Loan Agreement and Promissory Note

LOAN AGREEMENT

(Loan No. )

THIS LOAN AGREEMENT ("this Agreement") is made and entered into this day of , , by and between , a corporation ("Lender"), with its Home Office in , County, , and , ("Borrower"), a general partnership formed under law composed of (""), a Mississippi corporation, and (""), a corporation.

W I T N E S S E T H:

WHEREAS, , a corporation, owns a ("the ") located on a acre site in Mississippi, which manufactures ; and

WHEREAS, in order to obtain funds to be used in the acquisition of said and the thirty-one acre site on which the is located, Borrower has accepted, and Lender has agreed, subject to the terms and conditions of this Loan Agreement, to make contemporaneously with the execution of this Loan Agreement, a secured loan ("the Loan") in the principal amount of Dollars ($) to be advanced in one installment upon satisfaction of certain express conditions;

NOW, THEREFORE, in consideration of the mutual promises set forth herein and in consideration of the extension of credit to the Borrower and of the promises and undertakings herein set forth, the parties hereto agree as follows, it being expressly understood that all covenants, terms, conditions and undertakings set forth in this Agreement will survive and remain in full force and effect until such time as the principal amount of and all interest on any indebtedness owing by the Borrower to the Lender shall have been repaid in full and no additional extensions or advances have been requested.

ARTICLE I

Terms and Definitions

As used in this Agreement, the following terms shall have the meaning set forth opposite each of them:

(a) Assets: Anything owned by Borrower and/or any right or interest therein of Borrower that would be shown on a consolidated balance sheet of Borrower prepared in accordance with GAAP.

(b) Borrower: , a partnership formed under the laws of the State of .

(c) Business Day: Any day other than a Saturday, Sunday or other day on which Lender is closed at its home office in Boston, .

(d) Cash Flow Available for : At the end of each fiscal year the net income of Borrower as shown on the audited financial statements prepared in accordance with Paragraph 4.01(d) hereof...

(e) Cash Flow Coverage Ratio: The ratio of Cash Flow Available for to .

(f) Closing: The execution and delivery of this Loan Agreement and the Security Documents, certificates, instruments and agreements contemplated to be executed contemporaneously with this Loan Agreement.

(g) Commitment Letter: That certain commitment letter, dated , from Lender to and as extended by letter dated .

(h) Consolidated Basis: Assets, liabilities, and equities of Borrower and any Subsidiary shall be deemed to be one for accounting purposes...

(i) Current Assets: Assets owned by Borrower which in Borrower's ordinary and normal course of business will be converted into cash within a year...

(j) Current Liabilities: Debts, liabilities or other obligations of Borrower which must be paid or satisfied within a year...

(k) Current Ratio: Ratio of Current Assets to Current Liabilities.

(l) Deed of Trust and Security Agreement: That certain Deed of Trust and Security Agreement of even date herewith, executed by Borrower to Lender, conveying certain real property in County, Mississippi, to , Trustee...

(m) Default(s): Any event or condition, the occurrence of which is, or which would, with the lapse of time or the giving of notice or both, become an Event of Default.

(n) ERISA: The Employment Retirement Income Security Act of 1974, as amended...

(o) Event(s) of Default: See Paragraph 7.01 hereof.

(p) Financing Statements: The Financing Statements filed pursuant to the Uniform Commercial Code of the State of Mississippi...

(q) Funded Debt or Long Term Debt: Any loans, indebtedness for borrowed money...

(r) GAAP: Generally accepted accounting principles in the United States of America...

(s) Governmental Authority: Any and all courts, boards, agencies, commissions, offices, or authorities...

(t) Hazardous Substances: All hazardous and toxic substances, wastes or materials...

(u) Improvements: The Improvements located or to be located on the Land, including all buildings, together with all fixtures, fixed equipment and machinery attached to, installed in, or used in connection with the operation of the and Land.

(v) Indebtedness: The principal of, interest on, and all other amounts, payments, and premiums due under or secured by the security Documents.

(w) Internal Revenue Code: The Internal Revenue Code of 1986, as amended...

(x) Investment: Any advance, loan of capital, contribution by or any other investment of funds by Borrower.

(y) Land: The real estate or interest therein described in Exhibit "A" attached hereto...

(z) Legal Requirements: Any and all present and future judicial decisions, statutes, rulings, rules, regulations, permits, certificates, or ordinances...

(aa) Lender: and/or its successors or assigns.

(bb) Liabilities: Any debt, liability or other obligation of Borrower...

(cc) Loan: The loan of $ to be made by Lender in accordance with the terms of the Agreement...

(dd) Loan Agreement: This Loan Agreement, as executed by and between Borrower and Lender...

(ee) Material Supply Agreement: An agreement to be entered into by Corporation and Borrower...

(ff) Mortgaged Property: The Land and Improvements and all other property...

(gg) Net Income: The Net Income of the Borrower as determined on a consolidated basis in accordance with GAAP.

(hh) Net Tangible Assets: Tangible Assets less Current Liabilities.

(ii) Net Worth: All Assets less all Liabilities.

(jj) Note: That certain Promissory Note of even date herewith executed by Borrower to the order of the Lender in the principal amount of Dollars ($)...

(kk) Obligations: The obligation of Borrower to pay the principal and interest on the Note...

(ll) Partners: and .

(mm) Permitted Encumbrances: The liens, security interests and equipment leases described in Exhibit "B" attached hereto.

(nn) Person: An individual; a trust; an estate; a Governmental Authority; or a partnership, joint venture, corporation, company, firm, or any other entity whatsoever.

ARTICLE II

Disbursement of the Loan and the Note

2.01 Disbursement. Dollars ($) of the Loan shall be disbursed subject to and in accordance with the following conditions and limitations at the Closing, but no later than ...

2.02 The Note. The Loan shall be evidenced by a promissory note (the “Note”) of even date herewith executed by the Borrower and payable to the order of Lender setting forth an indebtedness in the principal amount of Dollars ($)...

2.03 Interest. The interest rate on the unpaid principal balance of the Note shall be per annum so long as the Note is not in default...

2.04 Use of Proceeds. The proceeds disbursed pursuant to this Loan Agreement shall be used solely to finance the purchase of the Mill and Land.

2.05 Prepayment. Except as otherwise set forth in this Agreement, Borrower may not prepay this Note in full or in part...

2.06 Commitment Fee. In consideration for Lender's commitment to make the Loan to Borrower, Borrower has paid to Lender, upon issuance of the Commitment Letter, a commitment fee of .

2.07 Offset. Upon the occurrence of any Event of Default and during the continuance thereof, Lender is hereby authorized...

2.08 Good Year - Bad Year Provisions.

(a) Good Year Prepayment. Within ninety (90) days following the end of each fiscal year, Borrower shall determine the amount, if any, by which Borrower's net income determined in accordance with GAAP exceed ...

(b) Bad Year Deferral. If Borrower's net income determined in accordance with GAAP are less than Dollars ($) for any fiscal year...

(c) Limitation on Good Year Prepayments. Borrower shall have no obligation to make a Good Year Prepayment at any time that the aggregate amount of Good Year Prepayments exceeds the aggregate amount of Bad Year Deferrals by $500,000.

ARTICLE III

Warranties and Representations

3.01 Warranties and Representations of Borrower. In order to induce Lender to make the Loan, Borrower represents and warrants to Lender as of the Closing the following:

(a) Organization of Borrower. Neither Partner of Borrower nor Borrower has any Subsidiaries...

(b) Authorization and Binding Effect...

(c) No Breach of Charter, By-Laws or other Agreements...

(d) Financial Statements...

(e) No Adverse Changes...

(f) Litigation...

(g) Operation in Accordance with Law...

(h) Condemnation...

(i) Title to Mortgaged Property...

(j) Priority of Lender's Security Interest...

(k) Regulation G: Use of Proceeds...

(l) Governmental Consent, etc...

(m) Business Names. Borrower only does business as .

(n) Tax Returns...

(o) Leases...

(p) ERISA...

3.02 Disclosure by Borrower to Lender. An act, event, state of fact, circumstance or thing shall be deemed disclosed to Lender only if disclosed in a writing delivered at or before the Closing.

ARTICLE IV

Covenants

4.01 Affirmative Covenants. Borrower covenants and agrees that, for so long as any obligation remains unpaid, Borrower will do or cause to be done the following:

(a) Payment of Taxes...

(b) Legal Actions to which Lender Made Party...

(c) No Other Liens...

(d) Financial Statements...

(e) Current Ratio. Borrower shall have a current Ratio of at least to one as of the end of each fiscal year.

(f) Cash Flow Coverage Ratio. Borrower shall have a Cash Flow Coverage Ratio of at least as of the end of each fiscal year.

(g) Net Tangible Assets to Hancock Funded Debt Ratio...

(h) Net Worth and Restrictions on Distributions...

(i) Limitation on Debt...

(j) No Change in Subordinated Debt Terms or in Ownership...

(k) Lease Obligations...

(l) Merger or Consolidation...

(m) Transfer of Security...

(n) Encumbrances...

(o) Payments on Loans to Partners...

(p) Material Supply Agreement...

(q) Other Data...

(r) Partnership and Corporate Existence, etc...

(s) Inspection...

(t) Compliance with Laws...

(u) Insurance...

(v) Bookkeeping...

(w) Payments Under the Note...

(x) Financial Accounting Practices...

(y) Repair, Etc...

4.02 Negative Covenants. Borrower covenants and agrees that so long as any part of the obligations remains unpaid, Borrower shall not, without Lender's prior written consent:

(a) Distributions...

(b) Merger...

(c) Loans...

(d) No Change in Business...

(e) Assign Rents...

(f) Replacement of Equipment...

(g) Liens...

(h) Guaranty...

(i) Sale...

(j) Fiscal Year...

(k) No Change of Shareholders. Etc...

(l) Leases...

(m) Affiliate Transaction...

ARTICLE V

Hazardous Substances

5.01 Representations, Covenants, and Warranties...

(a) Borrower has had performed reasonable investigations, studies, and tests as to any environmental contamination...

(b) Neither the Mortgaged Property nor any other personal or real property owned or used by Borrower is subject to any private or governmental lien...

(c) Except as set forth in Exhibit "F," no Hazardous Substances are located on or have been stored...

(d) Borrower shall immediately notify Lender should Borrower become aware of any Hazardous Substance or other environmental problem...

5.02 Indemnification...

5.03 Release of Land Containing Hazardous Substances...

ARTICLE VI

General Terms and Provisions

6.01 Performance at Borrowers Expense...

6.02 Approval of Lender and Further Assurances...

6.03 No Waiver...

6.04 Entire Agreement; Modification...

6.05 Severability and Construction...

6.06 Rights, Remedies, and Recourses Cumulative...

6.07 Successors and Assigns...

6.08 Notices. All notices, consents, approvals, or other communications required or permitted to be given pursuant to the Security Documents shall be in writing...

6.09 Participations...

6.10 Lender's Right to Perform the Obligations...

6.11 Headings...

6.12 Exhibits and Appendices...

6.13 Supplement to Deed of Trust...

6.14 Credit Support Agreement...

6.15 Consent to Jurisdiction...

6.16 Multiple Counterparts...

6.17 Tax Reimbursement Agreement...

6.18 Right to Cure Certain Financial Covenant Defaults...

ARTICLE VII

Events of Default Remedies

7.01 Events of Default...

7.02 Remedies...

ARTICLE VIII

Inspection

8.01 Inspection...

8.02 No Duty to Inspect...

ARTICLE IX

Miscellaneous Provisions

9.01 Annual Certification. Borrower covenants and agrees that it will furnish to Lender not later than the 90th day after the end of each fiscal year of Borrower a written certification signed by Borrower's Chief Financial Officer or Treasurer certifying that, to the best of his knowledge and belief after due inquiry, neither a Default nor an Event of Default has occurred and is continuing...

9.02 Payments of Costs and Fees...

9.03 No Assignment by Borrower...

9.04 Survival of Representations and Warranties...

9.05 Governing Law...

9.06 Waiver...

9.07 Records...

9.08 Indemnification...

9.09 No Recourse Against Partners...

EXECUTED as of the date first above written.

Appendix I ----- Material Supply Agreement

Appendix II -- Credit Support Agreement

Appendix III - Tax Reimbursement Agreement

EXHIBITS

Exhibit "A" - Land

Exhibit "B" - Permitted Encumbrances

Exhibit "C" - Opinion of Counsel for Borrower

Exhibit "D" - Note

Exhibit "E" - Certificate of Borrower

Exhibit "F" - Hazardous Substances

EXHIBIT "B"

TO LOAN AGREEMENT BETWEEN AND

a) Purchase money security interest(s) on any capital asset (excluding Land) of the Borrower or any of its Subsidiaries if such purchase money security interest attaches to such capital asset concurrently with the acquisition thereof and if the total debt(s) secured by such purchase money security interest(s) does not exceed $ and [80]% of the lesser of the cost or fair market value as of the time of acquisition of the asset covered thereby to the Borrower or such Subsidiary;

b) Liens securing taxes, assessments or governmental charges or levies...

c) Title to all minerals within the Land...

d) Right-of-Way to State Highway Commission dated , recorded in Land Deed Book at Page ...

e) Rights of railroad company servicing siding...

f) Locations of power poles and lines...

g) Location of chain link fence and gravel parking area and driveway...