Document:

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                                                                   EXHIBIT 10.27

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED MATERIALS ARE INDICATED BY THE
FOLLOWING NOTATION: [OMITTED MATERIAL]

                     MANUFACTURER'S EXCLUSIVE REPRESENTATIVE
                                    AGREEMENT

This Agreement made and entered into this 31st day of July 2001, by and between
Eagle Test Systems. Inc. of 620 S. Butterfield Rd., Mundelein, Illinois, U.S.A.
(hereafter ETS) principle/manufacturer, and Representative, Cogent International
Inc. of 115 Broadway 15th FL, New York, New York, 10006 (hereafter
Representative). In consideration of the mutual covenants contained herein, the
parties agree as follows:

                                   DEFINITIONS

a) Products shall mean any hardware products directly manufactured and/or
incorporated into products by ETS.

b) Software shall mean all computer software, software code, embedded software,
or software enabled techniques generated by ETS.

c) Third Party Software shall mean any software products incorporated into ETS
products by ETS, but developed and licensed by someone other than ETS.

d) Documentation means all documents that describe ETS' manufacturing process or
methods, general functional capabilities, limitations, and
operating-requirements of either Hardware or Software.

e) Updates shall mean the updates, modifications, improvements, and enhancements
of the Software.

f) Spare Parts means hardware normally sold separately as line items per
published price list, or modules, fuses, or relays as would be found in an ETS
spares kit.

                            EXCLUSIVE REPRESENTATIVE

ETS hereby appoints Cogent International Inc. as exclusive representative in the
territory known as China, including Hong Kong Island, for ETS products.

                                RESPONSIBILITIES

                              ETS RESPONSIBILITIES

<PAGE>

(i) ETS agrees to make every reasonable effort to manufacture quantities of the
Products sufficient to meet the sale requirements of representative.

(ii) ETS agrees to provide a Product Price List to Representative upon its
request. ETS will furnish representative written notice of any price changes
made by ETS, at least thirty (30) days prior to said changes.

(iii) All items currently manufactured by ETS may be subject to change at ETS'
sole discretion. Representative shall be entitled to receive written notice of
any changes in the standard product offering at least forty-five (45) days prior
to ETS' termination of manufacturing of said product affected by such change.

(iv) ETS agrees to supply Software by appropriate media, such as magnetic tape
or Compact Disk, and ETS product user's manuals and Documentation thereof upon
acceptance of the order from representative.

(v) ETS agrees to make Representative aware of any product updates as they are
made available by ETS for sale to customers.

(vi) ETS agrees to provide reasonable amounts of technical assistance to
representative in a manner deemed appropriate and confirmed by written agreement
by both parties.

(vii) ETS shall make spare parts of the Products available to representative for
a period of one year from the last date of shipment of such model at then
current prices, notwithstanding termination of this agreement. Generally, it is
ETS' policy to provide to Customers (non-representatives) availability of spare
parts for a period of ten years from date of purchase.

                              ETS PRODUCT WARRANTY

(i)      Hardware Warranty

ETS shall warrant its New Products to be free from defects caused by faulty
materials or poor workmanship and to conform to specifications furnished or
approved by ETS for a period of (1) one year from date of shipment to
representative or customer. During the warranty period, ETS shall have sole
discretion in the manner in which correction of reported product errors or.
failures are made. If ETS deems it appropriate, it may replace
defective-products or make a refund of the payment for any Products that are
returned by representative. The warranty period shall begin when system is
installed and successfully completing the system diagnostic program.

(ii)     Software Warranty

ETS warrants the Software and Updates to conform to documents furnished or
approved by ETS for (1) one year from date of shipment to representative. ETS
liability under this warranty is limited to correcting the errors, replacing or
making refund payment at its option for any Software or Updates that are
returned by representative.

(iii) ETS agrees to indemnify and hold harmless representative and its customers
against all damages and costs, including reasonable legal fees, which may be
assessed against representative

<PAGE>

or its customers in any claim by third parties alleging unlawful acts or
omissions to act where the alleged liability of representative or its customers
arises by reason of the use or sale of any item manufactured by ETS and
delivered to representative or its customers, provided that representative or
its customers give ETS written notice of all such claims or actions within
thirty (30) days of receipt of notice of said claim. In the event either the
representative or its customer seeks ETS' indemnification of such damages,
either party must allow ETS the opportunity to elect to take over, settle, or
defend the same through consul of its own choice and under its sole discretion
and at its own expense, and will make available to ETS all defenses against such
claims, known or available to representative or its customers.

(iv) The foregoing warranties are in lieu of all other warranties, expressed or
implied, including any and all warranties of merchantability and fitness for a
particular use. In no event shall ETS be liable for special or consequential
damages.

                         REPRESENTATIVE RESPONSIBILITIES

(i) Representative will be responsible for identifying customers/prospects,
making product presentations (with or without ETS assistance as deemed
appropriate), providing contact between ETS and the customer/prospect in a
timely manner, all at representatives' own expense. The representative will make
available a trained staff to meet these responsibilities (number of staff shall
be agreed to by both parties in writing), but must include a person trained in
performing equipment diagnostics, field service (at board replacement level) and
system setup/installation. ETS agrees to provide technical training to
representative staff at ETS-Mundelein. The cost of travel for representative
personnel will be the responsibility of representative. The cost of providing
the facilities and staff for the representative for said training will be the
responsibility of ETS.

(ii) Representative must make the service of product support available to all
customers within its region both during the warranty period and after warranty.
After warranty support services shall be made available to customers at a charge
deemed reasonable by both parties in writing. In an effort to provide such
services, Representative must have a minimum staff capable of supporting said
function. (number of staff shall be agreed to by both parties in writing). ETS
agrees to provide technical training to representative staff at ETS-Mundelein.
The cost of travel for representative personnel will be the responsibility of
representative. The cost of providing the facilities and staff for the
representative for said training will be the responsibility of ETS.

         (ii) (a) If Representative requires the assistance of Eagle personnel
to install or service systems at the customer site, Representative will cover
all transportation, lodging and meals for these personnel. This action shall be
deemed mandatory if any problem remains unresolved for 3 consecutive working
days.

(iii) Representative will use its best efforts to promote marketing of the
Products, and will not promote, market, or sell any competing product. In the
event that Representative seeks to engage in a relationship with a company
within the automatic test industry, and hence competitive with ETS products,
Representative shall make ETS aware of such opportunity and afford FTS the
opportunity to terminate this agreement.

<PAGE>

(iv) Representative agrees to maintain all necessary registrations with any and
all governmental agencies, commercial registries, and other offices as may be
required under local law so as to properly conduct commercial business in the
area.

(v) Representative agrees to maintain a minimum inventory of spare parts for
Products within Representatives geographic service region. Representative must
have an inventory quantity that is sufficient to meet the demands of its
customers (quantity shall be recommended by ETS at time of sale of equipment).
This inventory of spare parts is for the exclusive purpose of supporting
customers during the warranty period and may not be sold or made available for
sale by Representative for a period of six months after Representative's receipt
of said spares. Representative may purchase these spare parts at a [OMITTED
MATERIAL] discount from then current published prices.

Representative will maintain records of its inventory of spare parts on hand
with corresponding serial numbers and provide reports of the same to ETS on a
quarterly basis, or within 10 days of ETS' written request.

(vi) Representative must abide by ETS the software license agreement for all
ETS Software products. In addition, Representative must abide by all
corresponding software license agreements of all Third Party Software provided
by ETS to Representative.

(vii) Representative will obtain a signed copy of the ETS Software License
agreement (in English language) from the customer prior to delivery of the
Software or Updates to its customers.

(viii) Representative must sign the ETS-provided confidential
agreement/non-disclosure agreement (NDA) prior to or along with the execution of
this agreement. Said NDA shall be applicable to all information disclosed and
designated as confidential by ETS.

All written forms of confidential information shall be marked "Confidential."
All other information shall be designated as such, in writing, within thirty
(30) days of disclosure of said information.

                             MUTUAL RESPONSIBILITIES

(i) ETS agrees to participate in direct customer, sales. and training seminars
in the geographic area and/or the USA. The cost of visits either by ETS to
representative or representative to ETS will be the responsibility of the
traveling party unless otherwise agreed to in writing prior-to the trip.

(ii) ETS agrees to provide technical training to representative staff at ETS
Mundelein. The cost of travel for representative personnel will be the
responsibility of representative. The cost of providing the facilities and staff
for the representative for said training will be the responsibility of ETS.

<PAGE>

        REPRESENTATIVE'S COMMISSION AND PAYMENT TERMS OF SAID COMMISSION

     FOR SALES ORDERS PLACED DIRECTLY BY CUSTOMER IN REPRESENTATIVE'S REGION
               AND DELIVERED DIRECTLY INTO REPRESENTATIVE'S REGION

a) Except for the "Non-Commissionable Items" specified below, representative
shall be entitled to receive a sale commission of [OMITTED MATERIAL]% of the net
order for all orders placed by customers within representative's region and
shipped directly by ETS into the representative's region.

Non-commissionable items:
Custom Engineered Products (both Hardware and Software), Applications
Engineering Services, and any freight, taxes, C.O.D. charges, or duty are
excluded from commission.

b) ETS will pay Representative a Service Support Commission equal to [OMITTED
MATERIAL]% of commissionable items for systems/products covered in paragraph "a"
above in exchange for Representative providing required support services to
customers during all products' original warranty period.

            FOR SERVICE SUPPORT FOR SALES ORDERS RECEIVED BY ETS FROM
            CUSTOMERS LOCATED OUTSIDE OF REPRESENTATIVE'S REGION, BUT
             SHIPPED DIRECTLY FROM ETS INTO REPRESENTATIVE'S REGION

a) If a system is purchased from ETS by a customer location in a region outside
of Representative's region, but is directly shipped into the Representative's
region from ETS factory, ETS will pay Representative an "Outside Region" sales
commission of [OMITTED MATERIAL]% of commissionable items of the net order (less
other commission paid to other parties who received commission for order
placement) for systems/products covered in paragraph "a" of Section above
entitled FOR SALES ORDERS PLACED DIRECTLY BY CUSTOMER IN REPRESENTATIVE'S REGION
AND DELIVERED DIRECTLY INTO REPRESENTATIVE'S REGION.

b) If a system is purchased from ETS by a customer location in a region outside
of Representative's region, but is directly shipped into the Representative's
region from ETS factory, the Representative shall become responsible for the
provision of product service support to the customer under ETS standard warranty
(1 year). In exchange for the provision of this service by representative, ETS
will make payable to Representative a commission of [OMITTED MATERIAL]% of the
net order (less other commissions paid to other parties who received commission
for order placement). Under no circumstances is any sales commission due
Representative for equipment ordered by and delivered to another territory.

            FOR SERVICE SUPPORT FOR PRODUCTS TRANSFERRED BY CUSTOMER
                 FROM REGION OUTSIDE OF REPRESENTATIVE'S REGION
           INTO REPRESENTATIVE'S REGION-(TRANSFER SERVICE COMMISSION)

If ETS systems are shipped by customers (or other third parties) into
Representative's region, ETS may, at its discretion, choose to have
Representative provide service for the remainder of the warranty. In exchange
for the provision of service for these products, Representative shall be paid a
transfer service commission of up to [OMITTED MATERIAL]% of the original sale
price paid by customer, pro-rated accordingly for the remaining portion of the
term of the warranty.

<PAGE>

                            PAYMENT TO REPRESENTATIVE

All commissions due to Representative shall be made payable to representative
within 30 Days of ETS' receipt of final order payment from the customer. Should
ETS have to refund or credit any payment, the Representative's commission will
be adjusted accordingly, or it already paid to Representative, returned to ETS
within 30 days of ETS providing written notice of said refund.

                                 ORDER PLACEMENT

ALL ORDERS are considered valid when accepted by ETS, in writing.

All product shipment will be EX-WORKS Manufacturer's factory in Mundelein, IL.
ETS shall retain title to all Software and Updates at anytime.

Customer shall be responsible for any and all duties, customs, and taxes imposed
by the Applicable Government (exclusive of U.S.A.) or any municipality, county,
or prefecture thereof.

                  GUIDELINES FOR GENERAL PAYMENT TERMS TO EAGLE

(i) WELL KNOWN AND COMMERCIALLY RECOGNIZED GLOBAL CUSTOMERS OF GOOD CREDIT
STANDING (CREDIT STANDING SHALL BE DETERMINED AT ETS' SOLE DISCRETION ON AN
ORDER BY ORDER BASIS)

Payment shall be made in a manner that guarantees ETS receives a minimum payment
of 80% of total order value net 30 days after the time ETS makes order available
to customers' designated carrier for shipment. The balance of the order can be
determined by linkage to a set of mutually agreeable and measurable acceptance
criteria.

(ii) LESSER-KNOWN COMPANIES OF LOCAL ORIGIN WITH UNKNOWN CREDIT STANDING(CREDIT
STANDING SHALL BE DETERMINED AT ETS' SOLE DISCRETION ON AN ORDER BY ORDER BASIS)

Payment shall be made in a manner that guarantees ETS receives a minimum payment
of 80% of total order value at the time order is made available to customers'
designated carrier for shipment. This can be arranged through a secured letter
of credit or other proper customary methodology: The balance of the order can be
determined by linkage to a set of mutually agreeable and measurable acceptance
criteria.

                                 GENERAL ISSUES

                                   ADVERTISING

ETS shall supply free of charge, reasonable quantities of catalogs, brochures,
and the like.

                              PURCHASING DISCOUNTS

ETS will allow the representative to purchase one demonstration system per ear
at an additional discount of [OMITTED MATERIAL] on SYSTEMS [not including Custom
Engineered Products of Hardware and

<PAGE>

Software), Applications Engineering Services] Demonstration equipment must
remain on representative PREMISES for a period of six months after delivery.

                             RELATIONSHIP OF PARTIES

The relationship between ETS and representative is that of seller and
independent agent of seller, respectively. Unless authorized by the other party
in writing, neither party shall have the right to assume or create
responsibility, expressed or implied, on behalf of the other party, nor bind the
other party in any manner whatsoever. Neither party shall accept payment on
behalf of the other. Representative shall not engage in activities that might
cause ETS to be deemed to be doing business in the territory for any purpose.

                                  RESTRICTIONS

Representative shall refrain from doing any of the following without ETS written
consent:

1) Removing, altering, defacing any ETS label, legend, tag, serial number,
notice, trademark, patent number from any ETS product, container, or package.

2) Using or selling any ETS intellectual property, trademark, or trade name,
except to the extent necessary to effect representatives obligations to promote
or sell Product in the area.

3) Affixing any representatives own identifying marks, symbols, trademarks, or
legends to any product of ETS, or any action which may be detrimental to ETS
Proprietary interests in identifying marks, symbols, trademarks, or legends or
other intellectual property rights.

4) Disclosing to any third party proprietary information relating to ETS
products which representative gained as a result of this relationship with ETS.

5) Engaging in any trade practice that would injure the reputation of ETS or its
products.

6) Promoting or selling any products which Eagle deems directly competitive with
ETS products. (Therefore, Representative must obtain written consent to engage
or remain engaged in a representative relationship with a manufacturer within
the automatic test equipment industry.)

7) Making any warranties on behalf of ETS that exceed those of ETS as part of
the sale of Product to Representative's Customer.

                                   TERMINATION

a) This agreement may be terminated upon sixty (60) days written notice by
either party during the first year of this agreement, or upon ninety (90) days
written notice in subsequent years. In any case, a reason justifying termination
need not be given.

b) This agreement shall be considered terminated on the date of a breach of any
provision of this agreement, regardless of whether non breaching party has
received notice of Paid breach.

<PAGE>

Upon the non-breaching parties' receipt of notice of material breach,
non-breaching party may reinstate this agreement at its sole discretion.
However, reinstatement must be made by the non-breaching party in writing, and
subsequently approved in writing by breaching party. If non-breaching party does
not receive notice of breach, breaching party shall not be entitled to enforce
any provisions of this agreement. Therefore, all payments and/or benefits of
this agreement received by breaching party as of the date of actual breach shall
be refunded to non-breaching party. Such refund shall be made to non-breaching
party within thirty (30) days after notification of said breach is made by
non-breaching party to breaching party.

c) Upon termination of this agreement, it shall be understood that the
representative no longer has the right to act on behalf of ETS. However,
representative may continue selling any items remaining in its inventory.

d) In the event either party becomes insolvent, bankrupt, or court proceedings
are initiated relating to such parties' financial instability, this agreement
shall terminates automatically upon such date.

e) Upon termination of this agreement, representative shall return to ETS all
Software, Updates, and Documentation, and all copies thereof that are in
representative's possession at time of termination, save one copy of each to the
extent that it is required for customer service provided by representative after
termination.

f) Neither ETS nor representative shall, by reason of the termination, be liable
to the other for compensation, reimbursement or damages on account of the loss
of prospective profits on anticipated sales, or on account of expenditures,
investments, leases or commitments made in connection with this agreement
Notwithstanding the foregoing, nothing contained in this paragraph shall be
deemed to limit or otherwise restrict either party's right to recover damages
for the other parties' breach of any provisions of this agreement.

g) If termination action is originated by ETS, ETS will allow representative to
return spare parts or demonstration equipment and receive a refund of monies
paid according to the following plan (assuming parts deemed in good, working
condition):

                               [OMITTED MATERIAL]
<PAGE>

                                   ASSIGNMENT

Neither party may assign or otherwise transfer any right, title, interest or
obligation of this agreement without the express written consent of the other.
In the event of an assignment, the benefits of this agreement shall transfer to
such assignees, transferees, or other successors, in a manner consistent with
the provisions of this agreement.

                                  FORCE MAJEURE

Neither party shall be liable for any breach of this agreement occasioned by an
act of God, labor dispute, unavailable transportation, goods or services,
governmental restrictions, war or other hostilities, or cause beyond the control
of such party. In the event of delay attributable to such causes, the period for
performance of the obligation shall be extended for a period equal to the delay.

                                     NOTICES

                                  VALID NOTICE

Notice shall be deemed effectively given only when said notice is delivered
personally to an officer of the other party or sent by FAX and confirmed by
registered mail that is addressed to an officer of the other party. The
following addresses are the only addresses deemed appropriate for the receipt of
said notice:

On behalf of Eagle Test Systems, Inc
Eagle Test Systems, Inc.
620 S. Butterfield Rd.
Mundelein, IL 60060 U.S.A.

On behalf of Representative:
Cogent International Inc.
115 Broadway 15th FL
New York, NY  10006

                                    CONFLICTS

The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Illinois and U.S. Copyright and
Patent laws. Therefore, the Illinois State Courts (or, if there is exclusive
federal jurisdiction, the United States District Court for the District of
Illinois) shall have exclusive jurisdiction and venue over any dispute arising
out of this Agreement, and Representative hereby consents to the jurisdiction of
such courts.

<PAGE>

                                     WAIVER

Any waiver by ETS of any breach of this agreement shall not be deemed to be a
continuing waiver or a waiver of any other default, but shall apply solely to
the instance to which the waiver is directed.

<PAGE>

                                ENTIRE AGREEMENT

Representative acknowledges this agreement constitutes the entire agreement
between the parties and supersedes any and all prior agreements of the parties,
whether written or verbal. Any amendment to this agreement must be authorized in
writing by qualified officers of both parties.

By:  /s/ William Huo                              By:  /s/ Len Foxman
    --------------------------------------           ----------------
William Huo (Print name)                          Len Foxman

President (Title)                                 President
----------                                        ---------
Cogent International Inc.                         Eagle Test Systems, Inc.

DATE:  7/31/01                                    DATE:  8/1/01
     ---------                                         --------SURRENDER OF COLLATERAL

 

Exhibit 10.1

SURRENDER OF COLLATERAL,

CONSENT TO STRICT FORECLOSURE,

AND RELEASE AGREEMENT

(UCC 9620)

     THIS SURRENDER OF COLLATERAL, CONSENT TO STRICT FORECLOSURE, AND RELEASE
AGREEMENT (the “Agreement”) is entered into on June 18, 2004 by and between
AMPAC CAPITAL SOLUTIONS, LLC, a Nevada limited liability company (“Lender”),
and U.S. PLASTIC LUMBER LTD., a Delaware corporation (“Debtor”), and U.S.
PLASTIC LUMBER IP CORPORATION, a Delaware corporation, U.S. PLASTIC LUMBER
CORP., a Nevada corporation, and U.S. PLASTIC LUMBER FINANCE CORPORATION, a
Delaware corporation (collectively the “Guarantors”).

RECITALS

     A.     GUARANTY BUSINESS CREDIT CORPORATION, a Delaware corporation (“GBCC”),
and Debtor have entered into that certain Loan and Security Agreement dated as
of December 19, 2002 (as amended, restated, modified and supplemented from time
to time, the “Loan Agreement”). Capitalized terms used but not defined in this
Agreement shall have the meanings given to them in the Loan Agreement.

     B.     The Guarantors guaranteed the obligations of Debtor under the Loan
Agreement pursuant to a Secured Continuing Corporate Guaranty dated December
19, 2002 and delivered by each respective Guarantor to Lender (the
“Guarantees”).

     C.     GBCC and Debtor have entered into that certain Second Amendment to Loan
and Security Agreement and Limited Waiver of Defaults by and between Debtor and
GBCC dated as of July 25, 2003 with respect to the Loan Agreement (as amended,
supplemented and modified from time to time, the “Second Amendment”) whereby
GBCC established the Special Advance Subline (as defined in the Second
Amendment, the “Special Advance Subline”).

     D.     GBCC and Debtor have entered into that certain Third Amendment to Loan
and Security Agreement and Limited Waiver of Defaults by and between Debtor and
GBCC dated as of December 11, 2003 with respect to the Loan Agreement (as
amended, supplemented and modified from time to time, the “Third Amendment”)
whereby, among other things, GBCC increased the Special Advance Subline from
$2,500,000.00 to $3,250,000.00 and the due date of the Term Advance was changed
to May 31, 2004.

     E.     GBCC and Debtor have entered into that certain Fourth Amendment to Loan
and Security Agreement by and between Debtor and GBCC dated as of February 23,
2004 with respect to the Loan Agreement (as amended, supplemented and modified
from time to time, the “Fourth Amendment”) whereby, among other things, GBCC
increased the Special Advance Subline from $3,250,000.00 to $4,000,000.00.

     F.     GBCC and Debtor have entered into that certain Fifth Amendment to Loan
and Security Agreement by and between Debtor and GBCC dated as of March 19,
2004 with respect to the Loan Agreement (as amended, supplemented and modified
from time to time, the “Fifth Amendment”) whereby, among other things, GBCC increased the Special
Advance Subline from $4,000,000.00 to $5,000,000.00.

 

 

     G.     AMPAC received an assignment of GBCC’s rights, title and interest to
the Loan Agreement, the Participation Agreement and the Transaction Documents
on May 25, 2004.

     H.     AMPAC and Debtor have entered into that certain Sixth Amendment to Loan
and Security Agreement by and between Debtor and AMPAC dated as of May 31, 2004
with respect to the Loan Agreement (as amended, supplemented and modified from
time to time, the “Sixth Amendment”) whereby, among other things, AMPAC
increased the Special Advance Subline from $5,000,000.00 to $6,000,000.00.

     I.     AMPAC and Debtor have entered into that certain Seventh Amendment to
Loan and Security Agreement by and between Debtor and AMPAC dated as of June 8,
2004 with respect to the Loan Agreement (as amended, supplemented and modified
from time to time, the “Seventh Amendment”) whereby, among other things, AMPAC
agreed to extend the maturity date of the Term Advance and Special Advance
Subline to July 31, 2004.

     J.     As security for the performance of Debtor’s obligations under the Loan
Agreement, Debtor granted Lender a security interest in all of Debtor’s
personal property as more fully described in the Loan Agreement (the
“Collateral”).

     K.     The Collateral includes that certain personal property of Debtor
located at 14312 Central Ave., Chino, California (the “Chino Facility”),
including, but not limited to, all of the furniture, equipment, leasehold
improvements, inventory, accounts, chattels, security deposits, utilities
deposits, credits and general intangibles and other assets of all kinds,
tangible and intangible, used at or in connection with the business being
operated at the Chino Facility by Debtor (the “California Collateral”).

     L.     Debtor has failed to pay the June 1, 2004 monthly payments due on the
Term Advance and the Special Advance Subline or the Extension Fee due on June
9, 2004 as required by the Loan Agreement which failures constitute material
breaches of the terms and conditions of the Loan Agreement. Due to Debtor’s
default, Lender may exercise all of its rights and remedies including taking
possession of and liquidating the Collateral.

     M.     Lender has demanded from Debtor payment of all moneys due Lender and
possession of the California Collateral.

     N.     Debtor has agreed to turn over the California Collateral and agrees
that Lender may retain the California Collateral in partial satisfaction of the
indebtedness as provided for in Section 9620 of the California Uniform
Commercial Code. Debtor and Guarantors have waived and renounced, after
default, all of their rights to notice of any kind, including a Notification of
Disposition of Collateral and their right to require Disposition of Collateral
as provided for in Section 9624 of the California Uniform Commercial Code.

2

 

AGREEMENT

     NOW, THEREFORE, based upon the agreed upon facts set forth above, which
are incorporated herein, and the mutual promises contained herein, the parties
agree as follows:

     1. ACKNOWLEDGMENTS OF DEBTOR AND GUARANTORS.

          1.1 Debtor and Guarantors acknowledge that each is in default under the
Loan Agreement and are jointly and severally indebted to Lender in the
principal amount of approximately $7,097,202.89 as of June 17, 2004 plus
interest, costs, fees and expenses (the “Indebtedness”). Interest shall
continue to accrue on the Special Advance Subline at the Default Rate. The
Term Advance shall continue to accrue interest as set forth in paragraph 7 of
the Third Amendment. In addition, Lender is entitled to add to the
Indebtedness all of Lender’s costs, fees and expenses including reasonable
attorneys’ fees incurred in enforcing its rights.

          1.2 Debtor and Guarantors acknowledge that: (i) Lender has been granted a
security interest in the California Collateral, and (ii) Lender is entitled to
immediately proceed to foreclose upon the California Collateral and to exercise
each of Lender’s other rights and remedies set forth in the Loan Agreement as
provided by the California Uniform Commercial Code.

          1.3 Debtor and Guarantors irrevocably:

               1.3.1 consent to Lender retaining the California Collateral in partial
satisfaction of the Indebtedness in accordance with the terms set forth herein
and pursuant to the provisions of Section 9620 of the Revised Article 9 of the
UCC; and

               1.3.2 irrevocably waive and renounce any and all rights to notice they
have or may have under Section 9601, et seq., of the UCC, Part 6 of the
California Commercial Code including, without limitation, all rights under
Section 9620 to receive notice of the proposed retention of the California
Collateral or subsequent disposition of same, or to the full extent of the law,
any other notice or right they may have arising under or pursuant to this or
any other section of the California Uniform Commercial Code or otherwise.

          1.4 Debtor and Guarantors, and each of them, acknowledge that none of them
has any claims, offsets, demands, damages, suits, assertions, cross-complaints,
causes of action or debts of any kind or nature whatsoever, whether known or
unknown, and whenever or howsoever arising (collectively referred to herein as
“Existing Claims”), that can be asserted to reduce or eliminate Debtor’s and
Guarantors’ joint and several liability to repay the Indebtedness, perform the
Guarantees or, seek any affirmative relief or damages of any kind or nature
from Lender, its officers, representatives, employees, counsel, assigns or
successors. To the extent any such Existing Claims exist, they are fully,
forever, and irrevocably waived and released by Debtor and Guarantors as more
fully provided for in Section 3 hereof.

3

 

     2. LENDER’S ACCEPTANCE OF COLLATERAL IN PARTIAL SATISFACTION OF INDEBTEDNESS.

          2.1 Pursuant to Section 9620 of the California Uniform Commercial Code,
this document shall constitute notice by the Lender and receipt and consent by
Debtor and Guarantors of Lender’s proposal to retain the California Collateral
in partial satisfaction of the Indebtedness. This Agreement shall also
constitute Debtor’s and Guarantors’ post default waiver and renunciation of all
of their rights under Article 9, subdivision 6, of the California Uniform
Commercial Code (including, without limitation, Section 9620).

          2.2 Debtor and Guarantors shall immediately assemble and make available to
Lender for its immediate possession the California Collateral and all items
relating thereto including, but not limited to, computer disks, records as to
the California Collateral, contracts, books and records and other information
that may be of assistance to Lender in its management and liquidation of the
California Collateral.

          2.3 The location of the California Collateral is 14312 Central Ave.,
Chino, California.

          2.4 Lender agrees to accept said California Collateral in partial
satisfaction of the obligations constituting the Indebtedness in the amount of
THREE HUNDRED THOUSAND AND XX/100S DOLLARS ($300,000.00), and such amount shall
be credited against, and reduce the amount of, the Indebtedness. Debtor and
Guarantor acknowledge that the credit being received for the California
Collateral is fair and reasonable.

     3. RELEASE OF CLAIMS.

          3.1 Release. Debtor, and Guarantors, and each of them, on behalf of each
of their respective successors, assigns, heirs and estates, hereby forever and
irrevocably release Lender and its affiliates, members, managers,
representatives, agents, attorneys, employees, predecessors, successors and
assigns, from any and all claims, offsets, demands, damages, suits, assertions,
cross-complaints, causes of action or debts of any kind or nature whatsoever,
whenever or howsoever arising, including, but not limited to, the Existing
Claims (collectively, the “Claims”), whether such Claims are known or unknown,
contingent or absolute, existing as of the date of this Agreement. The Claims
released include, without limitation, all Claims:

               3.1.1 that Lender breached its obligations under the Loan Agreement or the
Guarantees,

               3.1.2 that the Lender failed to fund any loan or honor any commitment to
provide financial accommodations; and

               3.1.3 of tort or wrongful conduct, including, but not limited to, any
Claim by Debtor or Guarantors for trade libel and/or any claim of fraudulent
representation or

4

 

concealment, or claim of misappropriation, against Lender or its
affiliates, members, managers, representatives, agents, attorneys, employees,
predecessors, successors and assigns.

          3.2 Release of Unknown Debtor’s Claims. Debtor and Guarantors, and each
of them, acknowledge that they have been advised by counsel with respect to the
release contained herein. Debtor and Guarantors, and each of them, hereby waive
and relinquish all the rights and benefits which any of them may have with
respect to the Claims released herein and under Section 1542 of the California
Civil Code and any similar provision of law or rule or decision. Debtor and
Guarantors are familiar with and waive the provisions of Section 1542 of the
California Civil Code, which provides as follows:

	 	 	 	A general release does not extend to claims which the creditors does not
know or suspect to exist in his favor at the time of executing the
release which, if known by him, must have materially affected his
settlement with the debtor.

          3.3 Consideration for Releases. Debtor and Guarantors, and each of them,
acknowledge that:

               3.3.1 The California Collateral is worth equal to or less than the credit
being received and that they are receiving full and adequate consideration for
the release of the Claims;

               3.3.2 the foregoing waiver of the provisions of Section 1542 of the
California Civil Code was separately bargained for; and

               3.3.3 each of them has been advised by counsel with respect to the release
contained herein, and each of them is executing this release voluntarily, with
full knowledge of its significance and with the express intention of effecting
the legal consequences anticipated by California Civil Code Section 1541.

          3.4 No Prior Transfer of Claims. Debtor and Guarantors, and each of them,
hereby warrant and represent to Lender, as to any released Claim, each of them
is the sole and absolute owner thereof, free and clear of all of the rights and
interest of any other person therein and has the right, ability and sole power
to release such released Claim.

          3.5 Binding Nature. Debtor and Guarantors acknowledge that their
respective counsel have explained to them the facts that: (1) the foregoing
release is binding upon each of them; (2) Debtor and Guarantors have no Claim
remaining against Lender; (3) this Agreement is binding and enforceable and not
subject to any claim of voidability by reason of economic duress, coercion or
similar legal or equitable theory; and (4) Debtor and Guarantors are entering
into this Agreement with full knowledge of its consequences and to induce
Lender to enter into this Agreement.

     4. BANKRUPTCY MATTERS.

          4.1 DEBTOR AND GUARANTORS EACH ACKNOWLEDGE THAT:

5

 

               4.1.1 IF DEBTOR OR GUARANTORS, OR ANY OF THEM, FAIL TO PERFORM THEIR
RESPECTIVE OBLIGATIONS UNDER THIS AGREEMENT AND FILE, OR HAVE FILED AGAINST
THEM, A CASE UNDER THE BANKRUPTCY CODE, SUCH A FILING COULD DELAY LENDER’S
DISPOSITION OF THE COLLATERAL.. IN THAT EVENT, LENDER HAS GOOD CAUSE FOR

               OBTAINING RELIEF FROM THE AUTOMATIC STAY IMPOSED BY SECTION 362 OF TITLE 11 OF
THE BANKRUPTCY CODE OR ANY SIMILAR PROVISION OF LAW INCLUDING, INCLUDING, ANY
RIGHT TO SEEK RELIEF UNDER SECTION 105 OF THE BANKRUPTCY CODE;

               4.1.2 THE COLLATERAL IS NOT NECESSARY TO AN EFFECTIVE REORGANIZATION OF
DEBTOR OR ANY GUARANTOR, OR ANY OF THEM, BECAUSE AN EFFECTIVE REORGANIZATION IS
NOT POSSIBLE; AND

               4.1.3 DEBTOR AND EACH GUARANTOR CANNOT PROVIDE “ADEQUATE PROTECTION” (AS
DEFINED IN SECTION 362(D)(1) OF THE CODE) OF LENDER’S SECURITY INTEREST IN THE
COLLATERAL.

          4.2 DEBTOR AND EACH GUARANTOR MAKE THE FOREGOING ACKNOWLEDGMENTS WITH THE
UNDERSTANDING AND DESIRE THAT THEY BE TREATED AS ADMISSIONS IN CONNECTION WITH
ANY PROCEEDING FOR RELIEF FROM THE AUTOMATIC STAY OR ANY SEVIILAR PROVISION OF
LAW SEEKING LEAVE TO FORECLOSE OR EXERCISE ANY REMEDY AGAINST THE COLLATERAL IN
ANY SUBSEQUENT BANKRUPTCY PROCEEDING THAT
INVOLVE DEBTOR.

          4.3 BASED ON THE FOREGOING FACTUAL BACKGROUND, DEBTOR AND GUARANTORS, AND
EACH OF THEM, AGREE THAT, IN THE EVENT THAT ANY ONE OR MORE OF THEM SHALL (I)
FILE OR SEEK IN ANY FUTURE CHAPTER 11 CASE (OR ANY OTHER CASE FILED UNDER THE
BANKRUPTCY CODE BY OR AGAINST EITHER DEBTOR) ANY RELIEF TO MODIFY OR LIMIT
LENDER’S RIGHTS HEREUNDER IN ANY BANKRUPTCY COURT OF COMPETENT JURISDICTION OR,
(II) HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY
TRUSTEE, RECEIVER, CONSERVATOR OR LIQUDDATOR, (III) BE THE SUBJECT OF ANY
ORDER, JUDGMENT OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION
APPROVING A PETITION FILED BY OR AGAINST SUCH PARTY FOR ANY REORGANIZATION,
ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION OR SIMILAR
RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE LAW RELATING TO BANKRUPTCY,
INSOLVENCY OR RELIEF FOR DEBTOR, THEN LENDER SHALL THEREUPON BE ENTITLED TO
RELIEF FROM:

               4.3.1 ANY AUTOMATIC STAY IMPOSED BY SECTION 362 OF TITLE 11 OF THE
BANKRUPTCY CODE, AS AMENDED, ON OR AGAINST THE RIGHTS AND REMEDIES OTHERWISE
AVAILABLE TO LENDER AS PROVIDED IN THIS AGREEMENT OR IN THE LOAN AGREEMENT, OR

6

 

               4.3.2 ANY OTHER SIMILAR PROVISION OF LAW WHICH RESULTS IN DELAYING OR
PROHIBITING LENDER’S RIGHT TO EXERCISE ITS RIGHTS AND REMEDIES UNDER THIS
AGREEMENT AND THE LOAN AGREEMENT.

          DEBTOR AND GUARANTORS HEREBY FURTHER AGREE:

               (i) TO TAKE AND/OR CONSENT TO ANY AND ALL ACTION NECESSARY TO EFFECTUATE
SUCH RELIEF FROM THE AUTOMATIC STAY OR OTHER PROVISION OF LAW, AND

               (ii) THAT THEY WAIVE THEIR RIGHTS TO SEEK SECTION 105 INJUNCTIONS, ANY
OTHER RIGHTS, OR THE FILING OF A SUBSEQUENT PROCEEDING BY EITHER DEBTOR OR ANY
GUARANTOR WITH RESPECT TO ANY ACTS BY LENDER TO ENFORCE RIGHTS IN THE
COLLATERAL.

          4.4 PROVIDED DEBTOR OR ANY GUARANTOR ARE VIGOROUSLY OPPOSING THE RELIEF
SOUGHT, THE FOREGOING CONSENT AND WAIVER SHALL NOT APPLY TO AN INVOLUNTARY
PETITION FILED AGAINST DEBTOR UNTIL AND UNLESS A FINAL ORDER FOR RELIEF IS
ENTERED; PROVIDED, HOWEVER, THAT NOTHING SET FORTH HEREIN SHALL PREVENT LENDER
FROM SEEKING RELIEF FROM THE AUTOMATIC STAY OR ANY OTHER RELIEF IT DESIRES.

     5. ATTORNEYS’ FEES AND EXPENSES. Whether or not litigation is necessary
to enforce any of the provisions of this Agreement (including, without
limitation, the securing of any relief from any provision of the Bankruptcy
Code or incurred in any manner in connection with a bankruptcy proceeding of
Debtor or Guarantors), the prevailing party shall recover from the
non-prevailing party(ies) all reasonable costs, expenses and attorneys’ fees
incurred in connection with pursuing any rights under the Loan Agreement,
including, without limitation, attorneys’ fees incurred in connection with (a)
relief from stay or any similar or other proceedings in any Bankruptcy case,
(b) any appeals, (c) the enforcement of any judgment, and (d) the appointment
of any receiver in connection with Lender’s pursuit of its rights and remedies,
which appointment Debtor and Guarantors hereby consent to.

     6. ADDITIONAL ASSURANCES. The parties agree that they will execute such
other documents and instruments and perform such other acts as may reasonably
be required by Lender to carry out and effectuate the purpose and intent of
this Agreement.

     7. INTEGRATION. This Agreement and all documents and exhibits referred to
herein and/or attached hereto, constitute the complete agreement of the parties
hereto with respect to the subject matters referred to herein and supersede all
prior or contemporaneous negotiations, promises, covenants, agreements or
representations of every kind or nature whatsoever with. respect thereto, all
of which have become merged and finally integrated into this Agreement. Each of
the parties understands that in the event of any subsequent

7

 

litigation, controversy or dispute concerning any terms, conditions or
provisions of this Agreement, neither party shall be permitted to offer or
introduce any oral evidence concerning any other oral promises or oral promises
or oral agreements between the parties relating to the subject matters of this
Agreement not included or referred to herein and not reflected by a writing.
This Agreement cannot be amended, modified, or supplemented except by a written
document signed by all parties hereto.

8. MISCELLANEOUS PROVISIONS

          8.1 Rules of Construction. The Article and Section headings in this
Agreement are inserted only as a matter of convenience, and in no way define,
limit, extend or interpret the scope of this Agreement or of any particular
Article or Section.

          8.2 Severability. The validity, legality or enforceability of this
Agreement will not be affected even if one or more of the provisions of this
Agreement is held to be invalid, illegal or unenforceable in any respect.

          8.3 Agreement Negotiated. The parties hereto are sophisticated and have
been represented by lawyers throughout this transaction who have carefully
negotiated the
provisions hereof As a consequence, the parties agree that the presumptions of
Section 1654 of the California Civil Code relating to the interpretation of
contracts against the drafter of any
particular clause should not be applied in this case and therefore waive its
effects.

          8.4 Notices. All notices, requests and demands required to be given
hereunder, shall be in writing and shall be deemed to have been duly given upon
the date of such service if served personally upon the party for whom intended,
or if mailed, by first class, registered or certified mail, return receipt
requested, postage prepaid, upon three (3) days after the date of such mailing,
to such party at its address as shown below or otherwise hereafter designated
by such party in writing:

          If to Lender:

	 	 	 	AMPAC Capital Solutions, LLC

7380 S. Eastern Ave., Ste. 150

Las Vegas, NV 89123

Attn: Larry R. Polhill, Manager

          If to Debtor or Guarantors:

	 	 	 	U.S. Plastic Lumber Ltd.

2300 Glades Road, Suite 440 West

Boca Raton, Florida 33431

Attn: Mark Alsentzer, CEO

          8.5 Time of Essence. Time is of the essence in the performance of this
Agreement.

8

 

          8.6 No Assignment; Binding Effect. This Agreement may be assigned by
Lender in whole or in part in its sole and absolute discretion. This Agreement
is personal to
Debtor and Guarantors and shall not be assigned by any of them to any other
person or entity and any such assignment shall be in violation hereof and null
and void. Notwithstanding the above, this Agreement shall be binding upon and
shall inure to the benefit of the respective parties hereto and their
respective heirs, estates and successors, and the assigns of Lender.

          8.7 Recitals Incorporated. The Recitals are incorporated into and are a
part of this Agreement.

          8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

          8.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.

          8.10 No Joint Venture. The parties hereto are debtor and creditor, no
fiduciary duty or relationship exists between them and the parties are not
engaging in a joint venture.

          8.11 Survival of Representations of Warranties, etc. Debtor and
Guarantors and each of them, represent and warrant and acknowledge that: (i)
Lender is relying upon the representations and warranties, all of which shall
survive the execution hereof; (ii) the execution, delivery and performance of
this Agreement has been duly authorized by Debtor and each Guarantor; and (iii)
this Agreement, when executed and delivered, constitutes the valid, binding and
legally enforceable obligation of Debtor and each Guarantor in accordance with
the terms hereof.

          8.12 Confidentiality. The terms of this Agreement have been negotiated
and received in confidence and, except as otherwise set forth herein, neither
the Lender, the Debtor, nor any Guarantors, nor any of them, their
representatives, employees or those acting on their behalf, will disclose any
of the terms of this Agreement, or authorize anyone else to disclose such
terms, without the express written consent of the other parties, except that
the parties may disclose the terms of this Agreement to their attorneys,
accountants, auditors and financial advisors, and as required by law. The
Lender further agrees that it will not disclose to anyone any financial or
other business information the Debtor except as reasonably necessary in the
sale, disposition, or exploitation of the California Collateral, in which case
Lender may disclose such information and the terms and conditions of this
Agreement and the other agreements between the parties.

          8.13 VENUE, JURISDICTION; JURY TRIAL WAIVER. LENDER, DEBTOR AND
GUARANTORS, AND EACH OF THEM, HEREBY:

9

 

               8.13.1 CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
IN CALIFORNIA,

               8.13.2 AGREE THAT THE EXCLUSIVE VENUE OF ANY PROCEEDING RESPECTING THIS
AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND
OF ANY DISPUTE BETWEEN THE LENDER, EACH BORROWER AND EACH GUARANTOR, SHALL BE A
COURT OF COMPETENT JURISDICTION LOCATED IN SAN BERNARDINO COUNTY, CALIFORNIA;
AND

               8.13.3 IRREVOCABLY WAIVE THEIR RIGHT TO A JURY TRIAL IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT NATTER OF THE LOAN AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE INDEBTEDNESS. THE FOREGOING WAIVER OF TRIAL
BY JURY IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY DEBTOR,
GUARANTORS, AND LENDER, AND EACH OF THEM ACKNOWLEDGES THAT LENDER NOR ANY
PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT. LENDER, DEBTOR AND GUARANTORS FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED IN THE NEGOTIATION AND EXECUTION OF THIS AGREEMENT AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE
WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL. LENDER, DEBTOR AND GUARANTORS FURTHER ACKNOWLEDGE THAT THEY HAVE READ
AND UNDERSTAND THE MEANING AND RAMIFICATION OF THIS PROVISION.

[SIGNATURES FOLLOW ON NEXT PAGE]

10

 

     IN WITNESS WHEREOF, this Agreement is executed as of the day and year
first above written.

“DEBTOR”:

	 	 	 	 	 
	 	U.S. PLASTIC LUMBER LTD.

 	 
	 	By:  	/s/ Michael
D. Schmidt
 	 
	 	 	Name: Michael D. Schmidt	 	 
	 	 	Title: Treasurer	 	 
	 

“LENDER”:

	 	 	 	 	 
	 	AMPAC CAPITAL SOLUTIONS, LLC

 	 
	 	By:  	/s/ Larry
R. Polhill
 	 
	 	 	Name: Larry R. Polhill	 	 
	 	 	Title: Manager	 	 
	 

GUARANTORS”:

	 	 	 	 	 
	 	U.S. PLASTIC LUMBER IP CORPORATION

 	 
	 	By:  	/s/ Michael D. Schmidt
 	 
	 	 	Name: Michael D. Schmidt	 	 
	 	 	Title: Treasurer	 	 
	 

	 	 	 	 	 
	 	U.S. PLASTIC LUMBER CORP.

 	 
	 	By:  	/s/ Michael D. Schmidt
 	 
	 	 	Name: Michael D. Schmidt	 	 
	 	 	Title: Chief Financial Officer	 	 
	 

	 	 	 	 	 
	 	U.S. PLASTIC LUMBER FINANCE CORPORATION

 	 
	 	By:  	/s/ Michael D. Schmidt
 	 
	 	 	Name: Michael D. Schmidt	 	 
	 	 	Title: Treasurer	 	 
	 

11

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