1
EXHIBIT 10
------
DETREX CORPORATION
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF APRIL 25, 2001
COMERICA BANK
Execution Copy
2
TABLE OF CONTENTS
Page
----
1. DEFINITIONS 1
2. THE INDEBTEDNESS: REVOLVING CREDIT 13
2.1 Commitment 13
2.2 Types of Advances and Maturity 13
2.3 Requests for Advances 13
2.4 Disbursement of Advances 14
2.5 Revolving Credit Commitment Fee 14
2.6 Optional Reduction or Termination of Revolving Credit
Commitment 14
2.7 Borrowing Base Limitation 15
2.8 Facility Fee 15
2.9 Interest 15
2.10 Interest Periods 15
2.11 Conversions of Advances 16
2.12 Prepayment 16
2.13 Eurodollar Lending Office 17
2.14 Unavailability 17
2.15 Illegality 17
2.16 Yield Protection 17
2.17 Capital Adequacy 18
3. LETTERS OF CREDIT 19
3.1 Letters of Credit 19
3.2 Conditions to Issuance 19
3.3 Letter of Credit Fees 20
3.4 Issuance Fees 20
3.5 Existing Letters of Credit 20
4. THE INDEBTEDNESS: Equipment Line of Credit 21
5. PAYMENTS 22
5.1 Payment Procedure 22
5.2 Application of Proceeds 22
5.3 Deposits and Accounts 22
6. CONDITIONS 23
3
TABLE OF CONTENTS
(Continued)
Page
----
6.1 Execution of Notes and This Agreement 23
6.2 Corporate Authority 23
6.3 Opinion of Counsel 23
6.4 Collateral Documents 23
6.5 Representations and Warranties 23
6.6 Compliance with Certain Documents and Agreements 23
6.7 No Default 24
6.8 No Material Adverse Change 24
6.9 Company's Certificate 24
6.10 Other Documents and Instruments 24
6.11 Borrowing Base Report 24
6.12 Continuing Conditions 24
7. REPRESENTATIONS AND WARRANTIES 24
7.1 Corporate Authority 24
7.2 Due Authorization 25
7.3 Encumbrances 25
7.4 No Negative Pledges 25
7.5 Subsidiaries 25
7.6 Taxes 25
7.7 Enforceability of Agreement and Loan Documents 25
7.8 Non-contravention 25
7.9 No Litigation 25
7.10 Consents, Approvals and Filings, Etc 26
7.11 ERISA 26
7.12 No Investment Company 26
7.13 Agreements Affecting Financial Condition 26
7.14 Title to Collateral 26
7.15 Environmental Matters and Safety Matters 26
7.16 Accuracy of Information 27
8. AFFIRMATIVE COVENANTS 27
8.1 Financial Statements 27
8.2 Certificates; Other Information 29
8.3 Payment of Obligations 29
8.4 Conduct of Business and Maintenance of Existence 30
8.5 Maintenance of Property 30
8.6 Inspection of Property; Books and Records; Discussions 30
8.7 Notices 30
ii
4
TABLE OF CONTENTS
(Continued)
Page
----
8.8 Indemnification 31
8.9 Further Assurances; Financing Statements 31
8.10 Compliance with Leases 32
8.11 Insurance 32
8.12 Power of Attorney 32
9. NEGATIVE COVENANTS 33
9.1 Cash Flow Coverage Ratio 33
9.2 Consolidated Tangible Net Worth 33
9.3 Indebtedness 33
9.4 Limitation on Liens 33
9.5 Contingent Obligations 33
9.6 Prohibition of Fundamental Changes 33
9.7 Prohibition on Sale of Assets 34
9.8 Investments 34
9.9 Sale and Leaseback 35
9.10 Negative Pledge of Assets 35
10. DEFAULTS 35
10.1 Events of Default 35
10.2 Exercise of Remedies 37
10.3 Rights Cumulative 37
10.4 Waiver by Companies of Certain Laws 37
10.5 Waiver of Defaults 38
11. MISCELLANEOUS 38
11.1 Accounting Principles 38
11.2 Consent to Jurisdiction 38
11.3 Law of Michigan 38
11.4 Interest 38
11.5 Closing Costs and Other Costs 39
11.6 Notices 39
11.7 Further Action 39
11.8 Successors and Assigns 40
11.9 Indulgence 40
11.10 Counterparts 40
11.11 Amendment and Waiver 40
11.12 Confidentiality 40
11.13 Effective Upon Execution 40
iii
5
TABLE OF CONTENTS
(Continued)
Page
----
11.14 Waiver of Jury Trial 40
11.15 Complete Agreement; Conflicts 41
11.16 Severability 41
11.17 Table of Contents and Headings 41
11.18 Construction of Certain Provisions 41
11.19 Independence of Covenants 41
11.20 Reliance on and Survival of Various Provisions 41
11.21 Concerning Joint and Several Liability of the Companies and Related
Matters 42
11.22 Conflict between Security Agreements, Mortgages and Agreement 43
Exhibits
Exhibit A - Form of Borrowing Base Report
Exhibit B - Existing Letters of Credit
Exhibit C - Form of Letter of Credit Agreement
Exhibit D - Eligible Inventory Summary Form
Exhibit E - Revolving Credit Note Form
Exhibit F - Compliance Certificate
Exhibit G - Real Property
Exhibit H - Month End Aging and Ineligible Summary Form
Exhibit I - Form of Equipment Note
Exhibit J - Form of Equipment Term Note
Exhibit K - Request for Advance Form
iv
6
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement"), is made
as of the 25th day of April, 2001, by and between Comerica Bank ("Bank") and the
borrowers listed on Schedule 1, each having its chief executive office at the
location listed below its name on Schedule 1 (individually a "Company" and
collectively "Companies").
RECITALS:
A. Companies and Bank entered into a Credit Agreement dated June 13,
1996, as amended by seven amendments ("Existing Agreement").
B. Companies and Bank desire to amend and restate the Existing
Agreement in its entirety.
NOW, THEREFORE, the Existing Agreement is amended and restated in its
entirety as follows:
1. DEFINITIONS
For purposes of this Agreement the following terms (when capitalized)
will have the following meanings:
"Account Debtor" shall mean the party who is obligated on or under any
Account.
"Account(s)" shall mean, with respect to any Person, any right of such
Person to payment for goods sold or leased or for services rendered, as further
defined under the UCC.
"Advance" shall mean a borrowing requested by Companies and made by
Bank under Section 2 of this Agreement, including any refunding or conversions
of such borrowings pursuant to Section 2.12 hereof, and shall include a
Eurodollar-based Advance and a Prime-based Advance.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the Person that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
the common control with such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person or group of Persons,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of
1
7
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Alternate Base Rate" shall mean for any day a rate per annum (rounded
upwards, if necessary, to the next higher 1/16 of 1%) equal to the Federal Funds
Effective Rate in effect on such day plus one percent (1%).
"Applicable Interest Rate" shall mean the Eurodollar-based Rate or the
Prime-based Rate, as selected by Companies from time to time pursuant to the
terms of this Agreement.
"Borrowing Base Report" shall mean the report to be furnished by
Companies to Bank pursuant to the provisions of Sections 6.11 and 8.2(c) hereof,
substantially in the form of Exhibit "A" attached hereto.
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business in Detroit, Michigan.
"Capital Expenditures" shall mean, with respect to any Person, without
duplication, any amounts accrued in respect of a period in respect of any
purchase or other acquisition for value of fixed or capital assets; provided
that, in no event shall Capital Expenditures include amounts expended in respect
of normal repair and maintenance of plant facilities, machinery, fixtures and
other like capital assets utilized in the ordinary conduct of business (to the
extent such amounts would not be capitalized in preparing a balance sheet
determined in accordance with GAAP).
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) which, in conformity with GAAP is
required to be capitalized on the balance sheet of that Person.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Bank is or
has been granted or arises or has arisen, under or in connection with this
Agreement, the Loan Documents or otherwise, to secure the Indebtedness of the
Companies to the Bank.
"Collateral Documents" shall mean the Security Agreements, the
Mortgages, the Pledge Agreement and all of the other security documents executed
by Companies and delivered to the Bank as of the date hereof or, from time to
time, subsequent thereto, in connection with this Agreement, as such Collateral
Documents may be amended from time to time.
2
8
"Commonly Controlled Entity" shall mean, with respect to any Person, an
entity, whether or not incorporated, which is under common control with Detrex
within the meaning of Section 414(b) or (c) of the Code.
"Companies" shall mean the borrowers listed on Schedule 1.
"Consolidated Adjusted Net Income" shall mean as of any date of
determination thereof net income from continuing operations of Detrex and its
consolidated Subsidiaries for the applicable Measuring Period (determined
without giving effect to extraordinary gains or extraordinary losses),
determined in accordance with GAAP, as consolidated in accordance with GAAP,
less to the extent added in calculating such net income, the amount of any
recoveries in environmental reserves (net of applicable taxes) and plus to the
extent deducted in calculating such net income, the amount of any deductions
related to increases in environmental reserves (net of applicable taxes) and any
charges taken in connection with the closing of any facility of Detrex or any of
its Subsidiaries.
"Consolidated Cash Flow Coverage Ratio (Environmental)" shall mean as
of any date of determination thereof, a ratio, the numerator of which is
Consolidated Adjusted Net Income for the applicable Measuring Period, plus
depreciation and amortization expenses for such period, of Detrex and its
consolidated Subsidiaries and the denominator of which is the sum of unfunded
Capital Expenditures, payments on capital leases and dividends paid or payable
during such period, of Detrex and its consolidated Subsidiaries plus the amount
of all payments of principal paid or payable by Detrex and its consolidated
Subsidiaries during such period, plus, to the extent not reflected in the
calculation of Consolidated Adjusted Net Income, the amount of any cash
expenditures during such period by Detrex and its consolidated Subsidiaries
which are deductions from long term or short term environmental reserves, all as
determined in accordance with GAAP, as consolidated in accordance with GAAP.
"Consolidated Cash Flow Coverage Ratio (Operating)" shall mean as of
any date of determination thereof, a ratio, the numerator of which is
Consolidated Adjusted Net Income for the applicable Measuring Period, plus
depreciation and amortization expenses for such period, of Detrex and its
consolidated Subsidiaries and the denominator of which is the sum of unfunded
Capital Expenditures, payments on capital leases and dividends paid or payable
during such period, of Detrex and its consolidated Subsidiaries plus the amount
of all payments of principal paid or payable by Detrex and its consolidated
Subsidiaries during such period, all as determined in accordance with GAAP, as
consolidated in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean as of the date of any
determination thereof, the total shareholders' equity (including capital stock
and additional paid in capital and retained earnings after deducting treasury
stock) of Detrex and its consolidated Subsidiaries which would appear as such on
a consolidated balance sheet of Detrex and its consolidated Subsidiaries as at
such time prepared in accordance with GAAP, less any amounts reflected
3
9
therein for any goodwill and intangible assets and less any amounts reflected
therein for minority interests.
"Contingent Obligation" as to any Person shall mean any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other financial obligations ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Contractual Obligation" shall mean as to any Person, any provision of
any security issued by such Person or of any financial agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Detrex" shall mean Detrex Corporation, a Michigan corporation.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, supplemented, or modified or any successor act or code.
"Effective Date" shall mean April 25, 2001 upon which date the
obligations of Companies and Bank under this Agreement shall be effective.
"Eligible Account" shall mean an Account which has been included in a
Borrowing Base Report to determine the Lending Availability, and as to which
Account the following is true and accurate as of the time it was utilized to
determine the Lending Availability and as of the time Companies have requested
an Advance based in part thereon:
(a) it is not owing more than ninety (90) days after the date of
the original invoice or other writing evidencing such Account;
4
10
(b) it arises from the sale of goods and such goods have been
shipped or delivered to the Account Debtor under such Account;
or it arises from services rendered and such services have
been performed;
(c) it is payable in U.S. Dollars and is evidenced by an invoice,
dated not later than the date of shipment or performance,
rendered to such Account Debtor or some other evidence of
billing (including computer records) reasonably acceptable to
the Bank, and is not evidenced by any note, trade acceptance,
draft or other instrument or by any chattel paper;
(d) it is a valid, legally enforceable obligation of the Account
Debtor thereunder, and is not subject to any offset,
counterclaim or other defense on the part of such Account
Debtor, whether or not asserted by such Account Debtor or to
any claim on the part of such Account Debtor denying liability
thereunder in whole or in part, other than routine adjustments
in the ordinary course of business with Account Debtor which
may require refunds from time to time which are not material
in the aggregate;
(e) it is not subject to any sale of accounts, any rights of
offset, assignment, lien or security interest whatsoever other
than to Bank;
(f) it is not owing by a subsidiary or Affiliate of any of the
Companies, nor by an Account Debtor which (i) does not
maintain its chief executive office in the United States of
America, (ii) is not organized under the laws of the United
States of America, or any state thereof, or (iii) is the
government of any foreign country or sovereign state, or of
any state, province, municipality or other instrumentality
thereof;
(g) it is not owing by an Account Debtor for which Companies have
received a notice of (i) the death of the Account Debtor or
any partner of the Account Debtor, (ii) the dissolution,
liquidation, termination of existence, insolvency or business
failure of the Account Debtor, (iii) the appointment of a
receiver for any part of the property of the Account Debtor,
or (iv) an assignment for the benefit of creditors, the filing
of a petition in bankruptcy, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or
against the Account Debtor;
(h) it is not owing by any Account Debtor whose obligations Bank,
acting in its sole discretion (based on a good faith belief
that the collectibility of the Accounts owed by such Account
Debtor is impaired), shall have notified Companies are not
deemed to constitute Eligible Accounts.
5
11
Any Account which is at any time an Eligible Account but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be an
Eligible Account.
"Eligible Inventory" shall mean Inventory consisting of raw materials
or finished goods of any of the Companies (other than Detrex) which has been
included in a Borrowing Base Report to determine the Lending Availability and as
to which Inventory the following is true and accurate as of the time it was
utilized to determine the Lending Availability and as of the time the Companies
have requested an Advance based in part thereon:
(a) such item of Inventory is of merchantable quality and is
usable or salable by Companies in the ordinary course of their
business;
(b) Companies have granted to the Bank a perfected security
interest in such item of Inventory prior in right to all other persons
or entities and such item of Inventory has not been sold, transferred
or otherwise assigned by Companies to any person other than the Bank;
(c) such item of Inventory is located within the continental
United States of America at such location or locations as Company shall
have represented in the Loan Documents, relating to Inventory;
(d) the value of each item of Inventory utilized to determine
the Lending Availability was determined in accordance with GAAP
utilizing "first in, first out", at the lower of cost or market value;
(e) it is not Inventory that Bank, acting in its sole
discretion (based on a good faith belief that the value of such
inventory is impaired), after having notified Companies, excludes from
Eligible Inventory.
Any Inventory which is at any time Eligible Inventory, but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be
Eligible Inventory.
"Environmental Material Adverse Event" shall mean any event relating to
any environmental condition (including any final adverse determination in any
litigation, arbitration or governmental investigation or proceeding) which has
or is likely to impose on any of the Companies a liability or assessment in a
material amount unless such liability or assessment has been reflected in the
environmental reserve included in the financial statements of Detrex most
recently filed with the Securities and Exchange Commission.
"Equipment Line Maturity Date" shall mean May 1, 2002.
6
12
"Equipment Note" shall mean the Note described in Section 4.1 hereof
made by Companies to Bank in the form attached hereto as Exhibit "I".
"Equipment Term Notes" shall mean the Notes described in Section 4.2
hereof made by Companies to Bank in the form attached hereto as Exhibit "J".
"Eurodollar-based Advance" shall mean an Advance which bears interest
at the Eurodollar-based Rate.
"Eurodollar-based Rate" shall mean a per annum interest rate which is
equal to the sum of two and one quarter percent (2 1/4%) plus the quotient of:
(a) the per annum interest rate at which Bank's Eurodollar Lending
Office offers deposits to prime banks in the eurodollar market
in an amount comparable to the relevant Eurodollar-based
Advance and for a period equal to the relevant Interest Period
at approximately 11:00 a.m. Detroit time two (2) Business Days
prior to the first day of such Interest Period; divided by
(b) a percentage equal to 100% minus the maximum rate on such date
at which Bank is required to maintain reserves on
"Euro-currency Liabilities" as defined in and pursuant to
Regulation D of the Board of Governors of the Federal Reserve
System or, if such regulation or definition is modified, and
as long as Bank is required to maintain reserves against a
category of liabilities which includes eurodollar deposits or
includes a category of assets which includes eurodollar loans,
the rate at which such reserves are required to be maintained
on such category;
all as conclusively determined by Bank, such sum to be rounded upward, if
necessary, to the nearest whole multiple of 1/16th of 1%.
"Eurodollar Lending Office" shall mean Bank's office located at Grand
Cayman, British West Indies or such other branch of Bank, domestic or foreign,
as it may hereafter designate as its Eurodollar Lending Office by notice to
Companies.
"Event of Default" shall mean any of the Events of Default specified in
Section 10.1 hereof.
"Existing Letters of Credit" means those letters of credit listed on
Exhibit "B" hereto which were issued by the Bank for the account of the
Companies listed on Exhibit "B" hereto before the date of this Agreement, as
such letters of credit may be amended, modified, or supplemented from time to
time in accordance with the terms hereof and thereof.
7
13
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Bank from three Federal funds brokers of recognized standing
selected by it.
"Formula Debt" shall mean at any time, the sum of all outstanding
Advances hereunder and the undrawn portion of outstanding Letters of Credit.
"GAAP" shall mean generally accepted accounting principles in effect
from time to time.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any federal, state,
local, foreign or other governmental or quasi-governmental authority or body (or
any agency, instrumentality or political subdivision thereof) pertaining to
Hazardous Material on or about any facilities owned, leased or operated by any
of the Companies, any Material Property or any portion thereof including,
without limitation, those relating to soil, surface, subsurface ground water
conditions and the condition of the ambient air and further including, without
limitation the Comprehensive Environmental Response, Compensation, and Liability
Act, as amended from time to time; the Superfund Amendments and Reauthorization
Act, Public Law 99-499, 100 Stat. 1613; the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901, et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801; the Clean Air Act, 42 U.S.C. Section 7401, et seq.; and the
regulations promulgated in connection therewith; the Environmental Protection
Agency regulations pertaining to asbestos (including 40 C.F.R. Part 61, Subpart
M); Occupational Safety and Health Administration regulations pertaining to
asbestos (including 29 C.F.R. Sections 1910.1001 and 1926.58); the Michigan
Environmental Response Act, as amended, M.C.L.A. 299.601, et seq.; and any state
and local laws and regulations pertaining to Hazardous Wastes and/or asbestos;
any so-called "Superfund" or "Superlien" law, any so-called "superfund" or
"superlien" law; and any other federal, state, foreign or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in
effect.
8
14
"Hereof", "Hereto", "Hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"Indebtedness" of any Person shall mean, as of any date, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
person as lessee under any lease which, in accordance with GAAP, is or should be
capitalized on the books of the lessee, (c) all obligations which are secured by
any lien or encumbrance existing on any asset or property of such Person whether
or not the obligation secured thereby shall have been assumed by such Person and
(d) all obligations of others similar in character to those described in clauses
(a) through (c) of this definition for which such Person is liable, contingently
or otherwise, as obligor, guarantor or in any other capacity, or in respect of
which obligations such Person assures a creditor against loss or agrees to take
any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such Person in respect of
letters of credit, surety bonds or similar obligations and all obligations of
such person to advance funds to, or to purchase assets, property or services
from, any other person in order to maintain the financial condition of such
other Person.
"Interest Period" shall mean with respect to any Eurodollar-based
Advance or election of a Eurodollar-based Rate, a period of one (1), two (2),
three (3) or six (6) months as (or any other period of time agreed to by
Companies and Bank) selected by Companies pursuant to the provisions of this
Agreement commencing on the day a Eurodollar-based Advance is made, or on the
effective date of an election of the Eurodollar-based Rate made under Section 2.
"Inventory" shall have the meaning ascribed to such term in the UCC.
"Issuing Office" shall mean Bank's International Banking Department,
Letter of Credit Division, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
or such other office as Bank shall designate as its Issuing Office.
"Lending Availability" shall mean as of any date of determination
thereof, the sum of (a) eighty five percent (85%) of Eligible Accounts plus (b)
fifty percent (50%) of Eligible Inventory; provided, however, in no event shall
the amount of Lending Availability determined under clause (b) exceed Five
Million Dollars ($5,000,000), less (c) the amount of the Reserve as of such date
of determination.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application of Companies requesting Bank to issue such Letter of
Credit (including the terms and conditions on the reverse side thereof or
otherwise provided therein), substantially in the form attached hereto as
Exhibit "C".
9
15
"Letter of Credit Fees" shall mean the fees payable to the Bank in
connection with Letters of Credit pursuant to Section 3.3 hereof.
"Letter of Credit Maximum Amount" shall mean the lesser of: (a) One
Million Two Hundred Fifty Thousand Dollars ($1,250,000) or (b) the Revolving
Credit Commitment minus the principal amount of Advances outstanding from time
to time under the Revolving Credit Note.
"Letter of Credit Obligation" shall mean the obligation of Companies
under each Letter of Credit Agreement to reimburse the Bank for each payment
made by the Bank under the Letter of Credit issued pursuant to such Letter of
Credit Agreement, together with all other sums, fees, charges and amounts which
may be owing to the Bank under such Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Bank as a result of a draw against any Letter of Credit.
"Letter(s) of Credit" shall mean any standby letters of credit issued
by Bank, titled as such, at the request of or for the accounts of Companies
pursuant to Article 3 hereof.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit-arrangement, encumbrance, lien (statutory or other) or preference,
priority or other security agreement (including without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any related financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction).
"Loan Documents" shall mean collectively, this Agreement, the Revolving
Credit Note, the Collateral Documents, any Letter of Credit Agreements and any
other documents, instruments or agreements executed pursuant to or in connection
with any such document.
"Material Property" shall mean with respect to each of the Companies
any property, whether personal or real, owned, leased or otherwise used by such
Company which is material to the operations of such Company.
"Measuring Period" shall mean for any date of the determination ending
on or before September 31, 2001, the period from January 1, 2001 through such
date of determination and for any date of determination occurring on or after
December 31, 2001 shall mean the four preceding fiscal quarters ending on such
date.
"Mortgages" shall mean the Continuing Collateral Mortgages encumbering
the real property described in attached Exhibit "G" executed and delivered by
Companies to the Bank as of the date hereof, as amended from time to time.
10
16
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Notes" shall mean the Revolving Credit Note, the Equipment Note and
each Equipment Term Note and "Note" shall mean each of them.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Encumbrances" shall mean with respect to any Person:
(a) the liens and encumbrances granted under or established by
this Agreement or the Loan Documents;
(b) liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued,
provided that such provision for the payment of all such taxes known to
such Person has been made on the books of such Person as may be
required by GAAP, and, in the case of any such contest, if so requested
by the Bank, an opinion of counsel (or other evidence satisfactory to
the Bank) to the effect that non-payment of such taxes will not
endanger the lien or security interest afforded by the Collateral
Documents and that none of the Collateral will be subject to loss or
forfeiture as a result of such nonpayment;
(c) mechanics', materialmen's, carriers', warehousemen's and
similar liens and encumbrances arising in the ordinary course of
business and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in good faith
by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any proceedings commenced for the
enforcement of such liens and encumbrances shall have been duly
suspended; and (ii) such provision for the payment of such liens and
encumbrances has been made on the books of such Person as may be
required by GAAP;
(d) liens arising in connection with worker's compensation,
unemployment insurance, old age pensions (subject to the applicable
provisions of this Agreement) and social security benefits which are
not overdue or are being contested in good faith by appropriate
proceedings diligently pursued, provided that in the case of any such
contest (i) any proceedings commenced for the enforcement of such liens
shall have been duly suspended; and (ii) such provision for the payment
of such liens has been made on the books of such Person as may be
required by GAAP;
(e)(i) liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection
with progress payments or advance
11
17
payments due under contracts with the United States or any foreign
government or any agency thereof entered into in the ordinary course of
business and (ii) liens incurred or deposits made in the ordinary
course of business to secure the performance of statutory obligations,
bids, leases, fee and expense arrangements with trustees and fiscal
agents and other similar obligations (exclusive of obligations incurred
in connection with the borrowing of money, any lease-purchase
arrangements or, except to the extent permitted pursuant to the
provisions of subsection (g) below, the payment of the deferred
purchase price of property), provided that full provision for the
payment of all such obligations set forth in clauses (i) and (ii) has
been made on the books of such Person as may be required by GAAP;
(f) Liens listed in attached Schedule 2; and
(g) Purchase money security interests to secure purchase money
indebtedness, not to exceed Five Hundred Thousand Dollars ($500,000) in
aggregate principal amount at any one time outstanding, incurred for
the purpose of purchasing or acquiring fixed assets, so long as such
security interests are created substantially contemporaneously with the
respective assets so purchased or acquired, do not extend to any other
property or assets of Companies other than the fixed assets so
financed, and secure only the purchase money indebtedness incurred
specifically to purchase or acquire the respective fixed assets.
"Person" shall mean an individual, corporation, partnership, trust,
incorporated or unincorporated organization, joint venture, joint stock company,
or a government or any agency or political subdivision thereof or other entity
of any kind.
"Plan" shall mean any pension plan which is covered by Title IV of
ERISA and in respect of which any of the Companies or a Commonly Controlled
Entity is an "employer" as defined in Section 4(5) of ERISA.
"Pledge Agreements" shall mean the Security Agreements (Negotiable
Collateral) pursuant to which Detrex and The Elco Corporation have pledged to
the Bank all of their respective interests in their Subsidiaries, as amended
from time to time.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean for any day a per annum interest rate
which is the greater of (i) the Prime Rate less one half of one percent (1/2%)
or (ii) the Alternate Base Rate.
12
18
"Prime Rate" shall mean the per annum interest rate established by Bank
as its prime rate for its borrowers as such rate may vary from time to time,
which rate is not necessarily the lowest rate on loans made by Bank at any such
time.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Request for Advance" shall mean a Request for Advance issued by
Company under this Agreement in the form annexed to this Agreement as Exhibit
"K".
"Requirement of Law" shall mean, as to any Person, the Articles of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reserve" shall mean as of any date of determination the amount
determined as set forth below:
Period Amount
------ ------
January 1 through March 31 $0
April 1 through June 30 $145,000
July 1 through September 30 $290,000
October 1 through December 31 $435,000
"Responsible Officer" shall mean, as to any Person, the chief executive
officer or chief operating officer of such Person or, with respect to financial
matters, the chief financial officer of such Person.
"Revolving Credit Commitment" shall mean Thirteen Million Dollars
($13,000,000), subject to reduction or termination pursuant to Section 2.6
hereof.
"Revolving Credit Commitment Fee" shall mean the commitment fee payable
to Bank pursuant to Section 2.5(a) hereof.
"Revolving Credit Maturity Date" shall mean May 1, 2003.
"Revolving Credit Note" shall mean the Note described in Section 2.1
hereof made by Companies to the Bank in the form annexed to this Agreement as
Exhibit "E" hereto.
13
19
"Security Agreements" shall mean those certain security agreements
encumbering the accounts, inventory, general intangibles, machinery, equipment
and all other personal property of Companies, executed and delivered by
Companies to the Bank, as of the date hereof, as amended from time to time.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.
"Subsidiary" shall mean, as to any Person, a corporation of which
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the time owned,
or the management of which is otherwise controlled, directly or indirectly,
through one or more intermediaries by such Person and in any event shall
include, as to any Person, a corporation of which fifty percent (50%) of the
shares of voting stock are owned by such Person.
"UCC" shall mean the Uniform Commercial Code, as adopted in the State
of Michigan.
Defined terms in this Agreement shall include in the singular number
the plural and in the plural number the singular.
2. THE INDEBTEDNESS: REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement,
the Bank agrees to lend to Companies at any time and from time to time from the
Effective Date until the Revolving Credit Maturity Date, and Companies may
borrow, sums not to exceed the Revolving Credit Commitment. All of the Advances
under this Section 2.1 shall be evidenced by the Revolving Credit Note under
which advances, repayments and readvances may be made, subject to the terms and
conditions of this Agreement.
2.2 Types of Advances and Maturity. The Revolving Credit Note shall
mature on the Revolving Credit Maturity Date and each Advance from time to time
outstanding thereunder shall bear interest at its Applicable Interest Rate. The
amount and date of each Advance, its Applicable Interest Rate, its Interest
Period, if applicable, and the amount and date of any repayment shall be noted
on Bank's records, which records will be conclusive evidence thereof absent
manifest error.
2.3 Requests for Advances. Companies may request an Advance under the
Revolving Credit upon the delivery to Bank of a Request for Advance executed by
an authorized officer of Detrex, subject to the following:
(a) each such Request for Advance shall set forth the information
required on the Request for Advance form annexed hereto as
Exhibit "K";
14
20
(b) each such Request for Advance shall be delivered to Bank by
11:00 a.m. Detroit time on the proposed date of Advance in the
case of a Prime-based Advance and by 11:00 a.m. Detroit time
on the third Business Day preceding the proposed date of
Advance in the case of a Eurodollar-based Advance;
(c) the principal amount of such Advance, plus the amount of any
outstanding indebtedness to be then combined therewith having
the same Applicable Interest Rate and Interest Period, if any,
shall be in the case of a Eurodollar-based Advance at least
$500,000 or any larger amount in $50,000 increments;
(d) a Request for Advance, once delivered to Bank, shall not,
without Bank's consent, be revocable by Companies;
(e) the principal amount of such Advance, plus the principal
amount of all other Advances and the undrawn amount of all
other Advances and the undrawn amount of all Letters of Credit
which shall be outstanding as of the date of the requested
Advance, shall not exceed the Revolving Credit Commitment;
(f) upon the funding of the requested Advance, the Formula Debt
shall not exceed the Lending Availability.
Bank may, at its discretion lend under this Section 2 upon the
telephone request of an authorized officer of Detrex and, in the event Bank
makes any such advance upon a telephone request, the requesting officer shall,
if so requested by Bank, mail to Bank, on the same day as such telephone
request, a Request for Advance in the form attached as Exhibit "K". Companies
hereby authorize Bank to disburse advances under this Section 2 pursuant to the
telephone instructions of any person purporting to be an authorized officer of
Detrex and Companies shall bear all risk of loss resulting from disbursements
made upon any telephone request. Each telephone request for an Advance shall
constitute a certification of the matters set forth in the Request for Advance
form as of the date of such requested Advance.
2.4 Disbursement of Advances. Unless the conditions for Advances are
not met by Companies or the Revolving Credit Commitment shall have been
suspended or terminated in accordance with this Agreement, the Bank shall make
available to Companies not later than 4:00 p.m. (Detroit time) on such date the
aggregate of the amounts so requested from it in like funds by credit to an
account of Companies maintained with Bank or to such other account or third
party as Companies may direct.
15
21
2.5 Revolving Credit Commitment Fee.
(a) From the date of execution of this Agreement to the Revolving
Credit Maturity Date, the Companies shall pay to the Bank a
Revolving Credit Commitment Fee monthly in arrears commencing
June 1, 2001, and within three Business Days after the last
day of each month thereafter. The Revolving Credit Commitment
Fee shall be an amount equal to the average daily balance of
the unborrowed portion of the Revolving Credit Commitment for
the monthly period then ending, minus the average daily face
amount of any outstanding Letters of Credit during such
period, multiplied by one quarter of one percent (1/4%). The
Revolving Credit Commitment Fee shall be computed on the basis
of a year of three hundred sixty (360) days and assessed for
the actual number of days elapsed. Upon request of Companies,
Bank shall provide to Companies the detail of Bank's
computation of the Revolving Credit Commitment Fee. Whenever
any payment of the Revolving Credit Commitment Fee shall be
due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next Business Day;
(b) It is expressly understood that the fees described in this
Section are not refundable under any circumstances.
2.6 Optional Reduction or Termination of Revolving Credit Commitment.
Upon at least five (5) Business Days' prior written or facsimile notice by
Detrex, on behalf of the Companies, to the Bank, the Companies may permanently
reduce the Revolving Credit Commitment in whole at any time, or in part from
time to time, without premium or penalty, provided that: (i) each partial
reduction of the Revolving Credit Commitment shall be in an aggregate amount
equal to One Million Dollars ($1,000,000) or any larger amount in One Million
Dollars ($1,000,000) increments; (ii) each reduction or termination shall be
accompanied by the payment of the Revolving Credit Commitment Fee, if any,
accrued on the amount of the Revolving Credit Commitment so reduced through the
date of such reduction or termination; (iii) the Revolving Credit Commitment, as
so reduced, shall not be less than the aggregate face amount of outstanding
Letters of Credit; and (iv) the Companies shall prepay the amount, if any, by
which the sums of aggregate unpaid principal amount of the Revolving Credit Note
plus the aggregate face amount of outstanding Letters of Credit exceeds the
amount of the Revolving Credit Commitment as so reduced, together with interest
thereon to the date of prepayment.
2.7 Borrowing Base Limitation. Notwithstanding anything to the contrary
herein, at no time shall the Formula Debt exceed the Lending Availability. If at
any time the Formula Debt shall exceed the Lending Availability, Companies shall
forthwith make a principal payment on the Revolving Credit Note in an amount
sufficient to bring Formula Debt in compliance with the Lending Availability.
Lending Availability shall be determined on the basis of the most recent
Borrowing Base Report to be delivered by Detrex, on behalf of the Companies, to
Bank pursuant to the provisions of Section 8.2(c) hereof.
16
22
2.8 Facility Fee. Upon execution of this Agreement, Companies shall pay
to the Bank a non-refundable facility fee in the amount of Sixty Thousand
Dollars ($60,000).
2.9 Interest. Advances under the Revolving Credit Note shall bear
interest from the date thereof on the unpaid principal balance thereof from time
to time outstanding, at a rate per annum equal to the Prime-based Rate or the
Eurodollar-based Rate, as the Companies may elect subject to the provisions of
this Agreement. With respect to Prime-based Advances, interest shall be payable
monthly on the first Business Day of each month, commencing on the first
Business Day following the month during which such Advance is made, and at
maturity. With respect to Eurodollar-based Advances, interest shall be payable
on the last day of each Interest Period applicable thereto, provided, however,
if such Interest Period is longer than three months, interest shall be payable
three months following the first day of such Interest Period and on the last day
of such Interest Period. Notwithstanding the foregoing, from and after the
occurrence of any Event of Default and solely during the continuation thereof,
the Advances shall bear interest, payable on demand, at a rate per annum equal
to: (i) in the case of Prime-based Advances, three percent (3%) above the
Prime-based Rate; and (ii) in the case of Eurodollar-based Advances, three
percent (3%) above the rate which would otherwise be applicable under this
Section 2.9 until the end of the then current Interest Period, at which time
such Advance shall bear interest at the rate provided for in clause (i) of this
Section 2.9. Interest on all Advances shall be calculated on the basis of a 360
day year for the actual number of days elapsed. The interest rate with respect
to any Prime-based Advance shall change on the effective date of any change in
the Prime-based Rate.
2.10 Interest Periods. Each Interest Period for a Eurodollar-based
Advance shall commence on the date such Eurodollar-based Advance is made or is
converted from an Advance of another type pursuant to Section 2.11 hereof or on
the last day of the immediately preceding Interest Period for such
Eurodollar-based Advance, and shall end on the date one, two, three or six
months thereafter (or any other date agreed to by Companies and Bank), as the
Companies may elect as set forth below, subject to the following:
(i) no Interest Period shall extend beyond the Revolving
Credit Maturity Date; and
(ii) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding
Business Day unless the next succeeding Business Day falls in another
calendar month, in which case, such Interest Period shall end on the
immediately preceding Business Day and when an Interest Period begins
on a day which has no numerically corresponding day in the calendar
month during which such Interest Period is to end, it shall end on the
last Business Day of such calendar month.
17
23
The Companies shall elect the initial Interest Period applicable to a
Eurodollar-based Advance by its Request for Advance given to the Bank pursuant
to Section 2.3 or by its notice of conversion given to the Bank pursuant to
Section 2.11, as the case may be. Provided that no Event of Default shall have
occurred and be continuing, the Companies may elect to continue an Advance as a
Eurodollar-based Advance by giving irrevocable written, telephonic or
telegraphic notice thereof to the Bank, before 11:00 a.m. on the third Business
Day immediately preceding the last day of the then current Interest Period
applicable to such Eurodollar-based Advance, specifying the duration of the
succeeding Interest Period therefor. If the Bank does not receive timely notice
of the election and the Interest Period elected by the Companies, the Companies
shall be deemed to have elected to convert such Eurodollar-based Advance to a
Prime-based Advance at the end of the then current Interest Period.
2.11 Conversions of Advances. Provided that no Event of Default shall
have occurred and be continuing, the Companies may, on any Business Day, convert
any outstanding Advance into an Advance of another type in the same aggregate
principal amount, provided that any conversion of a Eurodollar-based Advance
shall be made only on the last Business Day of the then current Interest Period
applicable to such Advance. If the Companies desire to convert an Advance, it
shall give the Bank written, telephonic or telegraphic notice, specifying the
date of such conversion, the Advances to be converted, the type of Advance
elected and, if the conversion is into a Eurodollar-based Advance, the duration
of the first Interest Period therefor, which notice shall be given not later
than 11:00 a.m. Detroit time on the applicable date of conversion in the case of
conversion to a Prime-based Advance and not later than 11:00 a.m. Detroit time
on the third Business Day immediately preceding the date of conversion in the
case of conversion to a Eurodollar-based Advance.
2.12 Prepayment. If Companies make any payment of principal with
respect to any Eurodollar-based Advance on any day other than the last day of
the Interest Period applicable thereto (whether voluntarily, by acceleration, or
otherwise), or if Companies fail to borrow any Eurodollar-based Advance after
notice has been given by Companies to Bank in accordance with the terms hereof
requesting such Advance, or if Companies fail to make any payment of principal
or interest when due in respect of a Eurodollar-based Advance, Companies shall
reimburse Bank on demand for any resulting loss, cost or expense incurred by
Bank as a result thereof, including, without limitation, any such loss, cost or
expense incurred in obtaining, liquidating, employing or redeploying deposits
from third parties, whether or not Bank shall have funded or committed to fund
such Advance. Such amount payable by Companies to Bank may include, without
limitation, an amount equal to the excess, if any, of (a) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow, refund or convert, through the last day of the relevant Interest
Period, at the applicable rate of interest for said Advance(s) provided under
this Agreement, over (b) the amount of interest (as reasonably determined by
Bank) which would have accrued to Bank on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
18
24
market. Calculation of any amounts payable to Bank under this paragraph shall be
made as though Bank shall have actually funded or committed to fund the relevant
Eurodollar-based Advance through the purchase of an underlying deposit in an
amount equal to the amount of such Advance and having a maturity comparable to
the relevant Interest Period; provided, however, that Bank may fund any
Eurodollar-based Advance in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Companies, Bank shall
deliver to Companies a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
2.13 Eurodollar Lending Office. For any Interest Period for which the
Applicable Interest Rate is the Eurodollar-based Rate, if Bank shall designate a
Eurodollar Lending Office which maintains books separate from those of the rest
of Bank, Bank shall have the option of maintaining and carrying the relevant
Advance on the books of such Eurodollar Lending Office.
2.14 Unavailability. If with respect to any Interest Period, Bank
reasonably determines that, by reason of circumstances affecting the foreign
exchange and interbank markets generally, deposits in Eurodollars in the
applicable amounts are not being offered to the Bank for such Interest Period,
then Bank shall forthwith give notice thereof to the Companies. Thereafter,
until Bank notifies Companies that such circumstances no longer exist, the
obligation of Bank to make Eurodollar-based Advances, and the right of Companies
to convert an Advance to or refund an Advance as a Eurodollar-based Advance
shall be suspended and thereafter Companies may elect as Applicable Interest
Rates only those which remain available.
2.15 Illegality. If, after the date hereof, the introduction or
implementation of, or any change in, any applicable law, rule or regulation or
in the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by Bank
(or its Eurodollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, shall make it unlawful or
impossible for the Bank (or its Eurodollar Lending Office) to honor its
obligations hereunder to make or maintain any Advance with interest at the
Eurodollar-based Rate, Bank shall forthwith give notice thereof to Companies.
Thereafter (a) the obligations of Bank to make Eurodollar-based Advances and the
right of Companies to convert an Advance or refund an Advance as a
Eurodollar-based Advance shall be suspended and thereafter Companies may select
as Applicable Interest Rates only those which remain available, and (b) if Bank
may not lawfully continue to maintain an Advance to the end of the then current
Interest Period applicable thereto, the Prime-based Rate shall be the Applicable
Interest Rate for the remainder of such Interest Period.
2.16 Yield Protection. If the adoption or implementation after the date
hereof, or any change after the date hereof in, any applicable law, rule or
regulation of any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by Bank
(or its Eurodollar Lending Office) with any request or directive
19
25
(whether or not having the force of law) made by any such authority, central
bank or comparable agency after the date hereof:
(a) shall subject Bank (or its Eurodollar Lending Office) to any
tax, duty or other charge with respect to any Advance or the
Revolving Credit Note or shall change the basis of taxation of
payments to Bank (or its Eurodollar Lending Office) of the
principal of or interest on any Advance or the Revolving
Credit Note or any other amounts due under this Agreement in
respect thereof (except for changes in the rate of tax on the
overall net income of Bank or its Eurodollar Lending Office
imposed by any jurisdiction in which Bank is organized or
engaged in business); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by Bank (or its Eurodollar
Lending Office) or shall impose on Bank (or its Eurodollar
Lending Office) or the foreign exchange and interbank markets
any other condition affecting any Advance or the Revolving
Credit Note;
and the result of any of the foregoing is to increase the costs to Bank of
maintaining any part of the indebtedness hereunder or to reduce the amount of
any sum received or receivable by Bank under this Agreement or under the Note,
by an amount deemed by the Bank to be material, then Bank shall promptly notify
Companies of such fact and demand compensation therefor and, within fifteen days
after demand by Bank, Companies agree to pay to Bank such additional amount or
amounts as will compensate Bank for such increased cost or reduction. Bank will
promptly notify Companies of any event of which it has knowledge which will
entitle Bank to compensation pursuant to this Section. A certificate of Bank
setting forth the basis for determining such additional amount or amounts
necessary to compensate Bank shall be conclusively presumed to be correct save
for manifest error. Bank agrees that, as promptly as practical after it becomes
aware of the occurrence of any event or the existence of a condition that will
cause Bank to be entitled to compensation under this Section, it will, to the
extent not inconsistent with Bank's internal policies, use reasonable efforts to
make, fund or maintain any affected Eurodollar-based Advance through another
lending office of Bank if as a result thereof the additional monies which would
otherwise be required to be paid in respect of such Eurodollar-based Advance
would be materially reduced and if, as determined by Bank, in its reasonable
discretion, the making, funding or maintaining of such Eurodollar-based Advance
through such other lending office would not materially adversely affect such
Advance or Bank. Companies shall pay all reasonable expenses incurred by Bank in
utilizing another lending office pursuant to this Section.
20
26
2.17 Capital Adequacy. In the event that at any time after the date of
this Agreement any change in law such as described in Section 2.16, hereof,
shall, in the reasonable opinion of Bank require that the credit provided under
this Agreement be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by Bank or any
corporation controlling Bank and such change has or would have the effect of
reducing the rate of return on Bank's or Bank's parent's capital or assets as a
consequence of the Bank's obligations hereunder to a level below that which Bank
or Bank's parent would have achieved but for such change, then Bank shall notify
Companies and demand compensation therefor and, within fifteen days after demand
by Bank, Companies agree to pay to Bank such additional amount or amounts as
will compensate Bank for such reduction. Bank will promptly notify Companies of
any event of which it has knowledge which will entitle Bank to compensation
pursuant to this Section. A certificate of Bank setting forth the basis for
determining such additional amount or amounts necessary to compensate Bank shall
be conclusively presumed to be correct save for manifest error.
3. LETTERS OF CREDIT.
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Bank may through its Issuing Office, in its sole discretion, at any
time and from time to time from the Effective Date until the Revolving Credit
Maturity Date, upon the request of Detrex, on behalf of the Companies, issue
standby Letters of Credit for the account of Companies, in an aggregate amount
at any one time outstanding not to exceed the Letter of Credit Maximum Amount.
Each Letter of Credit shall provide an initial expiration date not later than
one (1) year from its date of issuance or such later date as is acceptable to
Bank (subject to renewals in Bank's sole discretion) and that it is available by
drafts drawn at sight and presentation of documents (which shall be payable
within three (3) Business Days of sight, provided that the terms and conditions
of the Letter of Credit are complied with); provided that each Letter of Credit
shall expire upon (notwithstanding any renewals thereof) three (3) Business Days
prior to the Revolving Credit Maturity Date, unless such condition is waived by
Bank. Provided further, that all applications will be submitted and all Letters
of Credit issued in accordance with applicable provisions of U.S. law and
regulations, including, without limitation, the Trading with the Enemy Act,
Export Administration Act, International Emergency Economic Powers Act and the
Regulations of the Office of Foreign Assets Control of the U.S. Department of
the Treasury.
3.2 Conditions to Issuance. No Letter of Credit shall be issued for
Companies unless, as of the date the issuance of such Letter of Credit is
requested:
(a) the face amount of the Letter of Credit requested,
plus the face amount of all other outstanding Letters
of Credit does not exceed the Letter of Credit
Maximum Amount;
21
27
(b) the face amount of the Letter of Credit requested,
plus the principal amount of all Advances under the
Revolving Credit Note outstanding and other
outstanding Letters of Credit, does not exceed the
Revolving Credit Commitment;
(c) the obligations of Companies set forth in this
Agreement and any of the Loan Documents are valid,
binding and enforceable obligations of each of the
Companies, subject to bankruptcy, reorganization or
similar laws limiting the enforceability of
creditor's rights generally and be subject to the
availability of equitable remedies;
(d) no Event of Default exists and no event which, with
the giving of notice or lapse of time, or both, would
constitute an Event of Default exists;
(e) the representations and warranties contained in this
Agreement and the Loan Documents are true in all
material respects;
(f) the execution of the Letter of Credit Agreement with
respect to the Letter of Credit requested will not
violate the terms and conditions of any contract,
agreement or other borrowing of Companies (or any of
them);
(g) the Companies shall have delivered to Bank and the
Issuing Office, not less than five (5) Business Days
prior to the requested date for issuance, the Letter
of Credit Agreement related thereto, together with
such other documents and materials as may be required
pursuant to the terms thereof, and the terms of the
proposed Letter of Credit shall be satisfactory to
Bank and its Issuing Office;
(h) no order, judgment or decree of any court, arbitrator
or governmental authority shall purport by its terms
to enjoin or restrain Bank from issuing the Letter of
Credit, and no applicable law, rule, regulation,
request or directive (whether or not having the force
of law) shall prohibit or request that Bank refrain
from issuing the Letter of Credit requested or
letters of credit generally;
(i) Bank shall have received the issuance fee required in
connection with the issuance of such Letter of Credit
pursuant to Section 3.3 hereof.
Each Letter of Credit Agreement submitted to Bank pursuant hereto shall
constitute the requesting party's certification of the matters set forth in this
Section 3.2 (a) through (i).
3.3 Letter of Credit Fees. Companies agree to pay to Bank, Letter of
Credit Fees with respect to the undrawn face amount of such Letter of Credit
issued pursuant hereto, at a per
22
28
annum rate equal to two percent (2%). Such fees shall be payable annually in
advance and shall be calculated on the basis of a 360 day year and assessed for
the actual number of days elapsed from the date of the issuance of each Letter
of Credit until the date of expiration set forth in such Letter of Credit.
3.4 Issuance Fees. In connection with the Letters of Credit, the
Companies will pay the Bank, letter of credit issuance fees and standard
administration, payment and cancellation charges assessed by Bank or its Issuing
Office.
3.5 Existing Letters of Credit. Each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter of Credit, and each
application submitted in connection with each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter of Credit Agreement.
4. THE INDEBTEDNESS: EQUIPMENT LINE OF CREDIT
4.1 Bank may lend to Companies at any time and from time to time from
the date hereof until the Equipment Line Maturity Date, sums not to exceed Three
Million Dollars ($3,000,000) in aggregate principal amount. Each of the
borrowings hereunder shall be evidenced by the Equipment Note.
4.2 On June 1 and December 1 of each year, the advances outstanding
under the Equipment Note shall be termed out under an Equipment Term Note. The
indebtedness represented by each Equipment Term Note shall be payable in equal
monthly principal installments equal to the amount necessary to amortize the
original amount of such Equipment Term Note over a five year term commencing on
the first day of the first month after such Note is executed and on the first
day of each month thereafter until the maturity date thereof, when the entire
unpaid balance of principal and interest thereon shall be due and payable. The
maturity date for each Equipment Term Note shall be the date which is five (5)
years after the date thereof. In addition to the above required payments on
principal, Company agrees to pay interest on the unpaid principal balance of the
Equipment Note and each Equipment Term Note from time to time outstanding at a
per annum rate equal to the Prime Rate less one quarter of one percent (1/4%),
provided, however, upon the occurrence of any Event of Default hereunder,
interest shall be payable at a per annum rate of three percent (3%) above the
Prime Rate. Interest payments shall be made monthly, commencing on the first day
of the first month following the advance under the Equipment Note or applicable
Equipment Term Note and on the first day of each month thereafter. Interest
shall be computed on a daily basis using a year of 360 days for the actual
number of days elapsed, and in such computation effect shall be given to any
change in the interest rate resulting from a change in the Prime Rate on the
date of such change in the Prime Rate.
4.3 Bank shall not make advances under this Section 4 unless Companies
shall have first filed with Bank a request for draw in form acceptable to Bank
executed by an authorized
23
29
officer of Companies. Each such request for an advance shall be submitted to
Bank not less than ten (10) days prior to the requested date of disbursement of
the advance.
4.4 Bank will approve requests for draws upon presentation by Company
of such documents, instruments or opinions, in form and substance satisfactory
to the Bank, as the Bank may required
4.5 Companies may prepay the Equipment Note and each Equipment Term
Note in whole or in part without penalty. Any prepayments shall be applied to
principal payments due under the applicable note in the inverse order of their
maturities.
4.6 Proceeds of the Equipment Note shall be used solely to finance the
acquisition of machinery and equipment which is acceptable to Bank and each
advance shall be based on eighty percent (80%) of the invoice cost (excluding
installation and delivery expenses and other soft costs) of the machinery and
equipment to be purchased.
4.7 The Companies shall pay to the Bank an equipment facility
commitment fee quarterly in arrears commencing July 1, 2001, and within three
Business Days after the last day of each calendar quarter thereafter. The fee
shall be an amount equal to the average daily balance of the unborrowed portion
of the equipment facility for the quarterly period then ending, multiplied by
one quarter of one percent (1/4%). The fee shall be computed on the basis of a
year of three hundred sixty (360) days and assessed for the actual number of
days elapsed. Upon request of Companies, Bank shall provide to Companies the
detail of Bank's computation of the fee. Whenever any payment of the fee shall
be due on a day which is not a Business Day, the date for payment thereof shall
be extended to the next Business Day.
4.8 The aggregate amount of advances available under this Section 4
shall not exceed $3,000,000. Each advance shall be in amount not less than
$100,000.
5. PAYMENTS.
5.1 Payment Procedure.
(a) All payments by Companies of principal of, or interest on,
the Notes or of Revolving Credit Commitment Fees, Letter of Credit Obligations,
Letter of Credit Fees and other fees due and payable under this Agreement shall
be made without setoff or counterclaim on the date specified for payment under
this Agreement not later than noon (Detroit time) in immediately available funds
by Companies to Bank. Each of the Companies irrevocably authorizes Bank to
charge any account maintained by such Company with Bank for any amounts due and
payable under this Agreement.
24
30
(b) Whenever any payment to be made shall otherwise be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest, if any, in connection with such payment.
5.2 Application of Proceeds. Notwithstanding anything to the contrary
in this Agreement, after an Event of Default, the proceeds of any offsets,
voluntary payments by Companies or others and any other sums received or
collected in respect of the obligations under this Agreement, shall be applied
to the obligations under this Agreement in such order and manner as reasonably
determined by the Bank, and then, if there is any excess, to Companies.
5.3 Deposits and Accounts. In addition to and not in limitation of any
rights of the Bank or other holder of the Notes or assignee of Letter of Credit
Agreements and Letter of Credit Obligations under applicable law, the Bank and
each other such holder shall, in the event of a default under the Notes or any
Letter of Credit Agreement or an Event of Default hereunder, and without notice
or demand of any kind, have the right to liquidate and collect all property or
assets of Companies (including deposits and other credits), whether presently
owned or hereafter acquired, in possession or control of (or owing by) the Bank
or other holder for any purpose, and to apply the proceeds of any such
liquidations and collections, and offset any amounts owing to Companies (or any
of them), against Companies' obligations hereunder and under the Notes and Loan
Documents.
6. CONDITIONS. The obligation of Bank to make Advances, to make any
disbursement under the Equipment Note and to issue Letters of Credit pursuant to
this Agreement is subject to, and the Effective Date of this Agreement shall be
the date of, Companies' satisfaction of the following conditions:
6.1 Execution of Notes and This Agreement. Companies shall have
executed and delivered to Bank, the Revolving Credit Note, the Equipment Note,
and this Agreement (including all schedules, exhibits, certificates, opinions,
financial statements and other documents to be delivered pursuant hereto) and
the Revolving Credit Note, the Equipment Note, the Loan Documents and this
Agreement shall be in full force and effect.
6.2 Corporate Authority. Bank shall have received: (i) certified
copies of resolutions of the Board of Directors of each of the Companies
evidencing approval of the borrowings hereunder and execution and delivery of
the Loan Documents to which it is party; (ii) certified copies of each Company's
Articles of Incorporation and Bylaws; (iii) a certificate of good standing from
the state of each Company's incorporation, and from every state in which any of
the Companies is qualified to do business; and (iv) an incumbency certificate
for each Company.
6.3 Opinion of Counsel. Companies shall furnish Bank prior to the
initial Advance under this Agreement, an opinion of counsel to the Companies
dated the date hereof, and
25
31
covering such matters as required by and otherwise satisfactory in form and
substance to the Bank.
6.4 Collateral Documents. As security for all Indebtedness of Company
to the Banks hereunder, Company shall have furnished, executed and delivered to
Bank, or caused to be furnished, executed and delivered to Bank, prior to or
concurrently with the initial borrowing hereunder, in form and substance
satisfactory to the Bank and supported by appropriate resolutions in certified
form authorizing same, the Collateral Documents. In addition, if required or
advisable under applicable law to perfect the liens granted thereby, the Bank
shall have received, concurrently with or prior to the making of Advances
hereunder, proof that appropriate financing statements, collateral and other
documents covering such Collateral have been executed and delivered by the
appropriate parties and recorded or filed in such jurisdictions and such other
steps have been taken as necessary to perfect the security interests, or other
liens granted thereby.
6.5 Representations and Warranties. The representations and warranties
made by Companies under this Agreement and any of the Loan Documents shall have
been true and correct when made and shall be true and correct in all material
respects on and as of the date of any of the Advances hereunder, and the
representations and warranties of any of the foregoing which are contained in
any certificate, document or financial or other statement furnished at any time
hereunder or thereunder or in connection herewith or therewith shall have been
true and correct when made.
6.6 Compliance with Certain Documents and Agreements. Companies shall
have each performed and complied in all material respects with all agreements
and conditions contained in this Agreement, the Loan Documents and any agreement
or other document executed hereunder or thereunder and required to be performed
or complied with by each of them and none of such parties shall be in default in
the performance or compliance with any of the terms or provisions hereof or
thereof.
6.7 No Default. No Event of Default or event which with the lapse of
time or giving of notice or both would constitute an Event of Default shall have
occurred and be continuing.
6.8 No Material Adverse Change. There shall have been no material
adverse change in the condition (financial or otherwise), properties, business,
prospects of, results or operations of Companies (taken as a whole) from
December 31, 2000.
6.9 Company's Certificate. The Bank shall have received a certificate
of a responsible senior officer of each Company, dated the date of the making of
Advances hereunder, stating that the conditions of Sections 6.1 and 6.5 through
6.8, hereof have been fully satisfied.
26
32
6.10 Other Documents and Instruments. The Bank shall have received such
other instruments and documents as the Bank may reasonably request in connection
with the making of the Advances hereunder, and all such instruments and
documents shall be satisfactory in form and substance to the Bank.
6.11 Borrowing Base Report. The Bank shall have received a Borrowing
Base Report for the period ended April 13, 2001.
6.12 Continuing Conditions. The obligations of the Bank to make
Advances or any other extensions of credit under this Agreement shall be subject
to the continuing conditions that all documents executed or submitted pursuant
hereto shall be reasonably satisfactory in form and substance to Bank and its
counsel; Bank and its counsel shall have received all information, and such
counterpart originals or such certified or other copies of such materials, as
the Bank and its counsel may reasonably request; and all legal matters incident
to the transactions contemplated by this Agreement (including, without
limitation, matters arising from time to time as a result of changes occurring
with respect to any statutory, regulatory or decisional law applicable hereto)
shall be satisfactory to counsel to the Bank.
7. REPRESENTATIONS AND WARRANTIES
Companies jointly and severally represent and warrant and such
representations and warranties shall be deemed to be continuing representations
and warranties during the entire life of this Agreement:
7.1 Corporate Authority. Each Company is a corporation duly organized
and existing in good standing under the laws of its state of incorporation; and
each Company is duly qualified and authorized to do business as a foreign
corporation in each jurisdiction where the character of its assets or the nature
of its activities makes such qualification necessary and where failure to be so
qualified would have a material adverse effect on its business.
7.2 Due Authorization. With respect to each Company, the execution,
delivery and performance of this Agreement, the Loan Documents and any other
documents and instruments required under this Agreement to which it is party,
and the issuance of the Revolving Credit Note by it, are within its corporate
powers, have been duly authorized by each Company, are not in contravention of
law or the terms of such Company's Articles of Incorporation or Bylaws, and do
not require the consent or approval of any governmental body, agency or
authority material to the transactions contemplated by this Agreement or the
Loan Documents.
7.3 Encumbrances. There are no security interests in, liens, mortgages,
or other encumbrances on any of the Companies' property except for Permitted
Encumbrances and those not prohibited by the provisions of this Agreement.
27
33
7.4 No Negative Pledges. None of the Companies is a party to, or
subject to, any agreement, document or instrument which would restrict or
prevent it from granting first priority liens upon, security interests in and
pledges of assets to Bank.
7.5 Subsidiaries. There is no Subsidiary of any Company which is not a
party to this Agreement, except as disclosed on Schedule 7.5 hereto.
7.6 Taxes. Each Company has filed on or before their respective due
dates, all federal, state and foreign tax returns which are to the knowledge of
Companies required to be filed or have obtained extensions for filing such tax
returns and are not delinquent in filing such returns in accordance with such
extensions and have paid all taxes which have become due pursuant to those
returns or pursuant to any assessments received by any such party, as the case
may be, to the extent such taxes have become due except to the extent such tax
payments are being actively contested in good faith and to the extent such
Company has created reserves for such taxes in accordance with GAAP.
7.7 Enforceability of Agreement and Loan Documents. This Agreement and
each of the Loan Documents to which any of the Companies is a party and all
other certificates, agreements and documents executed and delivered by Companies
under or in connection herewith have each been duly executed and delivered by
their duly authorized officers and constitute the valid and binding obligations
of each Company, enforceable in accordance with their respective terms, except
as the validity or enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting creditors' rights
generally or other equitable principles (regardless of whether enforcement is
considered in proceedings in law or equity).
7.8 Non-contravention. The execution, delivery and performance of this
Agreement and the Loan Documents and any other documents and instruments
required under or in connection with this Agreement by each Company are not in
contravention of the terms of any agreement relating to Indebtedness of any
Company for borrowed money or any other material indenture, agreement or
undertaking to which any Company is a party or by which it is bound.
7.9 No Litigation. Except as disclosed by Companies to Bank in writing
prior to the Effective Date, there are no actions, claims, suits or proceedings
pending or, to the knowledge of any Company threatened against or affecting any
Company in any court or before or by any governmental department, agency or
instrumentality, an adverse decision in which would materially adversely affect
the financial condition of the Companies (taken as a whole) or their respective
abilities to perform their respective obligations under this Agreement or any of
the Loan Documents to which they are party.
7.10 Consents, Approvals and Filings, Etc. No authorization, consent,
approval, license, qualification or formal exemption from, nor any filing,
declaration or registration with,
28
34
any court, governmental agency or regulatory authority or any securities
exchange or any other person is required in connection with the execution,
delivery and performance by any Company of this Agreement, any of the Loan
Documents to which it is a party or any other documents or instruments to be
executed and or delivered by any Company in connection therewith or herewith.
7.11 ERISA. None of the Companies maintains or contributes to any
employee pension benefit plan subject to Title IV of ERISA, except as set forth
in Schedule 7.11 hereto. Except as set forth in Schedule 7.11, as of the date
hereof, there is no unfunded "actuarial accrued liabilities" of the Plans, and
there are no accumulated funding deficiencies within the meaning of ERISA, or
any existing liability with respect to the Plans owed to the PBGC or any
successor thereto.
7.12 No Investment Company. None of the Companies is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
None of the Companies is engaged principally, or as one of its important
activities, directly or indirectly, in the business of extending credit for the
purpose of purchasing or carrying margin stock, and none of the proceeds of any
of the Advances will be used, directly or indirectly, for any purpose which
would violate the provisions of Regulation U or X of the Board of Governors of
the Federal Reserve System. Terms for which meanings are provided in Regulation
U of the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this paragraph
with such meanings.
7.13 Agreements Affecting Financial Condition. None of the Companies is
party to any agreement or instrument or subject to any charter or other
corporate restriction which materially adversely affects the financial
condition, operations or prospects of any such party, as the case may be, except
as disclosed on the most recent Form 10-K or 10-Q for Detrex.
7.14 Title to Collateral. Each Company has good and valid title to the
property pledged, mortgaged or otherwise encumbered or to be encumbered under
the Collateral Documents and, to the Material Property owned by such Company.
7.15 Environmental Matters and Safety Matters. (a) Each Company is in
substantial compliance with all Hazardous Materials Laws, except as disclosed on
Schedule 7.15 hereto, and as to such matters disclosed on such Schedule, none
will have a material adverse effect on the financial condition or business of
the Companies (taken as a whole).
(b) No demand, claim, notice, suit, suit in equity, action,
administrative action, notice of investigation or notice of inquiry
whether brought by any governmental authority, private person or entity
or otherwise, arising under, relating to or in connection with any
applicable Hazardous Materials Laws is pending or, to the best
knowledge of any Company, threatened against any Company, any real
property in which any
29
35
Company holds or has held an interest or any past or present operation
of any Company, except as disclosed on Schedule 7.15 hereto, and as to
such matters disclosed on such Schedule, none will have a material
adverse effect on the financial condition or business of the Companies
(taken as a whole).
(c) Each Company (i) is, to the best of its knowledge, not the
subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any toxic
substances, radioactive materials, hazardous wastes or related
materials into the environment, (ii) has not received any notice of any
toxic substances, radioactive materials, hazardous waste or related
materials released in, or upon any of its properties in violation of
any applicable Hazardous Materials Laws, or (iii) does not know of any
reasonable basis for any such investigation, notice or violation,
except as disclosed on Schedule 7.15 hereto, and as to such matters
disclosed on such Schedule, none will have a material adverse effect on
the financial condition or business of the Companies (taken as a
whole).
(d) No release, threatened release, or disposal of hazardous
waste, solid waste or other wastes is occurring or, to the knowledge of
any Company, has occurred on, under or, to the knowledge of any
Company, to any real property in which any Company holds any interest
or performs any of its operations, in violation of any Hazardous
Material Law except as disclosed on Schedule 7.15 hereto, and as to
such matters disclosed on such Schedule, none are expected to have a
material adverse effect on the financial condition or business of the
Companies (taken as a whole).
7.16 Accuracy of Information. The consolidated financial statements of
Companies dated as of December 31, 2000, furnished the Bank by Companies are
correct in all material respects and fairly present the financial condition of
Companies and the results of their operations as of the date thereof; since such
date there has been no material adverse change in the financial condition of
Companies. To the knowledge of Companies' respective financial officers and
except as previously disclosed in writing by Companies to Bank, Companies do not
have any material contingent obligations (including any liability for taxes) not
disclosed by or reserved against said balance sheets, and at the present time
there are no material unrealized or anticipated losses from any present
commitment of Companies (or any of them).
8. AFFIRMATIVE COVENANTS
Companies jointly and severally covenant and agree that they will, so
long as the Bank is committed to make any Advances under this Agreement and
thereafter so long as any obligations remain outstanding under this Agreement:
30
36
8.1 Financial Statements. Furnish to Bank:
(a) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year of ▇▇▇▇▇▇ Plastics, Inc., a copy of the balance sheet of
▇▇▇▇▇▇ Plastics, Inc. as at the end of such year and the related statements of
income and changes in shareholders' equity and financial position (including
changes in cash flow) for such year, setting forth in each case in comparative
form the figures for the previous year, certified without qualification or
exception arising out of the scope of the audit, by Deloitte & Touche or other
independent certified public accountants of nationally or regionally recognized
standing;
(b) as soon as available, but in any event within ninety (90) days
after the end of each fiscal year of Detrex, a copy of either
the consolidated balance sheet of Detrex and its consolidated
Subsidiaries as at the end of such year and the related
consolidated statements of income and changes in shareholders'
equity and financial position (including changes in cash flow)
for such year, setting forth in each case in comparative form
the figures for the previous year, certified without
qualification or exception arising out of the scope of the
audit, by Deloitte & Touche or other independent certified
public accountants of nationally or regionally recognized
standing, or a copy of the Annual Report on Form 10-K of
Detrex as filed with the Securities and Exchange Commission;
and
(c) as soon as available, but in any event within thirty (30) days
after the end of each month (other than December), the
unaudited consolidated balance sheets of Detrex and its
consolidated Subsidiaries as at the end of such month and the
related unaudited consolidated statements of income and
changes in shareholders' equity and financial position of
Detrex and its consolidated Subsidiaries for such month
certified by a Responsible Officer of Detrex, on behalf of the
Companies as being correct in all material respects (subject
to normal year-end audit adjustments);
(d) as soon as available, but in any event within thirty (30) days
after the end of each month, the unaudited balance sheets of
▇▇▇▇▇▇ Plastics, Inc. and The Elco Corp. as at the end of such
month and the related unaudited statements of income and
changes in shareholders' equity and financial position of
▇▇▇▇▇▇ Plastics, Inc. and The Elco Corp. for such month
certified by a Responsible Officer of ▇▇▇▇▇▇ Plastics, Inc.
and The Elco Corp. on behalf of the Companies as being correct
in all material respects (subject to normal year-end audit
adjustments);
all such financial statements to be complete and correct in all material
respects and, in the case of the financial statements to be delivered pursuant
to subsections (a) and (b) above, be prepared in accordance with GAAP applied
consistently throughout the prior periods reflected therein (except as disclosed
therein).
31
37
8.2 Certificates; Other Information. Furnish to Agent and each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Section 8.1(b) and within forty five (45) days
after the end of each calendar quarter, a certificate of a
Responsible Officer of Detrex, on behalf of the Companies, in
the form attached as Exhibit "F" stating that, to the best of
such officer's knowledge, the Companies, during such period
have observed or performed in all material respects all of
their covenants and other agreements, and satisfied every
condition, contained in this Agreement and in the Notes and
any other Loan Document to be observed, performed or satisfied
by them, and that such officer has obtained no knowledge of
any default or Event of Default except as specified in such
certificate and setting forth in detail the calculations
supporting such statement in the case of compliance with
Sections 9.1 through 9.4, inclusive;
(b) within five (5) days after the same are sent, copies of all
financial statements and reports which Detrex sends to its
stockholders generally, and within five (5) days after the
same are filed, copies of all financial statements and reports
which Detrex may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental
Authority;
(c) on Thursday of each week, a Borrowing Base Report (in the form
attached as Exhibit "A") calculating the Lending Availability
as of the end of the preceding week;
(d) within twenty (20) days after and as of the end of each month
(i) in form satisfactory to Bank, a detailed accounts payable
list; (ii) in the form attached hereto as Exhibit "D", a
summary of Companies' Eligible Inventory, (iii) in form
satisfactory to the Bank, a detailed aging of Companies'
Accounts, and (iv) in the form attached hereto as Exhibit "H",
a Month End Aging and Ineligible Summary.
(e) as soon as available and in any event not later than forty
five (45) days after the end of each fiscal year, financial
projections for the Companies for the current fiscal year; and
(f) as soon as available and in any event not later than forty
five (45) days after the end of each fiscal quarter of Detrex,
updated financial projections for the Companies for the
current fiscal year;
(g) within thirty (30) days after and as of the end of each month,
in form satisfactory to Bank, monthly statements of income for
each of Companies' business units;
32
38
(h) promptly, such additional financial and other information as
Bank may from time to time reasonably request.
8.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other obligations of whatever nature, except to the extent
being contested in good faith by appropriate proceedings diligently pursued and
against which reserves as required by GAAP have been established and except for
the payment of trade payables in the ordinary course of business in a manner
consistent with past practice.
8.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by them, and
preserve, renew and keep in full force and effect their corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of their businesses; comply with
all Contractual Obligations, Requirements of Law and applicable Environmental
Laws except to the extent that the failure to comply therewith could not, in the
aggregate, have a material adverse effect on the business, operations, property
or financial or other condition of the Companies taken as a whole.
8.5 Maintenance of Property. In a manner consistent with past practice
and prudent business practices, keep all Material Property owned or leased by
any of the Companies in good working order and condition.
8.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to their business and activities; and permit
representatives of Bank (a) to visit and inspect any of their properties and,
unless otherwise prohibited by law or any rule, regulation or court order
promulgated or issued by any Governmental Authority, examine and make abstracts
from any of their books and records at any reasonable time and as often as may
reasonably be desired, (b) for the purposes of determining compliance by
Companies with the terms of this Agreement, conduct collateral audits of
Companies, (c) to discuss the business, operations, properties and financial and
other condition of Companies with officers of Companies and with their
independent certified public accountants; and (d) to verify with Account Debtors
Accounts balances owed to Companies.
8.7 Notices. Promptly give notice to the Bank:
(a) of the occurrence of any default or Event of Default;
(b) of the occurrence of any default or event of default under any
Contractual Obligation of any of Companies or of any
litigation, investigation or proceeding which may exist at any
time between Companies (or any of them) and any
33
39
Governmental Authority, which in either case, if adversely
determined, would have a material adverse effect on the
business, operations, property or financial or other condition
of Companies taken as a whole;
(c) of any litigation or proceeding affecting Companies (or any of
them) (i) in which the anticipated liability or assessment
against Companies (or any of them) is Five Hundred Thousand
Dollars ($500,000) or more individually or Two Million Dollars
($2,000,000) or more in the aggregate and not covered by
insurance or reserved against by Companies in accordance with
GAAP or (ii) in which injunctive or similar relief is sought
and which could have a material adverse effect on the
business, operations, property or financial or other condition
of Companies taken as a whole;
(d) of the following events, to the extent applicable, as soon as
possible and in any event within thirty (30) days after any of
the Companies knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with
respect to any Plan, or (ii) the institution of proceedings or
the taking or expected taking of any other action by PBGC or
any Company or any Commonly Controlled Entity to terminate,
withdraw or partially withdraw from any Plan and with respect
to a Multiemployer Plan, the reorganization or insolvency of
the Plan, and in addition to such notice, deliver to the Agent
and each Bank whichever of the following may be applicable:
(1) a certificate of the chief financial officer of Detrex
setting forth details as to such Reportable Event and the
action that the applicable Company or Commonly Controlled
Entity proposes to take with respect thereto, together with a
copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or (2) any notice delivered by
PBGC evidencing its intent to institute such proceedings or
any notice to PBGC that such Plan is to be terminated, as the
case may be; and
(e) of a material adverse change in the business, operations,
property or financial or other condition of the Companies
(taken as a whole).
Each notice pursuant to this Section 8.7 shall be accompanied by a
statement of a Responsible Officer of Detrex, on behalf of the Companies,
setting forth details of the occurrence referred to therein and stating what
action (including the timing thereof) the Companies propose to take with respect
thereto.
8.8 Indemnification. Indemnify and save Bank harmless from all loss,
cost, damage, liability or expenses, including attorney fees, incurred by Bank
by reason of an Event of Default or in exercising in good faith any of its
rights, remedies or prerogatives under or in connection with this Agreement or
any of the Loan Documents, provided, however, Companies shall have
34
40
no such indemnification obligations with respect to losses, costs, damages,
liabilities or expenses arising from the gross negligence or willful misconduct
of the Bank.
8.9 Further Assurances; Financing Statements. Furnish to Bank and at
Companies' expense, upon Bank's request, in form satisfactory to Agent,
assignments, lien instruments or other security instruments, consents,
acknowledgments, subordinations and financing statements covering any or all of
the Collateral pledged, assigned, or encumbered pursuant to the Collateral
Documents of every nature and description, whether now owned or hereafter
acquired, to the extent that Bank may reasonably require, or execute and deliver
or cause to be executed and delivered such other documents or instruments as
Bank may reasonably require to effectuate more fully the purposes of this
Agreement.
8.10 Compliance with Leases. Comply with the material terms and
conditions of any leases covering any premises or property (real or personal)
wherein any of the Collateral pledged, assigned or encumbered pursuant to the
Collateral Documents is located, or covering any of the Material Property, and
any orders, ordinances, laws or statutes of any city, state or other
governmental department having jurisdiction with respect to such premises or
property, or the conduct of business thereon.
8.11 Insurance. Maintain insurance coverage on its physical assets and
against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature, and in the event of
acquisition of additional property, real or personal, or of incurrence of
additional risks of any nature, increase such insurance coverage in such manner
and to such extent as prudent business judgment and then current practice would
dictate; and in the case of all policies covering property subject to the
Collateral Documents, or property in which the Banks shall have a security
interest of any kind whatsoever, other than those policies protecting against
casualty liabilities to strangers, all such insurance policies shall provide
that the loss payable thereunder shall be payable to Companies, and the Bank;
all said policies or copies thereof, including all endorsements thereon and
those required hereunder, to be deposited with the Bank; and Companies assign to
the Bank as additional security for the repayment of the Indebtedness and the
performance of all other obligations hereunder, all their rights to receive
insurance proceeds of any kind.
8.12 Power of Attorney. Each Company does hereby make, constitute and
appoint any officer or agent of Bank as its true and lawful attorney-in-fact,
with power, upon the occurrence of any Event of Default (exercisable following
the expiration of any applicable period of cure and for so long as such Event of
Default is continuing), to endorse its name or any of its officers or agents
upon any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under any policy of insurance) or collateral that
may come into possession of the Agent in full or part payment of any amounts
owing to the Bank; to sign and endorse its name and/or any of its officers or
agents upon any invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
35
41
notices in connection with its Accounts, and any instrument or document relating
thereto or to its rights therein; to execute on its behalf, any financing
statements, amendments, subordinations or other filings pursuant to this
Agreement or any of the Loan Documents, granting unto Bank, as its
attorney-in-fact, full power to do any and all things necessary to be done in
and about the premises as fully and effectually as Companies might or could do,
and hereby ratifying all that any said attorney shall lawfully do or cause to be
done by virtue hereof. The power of attorney described herein shall be deemed
coupled with an interest and shall be irrevocable until the Revolving Credit
Maturity Date and thereafter until payment in full of all the Indebtedness of
Companies to the Bank under this Agreement and the performance by Companies of
all other obligations under this Agreement and the Loan Documents; Bank may, at
any time after the occurrence of an Event of Default, but before the expiration
of any applicable cure period or delivery of any required notice, notify Account
Debtors that Collateral has been assigned to Bank and that payments shall be
made directly to Bank. Upon request of the Bank, Companies will so notify such
Account Debtors and will indicate on all ▇▇▇▇▇▇▇▇ to such Account Debtors that
their accounts must be paid to or as directed by Bank. The Bank shall have full
power to collect, compromise, endorse, sell or otherwise deal with the
Collateral or proceeds thereof in the name of the Bank or in the name of
Companies, provided only that Bank shall act in a commercially reasonable
manner.
9. NEGATIVE COVENANTS
Companies jointly and severally covenant and agree that so long as any
Indebtedness or the commitment to lend under this Agreement remains outstanding,
they will not, without the prior written consent of the Bank:
9.1 Cash Flow Coverage Ratio. Permit the Consolidated Cash Flow
Coverage Ratio (Environmental) at any time to be less than .50 to 1.0 or the
Consolidated Cash Flow Coverage Ratio (Operating) to be less than 1.15 to 1.0.
9.2 Consolidated Tangible Net Worth. Permit Consolidated Tangible Net
Worth at any time to be less than $19,000,000.
9.3 Indebtedness. Become or remain obligated for any indebtedness for
borrowed money, or for any indebtedness incurred in connection with the
acquisition of any property, real or personal, tangible or intangible, except:
(a) indebtedness to the Bank;
(b) indebtedness set forth on Schedule 9.3 hereof;
36
42
(c) purchase money indebtedness incurred in connection with the
acquisition of fixed assets to the extent not exceeding Five
Hundred Thousand Dollars ($500,000) in the aggregate at any
time outstanding.
9.4 Limitation on Liens. Create, incur, assume or suffer to exist, any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired except:
(a) Liens established under the Collateral Documents;
(b) Permitted Encumbrances.
9.5 Contingent Obligations. Create, assume or suffer to exist any
Contingent Obligation.
9.6 Prohibition of Fundamental Changes. Enter into any transaction or
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), convey, sell, lease, transfer
or otherwise dispose of, in one transaction or a series of transactions, all or
a substantial part of its business or assets, or acquire by purchase or
otherwise all or substantially all the business or assets of, or stock or other
evidences of beneficial ownership of, any Person, or make any material change in
its present method of conducting business, except that:
(a) any Subsidiary of Detrex may be merged or consolidated with or
into Detrex (provided that Detrex shall be the continuing or
surviving corporation) or with any one or more Subsidiaries of
Detrex (provided that if any such transaction shall be between
a Subsidiary and a wholly-owned Subsidiary, the wholly-owned
Subsidiary shall be the continuing or surviving corporation);
(b) any Subsidiary of Detrex may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to Detrex or another wholly-owned
Subsidiary of Detrex;
(c) Companies may acquire any assets or business, or the capital
stock of businesses in the same or a related enterprise,
provided, that immediately after each such transactions and
after giving effect thereto, Companies are in compliance with
the terms of this Agreement and provided further, that the
aggregate purchase price for such acquisitions shall not
exceed Five Hundred Thousand Dollars ($500,000) during any
single fiscal year of Detrex.
9.7 Prohibition on Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of any of its assets (including, without limitation,
receivables and leasehold interests) whether now owned or hereafter acquired,
except as permitted by Section 9.8 hereof and except for
37
43
dispositions of obsolete or worn out property and other property (including
inventory) disposed of in the ordinary course of business.
9.8 Investments. Make or commit to make, any advance, loan, extension
of credit or capital contribution to, or purchase of any stock, bonds, notes,
debentures or other securities of, or make any other investment in, any Person
(all such transactions being herein called "investments") except:
(a) investments in accounts, contract rights and chattel paper (as
defined in the UCC) and notes receivable, arising or acquired
in the ordinary course of business;
(b) investments arising from sales of property (including products
and services) not prohibited by this Section 9;
(c) investments in bank certificates of deposit or eurodollar
deposit accounts (but only with banks having a combined
capital and surplus in excess of Fifty Million Dollars
($50,000,000), open market commercial paper maturing within
one year having the rating of either Standard & Poor's
Corporation of A-2 or better or of ▇▇▇▇▇'▇ Investors Service,
Inc. of P-2 or better, U.S. Treasury Bills subject to
repurchase agreement and short-term obligations issued or
guaranteed by the U.S. Government or any agency thereof;
(d) Companies' existing investments described in Schedule 9.8
attached hereto; and
(e) investments permitted by Section 9.6 hereof.
9.9 Sale and Leaseback. Enter into any transaction with any Person
providing for the leasing by one of the Companies of real or personal property
which has been or is to be sold or transferred by such Company to such Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of such Company, except
any such transaction involving assets having an aggregate book value which does
not exceed One Hundred Thousand Dollars ($100,000).
9.10 Negative Pledge of Assets. Enter into, or allow to exist, any
agreement, document or instrument which would restrict or prevent any of the
Companies from granting Agent on behalf of the Banks first priority liens upon,
security interests in and mortgages upon any of their respective assets subject
only to Liens permitted by the provisions of Section 9.5 of this Agreement.
38
44
10. DEFAULTS
10.1 Events of Default. Any of the following events is an "Event of
Default":
(a) Non-payment of the principal, when due, under any Note issued
hereunder, or of any Letter of Credit Obligation to be paid
hereunder or under any Letter of Credit Agreement in
accordance with the terms hereof and thereof or non-payment of
interest, when due, under any Note issued hereunder;
(b) Default in the payment of any money payable by Companies to
the Bank hereunder, other than as set forth in subsection (a),
above within three (3) Business Days of the date the same is
due and payable;
(c) Default is made in the due observance or performance of any
term, covenant or agreement contained in Sections 8.1 though
8.12 or Sections 9.1 through 9.10 of this Agreement;
(d) Default is made in the due observance or performance of any
other term, covenant or agreement contained in this Agreement
or any other Loan Document and such default continues
unremedied for a period of thirty (30) days after written
notice of such default by Bank to Companies;
(e) Any representation or warranty made by Companies (or any of
them) herein or in any instrument submitted pursuant hereto or
by any other party to the Loan Documents proves untrue in any
material respect when made or deemed made;
(f) Any of the Companies shall (i) default in any payment of
principal or of interest on any Indebtedness in an aggregate
amount exceeding Fifty Thousand Dollars ($50,000) (other than
the Notes) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was
created; or (ii) default in the observance or performance of
any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder
or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, with the giving of
notice if required, such Indebtedness to become due prior to
its stated maturity; or
(g) (i) Any of the Companies shall commence any case, proceeding
or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement,
39
45
adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of
its assets, or any of the Companies shall make a general
assignment for the benefit of its creditors; or (ii) there
shall be commenced against any of the Companies any case,
proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of any order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of sixty
(60) days; or (iii) there shall be commenced against any of
the Companies any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its
assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days from
the entry thereof; or (iv) any of the Companies shall take any
action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii) or (iii) above; or (v) any of the Companies
shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(h) To the extent applicable, (i) any Person shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA
or Section 4875 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, an
Single Employer Plan, which Reportable Event or institution of
proceedings is, in the reasonable opinion of the Bank likely
to result in the termination of such Plan for purposes of
Title IV of ERISA, and, in the case of a Reportable Event, the
continuance of such Reportable Event unremedied for thirty
(30) days after notice of such Reportable Event pursuant to
Section 4043(a), (c) or (d) of ERISA is given or the
continuance of such proceedings for thirty (30) days after
commencement thereof, as the case may be, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of
ERISA, or (v) any other event or condition shall occur or
exist with respect to a Single Employer Plan; and in each case
in clauses (i) through (v) above, such event or condition,
together with all other such events or conditions, if any,
could subject any of the Companies to any tax, penalty or
other liabilities in the aggregate material in relation to the
business, operations, property or financial or other condition
of the Companies taken as a whole; or
(i) One or more judgments or decrees shall be entered against the
Companies (or any of them) involving in the aggregate a
liability (not paid or not fully covered by
40
46
insurance) of Two Hundred Fifty Thousand Dollars ($250,000) or
more and all such judgments or decrees shall not have been
vacated, discharged, or stayed pending appeal within sixty
(60) days from the entry thereof; or
(j) There shall be any Environmental Material Adverse Event or
there shall be any other material adverse change in the
business, operations, assets or in the financial or other
condition, of the Companies taken as a whole;
(k) There shall be any change for any reason in the management,
ownership or control of any of the Companies which shall in
the reasonable judgment of the Bank materially adversely
affect the prospects for the successful operation of any of
the Companies.
10.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (v) the Bank may declare the Revolving Credit Commitment
terminated; (w) the Bank may declare the entire unpaid principal Indebtedness,
including the Notes, immediately due and payable, without presentment, notice or
demand, all of which are hereby expressly waived by Companies; (x) upon the
occurrence of any Event of Default specified in subsection (g), above, and
notwithstanding the lack of any declaration by Bank under preceding clause (w),
the entire unpaid principal Indebtedness, including the Notes, shall become
automatically and immediately due and payable, and the Revolving Credit
Commitment shall be automatically and immediately terminated; and (y) the Bank
may exercise any remedy permitted by this Agreement, the Loan Documents or law.
10.3 Rights Cumulative. No delay or failure of Bank in exercising any
right, power or privilege hereunder shall affect such right, power or privilege,
nor shall any single or partial exercise thereof preclude any further exercise
thereof, or the exercise of any other power, right or privilege. The rights of
Bank under this Agreement are cumulative and not exclusive of any right or
remedies which Bank would otherwise have.
10.4 Waiver by Companies of Certain Laws. To the extent permitted by
applicable law, each Company hereby agrees to waive, and does hereby absolutely
and irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, or any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
10.5 Waiver of Defaults. No Event of Default shall be waived by the
Bank except in a writing signed by an officer of the Bank in accordance with
Section 11.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof,
41
47
shall preclude other or further exercise of their rights by the Bank. No waiver
of any Event of Default shall extend to any other or further event of default.
No forbearance on the part of the Bank in enforcing any of its rights shall
constitute a waiver of any of their rights. Each Company expressly agrees that
this Section may not be waived or modified by the Bank by course of performance,
estoppel or otherwise.
11. MISCELLANEOUS
11.1 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP.
11.2 Consent to Jurisdiction. Each of the Companies and Bank hereby
irrevocably submit to the non-exclusive jurisdiction of any United States
Federal or Michigan state court sitting in Detroit in any action or proceeding
arising out of or relating to this Agreement or any of the Loan Documents and
Companies and Bank hereby irrevocably agree that all claims in respect of such
action or proceeding may be heard and determined in any such United States
Federal or Michigan state court. Companies irrevocably consent to the service of
any and all process in any such action or proceeding brought in any court in or
of the State of Michigan by the delivery of copies of such process to Companies
at their addresses specified on Schedule 1 hereto or by certified mail directed
to such address or such other address as may be designated by Companies in a
notice to the other parties that complies as to delivery with the terms of
Section 11.6. Nothing in this Section shall affect the right of the Bank to
serve process in any other manner permitted by law or limit the right of the
Bank to bring any such action or proceeding against Companies or any of their
property in the courts of any other jurisdiction. Each Company hereby
irrevocably waives any objection to the laying of venue of any such suit or
proceeding in the above described courts.
11.3 Law of Michigan. This Agreement and the Notes have been delivered
at Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan, except to the extent that the
Uniform Commercial Code, other personal property law or real property law of a
jurisdiction where Collateral is located is applicable and except as and to the
extent expressed to the contrary in any of the Loan Documents. Whenever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by 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 the remaining provisions of this
Agreement.
11.4 Interest. In the event the obligation of Companies to pay
interest on the principal balance of the Revolving Credit Note is or becomes in
excess of the maximum interest rate
42
48
which Companies are permitted by law to contract or agree to pay, giving due
consideration to the execution date of this Agreement, then, in that event, the
rate of interest applicable to the Notes shall be deemed to be immediately
reduced to such maximum rate and all previous payments in excess of the maximum
rate shall be deemed to have been payments in reduction of principal and not of
interest.
11.5 Closing Costs and Other Costs. Companies agree to pay, or
reimburse the Bank for payment of, on demand (a) all closing costs and expenses,
including, by way of description and not limitation, house and outside attorney
fees and advances, appraisal and accounting fees, and lien search fees incurred
by Bank in connection with any amendment, refinancing or restructuring of the
credit arrangements provided under this Agreement; (b) all stamp and other taxes
and fees payable or determined to be payable in connection with the execution,
delivery, filing or recording of this Agreement and the Loan Documents and the
consummation of the transactions contemplated hereby, and any and all
liabilities with respect to or resulting from any delay in paying or omitting to
pay such taxes or fees, and (c) all reasonable costs and expenses of the Bank
(including reasonable fees and expenses of counsel and whether incurred through
negotiations, legal proceedings or otherwise) in connection with any Event of
Default or the enforcement of this Agreement, or the Loan Documents or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement. All of said amounts required to be paid by
Companies, as aforesaid, may, at Bank's option, be charged by Bank as an
Advance.
11.6 Notices. Except as expressly provided otherwise in this
Agreement, all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing and shall be
given by personal delivery, by mail, by reputable overnight courier, by telex or
by facsimile and addressed or delivered to it at its address set forth on
Schedule 1 hereto or at such other address as may be designated by such party in
a notice to the other parties that complies as to delivery with the terms of
this Section 11.6. Any notice, if personally delivered or if mailed and properly
addressed with postage prepaid and sent by registered or certified mail, shall
be deemed given when received; any notice, if given to a reputable overnight
courier and properly addressed, shall be deemed given two (2) Business Days
after the date on which it was sent, unless it is actually received sooner by
the named addressee; and any notice, if transmitted by telex or facsimile, shall
be deemed given when received (answerback confirmed in the case of telexes and
receipt confirmed in the case of telecopies). Bank may, but shall not be
required to, take any action on the basis of any notice given to it by
telephone, but the giver of any such notice shall promptly confirm such notice
in writing or by telex or facsimile, and such notice will not be deemed to have
been received until such confirmation is deemed received in accordance with the
provisions of this Section set forth above. If such telephonic notice conflicts
with any such confirmation, the terms of such telephonic notice shall control.
43
49
11.7 Further Action. Companies, from time to time, upon written
request of Bank will make, execute, acknowledge and deliver or cause to be made,
executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may reasonably be required to
carry out the intent and purpose of this Agreement or the Loan Documents, and to
provide for Advances under and payment of the Notes, according to the intent and
purpose herein and therein expressed.
11.8 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Companies may not assign or otherwise
transfer any of their rights under this Agreement without the prior written
consent of the Bank.
11.9 Indulgence. No delay or failure of the Bank in exercising any
right, power or privilege hereunder shall affect such right, power or privilege
nor shall any single or partial exercise thereof preclude any further exercise
thereof, nor the exercise of any other right, power or privilege. The rights of
the Bank hereunder are cumulative and are not exclusive of any rights or
remedies which the Bank would otherwise have.
11.10 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
11.11 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any Loan Document, nor consent to any departure by Companies
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Bank, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
11.12 Confidentiality. Bank agrees that it will not disclose without
the prior consent of Companies (other than to its employees or to its auditors
or counsel) any information with respect to Companies, which is furnished
pursuant to this Agreement or any of the Loan Documents and specifically
designated in writing by Companies as confidential information; provided that
Bank may disclose any such information (a) as has become generally available to
the public or has been lawfully obtained by Bank from any third party under no
duty of confidentiality to Companies, (b) as may be required or appropriate in
any report, statement or testimony submitted to, or in respect to any inquiry,
by, any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Bank, including the Board of Governors of the Federal
Reserve System of the United States, the Office of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in respect to any summons or subpoena or in connection
with any litigation, (d) in order to comply with
44
50
any law, order, regulation or ruling applicable to the Bank, and (e) to any
transferee or assignee or to any participant of, or with respect to, the
Revolving Credit Note.
11.13 Effective Upon Execution. This Agreement shall become effective
upon the execution hereof by Bank and Companies and the issuance by Companies of
the Revolving Credit Note hereunder, and shall remain effective until the
Indebtedness has been repaid and discharged in full and no commitment to extend
any credit hereunder or under any of the other Loan Documents, whether optional
or obligatory, remains outstanding.
11.14 Waiver of Jury Trial. The Bank and Companies, after consulting
or having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waive any right any of them may have to a trial by jury in any
litigation based upon or arising out of this Agreement or any related instrument
or agreement or any of the transactions contemplated by this Agreement or any
course of conduct, dealing, statements (whether oral or written) or action of
any of them. Neither the Bank nor Companies shall seek to consolidate, by
counterclaim or otherwise, any such action in which a jury trial has been waived
with any other action in which a jury trial cannot be or has not been waived.
These provisions shall not be deemed to have been modified in any respect or
relinquished by the Bank or Companies except by a written instrument executed by
all of them.
11.15 Complete Agreement; Conflicts. This Agreement, the Revolving
Credit Note, any Requests for Advance hereunder, and the Loan Documents contain
the entire agreement of the parties hereto, superseding all prior agreements,
discussions and understandings relating to the subject matter hereof, and none
of the parties shall be bound by anything not expressed in writing. In the event
of any conflict between the terms of this Agreement and the other Loan
Documents, this Agreement shall govern.
11.16 Severability. In case any one or more of the obligations of
Companies under this Agreement, the Notes or any of the other Loan Documents
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of Companies shall not
in any way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Companies under this Agreement, the Notes
or any of the other Loan Documents in any other jurisdiction.
11.17 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
11.18 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is
45
51
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
11.19 Independence of Covenants. Each covenant hereunder shall be
given independent effect (subject to any exceptions stated in such covenant) so
that if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of an Event of Default or any
event or condition which with notice or lapse of time, or both, could become
such an Event of Default if such action is taken or such condition exists.
11.20 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of Companies or any party
to any of the Loan Documents made herein or in any of the Loan Documents or in
any certificate, report, financial statement or other document furnished by or
on behalf of Companies in connection with this Agreement or any of the Loan
Documents shall be deemed to have been relied upon by the Bank, notwithstanding
any investigation heretofore or hereafter made by the Bank or on the Bank's
behalf, and those covenants and agreements of Companies set forth in Sections
8.8 and 11.5 (together with any other indemnities of Companies contained
elsewhere in this Agreement or in any of the Loan Documents) shall survive the
repayment in full of the Indebtedness and the termination of the Revolving
Credit Commitment.
11.21 Concerning Joint and Several Liability of the Companies and
Related Matters.
(a) Each of the Companies authorizes Detrex with full power and
authority as attorney-in-fact, to execute and deliver Requests for Advances,
requests for issuance of Letters of Credit and each other instrument,
certificate and report to be delivered by the Companies to the Bank pursuant to
this Agreement. Each of the Companies agrees that it shall be bound by any
action taken by Detrex on its behalf pursuant to such appointment.
(b) Each of the Companies is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
Bank under this Agreement, for the mutual benefit, directly and indirectly, of
each of the Companies and in consideration of the undertakings of each of the
Companies to accept joint and several liability for the obligations of each of
them.
(c) Each of the Companies jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with each other Company, with respect to the payment and
performance of all of the obligations arising under this Agreement, it being the
intention of the parties hereto that all the obligations shall be the joint and
several obligations of all the Companies without preferences or distinction
among them.
46
52
(d) If and to the extent that any of the Companies shall fail to make
any payment with respect to any of the obligations hereunder as and when due or
to perform any of such obligations in accordance with the terms thereof, then in
each such event, the other Companies will make such payment with respect to, or
perform, such obligation.
(e) The obligations of each Company under the provisions of this
Agreement constitute full recourse obligations of such Company enforceable
against it to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other
circumstance whatsoever.
(f) The obligations of each Company under this Agreement shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any Company or any Bank or the Agent. The joint and several liability of the
Companies hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Company or the Bank.
(g) The provisions of this Section 11.21 are made for the benefit of
the Bank and its successors and assigns, and may be enforced by them from time
to time against any of the Companies as often as occasion therefor may arise and
without requirement on the part of the Bank first to ▇▇▇▇▇▇▇▇ any of its claims
or to exercise any of its rights against the other Companies or to exhaust any
remedies available to it against the other Companies or to resort to any other
source or means of obtaining payment of any of the obligations hereunder or to
elect any other remedy. The provisions of this Section 11.21 shall remain in
effect until all the obligations hereunder shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the obligations, is rescinded or must otherwise be
restored or returned by the Bank upon the insolvency, bankruptcy or
reorganization of the Companies, or otherwise, the provisions of this Section
11.21 will forthwith be reinstated in effect, as though such payment had not
been made.
11.22 Conflict between Security Agreements, Mortgages and Agreement.
In the event of any express inconsistency between the terms and provisions of
the Security Agreements or the Mortgages and the terms and provisions of this
Agreement, the terms and provisions of this Agreement shall control.
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK DETREX CORPORATION
By: By:
------------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President Its: Secretary
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
47
53
THE ELCO CORPORATION
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
▇▇▇▇▇▇ PLASTICS, INC.
By:
-------------------------------
▇▇▇▇▇▇ ▇. Israel
Its: Director
S.O. REALTY, INC.
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
48
54
EXHIBIT "A"
[SEE ATTACHED]
49
55
EXHIBIT "E"
REVOLVING CREDIT NOTE
Detroit, Michigan
$13,000,000 April 25, 2001
On or before May 1, 2003, FOR VALUE RECEIVED, the undersigned
(collectively "Companies") jointly and severally promise to pay to the order of
Comerica Bank, a Michigan banking corporation ("Bank") at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, in lawful money of the United States of America the
Indebtedness to Bank or so much of the sum of Thirteen Million Dollars
($13,000,000) as may from time to time have been advanced and then be
outstanding hereunder pursuant to the Amended and Restated Credit Agreement
("Agreement") dated as of April 25, 2001, made by and between Companies and
Bank, together with interest thereon as hereinafter set forth. Capitalized terms
used herein, unless defined to the contrary, have the meanings given them in the
Agreement.
Each of the Advances made hereunder shall bear interest at the interest
rate from time to time applicable thereto under the Agreement or as otherwise
determined thereunder, and interest shall be computed, assessed and payable as
set forth in the Agreement.
This Note is a note under which advances, repayments and readvances may
be made from time to time, but only in accordance with the terms and conditions
of the Agreement. This Note evidences borrowing under, is subject to, and may be
accelerated or matured under, the terms of the Agreement, to which reference is
hereby made.
Companies agree that in the event of a default hereunder or any default
or Event of Default under the Agreement, Bank shall be entitled to liquidate and
collect all property or assets (including deposits and other credits) whether
presently owned or hereafter acquired, of Companies in possession or control of
(or owing by) the Bank for any purpose, and to apply the proceeds of such
liquidations and collections, and offset any amounts owing by Bank, against
Companies' obligations hereunder and under the Agreement.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
50
56
Companies hereby waive presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agree that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note. Any transferees of,
or endorser, guarantor or surety paying this Note in full shall succeed to all
rights of Bank, and Bank shall be under no further responsibility for the
exercise thereof or the loan evidenced hereby.
This Note is an extension and renewal of a Revolving Credit Note dated
February 29, 2000 in the principal amount of $13,000,000 by Companies payable to
Bank.
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
DETREX CORPORATION
By:
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
THE ELCO CORPORATION
By:
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
▇▇▇▇▇▇ PLASTICS, INC.
By:
---------------------------
▇▇▇▇▇▇ ▇. Israel
Its: Director
S.O. REALTY, INC.
By:
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
51
57
EXHIBIT "F"
CERTIFICATE OF COVENANT COMPLIANCE
To: Comerica Bank
Re: Amended and Restated Credit Agreement dated as of April 25,
2001 ("Credit Agreement"), by and between Comerica Bank, and
Companies.
Gentlemen:
This certificate is furnished pursuant to Section 8.2(a) of the Credit
Agreement and sets forth various information as of , 200 (the
"Computation Date").
1. Tangible Net Worth. On the Computation Date, Consolidated Tangible
Net Worth, which is required to be at least $ was as
computed in the supporting documents attached hereto as Schedule 1.
2. Cash Flow Coverage Ratio. On the Computation Date, Consolidated
Cash Flow Coverage Ratio (Environmental), which was required to be at
least to 1.0 was to 1.0 and Consolidated Cash Flow Coverage Ratio
(Operating) which was required to be at least to 1.0 was
to 1.0 as computed in the supporting documents attached as Schedule 1.
The undersigned officer of Detrex, on behalf of Companies, hereby
certifies that:
A. All of the information set forth in this Compliance Certificate (and
in any Schedule attached hereto) is true and correct in all material respects;
and
B. As of the Computation Date, the Companies have observed and
performed all of their covenants and other agreements, and satisfied every
condition, contained in the Credit Agreement and in the Notes and any other Loan
Documents to be observed, performed and satisfied by them.
C. I have personally reviewed the Credit Agreement and this Compliance
Certificate is based on an examination sufficient to assure that this Compliance
Certificate is accurate.
D. Except as stated as Schedule 2 hereto (which shall describe any
existing Event of Default or event which with the passage of time and/or the
giving of notice, would constitute an
52
58
Event of Default and the notice and period of existence thereof and any action
taken with respect thereto or contemplated to be taken by Companies), no default
or Event of Default has occurred and is continuing on the date of this
Compliance Certificate.
Capitalized terms used herein and in the schedules hereto, unless
specifically defined to the contrary, have the meanings given to them in the
Credit Agreement.
IN WITNESS WHEREOF, Detrex, on behalf of the Companies, has caused this
Certificate to be executed and delivered by its duly authorized officer
this day of , 200 .
DETREX CORPORATION, on behalf of
the Companies
By:
------------------------------
Its:
-----------------------------
53
59
Schedule 1 to Exhibit H
[TO BE PREPARED BY DETREX]
54
60
EXHIBIT "I"
EQUIPMENT NOTE
Detroit, Michigan
$3,000,000 April 25, 2001
On or before May 1, 2002, FOR VALUE RECEIVED, the undersigned
(collectively "Companies") jointly and severally promise to pay to the order of
Comerica Bank, a Michigan banking corporation ("Bank") at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, in lawful money of the United States of America the
Indebtedness to Bank or so much of the sum of Three Million Dollars ($3,000,000)
as may from time to time have been advanced and then be outstanding hereunder
pursuant to the Amended and Restated Credit Agreement ("Agreement") dated as of
April 25, 2001, made by and between Companies and Bank, together with interest
thereon as hereinafter set forth. Capitalized terms used herein, unless defined
to the contrary, have the meanings given them in the Agreement.
Each of the advances made hereunder shall bear interest at the interest
rate from time to time applicable thereto under the Agreement or as otherwise
determined thereunder, and interest shall be computed, assessed and payable as
set forth in the Agreement.
This Note is a note under which advances and repayments but not
readvances may be made from time to time, but only in accordance with the terms
and conditions of the Agreement. This Note evidences borrowing under, is subject
to, and may be accelerated or matured under, the terms of the Agreement, to
which reference is hereby made.
Companies agree that in the event of a default hereunder or any default
or Event of Default under the Agreement, Bank shall be entitled to liquidate and
collect all property or assets (including deposits and other credits) whether
presently owned or hereafter acquired, of Companies in possession or control of
(or owing by) the Bank for any purpose, and to apply the proceeds of such
liquidations and collections, and offset any amounts owing by Bank, against
Companies' obligations hereunder and under the Agreement.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Companies hereby waive presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agree that no obligation
hereunder shall be discharged
55
61
by reason of any extension, indulgence, release, or forbearance granted by any
holder of this Note to any party now or hereafter liable hereon or any present
or subsequent owner of any property, real or personal, which is now or hereafter
security for this Note. Any transferees of, or endorser, guarantor or surety
paying this Note in full shall succeed to all rights of Bank, and Bank shall be
under no further responsibility for the exercise thereof or the loan evidenced
hereby.
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
DETREX CORPORATION
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
THE ELCO CORPORATION
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
▇▇▇▇▇▇ PLASTICS, INC.
By:
-------------------------------
▇▇▇▇▇▇ ▇. Israel
Its: Director
S.O. REALTY, INC.
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
56
62
EXHIBIT "I"
EQUIPMENT NOTE
$
------------------- Detroit, Michigan
, 200
------------ --
FOR VALUE RECEIVED, the undersigned (collectively "Companies" jointly
and severally promise to pay to the order of Comerica Bank, a Michigan banking
corporation ("Bank") at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, in lawful money
of the United States of America the principal sum of Dollars
($ ) in lawful money of the United States of America payable in monthly
principal installments each in the amount of $ commencing on ,
, and on a like day of each month thereafter until , 200 ,
when the entire unpaid balance of principal and interest thereon shall be due
and payable, together with interest thereon as hereinafter set forth.
The principal balance from time to time outstanding hereunder shall
bear interest at a per annum interest rate equal to Bank's Prime Rate less one
quarter of one percent (1/4%) or as otherwise determined under the Agreement (as
defined below), and interest shall be computed, assessed and payable as set
forth in the Agreement.
This Note evidences borrowing under, is subject to, and may be
accelerated or matured under, the terms of the Amended and Restated Credit
Agreement dated as of April 25, 2001, made by and between Companies and Bank
("Agreement"), to which reference is hereby made.
Companies agree that in the event of a default hereunder or any default
or Event of Default under the Agreement, Bank shall be entitled to liquidate and
collect all property or assets (including deposits and other credits) whether
presently owned or hereafter acquired, of Companies in possession or control of
(or owing by) the Bank for any purpose, and to apply the proceeds of such
liquidations and collections, and offset any amounts owing by Bank, against
Companies' obligations hereunder and under the Agreement.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
57
63
Companies hereby waive presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agree that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note. Any transferees of,
or endorser, guarantor or surety paying this Note in full share succeed to all
rights of Bank, and Bank shall be under no further responsibility for the
exercise thereof or the loan evidenced hereby.
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
DETREX CORPORATION
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
THE ELCO CORPORATION
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
▇▇▇▇▇▇ PLASTICS, INC.
By:
-------------------------------
▇▇▇▇▇▇ ▇. Israel
Its: Director
S.O. REALTY, INC.
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Secretary
58
64
EXHIBIT "K"
REQUEST FOR ADVANCE
Pursuant to the Amended and Restated Credit Agreement dated as of April
25, 2001, (herein called "Agreement"), the undersigned, on behalf of the
Companies, hereby request COMERICA BANK ("Bank") to make a(an) *
Advance to the Companies on , , in the amount
of DOLLARS, ($ ) under the Revolving
Credit Note dated April 25, 2001 issued by the Companies to Bank
(herein called "Note"). The Interest Period for the requested Advance, if
applicable, shall be .** The last day of the Interest
Period for the amounts being converted or refunded hereunder, if applicable,
is , .
The undersigned, on behalf of the Companies, certifies that no event
has occurred or condition exists which constitutes, or with the passage of time
and/or giving of notice would constitute, a default under the Agreement or the
Note, and none will exist upon the making of the Advance requested hereunder.
The undersigned further certifies, on behalf of the Companies, that upon
advancing the sum requested hereunder, the aggregate principal amount
outstanding under the Note will not exceed the face amount thereof or any
advance formula applicable to Advance under such Note. If the amount advanced to
the Companies under the Note shall at any time exceed the face amount thereof or
any advance formula applicable to Advances under such Note, the Companies will
pay such excess amount on demand.
The undersigned, on behalf of the Companies, hereby authorizes said
Bank to disburse the proceeds of this Request for Advance by crediting the
account of with Bank separately designated by the Companies or as the
undersigned, as agent for the Companies, may otherwise direct, unless this
Request for Advance is being submitted for a conversion or refunding, in which
case it shall refund or convert that portion stated above of the existing
outstandings under the Note.
Dated this day of , .
DETREX CORPORATION, for itself and
on behalf of the other Companies
By:
------------------------------
Its:
-----------------------------
------------
*Insert, as applicable, "Eurodollar-based", or "Prime-based".
**For a Eurodollar-based Advance insert, as applicable, "1, 2, 3 or 6 months".
59
