EXHIBIT 10.9
CREDIT AGREEMENT
IRREVOCABLE LETTER OF CREDIT NO. 24058
Dated July 22, 2002
Beneficiary:
Regions Bank
as Trustee under the Indenture
referred to
below
60 Commerce Street
Montgomery, Alabama 36104
Attention: Corporate Trust Department
Dear Sirs:
1. For the account of Ocean Bio-Chem, Inc., Star-Brite
Distributing,
Inc., Star Brite Automotive, Inc., Star
Brite Distributing (Canada) Inc.,
corporations organized under the laws of
the State of Florida, and KINPAK INC.,
a corporation organized under the laws of
the State of Alabama (collectively,
the "Borrowers"), we hereby authorize you
to draw on us at sight, as hereinafter
provided, an amount not exceeding
$3,638,083, (such amount, as reduced from time
to time pursuant to paragraph 6 below and
as reinstated from time to time
pursuant to paragraphs 10 and 11 below,
being herein called the "Credit
Amount").
2. This Letter of Credit is irrevocable and is issued to you,
as
trustee under the Trust Indenture dated as
of July 1, 2002 (the "Indenture"),
between you and The Industrial Development
Board of the City of Montgomery, a
public corporation organized under the laws
of the State of Alabama (the
"Issuer"), pursuant to which Indenture
$3,500,000 in aggregate principal amount
of the Issuer's Industrial Development
Revenue Bonds (KINPAK INC. Project)
Series 2002 dated the date of delivery and
payment therefor (the "Bonds") are
being issued. This Letter of Credit is
issued pursuant to various credit and
security documents between us and the
Borrowers , including that certain Credit
Agreement dated as of July 1, 2002 (the
"Credit Agreement"). Capitalized terms
used herein without definition shall have
the respective meanings assigned to
them in the Credit Agreement.
3. Of the Credit Amount, (i) up to $3,500,000, which is an amount
equal
to the principal amount of the Bonds (the
"Principal Portion"), may be drawn
with respect to payment of the unpaid
principal amount of the Bonds, or payment
of the principal portion of the purchase
price of Bonds tendered (or deemed
tendered) to you for purchase in accordance
with the optional or mandatory
tender provisions of the Indenture
("Tendered Bonds") and (ii) up to $138,083,
which is an amount equal to the maximum
amount of interest payable on the Bonds
at the rate of 12% per annum for a period
of 120 days, computed on the basis of
a 365 day year (the "Interest Portion"),
may be drawn with respect to payment of
accrued but unpaid interest on the Bonds,
or payment of the interest portion of
the purchase price of Tendered Bonds. This
Letter of Credit does not apply to
any interest that may accrue on the Bonds
after the Bonds become due (whether by
maturity, redemption, acceleration or
otherwise), or to any premium due upon
redemption of the Bonds.
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4. Funds under this Letter of Credit are available to you against
your
sight draft(s), drawn on Regions Bank,
Birmingham, Alabama stating on their
face: "Drawn under Regions Bank Irrevocable
Letter of Credit No. 24058"
accompanied by your written certificate
signed by your authorized officer,
appropriately completed, in the form of
Appendix A, B or C hereto, as indicated
below. Presentation of such drafts and
certificates shall be made at our office
located at
Regions Bank
417 North 20th Street
Birmingham, Alabama 35203
or at any other office which may be
designated by us by written notice delivered
to you (the office address specified above
and any other office so designated by
us being herein called our "Principal
Office"). We hereby agree that each draft
drawn under and in compliance with the
terms of this Letter of Credit will be
duly honored by us with our own funds upon
due delivery of the certificates, as
specified below, if presented at our
Principal Office on or before the
expiration date hereof. All payments made
by us pursuant to this Letter of
Credit will be made with our own funds.
5. If a drawing is made by you hereunder at or prior to 10:00
a.m.
(Birmingham, Alabama time) on a Business
Day, and provided that the documents so
presented conform to the terms and
conditions hereof, payment shall be made to
you, or to your designee, of the amount
specified, in immediately available
funds, not later than 1:30 p.m.
(Birmingham, Alabama time) on the same business
day. If a drawing is made by you hereunder
after 10:00 a.m. (Birmingham, Alabama
time) on a business day, and provided that
the documents so presented conform to
the terms and conditions hereof, payment
shall be made to you, or to your
designee, of the amount specified, in
immediately available funds, not later
than 1:30 p.m. (Birmingham, Alabama time)
on the next succeeding business day.
Payment under this Letter of Credit may be
made by deposit of immediately
available funds into a designated account
that you maintain with us.
6. Multiple drawings may be made hereunder, provided that
drawings
honored by us hereunder shall not, in the
aggregate, exceed the Credit Amount.
The Credit Amount shall be reduced as
follows:
(a) Payment by us of drawings with respect to principal due
upon
maturity, redemption or acceleration of the Bonds shall pro
tanto
reduce the Principal Portion of the Credit Amount, without
reinstatement.
(b) Payment by us of drawings with respect to interest due on
the
Bonds shall pro tanto reduce the Interest Portion of the Credit
Amount,
subject to reinstatement as provided in paragraph 10 below.
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(c) Payment by us of drawings with respect to the purchase of
Tendered Bonds shall pro tanto reduce the Principal Portion of
the
Credit Amount, to the extent of the principal portion of the
purchase
price so drawn, and shall pro tanto reduce the Interest Portion of
the
Credit Amount, to the extent of the interest portion of the
purchase
price so drawn, in each case subject to reinstatement as provided
in
paragraph 11 below.
(d) At any time after the principal amount of the Bonds
outstanding is reduced as a result of payment of the principal of
Bonds
due upon maturity or redemption, the Interest Portion of the
Credit
Amount may be reduced by delivery to us of written notice in the
form
of Appendix A hereto from you certifying the maximum amount of
interest
that would be
payable on the Bonds then outstanding for a period of 120
days at the rate of 12% per annum, computed on the basis of a 365
day
year (the "Maximum Interest Coverage"). Upon receipt by us of
such
notice from you, the Interest Portion of the Credit Amount shall
be
reduced to the Maximum Interest Coverage so certified by you and
shall
not thereafter be increased or reinstated to an amount in excess
of
such Maximum Interest Coverage. If, on the date of receipt of
such
notice by us, the Interest Portion of the Credit Amount then
available
for drawing hereunder is less than the Maximum Interest Coverage
so
certified (as a result of draws against the Interest Portion for
which
no reinstatement has become effective), the Interest Portion shall
not
thereafter be increased or reinstated to an amount greater than
the
Maximum Interest Coverage so certified by you.
7. For drawings under the Principal Portion to pay principal of
the
Bonds due upon maturity, redemption or
acceleration, your drafts must be
accompanied by your written certificate
signed by your authorized officer and
appropriately completed in the form of
Appendix A (an "A Drawing").
8. For drawings under the Interest Portion to pay the interest due
on
the Bonds, your drafts must be accompanied
by your written certificate signed by
your authorized officer and appropriately
completed in the form of Appendix B (a
"B Drawing").
9. For drawings under the Principal Portion and (if applicable)
the
Interest Portion to pay the purchase price
of Tendered Bonds, your drafts must
be accompanied by your written certificate
signed by your authorized officer and
appropriately completed in the form of
Appendix C (a "C Drawing").
10. On the day of payment by us of any B Drawing hereunder, the
Interest Portion of the Credit Amount will
be automatically reinstated by the
amount of such B Drawing; provided,
however, that the Interest Portion shall
never be reinstated to an amount in excess
of the Maximum Interest Coverage, as
certified in the most recent notice with
respect to Maximum Interest Coverage
received by us pursuant to paragraph 6
above.
11. Upon receipt by us of funds adequate and available to reimburse
us
for a C Drawing with respect to any
Tendered Bond or Bonds ("Reimbursement
Funds"), (i) the Principal Portion shall be
reinstated by the amount of the
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principal portion of the purchase price of
such Tendered Bond or Bonds, and (ii)
the Interest Portion shall be reinstated by
the amount of the interest portion
of the purchase price of such Tendered Bond
or Bonds; provided, however, that
the Interest Portion shall never be
reinstated to an amount in excess of the
Maximum Interest Coverage, as certified in
the most recent notice with respect
to Maximum Interest Coverage received by us
pursuant to paragraph 6 above. Bonds
with respect to which we receive such
Reimbursement Funds shall no longer be
considered "Pledged Bonds" for purposes of
the Indenture and the Credit
Agreement. We shall promptly notify you of
the receipt by us of all Reimbursed
Funds, such notice to be in the form of
Appendix D hereto.
12. Reductions of the Credit Amount provided for in paragraph 6
above
shall reduce the amounts
which you may draw hereunder
notwithstanding:
(a) the fact that such reduction is the result of a payment
under
this Letter of Credit against presentation of a sight draft or
certificate which does not substantially comply with the terms of
this
Letter of Credit (including without limitation (i) the fact that
any
draft or certificate presented upon this Letter of Credit, or
any
endorsement thereon, proves to be forged, fraudulent, invalid,
unenforceable or insufficient in any respect or any statement
therein
is inaccurate in any respect whatever or (ii) the failure of
any
document to bear reference, or to bear adequate reference, to
this
Letter of Credit);
(b) the use to which this Letter of Credit may be put or any
acts
or omissions of the Trustee in connection therewith; or
(c) any other circumstances or happening whatsoever, whether or
not similar to any of the foregoing, in making payment under
this
Letter of Credit;
provided that such payment shall not
constitute gross negligence or willful
misconduct by us. In furtherance and not in
limitation of the foregoing, we may
accept documents that appear on their face
to be in order, without
responsibility for further
