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EXHIBIT 10(o)
SIXTH AMENDMENT TO
CREDIT AGREEMENT
THIS SIXTH AMENDMENT ("Amendment") dated as of February 29, 2000, by
and among the borrowers listed on Schedule 1 (collectively "Companies") and
Comerica Bank, a Michigan banking corporation ("Bank").
RECITALS:
A. Companies and Bank entered into a Credit Agreement dated as of
June 13, 1996, which was amended by five amendments (as amended, "Agreement").
B. Companies and Bank desire to amend the Agreement and the Equipment
Notes (as defined in the Agreement) as hereinafter set forth.
NOW, THEREFORE, the parties agree as follows:
1. The definitions of Revolving Credit Commitment, Revolving Credit
Maturity Date, Equipment Line Maturity Date, Lending Availability and Equipment
Reliance set forth in Section 1 of the Agreement are amended to read in their
entireties as follows:
"Equipment Line Maturity Date' shall mean May 1, 2001.
"Equipment Reliance' shall initially mean $750,000. On the
first day of each month, beginning March 1, 2000, Equipment Reliance
shall decrease by $50,000 until such time as the Equipment Reliance is
zero.
"Lending Availability' shall mean as of any date of
determination thereof, the sum of (a) eighty five percent (85%) of
Eligible Accounts plus (b) thirty five percent (35%) of Eligible
Inventory; provided, however, in no event shall the amount of Lending
Availability determined under this clause (b) exceed Four Million
Dollars ($4,000,000), plus (c) the amount of the Equipment Reliance as
of such date.
'Revolving Credit Commitment' shall mean Thirteen Million
Dollars ($13,000,000), subject to reduction or termination pursuant to
Section 2.6 hereof.
'Revolving Credit Maturity Date' shall mean May 1, 2001."
2. Section 2.A.2 is amended to read in its entirety as follows:
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"2.A.2 The indebtedness represented by each Equipment Note shall
be payable in equal monthly principal installments equal to the amount
necessary to amortize the original amount of the Equipment Note over a
five year term commencing on the first day of the first month after
such loan is made 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 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 each
Equipment Note from time to time outstanding at a per annum rate equal
to one percent (1%) above the Prime Rate, provided, however, upon the
occurrence of any Event of Default hereunder, interest shall be payable
at a per annum rate of four percent (4%) above the Prime Rate. Interest
payments shall be made monthly, commencing on the first day of the
first month following the advance under the applicable Equipment 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."
3. The first three sentences of Section 4.1 of the Agreement are
amended to read in their entirety as follows:
"The Revolving Credit Notes and the Advances under Section 2
hereof 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 three quarters of one percent (3/4%) plus the Prime
Rate. Interest shall be payable monthly on the first Business Day of
each calendar month, commencing on the first Business Day of the
calendar month during which such Advance is made, and at maturity.
Notwithstanding the foregoing, from and after the occurrence of any
Event of Default and during the continuation thereof, the Advances
shall bear interest, payable on demand, at a rate per annum equal to
three and three quarters percent (3-3/4%) above the Prime Rate."
4. Sections 9.1, 9.2, 9.3 and 9.4 are amended to read in their
entireties as follows:
"9.1 Leverage Ratio. Beginning December 31, 1999, permit the
Consolidated Leverage Ratio at any time to be more than 2.75 to 1.0."
9.2 Cash Flow Coverage Ratio. Permit the Consolidated Cash
Flow Coverage Ratio at any time to be less than the amounts specified
below for the determination date specified below:
December 31, 1999 .30 to 1.0
March 31, 2000 .30 to 1.0
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June 30, 2000 .30 to 1.0
September 30, 2000 .30 to 1.0
December 31, 2000 and as of the last day of each fiscal
quarter thereafter .50 to 1.0
9.3 Current Ratio. Beginning December 31, 1999, permit the ratio
of Consolidated Current Assets to Consolidated Current Liabilities at
any time to be less than 1.0 to 1.0.
9.4 Consolidated Tangible Net Worth. Permit Consolidated Tangible
Net Worth at any time to be less than the following amounts during the
periods specified below:
December 31, 1999 through December 30, 2000 $16,000,000
December 31, 2000 and thereafter $16,500,000"
5. The definition of "Measuring Period" is amended to read in its
entirety as follows:
""Measuring Period' shall mean for the determination date
referred to below the applicable period shown opposite such
determination date:
Determination Date Measuring Period
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March 31, 2000 January 1, 2000 through March 31, 2000
June 30, 2000 January 1, 2000 through June 30, 2000
September 30, 2000 January 1, 2000 through September 30, 2000
December 31, 2000 The four preceding fiscal quarters ending on such
and the last day of each determination date
fiscal quarter thereafter"
6. Exhibit "E" to the Agreement is deleted and attached Exhibit "E"
is substituted therefor.
7. Each of the existing Equipment Notes is amended to increase the
non-default interest rate to the rate set forth in Section 2.A.2 of the
Agreement (as amended by this Amendment).
8. The Companies did not comply with the provisions of Sections 9.1,
9.2, 9.3 and 9.4 of the Agreement for the period ended December 31, 1999 (as
such provisions were in effect prior to this Amendment). The Bank hereby waives
any default under the Agreement arising as a result of such non-compliance with
the prior provisions for the period ended December 31, 1999. This is not a
waiver of any non-compliance for any period for such covenants as amended by
this Amendment.
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9. Companies hereby represent and warrant that, after giving effect
to the amendments contained herein, (a) execution, delivery and performance of
this Amendment and any other documents and instruments required under this
Amendment or the Agreement are within each Company's corporate powers, have been
duly authorized, are not in contravention of law or the terms of any Company's
Articles of Incorporation or Bylaws, and do not require the consent or approval
of any governmental body, agency, or authority; and this Amendment and any other
documents and instruments required under this Amendment or the Agreement, will
be valid and binding in accordance with their terms; (b) the continuing
representations and warranties of each Company set forth in Sections 7.1 through
7.15 of the Agreement are true and correct on and as of the date hereof with the
same force and effect as made on and as of the date hereof; (c) the continuing
representations and warranties of each Company set forth in Section 7.16 of the
Agreement are true and correct as of the date hereof with respect to the most
recent financial statements furnished to the Bank by Companies in accordance
with Section 10.1 of the Agreement; and (d) no Event of Default (as defined in
the Agreement) or condition or event which, with the giving of notice or the
running of time, or both, would constitute an Event of Default under the
Agreement, has occurred and is continuing as of the date hereof.
10. Except as expressly provided herein, all of the terms and
conditions of the Agreement remain unchanged and in full force and effect.
11. This Amendment shall be effective upon (a) the payment by
Companies to Bank of a non-refundable amendment fee in the amount of $37,500 and
(b) execution and delivery by Companies to Bank of a replacement Revolving
Credit Note in the form attached hereto as Exhibit "E".
IN WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK DETREX CORPORATION
By: By:
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Xxxxxxx X. Xxxxx Xxxxxx X. Israel
Its: Assistant Vice President Its: Vice President-Finance and
Chief Financial Officer
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THE ELCO CORPORATION
By:
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Xxxxxx X. Israel
Its: Treasurer
XXXXXX PLASTICS, INC.
By:
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Xxxxxx X. Israel
Its: Director
XXXXXXX-OXIDERMO, INC.
By:
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Xxxxxx X. Israel
Its: Treasurer
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SCHEDULE 1
Detrex Corporation
The Elco Corporation
Xxxxxx Plastics, Inc.
Xxxxxxx-Oxidermo, Inc.
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EXHIBIT "E"
REVOLVING CREDIT NOTE
Detroit, Michigan
$13,000,000 February 29, 2000
On or before May 1, 2001, 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 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx, 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 Credit Agreement ("Agreement") dated as of
June 13, 1996, made by and between Companies and Bank, as amended, 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.
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.
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This Note is a renewal and increase of a Revolving Credit Note dated
June 13, 1996 in the original principal amount of $12,000,000 by Companies
payable to Bank.
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
DETREX CORPORATION
By:
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Xxxxxx X. Israel
Its: Vice President-Finance
and Chief Financial Officer
THE ELCO CORPORATION
By:
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Xxxxxx X. Israel
Its: Treasurer
XXXXXX PLASTICS, INC.
By:
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Xxxxxx X. Israel
Its: Director
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XXXXXXX-OXIDERMO, INC.
By:
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Xxxxxx X. Israel
Its: Treasurer
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