Special Advance Promissory Note



 





Exhibit 10.2






AMENDED AND RESTATED SECURED PROMISSORY NOTE



(Special Advance Promissory Note)




			
	$6,000,000.00
	 	May 31, 2004

Los Angeles, California







     FOR VALUE RECEIVED, the undersigned ("Borrower”), hereby promises to pay
to the order of AMPAC CAPITAL SOLUTIONS, LLC, a Nevada limited liability
company (“AMPAC”), as successor in interest to GUARANTY BUSINESS CREDIT
CORPORATION, a Delaware corporation (“GBCC”), with its offices located at 225
W. Hospitality Lane, Ste. 200, San Bernardino, California 92408, in such coin
or currency of the United States which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment, the principal sum
of Six Million Dollars ($6,000,000), or such lesser amount as Borrower has
drawn pursuant to the Loan Agreement (as defined below) as Special Advance
Loans, together with interest from and after the date hereof on the unpaid
principal balance outstanding at a per annum rate equal to the Default Rate for
Revolving Advances.



     This Note is the Special Advance Promissory Note referred to in, and is
issued pursuant to, that certain Loan and Security Agreement by and between
Borrower and GBCC, dated December 19, 2002 (hereinafter, as amended, restated,
supplemented or modified from time to time, including without limitation, by:
(i) that certain Second Amendment to Loan and Security Agreement and Limited
Waiver of Defaults by and between Borrower and GBCC dated as of July 25, 2003,
as amended from time to time, the “Second Amendment”; (ii) that certain Third
Amendment to Loan and Security Agreement and Limited Waiver of Defaults by and
between Borrower and GBCC dated as of December 11, 2003, as amended from time
to time, the “Third Amendment”; (iii) that certain Fourth Amendment to Loan and
Security Agreement by and between Borrower and GBCC dated as of February 23,
2004, as amended from time to time, the “Fourth Amendment”; (iv) that certain
Fifth Amendment to Loan and Security Agreement by and between Borrower and GBCC
dated as of March 19, 2004, as amended from time to time, the “Fifth
Amendment”; and (v) that certain Sixth Amendment to Loan and Security Agreement
by and between Borrower and AMPAC dated as of May 31 2004, as amended from time
to time, the “Sixth Amendment”; collectively, the “Loan Agreement”), and is
entitled to all of the benefits and security of the Loan Agreement and the
other Transaction Documents. All of the terms, covenants, and conditions of the
Loan Agreement and the Transaction Documents are hereby made a part of this
Note and are deemed incorporated herein in full. All capitalized terms used
herein, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement. This Note amends and restates
in full the Amended and Restated Secured Promissory Note of Company dated as of
March 19, 2004.



     The rate of interest in effect hereunder shall increase or decrease by an
amount equal to any increase or decrease in the Prime Rate effective as of the
opening of business on the date that any such change in the Prime Rate occurs.
Interest shall be computed in the manner provided in the Loan Agreement.



     Subject to the terms of the Loan Agreement, the principal amount and
accrued interest of this Note shall be due and payable upon the occurrence of
an Acceleration Event (as defined in the Second Amendment).



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     Upon the occurrence of an Event of Default (excluding any Event of Default
expressly waived in writing by AMPAC on or before the date hereof), unless such
Event of Default is expressly curable pursuant to the Transaction Documents and
has been cured as provided therein, AMPAC shall have all of the default rights
and remedies set forth in the Loan Agreement and the other Transaction
Documents.



     Time is of the essence of this Note. To the fullest extent permitted by
applicable law, Borrower, for itself and its legal representatives, successors
and assigns, expressly waives presentment, demand, protest, notice of dishonor,
notice of non-payment, notice of maturity, notice of protest, presentment for
the purpose of accelerating maturity, diligence in collection, and the benefit
of any exemption or insolvency laws.



     Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or remaining
provisions of this Note. No delay or failure on the part of AMPAC in the
exercise of any right or remedy hereunder shall operate as a waiver thereof,
nor as an acquiescence in any default, nor shall any single or partial exercise
by AMPAC of any right or remedy preclude any other right or remedy. AMPAC, at
its option, may enforce its rights against any collateral securing this Note
without enforcing its rights against Borrower, any guarantor of the
indebtedness evidenced hereby or any other property or indebtedness due or to
become due to Borrower. Borrower agrees that, without releasing or impairing
Borrower’s liability hereunder, AMPAC may at any time release, surrender,
substitute or exchange any collateral securing this Note and may at any time
release any party primarily or secondarily liable for the indebtedness
evidenced by this Note.



     This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California.



     EACH OF AMPAC AND BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY, IF
ANY, IN ANY ACTION TO ENFORCE, DEFEND, INTERPRET OR OTHERWISE CONCERNING THIS
NOTE.



     IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed and
delivered in Los Angeles, California as of the date first above written.



	 	 	 
	 

	 	U.S. PLASTIC LUMBER LTD., a
Delaware

corporation
	 
	 	 
	

	 	By: /s/ Michael D. Schmidt
	

	 	
 
	

	 	Name:  Michael D. Schmidt
	

	 	
 
	

	 	Title: Treasurer
	

	 	
 








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