May 25, 1994 Congress Financial Corporation and Congress Financial Corporation (Central) 1133 Avenue of the Americas New York, New York 10036 Re: Modification to Seventeenth Amendment to Loan Agreement Ladies and Gentleman: LSB Industries, Inc. ("LSB") and those certain subsidiaries of LSB identified on the execution page hereof (LSB and such subsidiaries being hereinafter collectively referred to as the "LSB Companies") have requested that Congress Financial Corporation and Congress Financial Corporation (Central) (collectively, "Congress") agreed to and accept the following modifications to the Seventeenth Amendment to Loan Agreement dated March 30, 1994 ("Seventeenth Amendment") and Congress is willing to agree to such request. Terms used herein will have the meanings set forth in the Seventeenth Amendment. 1. The Introductory Paragraph of the Seventeenth Amendment is amended by deleting subsection (b) in its entirety and by inserting the following in lieu thereof: (b) the guaranteeing by LSB of loans made to Prime by Bank IV Oklahoma, N.A. ("Bank IV") in connection with the financing of: (i) Accounts purchased by Prime from one or more of the LSB Companies; and/or (ii) up to $5,000,000 of loans purchased from Equity Bank for Savings, F.A. and/or Bank IV in connection with the sale of Equity Bank to Fourth Financial Corporation. 2. Section 2.4 of the Seventeenth Amendment is deleted in its entirety and the following is inserted in lieu thereof: 2.4 Congress hereby consents to LSB's unconditionally guaranteeing to Bank IV the repayment of any loan or loans (including associated fees and expenses) made to Prime by Bank IV in connection with the financing of: (i) Accounts purchased from the LSB Companies in accordance herewith; and/or (ii) up to $5,000,000 of loans purchased from Equity Bank and/or Bank IV in connection with the sale of Equity Bank to Fourth Financial Corporation. 3. Continued Validity. Except as expressly set forth herein, the Seventeenth Amendment and other Loan Documents will continue in full force and effect. 4. Reliance. Bank IV may rely on this letter. 5. Counterpart Execution. This Agreement may be executed in counterparts, each of which will be deemed an original document, but all of which will constitute a single document. LSB INDUSTRIES, INC. L & S BEARING CO. TRIBONETICS CORPORATION LSB EXTRUSION CO. ROTEX CORPORATION SUMMIT MACHINE TOOL MANUFACTURING CORP. HERCULES ENERGY MFG. CORPORATION LSB FINANCIAL CORP. LSB LEASING CORP. LSB IMPORT CORP. LSB BEARING CORP. SUMMIT MACHINE TOOL SYSTEMS, INC. LSB EUROPA LIMITED BOWERDEAN LIMITED LSB INTERNATIONAL LIMITED INTERNATIONAL ENVIRONMENTAL CORPORATION CHP CORPORATION CLIMATE MASTER, INC. KOAX CORP. APR CORPORATION CLIMATEX, INC. By_______________________________ Name:__________________________ Title:_________________________ (the "LSB Companies") CONSENTED AND AGREED TO: PRIME FINANCIAL CORP. By_______________________________ Name:__________________________ Title:_________________________ ("Prime") CONSENTED AND AGREED TO: CONGRESS FINANCIAL CORPORATION AND CONGRESS FINANCIAL CORPORATION (CENTRAL) By_______________________________ Name:__________________________ Title:_________________________ Date Executed:___________________ ("Congress") ACKNOWLEDGED: BANK IV OKLAHOMA, N.A. By_______________________________ Name:__________________________ Title:_________________________ ("Bank IV") tq694x41.wpe