May 19, 1999
Congress Financial Corporation (Southwest)
1201 Main Street, Suite 1625
Dallas, Texas 75250
Ladies and Gentlemen:
Reference is made to the financing agreements (the
"Financing Documents") between L&S Bearing Co., LSB Extrusion
Co., Tribonetics Corporation, Rotex Corporation, L&S
Automotive Products Co., and International Bearings, Inc.
(collectively, "Borrower") and Bank of American National Trust
and Savings Association, successor-in-interest to BankAmerica
Business Credit, Inc. ("Lender"). We understand that, on the
Payoff Date (as hereinafter defined), Borrower expects to
obtain financing (the "Financing") from Congress Financial
Corporation (Southwest) ("Congress") for the purpose of
repaying in full all of the obligations and liabilities of
Borrower to Lender under or in respect of the Financing
Documents (the "Lender Obligations").
1. This letter will confirm that, upon receipt by
Lender of:
(a) no later than 12:00 p.m., Pacific time on
May 10, 1999, a wire transfer of immediately available funds
to Lender in the aggregate amount of $11,834,739.33, subject
to adjustment as set forth in this paragraph 1 (as so adjusted
the "Payout Amount"), consisting of:
(i) $11,723,071.78 in respect of unpaid
principal outstanding under the Financing Documents (assuming
no further loans or repayments are made); and
(ii) $109,136.29 in respect of accrued and
unpaid interest on such unpaid principal amount, assuming no
changes in applicable interest rates and no changes in the
outstanding principal amount (the per diem accrual of such
interest being $2,464.42 per day);
(iii) $2,531.26 representing expenses of
Lender payable by Borrower pursuant to the Financing Documents
consisting of (A) $0 in respect of letter of credit
obligations outstanding, (B) $63.39 in respect of letter
credit fees and expenses, and (C) $2,467.87 in respect of
unused line fees.
(b) a fully executed counterpart of this letter
agreement signed by Borrower.
(the date on which all of the foregoing conditions shall first
be satisfied herein called the "Payoff Date"), all of the
Lender Obligations shall be terminated and satisfied in full.
If the assumptions set forth above with respect to the
calculation of the principal and interest components of the
Payout Amount are not correct, we will so advise Borrower and
Congress and notify each of them writing on or before the
Payoff Date of the adjusted figure for the Payout Amount,
reflecting the appropriate changes in the amounts of principal
and interest. Upon receipt of the Payout Amount in accordance
with the foregoing and satisfaction of the other conditions
referred to above, Lender agrees to release, on and with
effect from the Payoff Date, all of its security interests,
liens and other documents created as security for the Lender
Obligations.
2. Please transfer the Payout Amount to Bank of
America, San Francisco, California, ABA No. 121000358, Account
No. 12575-03561 (reference LSB Industries), by wire transfer
of immediately available funds, for receipt no later than
12:00 p.m., Pacific time, on the Payoff Date.
3. Borrower hereby confirms that the commitments of
Lender to make loans to Borrower under the Financing Documents
are terminated as of the Payoff Date.
4. Lender will, concurrently with the satisfaction of
the conditions referred to in Paragraph 1 above, execute and
deliver any Uniform Commercial Code termination statements,
lien releases, mortgage releases, re-assignments of
trademarks, discharges of security interests, and other
similar discharge or release documents (and if applicable, in
recordable form) as are reasonably necessary to release, as of
record, the security interests, financing statements, and all
other notices of security interests and liens previously filed
by Lender with respect to the Lender Obligations.
5. Lender will, as promptly as practicable upon the
satisfaction of the conditions referred to in Paragraph 1
above, return to Borrower the originals of any and all
promissory notes and other documents evidencing or securing
Borrowers' obligations to Lender previously delivered to
Lender in connection with the Financing Documents, duly marked
"paid in full" or "cancelled" (or with written authorizations
to so mark such documents after the Payoff Date actually
occurs) as may be appropriate.
6. Lender shall execute and deliver to or for Borrower
or Congress such additional documents and shall provide
additional information as Borrower or Congress may reasonably
require to carry out the terms of this letter agreement.
7. Borrower acknowledges that the amounts referred to
in Paragraph 1 above are enforceable obligations of it owed to
Lender pursuant to the provisions of the Financing Documents
and confirms its agreement to the terms and provisions of this
letter by returning to Lender a signed counterpart of this
letter. This letter may be executed by each party on a
separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together
shall constitute one agreement.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, successor-in-trust to
BankAmerica Business Credit, Inc.
By: __________________________________
Title: _________________________________
Agreed to by the undersigned:
L&S BEARING CO.
By: __________________________________
Title: _________________________________
LSB EXTRUSION CO.
By: __________________________________
Title: _________________________________
TRIBONETICS CORPORATION
By: __________________________________
Title: _________________________________
ROTEX CORPORATION
By: __________________________________
Title: _________________________________
L&S AUTOMOTIVE PRODUCTS CO.
By: __________________________________
Title: _________________________________
INTERNATIONAL BEARINGS, INC.
By: __________________________________
Title: _________________________________