Supplemental Forbearance Agreement



 




EXHIBIT 10.1



As of April 12, 2002



U.S. Plastic Lumber Corp.



2300 Glades Road




Suite 440 West




Boca Raton, Florida 33431




Attention: John Poling




Re: Supplemental Forbearance Agreement



Ladies/Gentlemen:


     
Please refer to the Credit Agreement dated as of June 30,
2000 (as previously amended or otherwise modified, the
“Credit Agreement”) among U.S. Plastic Lumber
Corp. (the “Company”), various financial
institutions (the “Banks”) and Bank of America,
N.A. (“Bank of America”), as administrative
agent for the Banks (in such capacity, the
“Administrative Agent”). Capitalized terms used
but not defined herein have the respective meanings given
thereto in the Credit Agreement.


     
The Company has advised the Banks and the Administrative Agent
that the Company remains out of compliance with various
provisions of the Credit Agreement as more fully described in
the Forbearance Agreement dated as of November 14, 2001
(the “Original Forbearance Agreement”). In
addition, the Company (a) has failed to pay (i) interest
which was due under the Credit Agreement on January 31,
2002, February 28, 2002 and April 1, 2002 and
(ii) principal which was due under the Credit Agreement on
April 1, 2002 and (b) has advised the Administrative
Agent that it will be unable to make timely payment of interest
which will become due on April 30, 2002 (the Company’s
failure to make the interest payments on January 31, 2002,
February 28, 2002, April 1, 2002 and April 30,
2002 and the principal payment on April 1, 2002, the
“Payment Defaults”)


     
By its signature below, the Company acknowledges that so long as
any Payment Default (or any other Event of Default or any
Unmatured Event of Default, including any Known Default as
defined in the Original Forbearance Agreement) exists, the Banks
have no obligation to make Loans and the Issuing Bank has no
obligation to issue Letters of Credit. The Company further
acknowledges that the Administrative Agent and the Banks
currently have all rights, powers and remedies, whether arising
under any of the Loan Documents and/or applicable law, available
to them during the existence of an Event of Default, including
the right to accelerate the maturity of all Loans, to obtain
cash collateral for Letters of Credit and/or to terminate the
Commitments (all of the foregoing, the “Rights and
Remedies”).


     
The Company has requested that the Administrative Agent and the
Banks continue to forbear from exercising the Rights and
Remedies for a limited period of time. The Administrative Agent
and the Required Banks are willing to agree to such continued
forbearance







 




U.S. Plastic Lumber Corporation




As of April 12, 2002





Page 2



subject to the terms and conditions of this letter agreement.
Accordingly, the Company, the Administrative Agent and the
Required Banks agree as follows:



     1.     Forbearance. During the Forbearance Period (as defined
in the Original Forbearance Agreement as amended hereby), the
Administrative Agent and the Banks will not exercise the Rights
and Remedies with respect to the Payment Defaults so long as the
Company makes all Required Payments (as defined below) on a
timely basis. For purposes of the foregoing, “Required
Payments” means (a) a payment of $100,000 on or before
the date of the effectiveness of this letter agreement, which is
equal to a portion of the amount of interest which was due on
January 31, 2002; (b) a payment of $312,543.89 on
April 30, 2002, which is equal to the amount of interest
which was due on February 28, 2002 plus the balance of the
interest which was due on January 31, 2002; and (c) a
payment of $303,258.22 on May 30, 2002, which is equal to
the amount of interest expected that was due on April 1,
2002 plus $100,000; provided that the aggregate amount of all
Required Payments shall not exceed the sum of $715,802.11,
inclusive of all amounts payable on or after April 1, 2002
by the Company to the Consultant (as defined below). The Company
and the Required Banks agree that all Required Payments shall be
applied, first, to amounts payable to the Consultant, second, to
interest payable under the Credit Agreement on January 31,
2002, third, to interest due under the Credit Agreement on
February 28, 2002 and, fourth, to interest due under the
Credit Agreement on April 1, 2002.



     
2.     Effectiveness. This letter agreement shall become
effective on the date on which the Administrative Agent shall
have received (a) counterparts hereof signed by the Company
and the Required Banks, (b) evidence, satisfactory to the
Administrative Agent, that the Company and its Subsidiaries have
paid all employee withholding taxes to the extent due and
payable, (c) a demand note of the Company payable to Bank
of America in the form of Exhibit A hereto, (d) a
demand note of the Company payable to LaSalle Bank National
Association in the form of Exhibit B hereto, (e) a
certificate of the Company setting forth in reasonable detail
the status of the contract, for the project known as Remedial
Action for Pennsylvania Avenue Landfill located in Brooklyn, New
York and (f) confirmation that (i) the February
invoice of counsel to the Administrative Agent and all expenses
for the recently-completed field examination conducted by the
Administrative Agent (to the extent billed) have been paid in
full, (ii) the Company has retained Great American Group in
connection with the planned appraisal of the fixed assets of the
Company and its Subsidiaries, and (iii) the Company has
made the payment described in clause (a) of the definition
of “Required Payment”). Notwithstanding the foregoing
or any other provision of this Agreement, this letter agreement
shall expire and be of no further force or effect if the
conditions precedent set forth in clauses (b) through (f)
of the preceding sentence are not satisfied on or prior to the
tenth day following the execution and delivery of this Agreement
by the Required Banks.



     
3.     Amendments to Original Forbearance Agreement. The
Original Forbearance Agreement is amended as follows:







 




U.S. Plastic Lumber Corporation




As of April 12, 2002





Page 3





		
	 	     
        (a) Section 4(a) is amended by deleting
        the date “February 28, 2002” therein and
        substituting the date “May 31, 2002” therefor; and
        
	 
	 	     
        (b) Section 5(b) is amended in its entirety
        to read as follows:
        





		
	 	
        “(b) Any Event of Default, other than
        the Known Defaults and the Payment of Defaults (as defined in
        the letter agreement dated as of April 11, 2002 (the
        “Forbearance Extension Letter”) among the
        Required Banks, the Administrative Agent and the Company), shall
        occur and be continuing.”
        





		
	 	     
        (c) The following clauses (e), (f) and (g)
        shall be added to Section 5 in proper sequence:
        





		
	 	
        “(e) The Company shall fail to pay the
        March invoice of counsel to the Administrative Agent on or
        before April 15, 2002 or any other invoice of counsel to
        the Administrative Agent within 15 days after receipt
        thereof.”
        
	 
	 	
        (f) The Company shall fail to make any
        Required Payment as defined in Section 1 of the Forbearance
        Extension Letter.
        
	 
	 	
        (g) The Company shall fail to deliver to the
        Agent, on or before May 10, 2002, an appraisal of the
        equipment of the Company and its Subsidiaries, which appraisal
        shall set forth in reasonable detail the location of each item
        of equipment (including vehicles), whether such equipment is
        owned or leased (and, if leased, specifying whether such lease
        is an operating lease or financing lease), the name of each
        Person (other than the Agent and Halifax Fund, L.P.) which has a
        lien on (or is the lessor of) such item of equipment and the
        approximate amount secured by such lien (or, in the case of a
        lease, details as to the payments thereon), and the estimated
        forced sale value of each such item of equipment (other than
        equipment subject to an operating lease).
        
	 
	 	
        (h) EOS Partners, L.P.
        (“EOS”) shall notify the Company that it no
        longer wishes to pursue the transaction contemplated by the
        letter agreement dated April 11, 2002 between EOS and the
        Company.
        
	 
	 	
        (i) The Company shall fail to comply with
        any provision of Section 4 of the Forbearance Extension
        Letter.”
        




     
4. Additional
Agreements. As additional
consideration for the foregoing forbearance, the Company agrees
with the Administrative Agent and the Required Banks as follows:







 





U.S. Plastic Lumber Corporation




As of April 12, 2002





Page 4





		
	 	     
        (a)     The Company shall promptly (and in any event not later
        than April 30, 2002) make arrangements so that (a) the
        bank accounts of the Company and its Subsidiaries maintained
        with PNC National Bank and listed on Schedule I hereto are
        closed and replaced by accounts maintained with a Bank,
        (b) all of the other bank accounts of the Company and its
        Subsidiaries (other than (i) petty cash accounts maintained
        at each of the Company’s operating units which, in the
        aggregate, do not at any time contain more than $10,000 and
        (ii) accounts maintained solely to fund payroll and payroll
        taxes) are maintained with a Bank or a bank which has executed
        and delivered a blocked account agreement satisfactory to the
        Administrative Agent and (c) all collections of the Company
        and its Subsidiaries (subject to certain limited exceptions
        acceptable to the Administrative Agent) are transferred to the
        Administrative Agent on each Business Day, except for amounts
        necessary to fund payroll and payroll taxes which will be due
        within five Business Days.
	 
	 	
             
        (b)     The Company shall pay the reasonable costs and expenses
        of Casas, Benjamin & White, LLC (the
        “Consultant”), a financial consultant retained by
        counsel to the Administrative Agent, in connection with its
        evaluation of the operations, financial records, business
        prospects, economic value and other aspects of the Company and
        its Subsidiaries. The Company will (i) assist the
        Consultant in performing such evaluation (including
        (x) allowing the Consultant access to the work product and
        personnel of Conway Mackenzie & Dunleavy and providing
        the Consultant access to all information and records the
        Consultant deems necessary to conduct such evaluation) and
        (ii) maintain at all times a retainer with the Consultant
        of not less than $75,000.
	 
	 	     
        (c)     The Company shall promptly (and in any event no later
        than April 15, 2002) deliver to the Administrative Agent an
        accurate and complete list describing in reasonable detail all
        of the fixed assets of the Company and its Subsidiaries
        (including specification of the current locations of such
        assets).
	 
	 	     
        (d)     The Company shall permit the Administrative Agent to
        conduct, and shall promptly reimburse the Administrative Agent
        for all expenses of, a field examination of the Company and its
        Subsidiaries.




     
5.     Waiver. The Required Banks hereby waive any default that
resulted form the expiration of the Original Forbearance
Agreement prior to the effectiveness of this Agreement.


     
6.     No Other Change to the Loan Documents; Preservation of
Rights. Except to the extent expressly set forth herein,
(a) all of the terms and conditions of the Credit Agreement
and the other Loan Document shall remain unchanged and in full
force and effect, (b) this letter agreement shall not be
deemed a waiver or modification by the Administrative Agent or
any Bank of an term or provision of, or of any default under,
the Credit Agreement or any other Loan Document, and
(c) the Administrative Agent and the Banks hereby fully
preserve all their






 




U.S. Plastic Lumber Corporation




As of April 12, 2002





Page 5





rights, powers and remedies against the Company
and each Guarantor. In addition, subject to the forbearance set
forth in Section 1, nothing contained herein shall be deemed to
be a waiver or abandonment of any Event of Default (whether
presently or subsequently existing, including, without
limitation, any of the Payment Defaults) or of any right, power
or remedy available to the Administrative Agent or the Banks
under the Loan Documents or applicable law, each of which
rights, powers and remedies is hereby specifically and expressly
reserved, including, without limitation, the right to seek
judgment against the Company or any Guarantor, to foreclose any
interest in any collateral in which the Administrative Agent has
a security interest or other lien, or to take any other action
permitted under the Loan Documents and/or applicable law.
Without limiting the foregoing, nothing contained herein shall
constitute a waiver of any condition to the making of a Loan or
the issuance of a Letter of Credit, and the Company acknowledges
that it has no right to obtain any additional Loans or the
issuance of any additional Letters of Credit so long as any
Event of Default (including (i) any Payment Default or
(ii) any Known Default as defined in the Original
Forbearance Agreement) exists or would result therefrom.



     
7.     Counterparts.  This letter agreement may
be executed in any number of counterparts and by the different
parties on separate counterparts, and each such counterpart
shall be deemed to be an original but all such counterparts
shall together constitute one and the same agreement.



     
8.     Expenses.  The Company agrees to pay the
reasonable costs and expenses of the Administrative Agent
(including the reasonable fees and charge of counsel to the
Administrative Agent) in connection with the preparation,
execution and delivery of this letter agreement.



     
9.     Governing Law.  This letter agreement
shall be a contract made under and governed by the laws of the
State of Illinois applicable to contracts made and to be
performed entirely within such State.



     
10.     Representations.  The Company hereby
represents and warrants to the Administrative Agent and the
Banks that the execution, delivery and performance of this
letter agreement is within the Company’s powers, has been
duly authorized by the Company does not conflict with any of the
Company’s organizational documents, and does not conflict
with any law, agreement or obligation by which the Company is
bound.



     
11.     Successors and
Assigns.  This letter
agreement is binding upon the Company and its successors and
assigns and shall inure to the benefit of the Administrative
Agent and the Banks and their respective successors and assigns.



     
12.     Headings.  Headings used in this letter
agreement are for convenience of reference only and shall not
affect the construction of this letter agreement.







 





U.S. Plastic Lumber Corporation



As of April 12, 2002





Page 6




     
13.     Waiver of Jury Trial.
THE PARTIES HEREBY CONFIRM THAT THE WAIVER OF JURY TRIAL SET
FORTH IN SECTION 14.16 OF THE CREDIT AGREEMENT IS
APPLICABLE TO THIS LETTER AGREEMENT PURSUANT TO SUCH
SECTION 14.16.



     
14.     Release. In
consideration of the agreements and understandings in this
letter agreement, the Company, for itself and each of its
Subsidiaries, hereby releases each of the Administrative Agent
and each Bank, and their respective employees, officers,
participants, agents, affiliates, subsidiaries, successors and
assigns, from any claim, right or cause of action which now
exists, in any way related to facts in existence as of the date
hereof, whether known or unknown. By way of example and not
limitation, the foregoing includes any claims in any way related
to the Loan Documents and the business relationship between the
Company and its Subsidiaries, on the one hand, and the
Administrative Agent or any Bank, on the other hand.



     
15.     Covenant Not to Sue. The
Company hereby covenants that it will, and will cause each of
its Subsidiaries to, refrain from commencing any action or suit
or prosecuting any action or suit, in law or in equity, against
the Administrative Agent or any Bank, or any of their respective
employees, officers, agents, participants, affiliates,
subsidiaries, successors or assigns, on account of any claim,
action or cause of action which now exists in the Company’s
or such Subsidiary’s favor based upon facts existing as of
the date of this letter agreement. In addition to any other
liability which shall accrue upon the breach of this covenant,
the Company agrees to pay, and acknowledges that is shall be
liable for, all reasonable attorneys’ fees and costs
incurred by the Administrative Agent or any Bank in the defense
of any such action or suit.






 



U.S. Plastic Lumber Corporation
As of
April 12, 2002
Page 7


 


     Please acknowledge the foregoing by signing a counterpart of this letter agreement
and returning it to the Administrative Agent.



	 	 	 	 	 	 	 
	 	 	BANK OF
AMERICA, N.A., as Administrative
Agent
	 	 	 	 	 	 	
	 	 	
By:	 	
	 	 	 	

	 	 	 	Title:	KRISTINE
THENNES   Vice President
	 	 	 	 	

	 
	 	 	BANK OF
AMERICA, N.A., as Issuing Bank,
Swing Line Bank and a Bank
	 	 	 	 	 	 	
	 	 	
By:	 	
	 	 	 	

	 	 	 	Title:	THOMAS
CZERWINSKI   Vice President
	 	 	 	 	

	 
	 	 	LASALLE
BANK NATIONAL ASSOCIATION
	 	 	 	 	 	 	
	 	 	
By:	 	 	 	 
	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	

	 
	 	 	UNION
PLANTERS BANK
	 	 	 	 	 	 	
	 	 	
By:	 	
	 	 	 	

	 	 	 	Title:	 	
	 	 	 	 	







ACKNOWLEDGED AND AGREED
 as of April 12,
2002:


U.S. PLASTIC LUMBER CORP.




	 	 	 	 	 	 	 
	
By:	 	 	 	 
	 	

	 	Title:	 	 
	 	 	














 



     Please acknowledge the foregoing by signing a counterpart of this letter agreement
and returning it to the Administrative Agent.



	 	 	 	 	 	 	 
	 	 	BANK OF
AMERICA, N.A., as Administrative
Agent
	 	 	 	 	 	 	
	 	 	
By:	 	 	 	 
	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	

	 
	 	 	BANK OF
AMERICA, N.A., as Issuing Bank,
Swing Line Bank and a Bank
	 	 	 	 	 	 	
	 	 	
By:	 	 	 	 
	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	

	 
	 	 	LASALLE
BANK NATIONAL ASSOCIATION
	 	 	 	 	 	 	
	 	 	
By:	 	 	 	 
	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	

	 
	 	 	UNION
PLANTERS BANK
	 	 	 	 	 	 	
	 	 	
By:	 	
	 	 	 	

	 	 	 	Title:	 	V.P.
	 	 	 	 	







ACKNOWLEDGED AND AGREED
 as of April 12,
2002:


U.S. PLASTIC LUMBER CORP.




	 	 	 	 	 	 	 
	
By:	 	 	 	 
	 	

	 	Title:	 	 
	 	 	














 



U.S. Plastic Lumber Corporation
As of
April 12, 2002
Page 7


 


     Please acknowledge the foregoing by signing a counterpart of this letter agreement
and returning it to the Administrative Agent.



	 	 	 	 	 	 	 
	 	 	BANK OF
AMERICA, N.A., as Administrative
Agent
	 	 	 	 	 	 	
	 	 	
By:	 	 	 	 
	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	

	 
	 	 	BANK OF
AMERICA, N.A., as Issuing Bank,
Swing Line Bank and a Bank
	 	 	 	 	 	 	
	 	 	
By:	 	 	 	 
	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	

	 
	 	 	LASALLE
BANK NATIONAL ASSOCIATION
	 	 	 	 	 	 	
	 	 	
By:	 	 	 	 
	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	

	 
	 	 	UNION
PLANTERS BANK
	 	 	 	 	 	 	
	 	 	
By:	 	
	 	 	 	

	 	 	 	Title:	 	
	 	 	 	 	







ACKNOWLEDGED AND AGREED
 as of April 12,
2002:


U.S. PLASTIC LUMBER CORP.




	 	 	 	 	 	 	 
	
By:	 		 	 
	 	

	 	Title:	      Executive Vice
President
	 	 	














 





EXHIBIT A



NOTE

 


		



        	$704,749	December 5, 2001



     
ON DEMAND, U.S. Plastic Lumber Corp. (the “Company”)
hereby promises to pay to the order of Bank of America, N.A. (the
“Payee”) SEVEN HUNDRED FOUR THOUSAND SEVEN HUNDRED
FORTY-NINE DOLLARS ($704,749). The Company further promises to pay to
the order of the Payee interest on the
principal hereof from time to time outstanding until paid in
full at a rate per annum equal to the Reference Rate in effect
from time to time plus 1% (or, after demand by the Payee, 3%).
Prior to demand by the Payee for the payment of the unpaid
principal hereof, accrued interest shall be payable monthly on
the last day of each month. After demand, accrued interest shall
be payable on demand. Each payment (including any prepayment)
shall be applied, first, to accrued and unpaid interest
and, then, to unpaid principal.


     
Capitalized terms used herein but not defined shall have the
meanings attributed to them in the Credit Agreement dated as of
June 30, 2000 among the Company, various financial
institutions and the Payee, as Administrative Agent, Issuing
Bank and Swing Line Bank, as amended.


     
The Company is executing this Note in connection with the
termination of the IDSA Master Agreement
(Multicurrency — Cross Border) dated as of
June 12, 2000 between the Payee and the Company. The
Company confirms that all obligations hereunder constitute
Hedging Obligations of the Company and, accordingly, are
guaranteed pursuant to the Guaranty and secured pursuant to of
the Security Agreement and the other Collateral Documents.


     
The Company may prepay all or any portion of this Note at any
time and from time to time, without premium or penalty.


     
All payments of principal of, and interest on, this Note shall
be made in immediately available funds in lawful money of the
United States of America at the Payee’s principal office in
Chicago, Illinois, prior to 12:30 p.m., Chicago time, on the
date due; and funds received after that time shall be deemed to
have been received by the Payee on the next following Business
Day. The Company hereby authorizes the Payee to charge any of
the Company’s deposit accounts maintained with the Payee
for the payment when due of all amounts payable with respect to
this Note. The above provisions of this paragraph shall not
affect the Company’s obligation to pay when due all amounts
payable by it hereunder, whether or not there are sufficient
funds therefor in any such deposit accounts.


     
If any payment hereunder falls due on a day which is not a
Business Day, the due date for such payment shall be extended to
the next Business Day (and additional interest shall accrue for
the period of such extension).


     
The Company warrants to the Payee that: (a) it is duly
organized, validly existing and in good standing under the laws
of the State of Nevada; (b) the execution and delivery of
this Note and the performance by the Company of its obligations
hereunder are within the Company’s corporate powers and
have been duly authorized by all necessary action on the
Company’s part;






 




and (c) this Note is the Company’s
legal, valid and binding obligation, enforceable in accordance
with its terms, the making and performance of which do not and
will not contravene or conflict with the Company’s charter
or by-laws, or violate or constitute a default under any law,
any presently existing requirement or restriction imposed by any
judicial, arbitral or other governmental instrumentality or any
agreement, instrument or indenture by which the Company is bound.




     
So long as any portion of this Note remains
unpaid, the Company covenants and agrees that the Company will
promptly provide the Payee with such information regarding the
assets, operations and financial condition of the Company as the
Payee may from time to time reasonably request.



     
The Company acknowledges that the Payee may
demand payment of this Note at any time and that upon such
demand all obligations of the Company hereunder shall become
immediately due and payable.



     
The Company agrees to pay all expenses of the
Payee in connection with the preparation, execution and delivery
of this Note. In addition, if any amount payable hereunder is
not paid when due (by acceleration or otherwise), the Company
will pay all costs and expenses (including, without limitation,
reasonable attorneys’ fees and court costs) incurred by the
Payee in connection with collection of such amount and the
enforcement of its rights hereunder (whether or not any lawsuit
is ever filed).



     
EACH OF THE COMPANY AND, BY ITS ACCEPTANCE
HEREOF, THE PAYEE WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
NOTE OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.



     
The rights and privileges of the Payee hereunder
shall inure to the benefit of its successors and assigns.




2







 



     This Note shall be governed by and construed in accordance with the laws
of the State of Illinois.


 


	 	 	 	 
	 	
U.S. PLASTIC LUMBER CORP.
	 
	 
	 	By:	 	 
	 	 	 	


	 	Title:	 	 
	 	 	 	







3






 



EXHIBIT B


NOTE



	 	 	 
	$375,500	 	
January 16, 2002



     ON DEMAND, U.S.
Plastic Lumber Corp. (the “Company”) hereby promises to pay
to the order of LaSalle Bank National Association (the
“Payee”) THREE HUNDRED
SEVENTY-FIVE THOUSAND FIVE HUNDRED DOLLARS ($375,500). The Company further
promises to pay to the order of the Payee interest on the principal hereof from
time to time outstanding until paid in full at a rate per annum equal to the
Reference Rate in effect from time to time plus 1% (or, after demand by the
Payee, 3%). Prior to demand by the Payee for the payment of the unpaid
principal hereof, accrued interest shall be payable monthly on the last day of
each month. After demand, accrued interest shall be payable on demand. Each
payment (including any prepayment) shall be applied, first, to accrued and
unpaid interest and, then, to unpaid principal.


     Capitalized terms used herein but not defined shall have the meanings
attributed to them in the Credit Agreement dated as of June 30, 2000 among the
Company, various financial institutions (including the Payee) and Bank of
America, N.A., as Administrative Agent, Issuing Bank and Swing Line Bank, as
amended.


     The Company is executing this Note in connection with the termination of
the IDSA Master Agreement dated as of September 29, 2000 between the Payee and
the Company. The Company confirms that all obligations hereunder constitute
Hedging Obligations of the Company and, accordingly, are guaranteed pursuant to
the Guaranty and secured pursuant to the Security Agreement and the other
Collateral Documents.


     The Company may prepay all or any portion of this Note at any time and
from time to time, without premium or penalty.


     All payments of principal of, and interest on, this Note shall be made in
immediately available funds in lawful money of the United States of America at
the Payee’s principal office in Chicago, Illinois, prior to 12:30 p.m., Chicago
time, on the date due; and funds received after that time shall be deemed to
have been received by the Payee on the next following Business Day. The
Company hereby authorizes the Payee to charge any of the Company’s deposit
accounts maintained with the Payee for the payment when due of all amounts
payable with respect to this Note. The above provisions of this paragraph
shall not affect the Company’s obligation to pay when due all amounts payable
by it hereunder, whether or not there are sufficient funds therefor in any such
deposit accounts.


     If any payment hereunder falls due on a day which is not a Business Day,
the due date for such payment shall be extended to the next Business Day (and
additional interest shall accrue for the period of such extension).


     The Company warrants to the Payee that: (a) it is duly organized, validly
existing and in good standing under the laws of the State of Nevada; (b) the
execution and delivery of this Note and the performance by the Company of its
obligations hereunder are within the Company’s corporate powers and have been
duly authorized by all necessary action on the Company’s part;














 



and (c) this Note is the Company’s legal, valid and binding obligation,
enforceable in accordance with its terms, the making and performance of which do
not and will not contravene or conflict with the Company’s charter or by-laws,
or violate or constitute a default under any law, any presently existing
requirement or restriction imposed by any judicial, arbitral or other
governmental instrumentality or any agreement, instrument or indenture by which
the Company is bound.


     So long as any portion of this Note remains unpaid, the Company
covenants and agrees that the Company will promptly provide the Payee with such
information regarding the assets, operations and financial condition of the
Company as the Payee may from time to time reasonably request.


     The Company acknowledges that the Payee may demand payment of this Note
at any time and that upon such demand all obligations of the Company hereunder
shall become immediately due and payable.


     The Company agrees to pay all expenses of the Payee in connection with
the preparation, execution and delivery of this Note. In addition, if any amount
payable hereunder is not paid when due (by acceleration or otherwise), the
Company will pay all costs and expenses (including, with limitation, reasonable
attorneys’ fees and court costs) incurred by the Payee in connection with
collection of such amount and the enforcement of its rights hereunder (whether
or not any lawsuit is ever filed).


     EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE PAYEE WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS NOTE OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.


     The rights and privileges of the Payee hereunder shall inure to the
benefit of its successors and assigns.



2










 



     This Note shall be governed by and construed in accordance with the laws
of the State of Illinois.


 


	 	 	 	 
	 	
U.S. PLASTIC LUMBER CORP.
	 
	 
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