loan
Documents have been duly authorized by all necessary corporate action and each
represents a legal, valid and binding obligation of Borrower and is fully
enforceable according to its terms, except as limited by laws relating to the
enforcement of creditors’ rights.

 

3.7 Conflicts. There is no provision in Borrower’s organizational or charter
documents, if any, or in any indenture, contract or agreement to which Borrower
is a party which prohibits, limits or restricts the execution, delivery or
performance of the Loan Documents and neither the execution, delivery nor
performance of the Loan Documents constitute a default, event of default or
event of similar import under any indenture, contract or agreement to which
Borrower is a party.

 

3.8 Governmental Approvals. The execution, delivery and performance of the Loan
Documents does not require any approval of or filing with any governmental
agency or authority.

 

3.9 Litigation, etc. There are no actions, claims or proceedings pending or to
the knowledge of Borrower threatened against Borrower which might materially
adversely affect the ability of Borrower to conduct its business or to pay or
perform the Obligations or which might adversely affect any material portion of
the Collateral or the Bank’s interest therein.

 

3.10 Accounts and Contract Rights. All accounts arise out of legally enforceable
and existing contracts, and represent unconditional and undisputed bona fide
indebtedness by a Debtor, and are not and will not be subject to any discount
(except such cash or trade discount as may be shown on any invoice, contract or
other writing delivered to the Bank). No contract right, account, general
intangible or chattel paper is or will be represented by any note or other
instrument, and no contract right, account or general intangible is, or will be
represented by any conditional or installment sales obligation or other chattel
paper, except such instruments or chattel paper as have been or immediately upon
receipt by the Borrower will be delivered to the Bank (duly endorsed or
assigned), which Borrower hereby covenants to cause to be timely done, and such
delivery, in the case of chattel paper, shall include all executed copies except
those in the possession of the installment buyer and Borrower shall cause to be
delivered to the Bank immediately upon receipt thereof by Borrower all security
for and guaranties of any of the Collateral together with such assignments and
endorsements thereof as the Bank may request.

 

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3.11 Title to Collateral. At the date hereof the Borrower is (and as to
Collateral that the Borrower may acquire after the date hereof, on the date of
such acquisition, will be) the lawful owner of the Collateral, and the
Collateral and each item thereof is, will be and shall at all times this
Agreement remains in effect continue to be free of all restrictions, liens,
encumbrances or other rights, title or interests (other than the security
interest therein granted to the Bank under the Loan Documents and the interests
of each mortgagee, beneficiary, lessee or secured party to the extent, and only
to the extent, arising under a mortgage, deed of trust, lease of personal
property and security agreement, credits, defenses, recoupments, set-offs or
counterclaims whatsoever. The Borrower has and will have full power and
authority to grant to the Bank a security interest in the Collateral and, the
Borrower has not transferred, assigned, sold, pledged, encumbered, subjected to
lien or granted any security interest in, and will not transfer, assign, sell
(except sales or other dispositions in the ordinary course of business in
respect to inventory as expressly permitted in this Agreement), pledge,
encumber, subject to lien or grant any security interest in any of the
Collateral (or any of the Borrower’s right, title or interest therein), to any
person other than the Bank. The Collateral is and will be valid and genuine in
all respects. The Borrower hereby warrants and covenants to defend the Bank’s
right to and interest in the Collateral against all claims and demands of all
persons whatsoever.

 

3.12 Location of Collateral. Except for sale, processing, use, consumption or
other disposition in the ordinary course of business, the Borrower will keep all
inventory and equipment only at locations specified in this Agreement or
specified to the Bank in writing. The Borrower shall, during the term of this
Agreement, keep the Bank currently and accurately informed in writing of each
location where the Borrower’s records relating to its accounts and contract
rights, respectively, are kept, and shall not remove such records or any of them
to another location without giving the Bank at least thirty (30) days prior
written notice thereof.

 

3.13 Third Parties. The Bank shall not be deemed to have assumed any liability
or responsibility to the Borrower or any third person for the correctness,
validity or genuineness of any instruments or documents that may be released or
endorsed to the Borrower by the Bank (which shall automatically be deemed to be
without recourse to the Bank in any event) or for the existence, character,
quantity, quality, condition, value or delivery of any goods purporting to be
represented by any such documents; and the Bank, by accepting such security
interest in the Collateral, or by releasing any Collateral to the Borrower,
shall not be deemed to have assumed any obligation or liability to any supplier
or Debtor or to any other third party, and the Borrower agrees to indemnify and
defend the Bank and hold it harmless in respect to any claim or proceeding
arising out of any matter referred to in this paragraph.

 

3.14 Payment of Accounts. Each account or other item of Collateral, other than
inventory and equipment, will be paid in full on or before the date shown as its
due date in the schedule of Collateral, in the copy of the invoice(s) relating
to the account or other Collateral or in contracts relating thereto. Upon any
suspension of business, assignment or trust mortgage for the benefit of
creditors, dissolution, petition in receivership or under any chapter of the
Bankruptcy Code as amended from time to time by or against any Debtor, any
Debtor becoming insolvent or unable to pay its debts as they mature or any other
act of the same or different nature amounting to a business failure, the
Borrower will immediately notify the Bank thereof.

 

3.15 Taxes. The Borrower has filed all Federal, state and other tax returns
required to be filed (except for such returns for which current and valid
extensions have been filed), and all taxes, assessments and other governmental
charges due from the Borrower have been fully paid. The Borrower has established
on its books reserves adequate for the payment of all Federal, state and other
tax liabilities (if any).

 

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3.16 Use of Proceeds. The proceeds of the Loan will not be used for personal,
family or household purposes or the purpose of purchasing or carrying margin
stock or margin securities within the meaning of Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
The Collateral is not, and will not be, used or acquired primarily for personal,
family or household purposes.

 

3.17 Environmental. As of the date hereof neither the Borrower nor any of
Borrower’s agents, employees or independent contractors (1) have caused or are
aware of a release or threat of release of Hazardous Materials (as defined
herein) on any of the premises or personal property owned or controlled by
Borrower (“Controlled Property”) or any property abutting Controlled Property
(“Abutting Property”), which could give rise to liability under any
Environmental Law (as defined herein) or any other Federal, state or local law,
rule or regulation; (2) have arranged for the transport of or transported any
Hazardous Materials in a manner as to violate, or result in potential
liabilities under, any Environmental Law; (3) have received any notice, order or
demand from the Environmental Protection Agency or any other Federal, state or
local agency under any Environmental Law; (4) have incurred any liability under
any Environmental Law in connection with the mismanagement, improper disposal or
release of Hazardous Materials; or (5) are aware of any inspection or
investigation of any Controlled Property or Abutting Property by any Federal,
state or local agency for possible violations of any Environmental Law.

 

To the best of Borrower’s knowledge, neither Borrower, nor any prior owner or
tenant of any Controlled Property, committed or omitted any act which caused the
release of Hazardous Materials on such Controlled Property which could give rise
to a lien thereon by any Federal, state or local government. No notice or
statement of claim or lien affecting any Controlled Property has been recorded
or filed in any public records by any Federal, state or local government for
costs, penalties, fines or other charges as to such property. All notices,
permits, licenses or similar authorizations, if any, required to be obtained or
filed in connection with the ownership, operation, or use of the Controlled
Property, including without limitation, the past or present generation,
treatment, storage, disposal or release of any Hazardous Materials into the
environment, have been duly obtained or filed.

 

Borrower agrees to indemnify and hold the Bank and each Bank Affiliate harmless
from all Claims (as hereinafter defined) arising from or in any way related to
(i) any and all of its violations of any Environmental Law (including those
arising from any lien by any Federal, state or local government arising from the
presence of Hazardous Materials) or (ii) the presence of Hazardous Materials
located on or emanating from any Controlled Property or Abutting Property
whether existing or not existing and whether known or unknown at the time of the
execution hereof and regardless of whether or not caused by, or within the
control of Borrower, including, without limitation, any inspection,
investigation, cleanup, environmental engineering or other remedial response
efforts. Borrower further agrees to reimburse Bank and each Bank Affiliate upon
demand for any costs incurred by Bank in connection with the foregoing. Borrower
agrees that its obligations hereunder shall be continuous and shall survive the
repayment of all Obligations and other debts to Bank, if any, and shall continue
so long as a valid claim may be lawfully asserted against the Bank or any Bank
Affiliate.

 

The term “Hazardous Materials” includes but is not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Law or that may have a negative
impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives.

 

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The term “Environmental Law” means any present and future Federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, relating to protection of human health or the environment, relating
to Hazardous Materials, relating to liability for or costs of remediation or
prevention of releases of Hazardous Materials or relating to liability for or
costs of other actual or threatened danger to human health or the environment.
The term “Environmental Law” includes, but is not limited to, the following
statutes, as amended, any successor thereto, and any regulations promulgated
pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including but not limited to Subtitle I
relating to underground storage tanks); the Solid Waste Disposal Act; the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act; the River and
Harbors Appropriation Act, New York Environmental Conservation Law, Chapter 43-B
of the New York Consolidated Laws.

 

4. AFFIRMATIVE COVENANTS

 

4.1 Payments and Performance. Borrower will duly and punctually pay all
Obligations becoming due to the Bank and each Bank Affiliate and will duly and
punctually perform all Obligations on its part to be done or performed under
each of the Loan Documents.

 

4.2 Books and Records; Inspection. Borrower will at all times keep proper books
of account in which full, true and correct entries will be made of its
transactions in accordance with generally accepted accounting principles,
consistently applied and which are, in the opinion of a Certified Public
Accountant acceptable to Bank, adequate to determine fairly the financial
condition and the results of operations of Borrower. Borrower will at all
reasonable times make its books and records available in its offices for
inspection, examination and duplication by the Bank and the Bank’s
representatives and will permit inspection of the Collateral and all of its
properties by the Bank and the Bank’s representatives. Borrower will from time
to time furnish the Bank with such information and statements as the Bank may
request in its sole discretion with respect to the Obligations or the Bank’s
security interest in the Collateral. Borrower shall, during the term of this
Agreement, keep the Bank currently and accurately informed in writing of each
location where Borrower’s records relating to its accounts and contract rights
are kept, and shall not remove such records to another location without giving
the Bank at least thirty (30) days prior written notice thereof.

 

4.3 Financial Statements. Borrower will furnish to Bank:

 

  (a) as soon as available to Borrower, but in any event within 120 days after
the close of each fiscal year end, a full and complete signed copy of financial
statements of Premier Packaging Corporation, reviewed by certified public
accountants acceptable to Bank, which shall include a balance sheet of Premier
Packaging Corporation, as at the end of such year, statement of cash flows and
statement of profit and loss of Premier Packaging Corporation reflecting the
results of its operations during such year, bearing the unqualified opinion of
such certified public accountants and prepared on an annual basis in accordance
with generally accepted accounting principles, consistently applied together
with any so-called management letter;         (b) as soon as available to
Borrower, but in any event within 45 days after the close of each fiscal quarter
end, a full and complete copy of management prepared financial statements of
Premier Packaging Corporation;         (c) as soon as available to Borrower, but
in any event within 30 days after the close of each fiscal year end, management
prepared projections of Premier Packaging Corporation;

 

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  (d) as soon as available to Borrower, but in any event within 120 days after
the end of each fiscal year, an inventory listing for Premier Packaging
Corporation;         (e) as soon as available to Borrower, but in any event
within 120 days after the end of each fiscal year, an accounts receivable aging
report;         (f) as soon as available to Borrower, but in any event within
120 days after the end of each fiscal year, an accounts payable aging report;  
      (g) as soon as available to Borrower, but in any event within 120 days
after the end of each fiscal year, a covenant compliance certificate on the
bank’s form.         (h) from time to time, such financial data and information
about Borrower as Bank may reasonably request; and         (i) any financial
data and information about any guarantors of the Obligations as Bank may
reasonably request.

 

4.4 Conduct of Business. The Borrower will maintain its existence in good
standing and comply with all laws and regulations of the United States and of
each applicable state thereof and of each applicable political subdivision
thereof, and of any governmental authority which may be applicable to it or to
its business; provided that this covenant shall not apply to any tax, assessment
or charge which is being contested in good faith and with respect to which
reserves have been established and are being maintained.

 

4.5 Notice to Account Debtors. The Borrower agrees, promptly upon the request of
the Bank, to notify all or any of the Debtors in writing of the Bank’s security
interest in the Collateral in whatever manner the Bank requests and, hereby
authorizes the Bank, at the Borrower’s expense, to notify all or any of the
Debtors of the Bank’s security interest in the Borrower’s accounts and the other
Collateral and, without limiting any other right or remedy the Bank may have at
any time, to direct all or any Debtors to make all payments with respect to the
accounts and the other Collateral directly to the Bank following the occurrence
of an Event of Default or the Maturity Date.

 

4.6 Contact with Accountant. The Borrower hereby authorizes the Bank to directly
contact and communicate with any accountant employed by Borrower in connection
with the review and/or maintenance of Borrower’s books and records or
preparation of any financial reports delivered by or at the request of Borrower
to Bank.

 

4.7 Operating and Deposit Accounts. The Borrower shall maintain with the Bank
its primary operating and deposit accounts.. At the option of the Bank, all loan
payments and fees will automatically be debited from the Borrower’s primary
operating account and all advances will automatically be credited to the
Borrower’s primary operating account.

 

4.8 Taxes. Borrower will promptly pay all real and personal property taxes,
assessments and charges and all franchise, income, unemployment, retirement
benefits, withholding, sales and other taxes assessed against it or payable by
it before delinquent; provided that this covenant shall not apply to any tax
assessment or charge which is being contested in good faith and with respect to
which reserves have been established and are being maintained. The Bank may, at
its option, from time to time, discharge any taxes, liens or encumbrances of any
of the Collateral, and the Borrower will pay to the Bank on demand or the Bank
in its sole discretion may charge to the Borrower all amounts so paid or
incurred by it, together with interest thereon until paid at the rate set forth
in the Note that applies during the continuance of an Event of Default.

 

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4.9 Maintenance. Borrower will keep and maintain the Collateral and its other
properties, if any, in good repair, working order and condition. Borrower will
immediately notify the Bank of any loss or damage to or any occurrence which
would adversely affect the value of any Collateral. The Bank may, at its option,
from time to time, take any other action that the Bank may deem proper to
repair, maintain or preserve any of the Collateral, and the Borrower will pay to
the Bank on demand or the Bank in its sole discretion may charge to the Borrower
all amounts so paid or incurred by it, together with interest thereon until paid
at the rate set forth in the Note that applies during the continuance of an
Event of Default.

 

4.10 Insurance. Borrower will maintain in force property and casualty insurance
on all Collateral and any other property of the Borrower, if any, against risks
customarily insured against by companies engaged in businesses similar to that
of the Borrower containing such terms and written by such companies as may be
satisfactory to the Bank, such insurance to be payable to the Bank as its
interest may appear in the event of loss and to name the Bank as insured
pursuant to a standard loss payee clause; no loss shall be adjusted thereunder
without the Bank’s approval; and all such policies shall provide that they may
not be canceled without first giving at least ten (10) days written notice of
cancellation to the Bank. In the event that the Borrower fails to provide
evidence of such insurance, the Bank may, at its option, secure such insurance
and charge the cost thereof to the Borrower. At the option of the Bank, all
insurance proceeds received from any loss or damage to any of the Collateral
shall be applied either to the replacement or repair thereof or as a payment on
account of the Obligations. From and after the occurrence of an Event of
Default, the Bank is authorized to cancel any insurance maintained hereunder and
apply any returned or unearned premiums, all of which are hereby assigned to the
Bank, as a payment on account of the Obligations.

 

4.11 Notification of Default. Immediately upon becoming aware of the existence
of any condition or event which constitutes an Event of Default, or any
condition or event which would upon notice or lapse of time, or both, constitute
an Event of Default, Borrower shall give Bank written notice thereof specifying
the nature and duration thereof and the action being or proposed to be taken
with respect thereto.

 

4.12 Notification of Material Litigation. Borrower will immediately notify the
Bank in writing of any litigation or of any investigative proceedings of a
governmental agency or authority commenced or threatened against it which would
or might be materially adverse to the financial condition of Borrower, any
guarantor of the Obligations or any material part of the Collateral.

 

4.13 Pension Plans. With respect to any pension or benefit plan maintained by
Borrower, or to which Borrower contributes (“Plan”), the benefits under which
are guarantied, in whole or in part, by the Pension Benefit Guaranty Corporation
created by the Employee Retirement Income Security Act of 1974, P.L. 93-406, as
amended (“ERISA”) or any governmental authority succeeding to any or all of the
functions of the Pension Benefit Guaranty Corporation (“Pension Benefit Guaranty
Corporation”), Borrower will (a) fund each Plan as required by the provisions of
Section 412 of the Internal Revenue Code of 1986, as amended; (b) cause each
Plan to pay all benefits when due; (c) furnish Bank (i) promptly with a copy of
any notice of each Plan’s termination sent to the Pension Benefit Guaranty
Corporation (ii) no later than the date of submission to the Department of Labor
or to the Internal Revenue Service, as the case may be, a copy of any request
for waiver from the funding standards or extension of the amortization periods
required by Section 412 of the Internal Revenue Code of 1986, as amended and
(iii) notice of any Reportable Event as such term is defined in ERISA; and (d)
subscribe to any contingent liability insurance provided by the Pension Benefit
Guaranty Corporation to protect against employer liability upon termination of a
guarantied pension plan, if available to Borrower.

 

4.14 Lien Law. If any account or general intangible included in the Collateral
represents money owing pursuant to any contract for the improvement of real
property or for a public improvement for purposes of the Lien Law of the State
of New York (the “Lien Law”), Borrower shall (i) give Bank notice of such fact;
(ii) receive and hold any money advanced by Bank with respect to such account or
general intangible as a trust fund to be first applied to the payment of trust
claims as such term is defined in the Lien Law (Section 71 or otherwise); and
(iii) until such trust claim is paid, not use or permit the use of any such
money for any purpose other than the payment of such trust claims.

 

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5. NEGATIVE COVENANTS

 

5.1 Financial Covenants. The Borrower will not at any time or during any fiscal
period (as applicable) fail to be in compliance with any of the financial
covenants in this section.

 

  (a) Definitions. The following definitions shall apply to this Section:

 

(i) “Capital Expenditures” (“CAPEX”) shall mean for any period, all acquisitions
or machinery, equipment, land, leaseholds, buildings, improvements and all other
expenditures considered to be for fixed assets under GAAP, consistently applied.
Where an asset is acquired under a capital lease, the amount required to be
capitalized shall be considered a capital expenditure during the first year of
the lease.

 

(ii) “Current Assets” shall mean current assets as defined under GAAP.

 

(iii) “Current Liabilities” shall mean current liabilities as defined under
GAAP.

 

(iv) “Current Maturity of Long-Term Debt” (“CMLTD”) shall mean, for any period,
the current scheduled principal or capital lease payments required to be paid
during the applicable period.

 

(v) “Distributions” shall mean all cash dividends to shareholders, and all cash
distributions of Subchapter S corporations, to partners of partnerships, to
members of limited liability companies or to beneficiaries of trusts.

 

(vi) “Earnings” shall mean earnings as defined under GAAP.

 

(vii) “EBITDA” shall mean, for any period, Earnings from continuing operations
before payment of federal, state and local income taxes plus Interest Expense,
depreciation and amortization, in each case for such period, computed and
calculated in accordance with GAAP.

 

(viii) “GAAP” shall mean generally accepted accounting principles in effect from
time to time in the United States.

 

(ix) “Indebtedness” shall mean (x) all indebtedness for borrowed money or for
the deferred purchase price of property or services, and all obligations under
leases which are or should be, under GAAP, recorded as capital leases, in
respect of which a person is directly or contingently liable as borrower,
guarantor, endorser or otherwise, or in respect of which a person otherwise
assures a creditor against loss, (y) all obligations for borrowed money or for
the deferred purchase price of property or services secured by (or for which the
holder has an existing right, contingent or otherwise, to be secured by) any
lien upon property (including without limitation accounts receivable and
contract rights) owned by a person, whether or not such person has assumed or
become liable for the payment thereof, and (z) all other liabilities and
obligations which would be classified in accordance with GAAP as liabilities on
a balance sheet or to which reference should be made in footnotes thereto.

 

(x) “Intangible Assets” shall mean, as of the date of determination thereof,
assets that in accordance with GAAP are properly classifiable as intangible
assets, including, but not limited to, goodwill, franchises, licenses, patents,
trademarks, trade names and copyrights.

 

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(xi) “Interest Expense” shall mean, for any period, ordinary, regular, recurring
and continuing expenditures for interest on all borrowed money.

 

(xii) “Tangible Net Worth” shall mean, as of the date of determination thereof,
total assets, excluding all Intangible Assets and all obligations owed from
affiliates or any employee, less total liabilities.

 

(xiii) “Unfinanced CAPEX” shall mean, for any period, Capital Expenditures less
new long-term Indebtedness issued during such period to fund the Capital
Expenditures.

 

  (b) Current Ratio. The Borrower shall not permit the Current Assets to Current
Liabilities to be less than 1.25 to 1.0, at any time, reported on a rolling four
quarter basis.         (c) Debt to Tangible Net Worth. The Borrower shall not
permit the ratio of its Indebtedness to Tangible Net Worth to be greater than
3.0 to 1.0 at any time.         (d) EBITDA (after Taxes, Distributions and
Unfinanced CAPEX) to Interest Expense plus CMLTD. The Borrower shall not permit
the ratio of its EBITDA, minus taxes paid in cash, Distributions and Unfinanced
CAPEX, to Interest Expense plus CMLTD, to be less than 1.15 to 1.0 for any
fiscal year for the 4 consecutive fiscal quarters ending at the end of each
fiscal quarter.

 

5.2 Limitations on Indebtedness. Borrower shall not incur any indebtedness or
create, assume, guarantee, become contingently liable for, or suffer to exist
indebtedness in addition to indebtedness to the Bank, except (i) indebtedness or
liabilities of Borrower directly connected with the liens and security interests
approved by the Bank in accordance with Section 3.4, and (ii) indebtedness or
liabilities other than for money borrowed, that are unsecured and incurred or
arise in the ordinary course of Borrower’s business.

 

5.3 [Intentionally Omitted.]

 

5.4 Loans or Advances. The Borrower shall not make any loans or advances or
distributions or pay dividends in excess of $400,000 annually to any individual,
partnership, corporation, limited liability corporation, trust, or other
organization or person, including without limitation its officers and employees;
provided, however, that Borrower may make advances to its employees, including
its officers, with respect to expenses incurred by such employees in the
ordinary course of business which expenses are reimbursable by Borrower, and
provided further, however, that Borrower may extend credit in the ordinary
course of business in accordance with customary trade practices.

 

5.5 Dividends and Distributions. Borrower shall not, without prior written
consent of the Bank, pay any dividends on or make any distribution on account of
any class of Borrower’s capital stock in cash or in property (other than
additional shares of such stock), or redeem, purchase or otherwise acquire,
directly or indirectly, any of such stock, except, so long as Borrower is not in
default hereunder, if Borrower is a Subchapter S corporation, under the
regulations of the Internal Revenue Service of the United States, distributions
to the stockholders of Borrower in such amounts as are necessary to pay the tax
liability of such stockholders due as a result of such stockholders’ interest in
the Borrower.

 

5.6 Investments. The Borrower shall not make investments in, or advances to, any
individual, partnership, corporation, limited liability company, trust or other
organization or person other than as previously specifically consented to in
writing by the Bank. The Borrower will not purchase or otherwise invest in or
hold securities, non-operating real estate or other non-operating assets or
purchase all or substantially all the assets of any entity other than as
previously specifically consented to in writing by the Bank.

 

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5.7 Merger. Borrower shall not merge or consolidate or be merged or consolidated
with or into any other entity.

 

5.8 Capital Expenditures. The Borrower shall not, directly or indirectly, make
or commit to make capital expenditures by lease, purchase, or otherwise, except
in the ordinary and usual course of its business for the purpose of replacing
machinery, equipment or other personal property which, as a consequence of wear,
duplication or obsolescence, is no longer used or necessary in the Borrower’s
business.

 

5.9 Sale of Assets. Borrower shall not sell, lease or otherwise dispose of any
of its assets, except inventory in the ordinary and usual course of business and
except for machinery, equipment or other personal property which, as a
consequence of wear, duplication or obsolescence, is no longer used or necessary
in the Borrower’s business, provided that fair consideration is received
therefor; provided, however, in no event shall the Borrower sell, lease or
otherwise dispose of any equipment purchased with the proceeds of any loans,
including with limitation the Loan, made by the Bank.

 

5.10 Restriction on Liens. Borrower shall not grant any security interest in, or
mortgage of, any of its properties or assets including the Collateral. Borrower
shall not enter into any agreement with any person other than the Bank that
prohibits the Borrower from granting any security interest in, or mortgage of,
any of its properties or assets including the Collateral.

 

5.11 Other Business. Borrower shall not engage in any business other than the
business in which it is currently engaged or a business reasonably allied
thereto.

 

5.12 Change of Name, etc. Borrower shall not change its legal name or the State
or the type of its organization, without giving the Bank at least 30 days prior
written notice thereof.

 

6. DEFAULT

 

6.1 Default. “Event of Default” shall mean the occurrence of one or more of any
of the following events after the expiration of all applicable notice and cure
periods:

 

  (a) default or breach of any liability, obligation, covenant or undertaking to
Bank or any Bank Affiliate of the Borrower or any guarantor of the Obligations,
hereunder or otherwise, including, without limitation, failure to pay in full
and when due any installment of principal or interest, regularly scheduled or
termination payments under Hedging Contracts or any other amount or default or
breach of the Borrower or any guarantor of the Obligations under any other Loan
Document or any other agreement with the Bank or Bank Affiliate;         (b)
failure of the Borrower or any guarantor of the Obligations to maintain
aggregate collateral security value satisfactory to the Bank;         (c)
default or breach of any material liability, obligation or undertaking of the
Borrower or any guarantor of the Obligations to any person other than the Bank
or any Bank Affiliate;         (d) if any statement, representation or warranty
heretofore, now or hereafter made by the Borrower or any guarantor of the
Obligations in connection with any of the Loan Documents or any other agreement,
document or instrument related to the Obligations, or in any supporting
financial statement of the Borrower or any guarantor of the Obligations shall be
determined by the Bank to have been false or misleading in any material respect
when made;         (e) if the Borrower or any guarantor of the Obligations is a
corporation, trust, partnership or limited liability company, the liquidation,
termination or dissolution of any such organization, or the merger or
consolidation of such organization with or into another entity, or its ceasing
to carry on actively its present business or the appointment of a receiver for
its property, or, without the prior written consent of the Bank, the sale or
transfer of ownership of any interest in the Borrower;

 

13

 

 

  (f) the death of the Borrower or any guarantor of the Obligations and, if the
Borrower or any guarantor of the Obligations is a partnership or limited
liability company, the death of any partner or member;         (g) the
institution by or against the Borrower or any guarantor of the Obligations of
any proceedings under the Bankruptcy Code 11 USC §101 et seq. or any other
insolvency, debtor relief or debt adjustment law or any other law in which the
Borrower or any guarantor of the Obligations is alleged to be insolvent or
unable to pay its debts as they mature, or the making by the Borrower or any
guarantor of the Obligations of an assignment for the benefit of creditors or
the granting by the Borrower or any guarantor of the Obligations of a trust
mortgage for the benefit of creditors;         (h) the service upon the Bank of
a writ in which the Bank is named as trustee of the Borrower or any guarantor of
the Obligations;         (i) a judgment or judgments for the payment of money
shall be rendered against the Borrower or any guarantor of the Obligations, and
any such judgment shall remain unsatisfied and in effect for any period of
thirty (30) consecutive days without a stay of execution;         (j) any levy,
lien (including mechanics lien), seizure, attachment, execution or similar
process shall be issued or levied on any of the property of the Borrower or any
guarantor of the Obligations;         (k) the termination or revocation of any
guaranty of the Obligations; or         (l) the occurrence of such a change in
the condition or affairs (financial or otherwise) of the Borrower or any
guarantor of the Obligations, or the occurrence of any other event or
circumstance, such that the Bank, in its sole discretion, deems that it is
insecure or that the prospects for timely or full payment or performance of any
obligation of the Borrower or any guarantor of the Obligations to the Bank has
been or may be impaired.

 

6.2 Acceleration. If an Event of Default shall occur, at the election of the
Bank, all Obligations shall become immediately due and payable without notice or
demand, except with respect to Obligations payable on DEMAND, which shall be due
and payable on DEMAND, whether or not an Event of Default has occurred.

 

The Bank is hereby authorized, at its election, after an Event of Default or
after DEMAND, without any further demand or notice except to such extent as
notice may be required by applicable law, to take possession and/or sell or
otherwise dispose of all or any of the Collateral at public or private sale; and
the Bank may also exercise any and all other rights and remedies of a secured
party under the Code or which are otherwise accorded to it in equity or at law,
all as Bank may determine, and such exercise of rights in compliance with the
requirements of law will not be considered adversely to affect the commercial
reasonableness of any sale or other disposition of the Collateral. If notice of
a sale or other action by the Bank is required by applicable law, unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Borrower agrees that ten (10)
days written notice to the Borrower, or the shortest period of written notice
permitted by such law, whichever is smaller, shall be sufficient notice; and,
unless prohibited by applicable law, the Bank, its officers, attorneys and
agents may bid and become purchasers at any such sale, if public, and may
purchase at any private sale any of the Collateral that is of a type customarily
sold on a recognized market or which is the subject of widely distributed
standard price quotations. Any sale (public or private) shall be without
warranty and free from any right of redemption, which the Borrower hereby waives
and releases effective, without any further action whatsoever, immediately upon
the occurrence of an Event of Default, and may be free of any warranties as to
the Collateral if Bank shall so decide. No purchaser at any sale (public or
private) shall be responsible for the application of the purchase money. Any
balance of the net proceeds of sale remaining after paying all Obligations shall
be returned to such party as may be legally entitled thereto; and if there is a
deficiency, the Borrower shall be responsible for repayment of the same to the
Bank, each applicable Bank Affiliate and other party legally entitled thereto,
with interest at the rate set forth in the Note that applies during the
continuance of an Event of Default. Upon demand by the Bank, the Borrower shall
assemble the Collateral and make it available to the Bank at a place designated
by the Bank which is reasonably convenient to the Bank and the Borrower. The
Borrower hereby acknowledges that the Bank has extended credit and other
financial accommodations to the Borrower upon reliance of the Borrower’s
granting the Bank the rights and remedies contained in this Agreement and the
other Loan Documents including without limitation the right to take immediate
possession of the Collateral upon the occurrence of an Event of Default or after
DEMAND with respect to Obligations payable on DEMAND and the Borrower hereby
acknowledges that the Bank is entitled to equitable and injunctive relief to
enforce any of its rights and remedies hereunder or under the Code and the
Borrower hereby waives any defense to such equitable or injunctive relief based
upon any allegation of the absence of irreparable harm to the Bank.

 

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All amounts received by the Bank in respect of the Obligations, whether from
Borrower, any guarantor of the Obligations, any endorser of the Note or any
other person, or from any disposition of any of the Collateral, or otherwise,
shall be applied by the Bank in such order of priority as the Bank may elect,
including, without limitation, if the Bank so elects, in the following order:

 

First, to pay all outstanding fees, expenses and costs of the Bank under the
Loan Documents;

 

Second, to pay, pro rata, interest on the Note and scheduled payments under all
Hedging Contracts, if any;

 

Third, to pay, pro rata, principal outstanding on the Note and all amounts due
in accordance with the terms of the Hedging Contracts upon the termination
thereof;

 

Fourth, to pay any other Obligations; and

 

Last, the balance, if any, to the Borrower or as otherwise required by law.

 

The Bank shall not be required to marshal any present or future security for
(including but not limited to this Agreement and the Collateral subject to the
security interest created hereby), or guarantees of, the Obligations or any of
them, or to resort to such security or guarantees in any particular order; and
all of its rights hereunder and in respect of such securities and guaranties
shall be cumulative and in addition to all other rights, however existing or
arising. To the extent that it lawfully may do so, the Borrower hereby agrees
that it will not invoke and irrevocably waives the benefits of any law relating
to the marshaling of collateral which might cause delay in or impede the
enforcement of the Bank’s rights under this Agreement or under any other
instrument evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
guaranteed. Except as required by applicable law, the Bank shall have no duty as
to the collection or protection of the Collateral or any income thereon, nor as
to the preservation of rights against prior parties, nor as to the preservation
of any rights pertaining thereto beyond the safe custody thereof.

 

15

 

 

6.3 Power of Attorney. The Borrower hereby irrevocably constitutes and appoints
the Bank as the Borrower’s true and lawful attorney, with full power of
substitution, at the sole cost and expense of the Borrower but for the sole
benefit of the Bank, upon the occurrence of an Event of Default or after DEMAND
with respect to Obligations payable on DEMAND, to convert the Collateral into
cash, including, without limitation, completing the manufacture or processing of
work in process, and the sale (either public or private) of all or any portion
or portions of the inventory and other Collateral; to enforce collection of the
Collateral, either in its own name or in the name of the Borrower, including,
without limitation, executing releases or waivers, compromising or settling with
any Debtors and prosecuting, defending, compromising or releasing any action
relating to the Collateral; to receive, open and dispose of all mail addressed
to the Borrower and to take therefrom any remittances or proceeds of Collateral
in which the Bank has a security interest; to notify Post Office authorities to
change the address for delivery of mail addressed to the Borrower to such
address as the Bank shall designate; to endorse the name of the Borrower in
favor of the Bank upon any and all checks, drafts, money orders, notes,
acceptances or other instruments of the same or different nature; to sign and
endorse the name of the Borrower on and to receive as secured party any of the
Collateral, any invoices, freight or express receipts, or bills of lading,
storage receipts, warehouse receipts, or other documents of title of the same or
different nature relating to the Collateral; to sign the name of the Borrower on
any notice of the Debtors or on verification of the Collateral; and to sign, if
necessary, and file or record on behalf of the Borrower any financing or other
statement in order to perfect or protect the Bank’s security interest. The Bank
shall not be obliged to do any of the acts or exercise any of the powers
hereinabove authorized, but if the Bank elects to do any such act or exercise
any such power, it shall not be accountable for more than it actually receives
as a result of such exercise of power, and it shall not be responsible to the
Borrower except for its own gross negligence or willful misconduct. All powers
conferred upon the Bank by this Agreement, being coupled with an interest, shall
be irrevocable so long as any Obligation of the Borrower or any guarantor or
surety to the Bank shall remain unpaid or the Bank is obligated under this
Agreement to extend any credit to the Borrower.

 

6.4 Nonexclusive Remedies. All of the Bank’s rights and remedies not only under
the provisions of this Agreement but also under any other agreement or
transaction shall be cumulative and not alternative or exclusive, and may be
exercised by the Bank at such time or times and in such order of preference as
the Bank in its sole discretion may determine.

 

7. MISCELLANEOUS

 

7.1 Waivers. The Borrower waives notice of intent to accelerate, notice of
acceleration, notice of nonpayment, demand, presentment, protest or notice of
protest of the Obligations, and all other notices, consents to any renewals or
extensions of time of payment thereof, and generally waives any and all
suretyship defenses and defenses in the nature thereof. No delay or omission on
the part of the Bank or any Bank Affiliate in exercising any right under any of
the Loan Documents shall operate as a waiver of such right or of any other right
of the Bank, nor shall any delay, omission or waiver on any one occasion be
deemed a bar to or waiver of the same or any other right on any future occasion.
No course of dealing and no delay or omission of the Bank or any Bank Affiliate
in exercising or enforcing any of its rights, powers, privileges, remedies,
immunities or discretion under the Loan Documents or under applicable law shall
constitute a waiver thereof; and no waiver by the Bank of any Event of Default
or of any DEMAND shall operate as a waiver of any other Event of Default or any
other DEMAND, or of the same Event of Default or DEMAND on any other occasion.
No term or provision of any of the Loan Documents shall be waived, altered or
modified except with the prior written consent of the Bank, which consent makes
explicit reference to the term or provision in question. Except as provided in
the preceding sentence, no other agreement or transaction, of whatsoever nature,
entered into between the Bank or any Bank Affiliate and the Borrower at any time
(whether before, during or after the effective date or term of this Agreement)
shall be construed in any particular way as a waiver, modification or limitation
of any of the Bank’s (or any Bank Affiliate’s) rights, powers, privileges,
remedies, immunities or discretion under the Loan Documents or applicable law
(nor shall anything in any Loan Document be construed as a waiver, modification
or limitation of any of rights, powers, privileges, remedies, immunities or
discretion of the Bank under any such other agreement or transaction) and all of
the same may be exercised by the Bank (or Bank Affiliate) at such time or times
and in such order of preference as the Bank in its sole discretion may
determine.

 

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7.2 Waiver of Homestead. To the maximum extent permitted under applicable law,
the Borrower hereby waives and terminates any homestead rights and/or exemptions
respecting any of its property under the provisions of any applicable homestead
laws.

 

7.3 Deposit Collateral. The Borrower hereby grants to the Bank (for its own
account and as agent on behalf of each Bank Affiliate to the extent an
Obligation is owed to such Bank Affiliate at any time) a continuing lien and
security interest in any and all deposits or other sums at any time credited by
or due from the Bank or any Bank Affiliate to the Borrower and any cash,
securities, instruments or other property of the Borrower in the possession of
the Bank or any Bank Affiliate, whether for safekeeping or otherwise, or in
transit to or from the Bank or any Bank Affiliate (regardless of the reason the
Bank or Bank Affiliate had received the same or whether the Bank or Bank
Affiliate has conditionally released the same) as security for the full and
punctual payment and performance of all of the Obligations and such deposits and
other sums may be applied or set off against the Obligations at any time,
whether or not then due, whether or not demand has been made and whether or not
other collateral is then available to the Bank or any Bank Affiliate.

 

7.4 Indemnification. The Borrower shall indemnify, defend and hold the Bank and
each Bank Affiliate, as well as any assignee of the Bank as described in Section
7.9 below, and their respective directors, officers, employees, agents and
attorneys (each an “Indemnitee”) harmless of and from all claims, losses,
liabilities (including negligence, tort and strict liability), damages, demands,
judgments, settlements, suits, and all legal proceedings and any and all costs
and expenses in connection therewith (including reasonable attorneys’ fees and
expenses) (to the extent applicable given the circumstances, each a “Claim”)
that in any way relate to or arise out of this Agreement or any of the other
Loan Documents, the Obligations, the Collateral, or the Indemnitee’s
relationship with the Borrower or any guarantor or endorser of the Obligations
(each of which may be defended, compromised, settled or pursued by the
Indemnitee with counsel of the Bank’s election, but at the expense of the
Borrower); provided, however that, notwithstanding the foregoing, the Borrower
shall have no obligation hereunder to indemnify, defend or hold harmless any
Indemnitee for any Claim to the extent the Claim is determined by a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
directly and proximately from the actual, but not imputed, gross negligence or
willful misconduct of the Indemnitee. Notwithstanding anything to the contrary
in this Agreement or any other Loan Document, the provisions of this Section 7.4
shall survive payment of the Obligations, and/or any termination or
ineffectiveness of this Agreement, or any release or discharge related to the
Obligations or this Agreement executed by the Bank (or the assignee) in favor of
the Borrower.

 

7.5 Costs and Expenses. The Borrower shall pay to the Bank on demand any and all
costs and expenses (including, without limitation, reasonable attorneys’ fees
and disbursements, court costs, litigation and other expenses) incurred or paid
by the Bank in establishing, maintaining, protecting or enforcing any of the
Bank’s rights or the Obligations, including, without limitation, any and all
such costs and expenses incurred or paid by the Bank in defending the Bank’s
security interest in, title or right to the Collateral or in collecting or
attempting to collect or enforcing or attempting to enforce payment of the
Obligations, including in connection with post-judgment collection efforts, if
any.

 

7.6 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original, but all of which shall constitute but one
agreement.

 

7.7 Severability. If any provision of this Agreement or portion of such
provision or the application thereof to any person or circumstance shall to any
extent be held invalid or unenforceable, the remainder of this Agreement (or the
remainder of such provision) and the application thereof to other persons or
circumstances shall not be affected thereby.

 

7.8 Complete Agreement. This Agreement and the other Loan Documents constitute
the entire agreement and understanding between and among the parties hereto
relating to the subject matter hereof, and supersedes all prior proposals,
negotiations, agreements and understandings among the parties hereto with
respect to such subject matter.

 

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7.9 Binding Effect of Agreement. This Agreement shall be binding upon and inure
to the benefit of the respective heirs, executors, administrators, legal
representatives, successors and assigns of the parties hereto, and shall remain
in full force and effect (and the Bank shall be entitled to rely thereon) until
released in writing by the Bank. The Bank may transfer and assign any or all of
its rights and obligations under this Agreement and/or any of the other Loan
Documents and deliver all of any part of the Collateral to one more assignees,
who shall, respectively, thereupon have all of such transferred and assigned
rights and obligations of the Bank; and the Bank shall then be relieved and
discharged of any responsibility or liability with respect to the transferred
and assigned obligations. The Borrower may not assign or transfer any of its
rights or obligations under this Agreement. Except as expressly provided herein
or in the other Loan Documents, nothing, expressed or implied, is intended to
confer upon any person, other than the parties hereto, any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.

 

7.10 Further Assurances. Borrower will from time to time execute and deliver to
Bank such documents, and take or cause to be taken, all such other or further
action, as Bank may request in order to effect and confirm or vest more securely
in Bank all rights contemplated by this Agreement and the other Loan Documents
(including, without limitation, to correct clerical errors) or to vest more
fully in or assure to the Bank the security interest in the Collateral granted
to the Bank by this Agreement or any other Loan Document or to comply with
applicable statute or law and to facilitate the collection of the Collateral
(including, without limitation, the execution of stock transfer orders and stock
powers, endorsement of promissory notes and instruments and notifications to
obligors on the Collateral). Borrower authorizes the Bank to file financing
statements, continuation statements or amendments without the signature of
Borrower thereon, and any such financing statements, continuation statements or
amendments may be filed at any time in any jurisdiction. Bank may at any time
and from time to time file financing statements, continuation statements and
amendments thereto which contain any information required by the Code for the
sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including whether Borrower is an organization, the type
of organization and any organization identification number issued to Borrower.
Borrower agrees to furnish any such information to Bank promptly upon request.
In addition, Borrower shall at any time and from time to time take such steps as
Bank may reasonably request for Bank (i) to obtain an acknowledgment, in form
and substance satisfactory to Bank, of any bailee having possession of any of
the Collateral that the bailee holds such Collateral for Bank, (ii) to obtain
“control” (as defined in the Code) of any Collateral comprised of deposit
accounts, electronic chattel paper, letter of credit rights or investment
property, with any agreements establishing control to be in form and substance
satisfactory to Bank, and (iii) otherwise to insure the continued perfection and
priority of Bank’s security interest in any of the Collateral and the
preservation of its rights therein. Borrower hereby constitutes Bank its
attorney-in-fact to execute, if necessary, and file all filings required or so
requested for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; and such power, being coupled with an interest, shall be
irrevocable until this Agreement terminates in accordance with its terms, all
Obligations are irrevocably paid in full and the Collateral is released.

 

7.11 Amendments and Waivers. This Agreement may be amended and Borrower may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if Borrower shall obtain the Bank’s prior, express written
consent to each such amendment, action or omission to act. No course of dealing
and no delay or omission on the part of Bank in exercising any right hereunder
shall operate as a waiver of such right or any other right and waiver on any one
or more occasions shall not be construed as a bar to or waiver of any right or
remedy of Bank on any future occasion.

 

7.12 Terms of Agreement. This Agreement shall continue in full force and effect
so long as any Obligations or obligation of Borrower to Bank shall be
outstanding, or the Bank shall have any obligation to extend any financial
accommodation hereunder, and is supplementary to each and every other agreement
between Borrower and Bank and shall not be so construed as to limit or otherwise
derogate from any of the rights or remedies of Bank or any of the liabilities,
obligations or undertakings of Borrower under any such agreement, nor shall any
contemporaneous or subsequent agreement between Borrower and the Bank be
construed to limit or otherwise derogate from any of the rights or remedies of
Bank or any of the liabilities, obligations or undertakings of Borrower
hereunder, unless such other agreement specifically refers to this Agreement and
expressly so provides.

 

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7.13 Notices. Any notice under or pursuant to the Loan Documents shall be a
signed writing or other authenticated record (within the meaning of Article 9 of
the Code). Any notices under or pursuant to the Loan Documents shall be deemed
duly received and effective if delivered in hand to any officer or agent of the
Borrower or Bank, or three (3) Business Days (meaning any day that is neither a
Saturday, Sunday nor legal holiday on which the Bank is authorized or required
to be closed at the address set forth above) after mailing if mailed by
registered or certified mail, return receipt requested, addressed to the
Borrower or Bank at the address set forth in this Agreement or such other
address as either party may from time to time designate by written notice to the
other party.

 

7.14 Governing Law. This Agreement and, unless provided to the contrary therein,
the other Loan Documents shall be governed by federal law applicable to the Bank
and, to the extent not preempted by federal law, the laws of the State of New
York.

 

7.15 Reproductions. This Agreement and the other Loan Documents, as well as all
other documents which have been or may be hereinafter furnished by Borrower to
the Bank may be reproduced by the Bank by any photographic, photostatic,
microfilm, xerographic or similar process, and any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business).

 

7.16 Multiple Borrowers. If more than one person constitutes the Borrower, all
of the Obligations shall be joint and several as among each and of such persons;
provided, however, the release by the Bank of any one such person shall not
release any other person obligated on account of the Obligations, or any of
them. Any and all present and future debts of any one such person to any other
such person constituting the Borrower are hereby subordinated to the full
payment and performance of all Obligations. Each reference in the Loan Documents
to the Borrower shall be deemed to refer to each such person constituting the
Borrower individually and also to all such persons jointly. No person liable for
any Obligation may seek contribution from any other person also liable, unless
and until all Obligations to the Bank of the person from whom contribution is
sought have been irrevocably and indefeasibly satisfied in full. The release or
compromise by the Bank of any Collateral shall not release any person liable for
any of the Obligations.

 

7.17 Jurisdiction and Venue. Borrower irrevocably submits to the nonexclusive
jurisdiction of any Federal or state court sitting in New York, over any suit,
action or proceeding arising out of or relating to the Obligations, the
Collateral or any of the Loan Documents. Borrower irrevocably waives, to the
fullest extent it may effectively do so under applicable law, any objection it
may now or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that the same has been
brought in an inconvenient forum. Borrower hereby consents to any and all
process which may be served in any such suit, action or proceeding, (i) by
mailing a copy thereof by registered and certified mail, postage prepaid, return
receipt requested, to the Borrower’s address shown in this Agreement or as
notified to the Bank and (ii) by serving the same upon the Borrower in any other
manner otherwise permitted by law, and agrees that such service shall in every
respect be deemed effective service upon Borrower.

 

7.18 JURY WAIVER. THE BORROWER AND BANK EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY, AND AFTER AN OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL, (A) WAIVE
ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING IN CONNECTION
WITH THE LOAN DOCUMENTS, THE OBLIGATIONS, THE COLLATERAL AND ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND (B) AGREE
NOT TO SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE, OR HAS NOT BEEN, WAIVED. THE BORROWER CERTIFIES THAT NEITHER
THE BANK NOR ANY OF ITS REPRESENTATIVES, AGENTS OR COUNSEL HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT IN THE EVENT OF ANY SUCH
PROCEEDING SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.

 

[Signature Page Follows]

 

19

 

 

Executed as an instrument under seal as of _____________, 2019.

 

  Borrower:         Premier Packaging Corporation         By:       Frank D.
Heuszel, CEO

 

Accepted: Citizens Bank, N.A., a national banking association

 

By:     Name: Douglas Dandurand   Title: Vice President  

 

[Signature Page to LOAN AGREEMENT]

 

20

 

 

DISCLOSURE SCHEDULE

 

to

 

Loan and Security Agreement (see Section 3.4)

dated as of June 27, 2019

 

None.