Exhibit 10.2
(COMMUNITY BANK) [a59269a5926900.gif]
CHANGE IN TERMS AGREEMENT

                              Principal
$10,000,000.00   Loan Date
03-01-2011   Maturity
03-01-2013   Loan No
155354101   Call / Coll
CLS 07 / 240   Account
600714   Officer
765   Initials

References in the boxes above are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.

             
Borrower:
  BISCO INDUSTRIES, INC.   Lender:   COMMUNITY BANK
 
  1500 NORTH LAKEVIEW AVENUE       ANAHEIM BRANCH
 
  ANAHEIM, CA 92807       1750 S. STATE COLLEGE BLVD.
 
          ANAHEIM, CA 92806
 
          (800) 788-9999

      Principal Amount: $10,000,000.00

DESCRIPTION OF EXISTING INDEBTEDNESS.   Date of Agreement: March 1, 2011

A loan to Borrower evidenced by a Promissory Note dated November 15, 2000, as
modified by Change in Terms Agreements dated May 1, 2001; July 1, 2001;
September 1, 2001; October 19, 2001; April 30, 2002; June 17, 2002; August 28,
2002; September 16, 2002; October 28, 2002; January 24, 2003; March 27, 2003;
June 1, 2003; October 1, 2003; December 1, 2003; February 1, 2004; May 1, 2004;
June 23, 2004; August 1, 2004; February 1, 2005; April 1, 2005; April 1, 2006;
March 28, 2007; June 1, 2007; July 13, 2007; March 27, 2008, May 15, 2008;
March 3, 2009; March 23, 2010; April 16, 2010; October 1, 2010 and January 3,
2011 (“Note”).
DESCRIPTION OF COLLATERAL.
A security interest in personal property assets as described in two
(2) Commercial Security Agreements each dated March 23, 2010 and a security
interest in personal property assets as described in a Commercial Security
Agreement dated August 1, 2004 (“Security Agreement”).
DESCRIPTION OF CHANGE IN TERMS.
MODIFICATION OF BUSINESS LOAN AGREEMENT. The Business Loan Agreement dated
June 1, 2007 (“Loan Agreement”) is hereby modified and amended as follows:
1) The covenant entitled “Effective Tangible Net Worth” is hereby deleted in its
entirety and replaced with the following:
Effective Tangible Net Worth. Maintain an Effective Tangible Net Worth of not
less than $5,210,000.00 to be measured at the end of fiscal quarter May 31, 2011
and $7,000,000.00 to be measured at fiscal year end August 31, 2011. The term
“Effective Tangible Net Worth” means Borrower’s total assets, less intangibles
[i.e., goodwill, trademarks, patents, copyrights, organizational expenses, and
similar intangible items, but including leaseholds and leasehold improvements],
less amounts due from officers, partners, stockholders, directors, affiliates,
and subsidiaries, less total liabilities, plus amounts subordinated to Lender,
as evidenced by a subordination agreement, if any.
2) The covenant entitled “Debt to Effective Tangible Net Worth” is hereby
deleted in its entirety and replaced with the following:
Debt to Effective Tangible Net Worth. Maintain a maximum Debt to Effective
Tangible Net Worth Ratio of 3.55 to 1.00 to be measured at the end of fiscal
quarter May 31, 2011 and 2.50 to 1.00 to be measured at fiscal year end
August 31, 2011. The term “Debt to Effective Tangible Net Worth” means
Borrower’s total liabilities, less amounts subordinated to Lender, as evidenced
by a subordination agreement, if any divided by Borrower’s Effective Tangible
Net Worth. The term “Effective Tangible Net Worth” means Borrower’s total
assets, less intangibles [i.e. goodwill, trademarks, patents, copyrights,
organizational expenses, and similar intangible items, but including leaseholds
and leasehold improvements], less amounts due from officers, partners,
stockholders, directors, affiliates, and subsidiaries, less total liabilities,
plus amounts subordinated to Lender, as evidenced by a subordination agreement,
if any.
3) The following Affirmative Covenants entitled “Debt to Effective Tangible Net
Worth Ratio (EACO Corporation)” and “Debt Service Coverage Ratio (EACO
Corporation)” are hereby added:
Debt to Effective Tangible Net Worth Ratio (EACO Corporation). EACO Corporation
shall maintain a maximum Debt to Effective Tangible Net Worth Ratio of 3.25 to
1.00 on a consolidated basis to be measured at the end of each fiscal quarter.
The term “Debt to Effective Tangible Net Worth” means Borrower’s total
liabilities, less amounts subordinated to Lender, as evidenced by a
subordination agreement, if any divided by Borrower’s Effective Tangible Net
Worth. The term “Effective Tangible Net Worth” means Borrower’s total assets,
less intangibles [i.e. goodwill, trademarks, patents, copyrights, organizational
expenses, and similar intangible items, but including leaseholds and leasehold
improvements], less amounts due from officers, partners, stockholders,
directors, affiliates, and subsidiaries, less total liabilities, plus amounts
subordinated to Lender, as evidenced by a subordination agreement, if any. The
first measurement will be as of May 31, 2011.
Debt Service Coverage Ratio (EACO Corporation). EACO Corporation shall maintain
a Debt Service Coverage Ratio of not less than 1.25 to 1.00 on a consolidated
basis, to be measured at the end of each fiscal year. Debt Service Coverage
Ratio” is defined as net income plus depreciation expense, amortization expense
and any other non-cash expense less cash distributions, cash withdrawals, cash
dividends and any non-cash income all divided by the sum of current maturities
of long-term debt and current maturities of capital lease obligations, which sum
shall not be less than $1. The first measurement will be as of May 31, 2011.
4) The paragraph entitled “Additional Provision” is hereby deleted in its
entirety and replaced with the following:
Additional Provision. Bisco Industries, Inc. has advanced funds to EACO
Corporation for which it expects repayment in the future, Bisco Industries, Inc.
will require EACO Corporation to pay down advances from any proceeds received
from the sale of real estate in Florida. Bisco Industries, Inc. agrees to pay
the term loan first and the line of credit second at Community Bank from any
proceeds received from EACO Corporation from the sale of the real estate in
Florida.
5) The following Negative Covenant is hereby deleted in its entirety:
Except for non-recurring accounting and legal fees associated with the
completion of Borrower’s merger with EACO Corporation (“EACO”), Borrower will
not transfer any funds to EACO exceeding $60,000 in the aggregate in a single
calendar month without Lender’s prior written approval. Moreover, the
non-recurring merger costs must be paid from the sale of Borrower’s securities
and not from Borrower line #155354101 and shall not exceed $250,000 in the
aggregate.
6) The following Negative Covenant is hereby added:

 

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Loan No: 155354101   CHANGE IN TERMS AGREEMENT
(Continued)  
Page 2

Additional Negative Covenant. Borrower will not transfer any funds to EACO
exceeding $60,000 in the aggregate in a single calendar month without Lender’s
prior written approval.
MODIFICATION OF NOTE. The Note is hereby modified and amended as follows:
1) The maturity date of the Note is hereby extended from March 1, 2011 to
March 1, 2013.
2) The provision entitled “PRIMARY BANKING RELATIONSHIP” is hereby added:
PRIMARY BANKING RELATIONSHIP. Borrower and Lender acknowledge and agree that
Borrower now maintains or will maintain its primary banking relationship,
including its primary deposit account relationship (“Primary Banking
Relationship”), with Lender. In the event Borrower ceases to maintain its
Primary Banking Relationship with Lender (as determined by Lender in its sole
discretion), the interest rate margin set forth in this Note shall be increased
by one percent (1.00%) from zero percent (0.00%) to one percent (1.00%), at
Lender’s option, following a five (5) day written notice to the Borrower.
CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender’s right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
BORROWER:

            BISCO INDUSTRIES, INC.
      By:   /s/ GLEN F. CEILEY         GLEN F. CEILEY,        Chairman and CEO
of BISCO INDUSTRIES, INC.   

LASER PRO Landing, Ver. 5.55.00.002 Copr. Harland Financial Solutions, Inc.
1997, 2011. All Rights Reserved. CA G:[ILLEGIBLE] TR-12288 PR-TRADASST

 

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NOTICE TO GUARANTOR(S)

                              Principal
$10,000,000.00   Loan Date
03-01-2011   Maturity
03-01-2013   Loan No
155354101   Call / Coll
CLS 07 / 240   Account
600714   Officer
765   Initials

References in the boxes above are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.

             
Borrower:
  BISCO INDUSTRIES, INC.   Lender:   COMMUNITY BANK
 
  1500 NORTH LAKEVIEW AVENUE       ANAHEIM BRANCH
 
  ANAHEIM, CA 92807       1750 S. STATE COLLEGE BLVD.
 
          ANAHEIM, CA 92806
 
          (800) 788-9999

This NOTICE TO GUARANTOR(S) is attached to and by this reference is made a part
of the Disbursement Request and Authorization, dated March 1, 2011, and executed
in connection with a loan or other financial accommodations between COMMUNITY
BANK and BISCO INDUSTRIES, INC.
The above referenced loan represents a renewal of debt under the conditions of
your Commercial Guaranty.

            Guarantor(s):
         /s/ GLEN F. CEILEY         GLEN F. CEILEY       
GLEN F. CEILEY AND BARBARA A. CEILEY REVOCABLE TRUST

      BY:   /s/ GLEN F. CEILEY         GLEN F. CEILEY, Trustee        BY:   /s/
BARBARA A. CEILEY         BARBARA A. CEILEY, Trustee        EACO CORPORATION
      BY:   /s/ GLEN F. CEILEY         GLEN F. CEILEY, Authorized Officer     

           
THIS NOTICE TO GUARANTOR(S) IS EXECUTED ON MARCH 1, 2011.

BORROWER:

BISCO INDUSTRIES, INC.
      By:   /s/ GLEN F. CEILEY         GLEN F. CEILEY, Chairman and        CEO
of BISCO INDUSTRIES, INC.   

LASER PRO Lending, Ver. 5.55.00.002 Copr. Harland Financial Solutions, Inc.
1997, 2011. All Rights Reserved. CA G:[ILLEGIBLE]
TR-12288 PR-TRADASST