TWENTY-FIRST AMENDMENT TO LOAN AGREEMENT EXHIBIT 4.02
September 16, 1994
Congress Financial Corporation and
Congress Financial Corporation (Central)
1133 Avenue of the Americas
New York, New York 10036
Gentlemen:
Reference is made to the Loan Agreement, dated March 29, 1994, as
heretofore amended, modified, or supplemented (including, without limitation,
pursuant to that certain Amendment to Loan Agreement, dated August 16, 1985,
that certain Second Amendment to Loan Agreement, dated April 3, 1986, that
certain Third Amendment to Loan Agreement, dated October 26, 1986, that
certain Fourth Amendment to Loan Agreement, dated December 17, 1986, that
certain Fifth Amendment to Loan Agreement, dated March 7, 1988, that certain
Sixth Amendment to Loan Agreement dated March 31, 1989, that certain Seventh
Amendment to Loan Agreement, dated May 18, 1990, that certain Eighth Amendment
to Loan Agreement, dated May 1, 1991, that certain Ninth Amendment to Loan
Agreement, dated February 25, 1992, that certain Tenth Amendment to Loan
Agreement, dated March 31, 1992, that certain Eleventh Amendment to Loan
Agreement, dated December 10, 1992, that certain Twelfth Amendment to Loan
Agreement, dated April 23, 1993, that certain Thirteenth Amendment to Loan
Agreement, dated June 24, 1993, that certain Fourteenth Amendment to Loan
Agreement, dated September 23, 1993, that certain Fifteenth Amendment to Loan
Agreement, dated November 29, 1993, that certain Sixteenth Amendment to Loan
Agreement, dated January 25, 1994, that certain Seventeenth Amendment to Loan
Agreement, dated March 30, 1994 (the "Seventeenth Amendment"), that certain
Eighteenth Amendment to Loan Agreement, dated May 20, 1994 (the "Eighteenth
Amendment"), that certain Modification to Seventeenth Amendment to Loan
Agreement, dated May 25, 1994 (the "Modification Agreement"), the Nineteenth
Amendment to Loan Agreement, dated June 29, 1994 ("Nineteenth Amendment"), and
the Twentieth Amendment to Loan Agreement dated August 23, 1994 (the
"Twentieth Amendment"), hereinafter collectively, the "Loan Agreement",
currently by and among Congress Financial Corporation and Congress Financial
Corporation (Central) (collectively, "Congress"), LSB Industries, Inc.
(hereinafter "LSB"), L&S Bearing Co., Rotex Corporation, Tribonetics
Corporation, LSB Extrusion Co., International Environmental Corporation, CHP
Corporation, Koax Corp., Summit Machine Tool Manufacturing Corp., Hercules
Energy Mfg. Corporation, Climate Master, Inc., APR Corporation and Climatex,
Inc. (collectively, with LSB, the "Borrowers") LSB Financial Corp., LSB
Leasing Corp., LSB Import Corp., LSB Bearing Corp., Summit Machine Tool
Systems, Inc., LSB Europa Limited, Bowerdean Limited, and LSB International
Limited (collectively herein, and pursuant to the Loan Agreement, the
"Guarantors"), and Prime Financial Corp. (as to the Seventeenth Amendment, the
Eighteenth Amendment, the Modification Agreement, the Nineteenth Amendment,
and the Twentieth Amendment), and Bank IV Oklahoma, N.A. (as to the
Seventeenth Amendment, the Modification Agreement, the Nineteenth Amendment,
and the Twentieth Amendment).
September 16, 1994
Page 2
Borrowers and Guarantors have requested an extension of the termination
date of their existing arrangements with Congress and an extension of the
Selling Period and Congress is willing, subject to the terms and conditions
set forth herein, to so extend such termination date of the existing financing
arrangements with such termination date of the existing financing arrangements
with Borrowers and Guarantors and such Selling Period as provided below.
Congress, Borrowers and Guarantors agree as follows (capitalized terms used
herein, unless otherwise defined, shall have the meanings set forth in the
Loan Agreement):
I. TERM OF FINANCING ARRANGEMENTS. The date "September 30, 1994" in
Section 9.1 of the Accounts Agreement, as heretofore amended, is hereby
deleted and replaced with the date "October 31, 1994".
II. TERM OF SELLING PERIOD. The date "September 30, 1994" in Section
2.1 of the Seventeenth Amendment is hereby deleted and replaced with the date
"October 31, 1994".
III. DELIVERY OF CASH COLLATERAL UPON TERMINATION. In addition to all
of Congress' other rights and remedies available to it upon the effective date
of termination or non-renewal of the Loan Agreement and the other Financing
Agreements, upon the effective date of such termination or non-renewal,
Borrower shall (a) pay to Congress, in full, all outstanding and unpaid
Obligations and (b) furnish cash collateral to Congress in an amount equal to
(i) 115% of the face amount of all contingent Obligations consisting of all
letters of credit, banker's acceptances, purchase guarantees and other
financial accommodations (collectively, "Credits") issued and outstanding on
the effective date of such termination or non-renewal PLUS (ii) an amount
Congress determines is reasonably necessary to secure Congress from loss,
cost, damage or expense, including reasonable attorneys' fees and legal
expenses, in connection with any checks or other payments provisionally
credited to the Obligations and/or as to which Congress has not yet received
the final and indefeasible payment (collectively, "Uncollected Payments").
Such amounts shall be remitted to Congress by wire transfer in federal funds
to such bank account of Congress, as Congress may, in its discretion,
designate in writing to Borrower for such purpose. Congress shall be entitled
to hold such cash collateral delivered to Congress with respect to each of the
Credits until forty-five (45) days after the expiration date of each Credit,
and for a period of forty-five (45) days following termination or non-renewal
as to such contingent Obligations in respect of Uncollected Payments.
Congress may apply the cash collateral to any such contingent Obligations
which may become due by virtue of drawings or claims made pursuant to the
Credits or for claims made against Congress in connection with the Uncollected
Payments and shall release any remaining cash collateral to LSB upon the
expiration of the applicable forty-five (45) day period referred to in this
paragraph.
September 16, 1994
Page 3
IV. EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto, the
Loan Agreement and the Financing Agreements are hereby specifically ratified,
restated and confirmed by the parties hereto as of the date hereof. To the
extent of conflict between the terms of this Amendment and the Loan Agreement
or other Financing Agreements, the terms of this Amendment control.
V. FURTHER ASSURANCES. The parties hereto shall execute and deliver
such additional documents and take such additional action as may be necessary
to effectuate the provisions and purposes of this Amendment.
By the signature hereto of each of their duly authorized officers,
all of the parties hereby mutually covenant and agree a set forth herein (the
covenants and agreements of the Borrowers and Guarantors being joint and
several).
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September 16, 1994
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Very truly yours,
LSB INDUSTRIES, INC.
L&S BEARING CO.
ROTEX CORPORATION
TRIBONETICS CORPORATION
LSB EXTRUSION CO.
INTERNATIONAL ENVIRONMENTAL
CORPORATION
CHP CORPORATION
KOAX CORP.
SUMMIT MACHINE TOOL
MANUFACTURING CORP.
HERCULES ENERGY MFG. CORPORATION
CLIMATE MASTER, INC.
APR CORPORATION
CLIMATEX, INC.
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
BY:_________________________________
TITLE_______________________________
AGREED AND ACCEPTED:
CONGRESS FINANCIAL CORPORATION AND
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By______________________________________
Title___________________________________
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September 16, 1994
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ACKNOWLEDGED:
BANK IV OKLAHOMA, N.A.
By__________________________________
Title_______________________________
PRIME FINANCIAL CORP.
By__________________________________
Title_______________________________
September 16, 1994
Page 5
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ACKNOWLEDGED:
BANK IV OKLAHOMA, N.A.
By__________________________________
Title_______________________________
PRIME FINANCIAL CORP.
By__________________________________
Title_______________________________