EIGHTH AMENDMENT
TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS EIGHTH AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (the "Amendment") is dated as of March 1,
2000, and entered into by and between BANK OF AMERICA, N.A.
("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, that certain Fifth
Amendment to Amended and Restated Loan and Security Agreement
dated as of April 8, 1999, that certain Sixth Amendment to
Amended and Restated Loan and Security Agreement dated as of May
10, 1999, and that certain Seventh Amendment to Amended and
Restated Loan and Security Agreement dated as of January 1, 2000
(as so amended, the "Agreement");
WHEREAS, the Agreement provides that when a "Springing
Covenant Event" (as defined therein) occurs, two financial
covenants would become effective; and
WHEREAS, Borrower has made an interest payment under the
Bond Indenture on or before December 31, 1999 which has resulted
in the occurrence of the Springing Covenant Event; and
WHEREAS, when the two financial covenants became effective,
Borrower was in default with respect to each covenant (the
"Financial Covenant Defaults"), and Borrower requested that
Lender forebear from exercising its rights and remedies as the
result of the Financial Covenant Defaults for a 60-day period
(the "Forebearance Period"); and
WHEREAS, the Forebearance Period has now expired and the
parties have negotiated new financial covenants and have agreed
to increase the interest rates; and
WHEREAS, the Borrower desires that the Lender amend the
Agreement in certain respects; and
WHEREAS, the Lender is willing to amend the Agreement and to
grant Borrower's requests for new financial covenants 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
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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 new definitions are hereby added
to the Agreement:
"EBITDA" means earnings of any Person before taking
into account interest, taxes, depreciation, and
amoritzation, all as determined in accordance with GAAP.
"Net Worth" means the net worth of any Person as
determined in accordance with GAAP.
Section 2.02 Amendment to Section 3.1 (a) Interest Rates.
Section 3.1 (a) of the Agreement is hereby amended
in its entirety to read as follows:
3.1 Interest.
(a) Interest Rates. All amounts charged as Revolving
Loans shall bear interest on the unpaid principal amount thereof
from the date made until paid in full in cash at the Applicable
Interest Rate as described in Sections 3.1(a)(i) and (ii) but not
to exceed the maximum rate permitted by applicable law. Subject
to the provisions of Section 3.2, any of the Revolving Loans may
be converted into, or continued as, Reference Rate Loans or
Eurodollar Rate Loans in the manner provided in Section 3.2. If
at any time Revolving Loans are outstanding with respect to which
notice has not been delivered to Lender in accordance with the
terms of this Agreement specifying the basis for determining the
interest rate applicable thereto, then those Revolving Loans
shall be Reference Rate Loans and shall bear interest at a rate
determined by reference to the Reference Rate until notice to the
contrary has been given to the Lender and such notice has become
effective. Except as otherwise provided herein, the amounts
charged as Revolving Loans shall bear interest at the following
rates (the "Applicable Interest Rate"):
(i) For all amounts charged as Revolving Loans
other than Eurodollar Rate Loans, including all Revolving
Loans which are Reference Rate Loans, then at a fluctuating
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per annum rate equal to one and one-half percent (1.50%) per
annum (the "Reference Rate Margin") plus the Reference Rate;
and
(ii) If the Revolving Loans are Eurodollar Rate
Loans, then at a per annum rate equal to: three and seven-
eighths percent (3.875%) per annum (the "Eurodollar Margin")
plus the Eurodollar Rate determined for the applicable
Interest Period.
Each change in the Reference Rate shall be reflected in the
interest rate described in (i) above as of the effective date of
such change. All interest charges shall be computed on the basis
of a year of three hundred sixty (360) days and actual days
elapsed. Except as otherwise provided herein, (1) interest
accrued on each Eurodollar Rate Loan shall be payable in arrears
on each Eurodollar Interest Payment Date applicable to such
Eurodollar Rate Loan, and (2) interest accrued on the Reference
Rate Loans will be payable in arrears on the first day of each
month hereafter.?
Section 2.03 Amendment to Section 9.16. Section 9.16 of
the Agreement is hereby amended to read in its entirety as
follows:
"9.16 CCI Net Worth. The Net Worth of the CCI
Consolidated Group will not be less than or, where a deficit
amount is anticipated as indicated by brackets, e.g. [ ],
such deficit amount will not be greater than, the following
amounts at the end of each of the Fiscal Quarters during the
following Fiscal Year:
Fiscal Quarters in the
Following Fiscal Year Amount
_____________________ _______
First Fiscal Quarter during
Fiscal Year Ending
December 31, 2000 [$2,000,000]
Second Fiscal Quarter during
Fiscal Year Ending
December 31, 2000 $ -0-
Third Fiscal Quarter during
Fiscal Year Ending
December 31, 2000 $500,000
Fourth Fiscal Quarter during
Fiscal Year Ending
December 31, 2000 $500,000
Section 2.04 Amendment to Section 9.17. Section 9.17 of
the Agreement is hereby amended to read in its entirety as
follows:
"9.17 Interest Coverage Ratio. The ratio of interest
owed by the CCI Consolidated Group to EBITDA of the CCI
Consolidated Group will not be less than the following
ratios at the end of each of the Fiscal Quarters during the
following Fiscal Year:
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Fiscal Quarters in the
Following Fiscal Year 0xx Xxxxxxx 0xx Xxxxxxx 0xx Xxxxxxx 0xx Quarter
______________________ __________ ____________ ___________ ____________
Fiscal Year Ending
December 31, 2000 .8:1 1.4:1 1.5:1 1.5:1
Section 2.05 Section 9.19 of the Agreement is hereby
amended in its entirety to read as follows:
"9.19 On or before October 1, 2000 Borrower and
Lender shall have determined new financial covenants for the
Fiscal Year beginning in January, 2001 acceptable in all
respects to Lender, in its sole discretion. Unless such
financial covenants have been agreed to by October 1, 2000,
then this Agreement will terminate automatically on the
Termination Date without further notice by Lender."
Section 2.06 Section 11.1(e) of the Agreement is hereby
amended to read as follows:
"(e) any default by any Borrower in any payment of
principal of or interest on any indebtedness (other than the
Obligations and Intercompany Accounts) for borrowed money
where the then outstanding amount exceeds $500,000 beyond
any period of grace provided with respect thereto or in the
performance of any other agreement, term or condition
contained in any agreement under which any such obligation
is created if (i) the effect of such default is to cause or
permit the holder or holders of such obligation to cause,
such obligation to become due prior to its stated maturity,
and (ii) the effect of such default would have a material
adverse effect on the Borrower."
All other provisions of Section 11.1 remain unchanged.
ARTICLE III
___________
Amendment to Letter of Credit Agreement
_______________________________________
Section 3.01. Letter of Credit Agreemenet. The Letter of
Credit Fee as defined and described in the Letter of Credit
Agreement is hereby increased to two percent (2%) per annum. All
other provisions of the Letter of Credit Agreement remain
unchanged.
ARTICLE IV
__________
Ratifications, Representations and Warranties
_____________________________________________
Section 4.01. 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,
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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 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 V
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Conditions Precedent
____________________
Section 5.01. 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 December 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 & Xxxxxxxxx, a Professional Corporation.
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ARTICLE VI
__________
Miscellaneous
_____________
Section 6.01. 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 6.02. 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 6.03. 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 6.04. 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 6.05. 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 6.06. 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 6.07. 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.
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Section 6.08. Headings. The headings, captions and
arrangements used in this Amendment are for convenience only and
shall not affect the interpretation of this Amendment.
Section 6.09. 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 6.10. 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 6.11. 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
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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":
CLIMATE MASTER, INC.
By: /s/ Xxxx X. Xxxxxx
_____________________________________
Name: Xxxx X. Xxxxxx
___________________________________
Title: Board Chairman
___________________________________
INTERNATIONAL ENVIRONMENTAL CORPORATION
By: /s/ Xxxx X. Xxxxxx
_____________________________________
Name: Xxxx X. Xxxxxx
____________________________________
Title: Board Chairman
____________________________________
EL DORADO CHEMICAL COMPANY
By: /s/ Xxxx X. Xxxxxx
_____________________________________
Name: Xxxx X. Xxxxxx
___________________________________
Title: Board Chairman
__________________________________
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SLURRY EXPLOSIVE CORPORATION
By: /s/ Xxxx X. Xxxxxx
______________________________________
Name: Xxxx X. Xxxxxx
____________________________________
Title: Board Chairman
____________________________________
"LENDER"
BANK OF AMERICA, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxxx
_____________________________________
Xxxxxxx X. Xxxxxxxx, 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 Eighth
Amendment to Amended and Restated Loan and Security Agreement
dated as of March 1, 2000, between Climate Master, Inc.,
International Environmental Corporation, El Dorado Chemical
Company, 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 March 1, 2000.
CLIMACHEM, INC.
By: /s/ Xxxx X. Xxxxxx
__________________________________
Name: Xxxx X. Xxxxxx
________________________________
Title: Board 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
Eighth Amendment to Amended and Restated Loan and Security
Agreement dated as of March 1, 2000, between Climate Master,
Inc., International Environmental Corporation, El Dorado Chemical
Company, 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 March 1, 2000.
LSB INDUSTRIES, INC.
SUMMIT MACHINE TOOL MANUFACTURING
CORP
XXXXX MACHINERY MANUFACTURING
CORPORATION
By: /s/ Xxxx X. Xxxxxx
_________________________________
Name: Xxxx X. Xxxxxx
________________________________
Title: Board Chairman
________________________________
