EXHIBIT 10.2
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THE FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT ("First Amendment")
is made as of the 14th day of February, 1997 by and between FLEET CAPITAL
CORPORATION ("Lender"), a Connecticut corporation with an office located at 000
Xxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, and EAGLE PLASTICS, INC. ("EPI"), a
Nebraska Corporation with its chief executive office at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, PACIFIC PLASTICS, INC. ("PPI"), an Oregon corporation
with its chief executive office and principal place of business at 00000
Xxxxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx 00000 and ARROW PACIFIC PLASTICS,
INC. ("APP"), a Utah corporation with its chief executive office and principal
place of business at 00 Xxxx 0xx Xxxxxx, Xxxxxxx, Xxxx 00000. EPI, PPI and APP
are hereinafter sometimes referred to individually as "Borrower" and
collectively as "Borrowers."
W I T N E S S E T H:
WHEREAS, Borrowers and Lender entered into a certain Loan and Security
Agreement dated as of May 10, 1996 (said Loan and Security Agreement is
hereinafter referred to as the "Loan and Security Agreement"); and
WHEREAS, Borrowers and Lender desire to amend and modify certain
provisions of the Loan and Security Agreement.
NOW THEREFORE, in consideration of the premises, the mutual covenants
and agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Lender to Borrower, the parties hereto hereby agree as
follows:
Definitions. All capitalized terms used herein without definition shall
have the meanings given to them in the Loan and Security Agreement.
Termination Charges. Section 4.2.3 of the Loan and Security Agreement
is hereby deleted and the following is inserted in its stead:
"4.2.3 Termination Charges. At the effective date of termination of
this Agreement for any reason, Borrowers shall pay to Lender (in addition to the
then outstanding principal, accrued interest and other charges owing under the
terms of this Agreement and any of the other Loan Documents) as liquidated
damages for the loss of the bargain and not as a penalty, an amount equal to (i)
the sum of one percent (1%) of the lesser of the principal balance of the Term
Loan or Four Million Dollars ($4,000,000) less the amount of any prior
prepayments of the Term Loan plus three percent (3%) of the remaining portion of
the Total Credit Facility less the amount of principal paid on the Term Loan as
of such date, if termination occurs during the first or second twelve-month
period of the Original Term (May 10, 1996 through May 9, 1998); or (ii) the sum
of one percent (1%) of the lesser of the principal balance of the Term Loan or
Four Million Dollars ($4,000,000) less the amount of any prior prepayments of
the Term Loan plus two percent (2%) of the remaining portion of the Total Credit
Facility less the amount of principal paid on the Term Loan as of such date, if
termination occurs during the third 12-month period of the Original Term (May
10, 1998 through May 9, 1999). If termination occurs on the last day of the
Original Term, no termination charge shall be payable. Any other prepayment of
the Term Loan shall be subject to a prepayment fee equal to (i) the sum of (x)
one percent (1%) of the lesser of the amount of the prepayment or Four Million
Dollars ($4,000,000) less the amount of any prior prepayments of the Term Loan
plus (y) three percent (3%) of the remainder (if any) of the prepayment, if the
prepayment occurs during the first or second twelve-month period of the Original
Term (May 10, 1996 through May 9, 1998); or (ii) the sum of (x) one percent (1%)
of the lesser of the amount of the prepayment or ($4,000,000) less the amount of
any prior prepayments of the Term Loan, plus (y) two percent (2%) of the
remainder (if any) of the prepayment if the prepayment occurs within the third
twelve month period of the Original Term (May 10, 1998 through May 8, 1999). No
prepayment fee shall be due in respect to any prepayment made after May 8,
1999."
Leveraged Equity Participation Program. Section 8.2.2 of the Loan and
Security Agreement is hereby deleted and the following is inserted in its stead:
* * *
"8.2.2 Loans. Except as provided in Section 8.2.7 hereof, make, or
permit any Subsidiary of any Borrower to make, any loans or other advances of
money (other than for salary, travel, advances, advances against commissions and
other similar advances in the ordinary course of business) to any Person, except
that (x) if after giving effect to any such loan or advance, there is no
existing and continuing Default or Event of Default and Availability exceeds One
Million Dollars ($1,000,000) or, in the event that the Company has received Four
Million Dollars ($4,000,000) or more as a contribution to capital, which Four
Million Dollars ($4,000,000) is in turn contributed to the capital of any of
EPI, PPI or AAP or any combination thereof, Five Hundred Thousand Dollars
($500,000), then EPI may make loans and advances to PPI and/or APP and PPI
and/or APP may make loans and advances to EPI, and (y) if after giving effect to
any such loans or advance there is no existing and continuing Default or Event
of Default, Borrower may make loans and advances to its officers and executives
for the purpose of financing the purchase by such officers and executives in the
open market of shares of the Company's common stock; provided that the aggregate
amount of such loans and advances under this clause (y) does not exceed at any
point in time Six Hundred Thousand Dollars ($600,000).
Capital Expenditures. Section 8.2.8 of the Loan and Security Agreement
is hereby deleted and the following is inserted in its stead:
* * *
"8.2.8 Capital Expenditures. Make Capital Expenditures (including,
without limitation, by way of capitalized leases) which, in the aggregate, as to
Borrowers and their respective Subsidiaries during any fiscal year of Borrowers
exceeds the amount set forth opposite such fiscal year in the following
schedule:
Fiscal Year Ending Permitted Capital Expenditure
------------------ -----------------------------
December 31, 1996 $5,500,000
December 31, 1997 $4,000,000 plus the Carryover Amount
December 31, 1998 and each $1,500,000 plus the Carryover Amount
subsequent fiscal year
"Carryover Amount" shall mean (x) in respect to the fiscal year ending
December 31, 1997, Five Million Five Hundred Thousand Dollars ($5,500,000) less
the amount of Capital Expenditures made in the fiscal year of Borrower ending
December 31, 1996, and (y) in respect to subsequent fiscal years, the amount of
permitted Capital Expenditures (without giving effect to any Carryover Amount)
for the previous two fiscal years minus the amount of Capital Expenditures made
in such fiscal years. If, after the date of the First Amendment, Lender, in its
sole discretion, agrees to increase the amount of permitted Capital
Expenditures, Lender agrees that Borrowers shall not be required to pay any fees
in connection with any such increase."
* * *
Leases. Section 8.2.13 of the Loan and Security Agreement is hereby
deleted and the following is inserted in its stead:
"8.2.13 Leases. Become, or permit any of their respective Subsidiaries
to become, a lessee under any operating lease (other than a lease under which
any Borrower or any of their respective Subsidiaries is lessor) of Property if
the aggregate Rentals payable during any current or future period of 12
consecutive months under the lease in question and all other leases under which
Borrowers or any of their respective Subsidiaries is then lessee would exceed
$900,000. The term "Rentals" means, as of the date of determination, all
payments which the lessee is required to make by the terms of any lease."
Consolidated Net Cash Flow. Section 8.3.2 of the Loan and Security
Agreement is hereby deleted and the following is inserted in its stead:
"8.3.2 Consolidated Net Cash Flow. Achieve Consolidated Net Cash Flow
for each of the periods listed below equal to or greater than the amount set
forth opposite such period:
Net Cash Flow Amount
------------- ------
January 1, 1996 through and
including June 30, 1996 $150,000
January 1, 1996 through and
including September 30, 1996 $650,000
January 1, 1996 through and
including December 31, 1996 ($1,500,000)
January 1, 1997 through and
including March 31, 1997 ($1,000,000)
January 1, 1997 through and
including June 30, 1997 ($350,000)
January 1, 1997 through and
including September 30, 1997 $150,000
January 1, 1997 through and
including December 31, 1997 ($1,500,000)
January 1, 1998 through and
including March 31, 1998 ($1,150,000)
January 1, 1998 through and
including June 30, 1998 ($500,000)
January 1, 1998 through and
including September 30, 1998 $0
January 1, 1998 through and
including December 31, 1998 ($150,000)
January 1, 1999 through and
including March 31, 1999 ($500,000)"
Senior Interest Coverage Ratio. Section 8.3.3 of the Loan and Security
Agreement is hereby deleted and the following is inserted in its stead:
"8.3.3 Senior Interest Coverage Ratio. Achieve, at the end of each
fiscal period listed below a Senior Interest Coverage Ratio equal to or greater
than the ratio shown below for the fiscal period corresponding thereto:
Fiscal Period Ratio
------------- -----
January 1 to March 31 1.65 to 1
January 1 to June 30 3.50 to 1
January 1 to September 30 4.50 to 1
January 1 to December 31 2.40 to 1"
Availability. Borrowers covenant to maintain Availability of
at least Two Million Dollars ($2,000,000) at all times during the period from
June 1, 1997 to and including the earlier of (i) May 31, 1998, and (ii) the date
on which the Company receives Four Million Dollars ($4,000,000) or more as a
contribution to capital, which Four Million Dollars ($4,000,000) is in turn
contributed to the capital of any of EPI, PPI or AAP or any combination thereof.
Sale and Leaseback. Lender acknowledges that Borrowers
contemplate making certain Capital Expenditures or other expenditures in
connection with the construction of APP's new facility in Salt Lake City, Utah.
Lender further acknowledges and consents to any sale and leaseback transaction
entered into in connection with such improvements; provided that such sale and
leaseback transaction does not cause Borrowers to violate any other covenants
contained in the Loan and Security Agreement.
Fee. In order to induce Lender to enter into this First
Amendment, Borrowers agree to pay Lender, upon execution of this First
Amendment, an amendment fee of Twenty Thousand Dollars ($20,000).
Continuing Effect. Except as otherwise specifically set out
herein, the provisions of the Loan and Security Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, this First Amendment has been duly executed as of
the day and year specified at the beginning hereof.
FLEET CAPITAL CORPORATION
By:_________________________________
Name:___________________________
Title:__________________________
EAGLE PLASTICS, INC.
By:_________________________________
Name:___________________________
Title:__________________________
PACIFIC PLASTICS, INC.
By:_________________________________
Name:___________________________
Title:__________________________
ARROW PACIFIC PLASTICS, INC.
By:_________________________________
Name:___________________________
Title:__________________________
Consented and Agreed as of the
14th day of February, 1997
Xxxxxxx Xxxxx Mezzanine Capital Fund, L.P.
By:_______________________________
A General Partner
By:_______________________________
Name:_______________________________
Title:_______________________________
