EACO CORPORATION (OTCMKTS:EACO) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On July 24, 2018, EACO Corporation (“EACO”), Bisco Industries, Inc., a wholly-owned subsidiary of EACO (“Bisco”), and Glen F. Ceiley, EACO’s Chief Executive Officer and majority shareholder, entered into a Change in Terms Agreement dated July 12, 2018 (the “Amendment”) with Community Bank (the “Lender”). The Amendment modifies the Bisco’s $10,000,000 line of credit with Lender to that certain Business Loan Agreement dated June 14, 2016 between Bisco and Lender and the related Promissory Note of Bisco (collectively, the “Agreement”) (i) to extend the expiration date of the line of credit under the Agreement from March 1, 2019 to August 20, 2020; (ii) to reduce the default variable interest index rate by .500% (Wall Street Journal Prime Rate less .500%); and (iii) to add the following two other interest rate options that Bisco may select subject to the requirements in the Amendment provided that Bisco is not in default under the Agreement: (A) One Hundred Eighty (180) day Libor Rate plus a margin of 1.550%; or (B) the One (1) Year Libor plus a margin of 1.550%, as more fully described in the Amendment. As of July 24, 2018, the outstanding principal balance under this line of credit was $3,278,000. The Agreement contains financial and other covenants that have not been modified by the Amendment.
Concurrent with the execution of the Amendment, EACO and Bisco entered into a Commercial Security Agreement with the Lender (the “Security Agreement”), to which EACO granted the Lender a security interest in substantially all of EACO’s personal property to secure Bisco’s obligations under the Agreement, as amended by the Amendment. Bisco previously entered into a Commercial Security Agreement dated May 11, 2017 with the Lender, to which Bisco granted the Lender a security interest in substantially all of Bisco’s personal property.
On July 24, 2018, EACO and Bisco also entered into a similar Change in Terms Agreement dated July 13, 2018 (the “CD Amendment”) with the Lender to amend the Business Loan Agreement and related $100,000 Promissory Note dated July 12, 2016 with Comerica Bank, which was entered into to obtain a $100,000 certificate of deposit as security for EACO’s workers’ compensation requirements (the “CD”). to the CD Amendment, the CD was extended from July 1, 2018 to August 1, 2019.
The foregoing descriptions of the Amendment, the Security Agreement and the CD Amendment are not complete and are qualified in their entirety by reference to the full text of such documents, copies of which are filed herewith as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit | |
| No. | Description |
| 10.1 | Change in Terms Agreement dated July 12, 2018 ($10,000,000 line of credit) among Bisco, Glen R. Ceiley and Community Bank (executed on July 24, 2018). |
| 10.2 | Commercial Security Agreement dated July 12, 2018 among EACO and Community Bank (executed on July 24, 2018). |
| 10.3 | Change in Terms Agreement dated July 13, 2018 ($100,000 CD) among EACO and Community Bank (executed on July 24, 2018). |
EACO CORP ExhibitEX-10.1 2 tv499616_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 COMMUNITY BANK Partnership Banking° CHANGE IN TERMS AGREEMENT Principal $10,…To view the full exhibit click here
About EACO CORPORATION (OTCMKTS:EACO)
EACO Corporation (EACO) is a holding company. The Company, through its subsidiary, Bisco Industries, Inc. (Bisco), is engaged in the distribution of electronic components and fasteners. The divisions of the Company include Bisco industries, National-Precision and Fast-Cor. Bisco supplies parts used in the manufacture of products in a range of industries, including the aerospace, circuit board, communication, computer, fabrication, instrumentation, industrial equipment and marine industries. The Company operates in the United States and Canada. The National-Precision division sells electronic hardware and commercial fasteners to OEMs in the aerospace, fabrication and industrial equipment industries. National-Precision is the distributor of mil-spec and commercial fasteners, hardware and distribution services used in production. The Fast-Cor has access to the entire inventory of products that Bisco offers but focuses on selling to other distributors.