Exhibit 10.16
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") dated as of
December 19, 2002 is between U.S. Plastic Lumber Corp. ("USPL") and Quakertown,
LLC (the "Company").
WHEREAS, USPL, various financial institutions (the "Banks") and Bank of
America, N.A., as administrative agent for the Banks (in such capacity, the
"Administrative Agent") are parties to a Credit Agreement dated as of September
9, 2002 (as amended or otherwise modified prior to the date hereof, the "Credit
Agreement"; capitalized terms used but not otherwise defined herein have the
respective meanings given to them in the Credit Agreement);
WHEREAS, on the date hereof, USPL has paid all of its obligations under
the Credit Agreement other than $1,000,000 of principal;
WHEREAS, the Company has agreed to assume all of the remaining
obligations of USPL under the Credit Agreement, which obligations are to be
evidenced by notes issued on the date hereof (together with all additional notes
issued thereunder after the date hereof, the "Quakertown Notes") by the Company
to the Banks;
WHEREAS, in consideration for such assumption by the Company, USPL has
agreed to transfer to the Company, subject to the existing security interest of
the Administrative Agent, all of its right, title and interest in the Quakertown
Claim; and
WHEREAS, concurrently with such transfer, the Company and the
Administrative Agent will enter into a Second Amended and Restated Security
Agreement (the "Restated Security Agreement") to set forth their agreements with
respect to the Administrative Agent's security interest in, and rights with
respect to, the Quakertown Claim;
NOW THEREFORE, in consideration of the foregoing, USPL and the Company
hereby agree as follows:
1. Effective immediately, USPL hereby irrevocably contributes, assigns,
transfers and conveys to the Company all of USPL's right, title and interest in
and to the Quakertown Claim, together with all proceeds, products, profits and
returns of and from, all rights to prosecute, settle or otherwise pursue, and
all distributions on and rights arising out of, the Quakertown Claim (all of the
foregoing, the "Quakertown Rights"), subject to the existing security interest
of the Administrative Agent under the Security Agreement.
2. The Company hereby (a) assumes all rights and obligations of USPL
under the Credit Agreement, which obligations shall be evidenced from and after
the date hereof by the Quakertown Notes, (b) acknowledges receipt of the
Quakertown Rights from USPL and (c) acknowledges that the Quakertown Rights are
and shall continue to be subject to the security interest created by the
Security Agreement (or, after the amendment and restatement thereof, the
Restated Security Agreement).
USPL and the Company agree that the Administrative Agent and the Banks
shall be third-party beneficiaries of this Agreement.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Illinois applicable to contracts made and to be
performed entirely within the State of Illinois.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as of the date and year first written above.
U.S. PLASTIC LUMBER CORP.
By: /s/ Xxxxx X. Xxxxxxx
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Name Printed: Xxxxx X. Xxxxxxx
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Title: General Counsel and Secretary
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QUAKERTOWN, LLC
By: U.S. Plastic Lumber Corp., its sole Member
By: /s/ Xxxxx X. Xxxxxxx
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Name Printed: Xxxxx X. Xxxxxxx
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Title: President
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