SEVENTH AMENDMENT Exhibit 4.1
TO
LOAN AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is dated as of April 11, 1997, and entered into by
and between BANKAMERICA BUSINESS CREDIT, INC. ( Lender ) and LSB
INDUSTRIES, INC. ("Borrower").
WHEREAS, Lender and Borrower have entered into that certain
Loan and Security Agreement dated December 12, 1994, as amended
by (i) that certain First Amendment to Loan and Security
Agreement dated as of August 17, 1995, (ii) that certain Second
Amendment to Loan and Security Agreement dated as of December 1,
1995, (iii) that certain Third Amendment to Loan and Security
Agreement dated as of April 1, 1996, (iv) that certain Fourth
Amendment to Loan and Security Agreement dated as of July 1,
1996, (v) that certain Fifth Amendment to Loan and Security
Agreement dated as of November 18, 1996, and (vi) that certain
Sixth Amendment to Loan and Security Agreement dated as of
February 13, 1997 (as so amended, the "Agreement");
WHEREAS, Lender and Borrower desire to amend the Agreement
as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual conditions
and agreements set forth in the Agreement and this Amendment, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Capitalized terms used in this
Amendment, to the extent not otherwise defined herein, shall have
the same meanings as in the Agreement, as amended hereby.
Section 1.02. Amendment to Definition of Availability
Reductions. The definition of "Availability Reductions" is
hereby amended by adding a new subsection (vi) which reads as
follows:
"(vi) reserves in Lender s sole discretion with respect
to Swap Transactions, with the amount thereof to be at all times
based on a weekly mark-to-market calculation given to Lender by
Bank s Capital Markets Credit Group."
All other subsections of the definition remain unchanged.
Section 1.03 Amendment to Definition of Obligations. The
second sentence of the definition of "Obligations" beginning in
its original version as ""Obligations" includes" and ending
"Letter of Credit Agreement." is amended in its entirety to read
as follows:
""Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter owing from Borrower
to Lender under or in connection with the Letters of Credit and
(b) all debts, liabilities and obligations now or hereafter owing
from the Borrower to the Lender arising from or related to Swap
Transactions."
There is no change in the first sentence of the definition of
"Obligations".
Section 1.04 New Definition. The following new definition
is hereby added to the Agreement:
"Swap Transactions" means interest rate swaps entered into
by the Bank s Capital Markets Credit Group for the account of or
otherwise for the benefit of the Borrower.
ARTICLE II
Amendments
Section 2.01. Amendment to Article 2. Article 2 of the
Agreement is hereby amended by adding a new Section 2.5 which
reads as follows:
"2.5. Swap Transactions. The Borrower may request and the
Lender may, in its sole and absolute discretion, arrange for the
Borrower to obtain Swap Transactions from the Bank s Capital
Markets Credit Group, provided, however, that Lender's exposure
to the LSB Borrowing Group may in no event exceed a maximum
amount of $1,850,000. The Borrower agrees to indemnify and hold
the Lender harmless from all losses, liabilities, costs, expenses
and claims incurred by the Lender arising from or related to such
Swap Transactions. The Borrower acknowledges and agrees that the
obtaining of Swap Transactions from the Bank s Capital Markets
Credit Group (a) is in the sole and absolute discretion of the
Bank s Capital Markets Credit Group, (b) is subject to all rules
and regulations of the Bank s Capital Markets Credit Group, and
(c) is due to the Bank s Capital Markets Credit Group relying on
the indemnity of the Lender to the Bank s Capital Markets Credit
Group with respect to all risks of loss associated with the Swap
Transactions."
Section 2.02. Amendment to Section 12. The first sentence
of Section 12 which in its original version reads in its entirety
as follows "The initial term of this Agreement shall be three (3)
years from the Closing Date (the "Termination Date")" is hereby
amended to read in its entirety as follows:
"The initial term of this Agreement shall be from the
Closing Date until April 1, 1998 (the "Termination Date")."
All other provisions of Section 12 remain unchanged.
ARTICLE III
Ratifications, Representations and Warranties
Section 3.01.Ratifications. The terms and provisions set forth
in this Amendment shall modify and supersede all inconsistent
terms and provisions set forth in the Agreement and, except as
expressly modified and superseded by this Amendment, the terms
and provisions of the Agreement, including, without limitation,
all financial covenants contained therein, are ratified and
confirmed and shall continue in full force and effect. Lender
and Borrower agree that the Agreement as amended hereby shall
continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 3.02.Representations and Warranties. Borrower hereby
represents and warrants to Lender that the execution, delivery
and performance of this Amendment and all other loan, amendment
or security documents to which Borrower is or is to be a party
hereunder (hereinafter referred to collectively as the "Loan
Documents") executed and/or delivered in connection herewith,
have been authorized by all requisite corporate action on the
part of Borrower and will not violate the Articles of
Incorporation or Bylaws of Borrower.
ARTICLE IV
Conditions Precedent
Section 4.01.Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent
(unless specifically waived in writing by the Lender):
(a)Lender shall have received all of the following, each dated
(unless otherwise indicated) as of the date of this Amendment, in
form and substance satisfactory to Lender in its sole discretion:
(i)Company Certificate. A certificate executed by the Secretary
or Assistant Secretary of Borrower certifying (A) that Borrower's
Board of Directors has met and adopted, approved, consented to
and ratified the resolutions attached thereto which authorize the
execution, delivery and performance by Borrower of the Amendment
and the Loan Documents, (B) the names of the officers of Borrower
authorized to sign this Amendment and each of the Loan Documents
to which Borrower is to be a party hereunder, (C) the specimen
signatures of such officers, and (D) that neither the Articles of
Incorporation nor Bylaws of Borrower have been amended since the
date of the Agreement;
(ii)No Material Adverse Change. There shall have occurred no
material adverse change in the business, operations, financial
condition, profits or prospects of Borrower, or in the
Collateral, and the Lender shall have received a certificate of
Borrower's chief executive officer to such effect;
(iii) Other Documents. Borrower shall have
executed and delivered such other documents and
instruments as well as required record searches as
Lender may require.
(b) All corporate proceedings taken in connection with
the transactions contemplated by this Amendment and all
documents, instruments and other legal matters incident
thereto shall be satisfactory to Lender and its legal
counsel, Jenkens & Gilchrist, a Professional Corporation.
ARTICLE V
Miscellaneous
Section 5.01. Survival of Representations and Warranties.
All representations and warranties made in the Agreement or any
other document or documents relating thereto, including, without
limitation, any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this
Amendment and the other Loan Documents, and no investigation by
Lender or any closing shall affect the representations and
warranties or the right of Lender to rely thereon.
Section 5.02. Reference to Agreement. The Agreement, each
of the Loan Documents, and any and all other agreements,
documents or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the
Agreement as amended hereby, are hereby amended so that any
reference therein to the Agreement shall mean a reference to the
Agreement as amended hereby.
Section 5.03. Severability. Any provision of this
Amendment held by a court of competent jurisdiction to be invalid
or unenforceable shall not impair or invalidate the remainder of
this Amendment and the effect thereof shall be confined to the
provision so held to be invalid or unenforceable.
Section 5.04. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER
LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE
BEEN MADE AND TO BE PERFORMABLE IN THE STATE OF OKLAHOMA AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF OKLAHOMA.
Section 5.05. Successors and Assigns. This Amendment is
binding upon and shall inure to the benefit of Lender and
Borrower and their respective successors and assigns; provided,
however, that Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent
of Lender. Lender may assign any or all of its rights or
obligations hereunder without the prior consent of Borrower.
Section 5.06. Counterparts. This Amendment may be executed
in one or more counterparts, each of which when so executed shall
be deemed to be an original, but all of which when taken together
shall constitute one and the same instrument.
Section 5.07. Effect of Waiver. No consent or waiver,
express or implied, by Lender to or of any breach of or deviation
from any covenant or condition of the Agreement or duty shall be
deemed a consent or waiver to or of any other breach of or
deviation from the same or any other covenant, condition or duty.
No failure on the part of Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
power, or privilege under this Amendment, the Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, or privilege
under this Amendment, the Agreement or any other Loan Document
preclude any other or further exercise thereof or the exercise of
any other right, power, or privilege. The rights and remedies
provided for in the Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided
by law.
Section 5.08. Headings. The headings, captions and
arrangements used in this Amendment are for convenience only and
shall not affect the interpretation of this Amendment.
Section 5.09. Releases. As a material inducement to Lender
to enter into this Amendment, Borrower hereby represents and
warrants that there are no claims or offsets against, or defenses
or counterclaims to, the terms and provisions of and the other
obligations created or evidenced by the Agreement or the other
Loan Documents. Borrower hereby releases, acquits, and forever
discharges Lender, and its successors, assigns, and predecessors
in interest, their parents, subsidiaries and affiliated
organizations, and the officers, employees, attorneys, and agents
of each of the foregoing (all of whom are herein jointly and
severally referred to as the "Released Parties") from any and all
liability, damages, losses, obligations, costs, expenses, suits,
claims, demands, causes of action for damages or any other
relief, whether or not now known or suspected, of any kind,
nature, or character, at law or in equity, which Borrower now has
or may have ever had against any of the Released Parties,
including, but not limited to, those relating to (a) usury or
penalties or damages therefor, (b) allegations that a partnership
existed between Borrower and the Released Parties, (c)
allegations of unconscionable acts, deceptive trade practices,
lack of good faith or fair dealing, lack of commercial
reasonableness or special relationships, such as fiduciary, trust
or confidential relationships, (d) allegations of dominion,
control, alter ego, instrumentality, fraud, misrepresentation,
duress, coercion, undue influence, interference or negligence,
(e) allegations of tortious interference with present or
prospective business relationships or of antitrust, or (f)
slander, libel or damage to reputation, (hereinafter being
collectively referred to as the "Claims"), all of which Claims
are hereby waived.
Section 5.10. Expenses of Lender. Borrower agrees to pay
on demand (i) all costs and expenses reasonably incurred by
Lender in connection with the preparation, negotiation and
execution of this Amendment and the other Loan Documents executed
pursuant hereto and any and all subsequent amendments,
modifications, and supplements hereto or thereto, including,
without limitation, the costs and fees of Lender's legal counsel
and the allocated cost of staff counsel and (ii) all costs and
expenses reasonably incurred by Lender in connection with the
enforcement or preservation of any rights under the Agreement,
this Amendment and/or other Loan Documents, including, without
limitation, the costs and fees of Lender's legal counsel and the
allocated cost of staff counsel.
Section 5.11. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER
WITH THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL
AGREEMENTS BETWEEN LENDER AND BORROWER AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN LENDER AND BORROWER.
IN WITNESS WHEREOF, the parties have executed this Amendment
on the date first above written.
"BORROWER"
LSB INDUSTRIES, INC.
By: _________________________
Name: Tony M. Shelby
Title: Vice President
"LENDER"
BANKAMERICA BUSINESS CREDIT, INC.
By: _________________________
Name: Michael J. Jasaitis
Title: Vice President
CONSENTS AND REAFFIRMATIONS
Each of the undersigned hereby acknowledges the execution
of, and consents to, the terms and conditions of that certain
Seventh Amendment to Loan and Security Agreement dated as of
April 11, 1997, between LSB Industries, Inc., and BankAmerica
Business Credit, Inc. ("Creditor") and reaffirms its obligations
under that certain Cross-Collateralization and Cross-Guaranty
Agreement (the Cross-Collateralization Agreement ) dated as of
December 12, 1994, made by the undersigned in favor of the
Creditor, and acknowledges and agrees that the Cross-
Collateralization Agreement remains in full force and effect and
the Cross-Collateralization Agreement is hereby ratified and
confirmed.
Dated as of April 11, 1997.
CLIMATE MASTER, INC.
L&S BEARING CO.
SUMMIT MACHINE TOOL
MANUFACTURING CORP.
INTERNATIONAL ENVIRONMENTAL
CORPORATION
By: _______________________________
Tony M. Shelby, Vice President
acting on behalf of each of
the above
CONSENTS AND REAFFIRMATIONS
Each of the undersigned hereby acknowledges the execution
of, and consents to, the terms and conditions of that certain
Seventh Amendment to Loan and Security Agreement dated as of
April 11, 1997, between LSB Industries, Inc., and BankAmerica
Business Credit, Inc. ("Creditor") and reaffirms its obligations
under (i) that certain Continuing Guaranty with Security
Agreement (the "Guaranty") dated as of December 12, 1994, and
(ii) that certain Cross-Collateralization and Cross-Guaranty
Agreement (the Cross-Collateralization Agreement ) dated as of
December 12, 1994, each made by the undersigned in favor of the
Creditor, and acknowledges and agrees that the Guaranty and the
Cross-Collateralization Agreement remain in full force and effect
and the Guaranty and the Cross-Collateralization Agreement are
hereby ratified and confirmed.
Dated as of April 11, 1997.
UNIVERSAL TECH CORPORATION
LSB CHEMICAL CORP.
L&S AUTOMOTIVE PRODUCTS CO.
(f/k/a LSB Bearing Corp.)
INTERNATIONAL BEARINGS, INC.
LSB EXTRUSION CO.
ROTEX CORPORATION
TRIBONETICS CORPORATION
SUMMIT MACHINE TOOL SYSTEMS, INC.
HERCULES ENERGY MFG. CORPORATION
MOREY MACHINERY MANUFACTURING
CORPORATION
CHP CORPORATION
KOAX CORP.
APR CORPORATION
By: _________________________________
Tony M. Shelby, Vice President
acting on behalf of each of
the above