Exhibit
10.6


 


AMENDMENT NO. 4
TO

LOAN AND SECURITY AGREEMENT


 


AMENDMENT NO. 4 TO LOAN AND SECURITY
AGREEMENT (“Amendment No. 4”) dated February 3, 2005 by and among AEP
Industries, Inc. (“Borrower”), the parties from time to time to the Loan
Agreement (as hereinafter defined) as lenders (each individually, a “Lender”
and collectively, “Lenders”) and Congress Financial Corporation, a Delaware
corporation, in its capacity as agent for Lenders (in such capacity, “Agent”).


 


W I  T  N  E  S
S  E  T  H


 


WHEREAS, Agent, Lenders and Borrower have
entered into financing arrangements pursuant to which Agent and Lenders have
made and may make loans and advances and provide other financial accommodations
to Borrower as set forth in the Loan and Security Agreement, dated November 20,
2001, by and among Agent, Lenders and Borrower, as amended by Amendment No. 1
to Loan and Security Agreement, dated December 9, 2001, Amendment No. 2,
dated July 10, 2002 and Amendment No. 3, dated October 16, 2002 (as
amended hereby and as the same may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”)
and the agreements, documents and instruments at any time executed and/or
delivered in connection therewith or related thereto (collectively, together
with the Loan Agreement, the “Financing Agreements”); and


 


WHEREAS, Borrower has requested that
Agent and Lenders agree to (a) increase the amount of Permitted Transactions
under the Loan Agreement, and (b) increase advances from Agent to Borrower
based on Real Property and Equipment under the Loan Agreement;


 


NOW, THEREFORE, in consideration of the
mutual conditions and agreements and covenants set forth herein, and for other
good and valuable consideration, the adequacy and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:


 


1. Definitions.


 


(a) Additional
Definitions.  The Loan Agreement is
hereby amended to include, in addition and not in limitation, the term “Amendment
No. 4” which shall mean Amendment No. 4 to Loan and Security Agreement by and
among Borrower, Agent and Lenders, as it now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.


 


(b) Amendments
to Definitions.


 


(i) The
definition of “Equipment Availability” set forth in Section 1.34 of the
Loan Agreement is hereby amended by deleting such Section in its entirety
and replacing it with the following:


 





















 


“1.34  ‘Equipment
Availability’ shall mean, at any time,

$14,281,700 as reduced effective as of the first day of each month

commencing March 1, 2005 by an amount equal to $238,028.33.”


 


(ii) The
definition of “Maximum Credit” set forth in Section 1.69 of the Loan
Agreement is hereby amended by deleting “$85,000,000” in such section and
replacing it with “$100,000,000”.


 


(iii) The
definition of “Real Property Availability” set forth in Section 1.89 of
the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following:


 


“1.89  ‘Real
Property Availability’ shall mean $11,814,000

as reduced effective as of the first day of each month commencing

March 1, 2005 by an amount equal to $164,083.33.”


 


(c) Interpretation.  For purposes of this Amendment No. 4, all
terms used herein, including but not limited to, those terms used and/or
defined herein or in the recitals hereto shall have the respective meanings
assigned thereto in the Loan Agreement as amended by this Amendment No. 4.


 


2. Permitted Transactions.  Each reference to the figure “$25,000,000” in
each of Sections 9.9(e)(v), 9.9(f)(v), 9.10(g)(iii) and 9.11(c)(iv) of the Loan
Agreement is hereby deleted and replaced with the following: “$50,000,000”.


 


3. New Equipment Loans.


 


(a) Borrower
hereby confirms and agrees that as of the date of this Amendment No. 4, the
aggregate principal amount outstanding for Loans made in respect of the New
Equipment Availability is $1,194,000 (the “Existing New Equipment Loans”).  Upon the effective date of this Amendment No.
4, the Existing New Equipment Loans shall hereby be deemed to be included among
and replaced by the Loans made pursuant to the Equipment Availability.


 


(b) The
amendment and restatement of the New Equipment Loans as set forth in clause (a)
of this section shall not, in any manner, be construed to constitute payment
of, or impair, limit, cancel or extinguish, or constitute a novation in respect
of, any of the Obligations evidenced by or arising under the Financing
Agreements, and the liens and security interests securing the Obligations shall
not in any manner be impaired, limited, terminated, waived or released.


 


4. Amendment Fee.  In addition to all other fees, charges,
interest and expenses payable by Borrower to Agent under the Loan Agreement and
the other Financing Agreements, Borrower shall pay to Agent, for the account of
Lenders, an amendment fee in the amount of $50,000 which shall be fully earned,
due and payable as of the date hereof and which may be charged directly to any
loan account of Borrower maintained by Agent.


 


5. Representations and Warranties.  Borrower represents and warrants with and to
Agent and Lenders as follows, which representations and warranties shall
survive the execution and


 


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delivery hereof, the truth and accuracy of, or compliance with each,
together with the representations, warranties and covenants in the other
Financing Agreements, being a continuing condition of the making of any Loans
by Agent (or Agent on behalf of Lenders) to Borrower:


 


(a) As of the
date hereof and after giving effect to the consents provided for herein, no
Default or Event of Default exists or has occurred and is continuing.


 


(b) This
Amendment No. 4 and each other agreement or instrument to be executed and
delivered by Borrower in connection herewith have been duly authorized,
executed and delivered by all necessary action on the part of Borrower and the
agreements and obligations of Borrower contained herein constitute legal, valid
and binding obligations of Borrower enforceable against Borrower in accordance
with their respective terms.


 


6. Conditions Precedent.  The effectiveness of the consents contained
herein shall only be effective upon the satisfaction of each of the following
conditions precedent in a manner satisfactory to Agent:


 


(a) Agent shall
have received an executed original or executed original counterparts of this
Amendment No. 4 (as the case may be), duly authorized, executed and delivered
by Borrower;


 


(b) Agent
shall have received such approvals of the Lenders to the terms of this Amendment
No. 4 as may be required in the determination of Agent under the terms of the
Loan Agreement; and


 


(c) Agent
shall have received a true and correct copy of any consent, waiver or approval
to or of this Amendment No. 4 which Borrower is required to obtain from any
other Person, and such consent, waiver or approval shall be in form and
substance satisfactory to Agent.


 


7. Provisions of General Application.


 


(a) Effect
of this Amendment.  Except as
modified pursuant hereto, no other changes or modifications to the Financing
Agreements are intended or implied and in all other respects the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof. 
To the extent of conflict between the terms of this Amendment No. 4 and
the other Financing Agreements, the terms of this Amendment No. 4 shall
control.  The Loan Agreement and this
Amendment No. 4 shall be read and construed as one agreement.  Any acknowledgment or consent contained
herein shall not be construed to constitute a consent to any other or further
action by Borrower or any Subsidiary of Borrower or to entitle Borrower or any
Subsidiary of Borrower to any other consent. 
The parties confirm and agree that Amendment No. 3 to Loan and Security
Agreement shall be dated and effective as of October 16, 2002.


 


(b) Governing
Law.  The rights and obligations
hereunder of each of the parties hereto shall be governed by and interpreted
and determined in accordance with the laws of the State of New York, but
excluding any principles of conflicts of law or other rule of law that


 


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would result in the application
of the law of any jurisdiction other than the laws of the State of New York.


 


(c) Binding
Effect.  This Amendment No. 4 shall
be binding upon and inure to the benefit of each of the parties hereto and
their respective successors and assigns.


 


(d) Counterparts.  This Amendment No. 4 may be executed in any
number of counterparts, but all of such counterparts shall together constitute
but one and the same agreement.  In
making proof of this Amendment No. 4, it shall not be necessary to produce or
account for more than one counterpart thereof signed by each of the parties
hereto.  Delivery of an executed
counterpart of this Amendments No. 4 by telefacsimile shall have the same force
and effect as delivery of an original manually executed counterpart of this
Amendment No. 4.  Any party delivering
any executed counterpart of this Amendment No. 4 by telefacsimile shall also
deliver an original manually executed counterpart, but the failure to do so
shall not affect the validity, enforceability and binding effect of this
Amendment No. 4 as to such party or any other party.


 


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IN WITNESS WHEREOF, the parties hereto
have caused this Amendment No. 4 to be duly executed and delivered by their
authorized officers as of the date and year first above written.


 


 


	
   

  	
  CONGRESS FINANCIAL CORPORATION,

  
	
   

  	
  as Agent and as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AEP INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


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