SIXTH AMENDMENT
TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (the "Amendment") is dated as of May 10, 1999, and
entered into by and between BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("Lender") and CLIMATE MASTER, INC. ("Climate
Master"), INTERNATIONAL ENVIRONMENTAL CORPORATION ("IEC"), EL
DORADO CHEMICAL COMPANY ("EDC") and SLURRY EXPLOSIVE CORPORATION
("Slurry") (Climate, IEC, EDC, and Slurry being collectively
referred to herein as "Borrower").
WHEREAS, Lender and Borrower have entered into that certain
Amended and Restated Loan and Security Agreement dated as of
November 21, 1997 as amended by that certain First Amendment to
Amended and Restated Loan and Security Agreement dated as of March
12, 1998, that certain Second Amendment to Amended and Restated
Loan and Security Agreement dated as of June 30, 1998, that certain
Third Amendment to Amended and Restated Loan and Security Agreement
dated as of August 14, 1998, that certain Fourth Amendment to
Amended and Restated Loan and Security Agreement dated as of
November 19, 1998, and that certain Fifth Amendment to Amended and
Restated Loan and Security Agreement dated as of April 8, 1999 (as
so amended, the "Agreement");
WHEREAS, LSB Industries, Inc. ("LSB") has refinanced its
automotive group of subsidiaries identified as L&S Bearing Co., an
Oklahoma corporation, L&S Automotive Products Co., a Delaware
corporation, LSB Extrusion Co., an Oklahoma corporation, Rotex
Corporation, an Oklahoma corporation, Tribonetics Corporation, an
Oklahoma corporation, and International Bearings, Inc., an Oklahoma
corporation (collectively, the "Automotive Group");
WHEREAS, the Automotive Group has entered into a financing
arrangement with Congress Financial Corporation ("Congress") for a
line of credit and term loan of up to $18,550,000 which funds were
used to pay off Lender's working capital loans to the Automotive
Group and, in addition, upon Borrower's request Lender has issued
a one-year letter of credit for the benefit of Congress with LSB as
"account debtor";
WHEREAS, Lender and each member of the Automotive Group have
executed mutual releases;
WHEREAS, the Borrower desires that the Lender amend the
Agreement in certain respects; and
WHEREAS, the Lender is willing to amend the Agreement subject
to the terms and conditions contained herein;
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 The following definitions are hereby amended in
their entirety to read as follows:
"LSB Borrower Subsidiaries" means LSB, Morey Machinery
Manufacturing
Corporation and Summit Machine Tool Manufacturing Corp.
"LSB Consolidated Borrowing Group" means the LSB Borrower
Subsidiaries and
the CCI Consolidated Borrowing Group.
"LSB-Related Loan Agreements" means the following loan
agreements: (i) this
Agreement; and (ii) the Second Amended and Restated Loan and Security
Agreement
dated of even date herewith between Lender and the LSB Borrower
Subsidiaries.
"Springing Covenant Event" means three consecutive Business
Days when the
aggregate Availability of the LSB Consolidated Borrowing Group under all
of the LSB-
Related Loan Agreements is less than Fifteen Million Dollars
($15,000,000) (with
Availability calculated for this purpose without taking into account any
then outstanding
Overadvance Amount) on each such Business Day.
Section 2.02 The following new definition is hereby added to
the Agreement:
"Overadvance Amount" means the following amounts which
are taken into account in calculating Availability under the
other LSB-Related Loan Agreement: $500,000 before October 31,
1999; $333,334 between October 31, 1999 and November 29, 1999;
and $166,668 between November 30, 1999 and December 30, 1999.
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
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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 4.02. 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 since March 31, 1999, 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.
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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,
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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.
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IN WITNESS WHEREOF, the parties have executed this Amendment
on the date first above written.
"BORROWER":
CLIMATE MASTER, INC.
By:
___________________________________
Name:
_______________________________
Title:
_______________________________
INTERNATIONAL ENVIRONMENTAL CORPORATION
By:
____________________________________
Name:
__________________________________
Title:
_________________________________
EL DORADO CHEMICAL COMPANY
By:
___________________________________
Name:
__________________________________
Title:
__________________________________
SLURRY EXPLOSIVE CORPORATION
By:
____________________________________
Name:
__________________________________
Title:
___________________________________
"LENDER"
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
______________________________________
Michael J. Jasaitis, Vice President
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CONSENTS AND REAFFIRMATIONS
The undersigned hereby acknowledges the execution of, and
consents to, the terms and conditions of that certain Sixth
Amendment to Amended and Restated Loan and Security Agreement dated
as of May 10, 1999, between Climate Master, Inc., International
Environmental Corporation, El Dorado Chemical Corporation, Slurry
Explosive Corporation and Bank of America National Trust and
Savings Association ("Creditor") and reaffirms its obligations
under that certain Continuing Guaranty (the "Guaranty") dated as
of November 21, 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 May 10, 1999.
CLIMACHEM, INC.
By:
_________________________________
David Goss, Vice Chairman
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CONSENTS AND REAFFIRMATIONS
Each of the undersigned hereby acknowledges the execution of,
and consents to, the terms and conditions of that certain Sixth
Amendment to Amended and Restated Loan and Security Agreement dated
as of May 10, 1999, between Climate Master, Inc., International
Environmental Corporation, El Dorado Chemical Corporation, Slurry
Explosive Corporation and Bank of America National Trust and
Savings Association ("Creditor") and each reaffirms its obligations
under that certain Continuing Guaranty with Security Agreement (the
"Guaranty") dated as of November 21, 1997, and acknowledges and
agrees that such Guaranty remains in full force and effect and each
Guaranty is hereby ratified and confirmed.
Dated as of May 10, 1999.
LSB INDUSTRIES, INC.
SUMMIT MACHINE TOOL MANUFACTURING
CORP
MOREY MACHINERY MANUFACTURING
CORPORATION
By:
_______________________________
Name:
_____________________________
Title:
____________________________
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