EXHIBIT 4.2
TENTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
THIS TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment") is
dated as of September ___, 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, (vi)
that certain Sixth Amendment to Loan and Security Agreement dated as of
February 13, 1997, (vii) that certain Seventh Amendment to Loan and Security
Agreement dated as of April 11, 1997, (viii) that certain Eighth Amendment to
Loan and Security Agreement dated as of May 19, 1997, and (ix) that certain
Ninth Amendment to Loan and Security Agreement dated as of June 30, 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.
ARTICLE II
Amendments
Section 2.01. Amendment to Section 9.16. Section 9.16 of the Agreement
is hereby amended to read in its entirety as follows:
"9.16 Adjusted Tangible Net Worth. Adjusted Tangible Net Worth
will not be less than the following amounts at the end of each of the
Fiscal Quarters during the following Fiscal Years:
Fiscal Quarters in the
Following Fiscal Years 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Fiscal Year Ending
December 31, 1997 $ 64,500,000 $ 61,000,000 $57,400,000 $ 57,100,000
Fiscal Year Ending
December 31, 1998 $ 54,000,000 $ 55,200,000 $80,400,000 $ 80,400,000
Each Fiscal Quarter during each Fiscal Year ending thereafter: $80,400,000"
Section 2.02. Amendment to Section 9.17. Section 9.17 of the Agreement
is hereby amended to read in its entirety as follows:
"9.17 Debt Ratio. The ratio of Debt of the LSB Borrowing Group to
Adjusted Tangible Net Worth will not be greater than the following
ratios at the end of each of the Fiscal Quarters during the following
Fiscal Years:
Fiscal Quarters in the
Following Fiscal Years 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Fiscal Year Ending
December 31, 1997 2.39 to 1 2.39 to 1 2.52 to 1 2.49 to 1
Fiscal Year Ending
December 31, 1998 2.72 to 1 2.66 to 1 2.39 to 1 2.39 to 1
Each Fiscal Quarter during each Fiscal Year ending thereafter: 2.39 to 1."
Section 2.03. Amendment to Section 12. The first sentence of
Section 12 is hereby amended to read as follows:
"The initial term of this Agreement shall be from the Closing Date
until July 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 Tenth Amendment to Loan
and Security Agreement dated as of September ___, 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 September ___, 1997.
CLIMATE MASTER, INC.
SUMMIT MACHINE TOOL
MANUFACTURING CORP.
INTERNATIONAL ENVIRONMENTAL
CORPORATION
L & S BEARING CO.
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 Tenth Amendment to Loan
and Security Agreement dated as of September ___, 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 September ___, 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
CONSENTS AND REAFFIRMATIONS
El Dorado Nitrogen Company hereby acknowledges the execution of, and
consents to, the terms and conditions of that certain Tenth Amendment to Loan
and Security Agreement dated as of September ___, 1997, between LSB
Industries, Inc. and BankAmerica Business Credit, Inc. ("Creditor") and
reaffirms its obligations under that certain Continuing Guaranty with Security
Agreement (as amended, the "Guaranty") dated as of February 13, 1997, made by
the undersigned in favor of the Creditor, and acknowledges and agrees that the
Guaranty remains in full force and effect and the Guaranty is hereby ratified
and confirmed.
Dated as of September ___, 1997.
EL DORADO NITROGEN COMPANY
By: ___________________________________
Tony M. Shelby, Vice President