Exhibit 10.2
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this "Amendment")
is entered into as of December 21, 2004, by and between AMPAC CAPITAL SOLUTIONS,
LLC, a Nevada limited liability company ("Lender"), and U.S. PLASTIC LUMBER
LTD., a Delaware corporation as debtor and debtor in possession (the
"Borrower"), with respect to the following:
A. The Lender and the Borrower have entered into that certain
Credit and Security Agreement dated as of September 7, 2004 (as amended,
restated, modified and supplemented from time to time, including by this
Amendment, the "Loan Agreement"). Capitalized terms used but not defined in this
Amendment shall have the meanings given to them in the Loan Agreement.
B. The outstanding principal balance of the Note as of the date
hereof is $1,000,000.
C. The Borrower has requested that the Lender agree to loan an
additional $500,000 to the Borrower and the Lender has agreed to amend the Loan
Agreement on the terms and conditions set forth herein.
D. The Borrower has also requested that the Lender agree to
change the maturity date for the Advances from December 2, 2004 and the Lender
has agreed to amend the Loan Agreement on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions hereof, the parties hereto do hereby agree that the foregoing
recitals are incorporated herein by this reference and as follows:
1. TERM ADVANCE. The Loan Agreement is hereby amended to provide
for a Term Advance Loan (the "Term Advance Loan") under the Credit Facility
subject to the following terms and conditions:
(a) The amounts advanced by the Lender to Borrower under the
Term Advance Loan (each advance, a "Term Advance" and collectively the "Term
Advances") shall be evidenced by a promissory note in favor of the Lender in
form of Exhibit "A" hereto (the "Term Advance Note"). The aggregate amount of
the Term Advances made under the Term Advance Loan shall not exceed Five Hundred
Thousand Dollars ($500,000). Borrower hereby agrees to repay the Lender the Term
Advances, together with interest thereon, in the manner provided herein and in
the Term Advance Note. The principal owing hereunder in respect of the Term
Advances at any given time shall equal the aggregate amount of the Term Advances
made hereunder minus all principal payments thereon received by the Lender in
respect of the Term Advance. The outstanding principal balance of the Term
Advances shall bear interest at the rate of 1.25% per month. The Term Advance
Note shall be due and payable in full on the Termination Date.
1
(b) Except as set forth below or otherwise provided in this
Amendment, each Term Advance shall be treated in the same manner as an Advance:
(i) Each Term Advance shall not be subject to the
Borrowing Base.
(ii) The Borrower may request a Term Advance pursuant
to Section 2.2(a) of the Loan Agreement beginning on the date upon which the
Lender receives a signed copy of a final, non-appealable order of the Bankruptcy
Court approving this Amendment (with such modifications as are approved by the
Lender in its sole discretion) (the "Term Advance Final Order"). The Term
Advance Final Order (i) shall have been entered upon an application or motion of
the Obligors satisfactory in form and substance to the Lender in its sole
discretion, (ii) shall have authorized extensions of credit by the Lender in the
amount of a total of $1,500,000, (iii) shall approve the payment by the Obligors
of all of the fees and expenses set forth herein, and (iv) shall be in full
force and effect and shall not have been vacated, reversed, modified, amended or
stayed or the subject of a stay pending appeal.
(iii) A Term Advance, once repaid, may not be
reborrowed.
(iv) The Lender shall have no obligation to make any
further Term Advances to the Borrower if an Even of Default (other than an Event
of Default waived in this Amendment) has occurred and, as a result of such Event
of Default, the Lender has ceased making Advances to Borrower under the Loan
Agreement.
2. EXTENSION OF MATURITY DATE. The Borrower shall continue to
make all payments of principal and interest required by the Loan Agreement with
respect to the outstanding Advances, including the Term Advance, provided,
however, that the Advances shall be due and payable in full on the earlier of
the date of the closing of the purchase and sale of the Ocala Real Property and
Ocala Personal Property, or February 28, 2005. The failure of the Borrower to
indefeasibly pay the Advances in full and in cash on or before February 28, 2005
shall constitute an Event of Default. The definition of "Maturity Date" set
forth in Section 1.1 of the Loan Agreement is hereby amended as follows:
"Maturity Date" means the earlier of the date of the closing of the
purchase and sale of the Ocala Real Property and Ocala Personal Property,
or February 28, 2005.
3. AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT. The definition
of "Default Rate" set forth in Section 1.1 of the Loan Agreement is hereby
amended as follows:
"Default Rate" means an annual interest rate equal to eighteen
percent (18%) on the outstanding principal balance of the Note.
4. AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT. The definition
of "Obligations" set forth in Section 1.1 of the Loan Agreement is hereby
amended as follows:
"Obligations" means the Note, the Term Advance Note, the Obligation
of Reimbursement and each and every other debt, liability and obligation
of every type and description which any Obligor may now or at any time
hereafter owe to the Lender which
2
arises under this Agreement, any other Loan Document, the Orders or any
other document or order now or hereafter made, issued, delivered or given
in connection herewith or therewith, and whether it is direct or indirect,
due or to become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, or sole, joint, several or joint and several.
5. AMENDMENT TO SECTION 2.10(B) OF THE LOAN AGREEMENT. Section
2.10(b) of the Loan Agreement is hereby deleted in its entirety.
6. AMENDMENT TO SECTION 2.3 OF THE LOAN AGREEMENT. Section 2.3 of
the Loan Agreement is hereby amended as follows:
SALE MILESTONES. The Borrowing Base shall include the Minimum Liquidity
Reserve until each of the following conditions is satisfied as determined by the
Lender in its sale discretion (collectively, the "Sale Milestones"):
(a) Asset Purchase Agreement. The Obligors shall have
delivered to the Lender an Asset Purchase Agreement (the "Asset Purchase
Agreement") executed by Borrower and the purchaser party thereto by February 1,
2005 for the sale of the Ocala Real Property and the Ocala Personal Property for
a cash purchase price of at least $3,000,000.00 in form and content acceptable
to the Lender and contingent upon, among other things, an order of the
Bankruptcy Court approving the consummation of the sale pursuant to Section 363
of the Bankruptcy Code of the Ocala Real Property and the Ocala Personal
Property to such purchaser on the terms set forth in such Asset Purchase
Agreement. The closing of the purchase and sale of the Ocala Real Property and
Ocala Personal Property shall occur on or before February 28, 2005.
(b) Purchaser's Financing. The Obligors shall have
established that the purchaser party to the Asset Purchase Agreement has the
financial ability to pay the stated purchase price for the Ocala Real Property
and the Ocala Personal Property by providing to the Lender financial statements,
loan commitments or such other documentation as the Lender shall request.
(c) Sale Motion. The Obligors shall have filed in the
Bankruptcy Cases a motion (the "Sale Motion") to sell the Ocala Real Property
and the Ocala Personal Property to the purchaser party to the Asset Purchase
Agreement (or to such higher and better bidder as the Bankruptcy Court shall
determine) pursuant to Section 363(f) of the Bankruptcy Code and in accordance
with the Asset Purchase Agreement. The Sale Motion shall be inform and substance
satisfactory to the Lender. An order of the Bankruptcy Court approving the
consummation of the sale pursuant to Section 363 of the Bankruptcy Code of the
Ocala Real Property and the Ocala Personal Property to such purchaser on the
terms set forth in such Asset Purchase Agreement shall have been entered on or
before February 15, 2005.
(d) Bidding Procedures Motion. The Obligors shall have filed
in the Bankruptcy Cases, a motion (the "Bidding Procedures Motion") to establish
bidding procedures relating to the Sale described in the Sale Motion and shall
seek an expedited hearing on the
3
Building Procedures Motion. The Bidding Procedures Motion on same shall be in
form and content satisfactory to the Lender.
Notwithstanding anything to the contrary in this Agreement, the
Lender shall have no obligation to make Advances which cause the
outstanding balance of the Credit Facility to be more than $1,500,000
unless all of the Sale Milestones have been satisfied, as determined by
the Lender in its sole discretion.
7. AMENDMENT FEE. In consideration for the accommodations granted
by the Lender herein and in addition to all other fees and costs, the Borrower
hereby agrees to pay to the Lender a nonrefundable fee of Thirty-Five Thousand
($35,000.00) (the "Amendment Fee"). The Amendment Fee shall be due and payable
in full on the date which the Term Advance Final Order is final and
non-appealable. The Borrower hereby confirms that the Amendment Fee will be
fully earned by the Lender on said date and is nonrefundable.
8. RELEASE AND WAIVER OF CLAIMS BY THE BORROWER. For good and
valuable consideration, the receipt of which is hereby acknowledged and in
consideration of the Lender executing this Amendment, the Borrower does hereby
release the Lender and its managers, members, employees, attorneys and agents
from any and all claims, demands, causes of action, now known or unknown,
arising out of or related to the Loan Agreement or the transactions connected
therewith. The Borrower does hereby warrant and represent that no claims,
demands or causes of action, arising out of or related to the Loan Agreement or
the transactions connected therewith are now known or suspected to exist.
The Borrower intends this release to cover, encompass, release, and
extinguish, among other things, all claims and matters which might otherwise be
reversed by California Civil Code section 1542, which provides as follows:
"A general release does not extend to claims which the creditor 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."
9. CONDITIONS PRECEDENT. The obligations of the Lender hereunder
shall take effect only upon the satisfaction of the following conditions:
(a) Receipt by the Lender of a fully executed original of
this Amendment;
(b) Receipt by the Lender of the Term Advance Final Order in
accordance with Section 1 hereof;
(c) Receipt by the Lender of all interest payable pursuant
to Section 2.10 of the Loan Agreement as of the date of the Term Advance Final
Order;
(d) Receipt by the Lender of all costs and expenses,
including reasonable attorneys' fees, incurred by the Lender in accordance with
Section 9.6 of the Loan Agreement as of the date of the Term Advance Final
Order;
4
(e) Other than the defaults under Section 2.3 of the Loan
Agreement and the default in payment of the Obligations in full on December 2,
2004, no Defaults or Events of Default shall have occurred or be continuing; and
(f) The Lender shall have received such other documents,
certificates, opinions and information that the Lender shall require, each in
form and substance satisfactory to the Lender in its sole discretion.
10. MISCELLANEOUS.
(a) Reference to the Loan Agreement and the Loan Documents.
(i) Except as specifically amended by this Amendment,
the Loan Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms and are hereby ratified and
confirmed.
(ii) The Borrower hereby warrants and represents to the
Lender that there does not exist a Default or an Event of Default other than the
defaults under Section 2.3 of the Loan Agreement and the default in payment of
the Obligations in full on December 2, 2004 and the Borrower reaffirms, as of
the date hereof, that all of the warranties and representations of the Borrower
contained in the Loan Agreement and in the other Loan Documents are true,
complete and correct.
(b) Events of Default. Any failure to comply with the terms
and conditions of this Amendment shall constitute an Event of Default.
(c) Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(d) Governing Law. This Amendment shall be governed by and
construed according to the laws of the State of Florida.
(e) Attorneys' Fees. The Borrower shall pay, on written
demand, all fees and costs incurred by the Lender in connection with the
negotiation, documentation and execution of this Amendment, including the
reasonable fees and expenses of attorneys. If any legal action or proceeding
shall be commenced at any time by any party to this Amendment in connection with
its interpretation or enforcement, the prevailing party or parties in such
action or proceeding shall be entitled to reimbursement of its reasonable
attorneys' fees and costs in connection therewith, in addition to all other
relief to which the prevailing party or parties may be entitled.
(f) Jury Trial Waiver. EACH OF THE PARTIES HERETO WAIVES ITS
RIGHT TO A TRIAL BY JURY, IF ANY, IN ANY ACTION TO ENFORCE, DEFEND, INTERPRET OR
OTHERWISE CONCERNING THIS AMENDMENT.
[Remainder of Page Intentionally Left Blank]
5
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the date first written above.
Borrower:
U.S. PLASTIC LUMBER LTD., a
Delaware corporation, as
debtor and debtor in
possession
By /s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
Its: Assistant Treasurer
Lender:
AMPAC CAPITAL SOLUTIONS, LLC, a
Nevada limited liability company
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx
Its: Manager
6
Each of the undersigned hereby consents to and acknowledges the terms and
conditions of the foregoing Amendment and each other document executed in favor
of the Lender shall remain in full force and effect.
Guarantors:
U.S. PLASTIC LUMBER CORP., a
Nevada corporation, as
debtor and debtor in possession
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
Its: Vice President
U.S. PLASTIC LUMBER FINANCE
CORPORATION, a Delaware
corporation, as debtor and
debtor in possession
By: /s/Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
Its: Vice President
U.S. PLASTIC LUMBER IP
CORPORATION, a Delaware
corporation, as debtor and
debtor in possession
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
Its: Vice President
THE EAGLEBROOK GROUP, INC., a
Delaware corporation, as debtor
and debtor in possession
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
Its: Vice President
7
