Exhibit
10.3


 


AMENDMENT NO. 1 TO

LOAN AND SECURITY AGREEMENT


 


AMENDMENT NO. 1 TO LOAN AND SECURITY
AGREEMENT (“Amendment No. 1”) dated as of December 9, 2001 by and among
the financial institutions from time to time parties 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 AEP Industries
Inc. (“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 the same now exists and 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”);


 


WHEREAS, Agent and Lenders want to amend
certain provisions in Section 12 of the Loan Agreement;


 


WHEREAS, pursuant to Section 11.3 of the
Loan Agreement, amendments with respect to any provision of Section 12 of
the Loan Agreement do not require the agreement of Borrower;


 


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:


 


Section 1.                                            Definitions.                                  For
purposes of this Amendment, 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. 1 to Loan and Security Agreement.


 


Section 2.                                            Amendments
to Loan Agreement


 


2.1                                 Additional Loans.  The reference to the figure “$15,000,000” in Section 12.8(c)
of the Loan Agreement is hereby deleted and replaced with the following: “$8,500,000”.


 


2.2                                 Encumbrances.  The reference to the figure “$15,000,000” in Section 12.11(a)(ii)
of the Loan Agreement is hereby deleted and replaced with the following: “$8,500,000”.


 





















 


Section 3.                                            Provisions
of General Application


 


3.1                                 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. 1 and the other
Financing Agreements, the terms of this Amendment No. 1 shall control.  The Loan Agreement and this Amendment No. 1
shall be read and construed as one agreement.


 


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


 


3.3                                 Binding Effect.  This Amendment No. 1 shall be binding upon
and inure to the benefit of each of the parties hereto and their respective
successors and assigns.


 


3.4                                 Counterparts.  This Amendment No. 1 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, it shall not be necessary to produce or account
for more than one counterpart thereof signed by each of the parties hereto.


 


IN WITNESS
WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly
executed and delivered by their authorized officers as of the date and year
first above written.


 


 


	
   

  	
  CONGRESS FINANCIAL CORPORTION,

  as Agent and as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


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