THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 4.1
THIRD AMENDMENT
TO LOAN AND SECURITY AGREEMENT
THIRD AMENDMENT, dated as of November 18, 2002 (the "Amendment"), to the Loan and Security Agreement dated as of April 13, 2001, as amended by the First Amendment dated as of August 3, 2001 and the Second Amendment dated as of May 24, 2001 (the "Loan Agreement"), by and among (i) LSB INDUSTRIES, INC., a Delaware corporation (the "Parent"), CLIMACHEM, INC., an Oklahoma corporation ("ClimaChem"), and each of the Subsidiaries of ClimaChem identified on the signature pages thereof (such Subsidiaries, together with ClimaChem, each a "Borrower", and collectively, the "Borrowers"), (ii) the lenders identified on the signature pages thereof (each a "Lender" and collectively the "Lenders") and (iii) FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and administrative agent for the Lenders (the "Agent")
WHEREAS, the Borrowers have requested, and the Agent and the Lenders have agreed, to amend the Loan Agreement to modify the minimum EBITDA covenant, subject to the term and conditions of this Amendment.
NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereto hereby agree as follows:
1. Definitions in Amendment. Any capitalized term used herein and not defined shall have the meaning assigned to it in the Loan Agreement.
2. Minimum EBITDA. Section 7.20(a)(i) of the Loan Agreement is hereby amended in its entirety as follows:
"(i) Minimum EBITDA. EBITDA, measured on a fiscal quarter-end basis, of not less than the required amount set forth in the following table for the applicable period set forth opposite thereto:
|
Applicable Amount |
Applicable Period |
|
$18,000,000 |
For the 12 month period ending September 30, 2002 |
|
$14,000,000 (or, if ClimaChem does not consummate the sale of Slurry by December 31, 2002, $12,000,000) |
For the 12 month period ending December 31, 2002 |
Borrowers' EBITDA for the 12 month period ending each fiscal quarter after December 31, 2002 shall be determined based upon Borrowers' projected EBITDA for such period as set forth in the Projections delivered to Agent in accordance with Section 6.3(c), which Projections are in form and substance acceptable to Agent; provided, that if Agent and Borrowers cannot agree on the EBITDA covenant number based upon Borrowers' projected EBITDA, for purposes of this Section 7.20(a)(i), Borrowers' EBITDA for such 12 month period shall be determined by Agent in its Permitted Discretion and shall not be less than $19,000,000."
3.
Conditions. The effectiveness of this Amendment is subject to the fulfillment, in a manner satisfactory to the Agent, of each of the following conditions precedent (the first date upon which all such conditions shall have been satisfied being herein called the "Third Amendment Effective Date"):
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Representations and Warranties; No Event of Default. The representations and warranties contained herein, in Section 5 of the Loan Agreement and in each other Loan Document and certificate or other writing delivered to the Agent or any Lender pursuant hereto on or prior to the Third Amendment Effective Date shall be correct in all material respects on and as of the Third Amendment Effective Date as though made on and as of such date, except to the extent that such representations and warranties (or any schedules related thereto) expressly relate solely to an earlier date (in which case such representations and warranties shall be true and correct in all material respects on and as of such date); and no Default or Event of Default shall have occurred and be continuing on the Third Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms.
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Delivery of Documents. The Agent shall have received on or before the Third Amendment Effective Date the following, each in form and substance satisfactory to the Agent and, unless indicated otherwise, dated the Third Amendment Effective Date:
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counterparts of this Amendment which bear the signatures of each Borrower, Agent and each Lender; and
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such other agreements, instruments, approvals, opinions and other documents as the Agent may reasonably request from the Borrowers.
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Amendment Fee. The Borrowers shall have paid to the Agent, for the benefit of the Lenders, in immediately available funds, a fully earned and nonrefundable amendment fee equal to $5,000, the payment of which shall be effected by Agent charging such fee to Borrowers' Loan Account.
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Proceedings. All proceedings in connection with the transactions contemplated by this Amendment, and all documents incidental thereto, shall be satisfactory to the Agent and its special counsel, and the Agent and such special counsel shall have received from the Borrowers all such information and such counterpart originals or certified copies of documents, and such other agreements, instruments, approvals, opinions and other documents, as the Agent or such special counsel may reasonably request.
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Representations and Warranties; No Event of Default. The representations and warranties herein, in Section 5 of the Loan Agreement and in each other Loan Document and certificate or other writing delivered to the Agent or any Lender pursuant hereto on or prior to the Amendment Effective Date are correct in all material respects on and as of the Third Amendment Effective Date as though made on and as of such date, except to the extent that such representations and warranties (or any schedules related thereto) expressly relate solely to an earlier date (in which case such representations and warranties are true and correct in all material respects on and as of such date); and no Default or Event of Default has occurred and is continuing on the Third Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms.
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Organization, Good Standing, Etc. Each Borrower (i) is a corporation duly organized, validly existing and in good standing under the laws of the state of its organization, (ii) has all requisite power and authority to execute, deliver and perform this Amendment and the other Loan Documents to which it is a party being executed in connection with this Amendment, and to perform the Loan Agreement, as amended hereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except where the failure to be so qualified reasonably could not be expected to have a Material Adverse Change.
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Authorization, Etc. The execution, delivery and performance by each Borrower of this Amendment, and the performance by each Borrower of the Loan Agreement, as amended hereby, (i) have been duly authorized by all necessary action on the part of such Borrower, (ii) do not and will not contravene such Borrower's charter or by-laws, any applicable law or any material contractual restriction binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not and will not result in any suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties.
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Continued Effectiveness of the Loan Agreement. Except as otherwise expressly provided herein, the Loan Agreement and the other Loan Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, except that on and after the Third Amendment Effective Date (i) all references in the Loan Agreement to "this Agreement", "hereto", "hereof", "hereunder" or words of like import referring to the Loan Agreement shall mean the Loan Agreement as amended by this Amendment, and (ii) all references in the other Loan Documents to which any Borrower is a party to the "Loan Agreement", "thereto", "thereof", "thereunder" or words of like import referring to the Loan Agreement shall mean the Loan Agreement as amended by this Amendment. Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as an amendment of any right, power or remedy of the Lender under the Loan Agreement or any other Loan Document, nor constitute an amendment of any provision of the Loan Agreement or any other Loan Document.
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Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
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Headings. Section headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
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Governing Law. This Amendment shall be governed by, and construed in accordance with, the law of the State of New York.
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Costs and Expenses. The Borrowers jointly and severally agree to pay on demand all reasonable fees, costs and expenses of the Agent and each Lender in connection with the preparation, execution and delivery of this Amendment and the other related agreements, instruments and documents.
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Amendment as Loan Document. Each Borrower hereby acknowledges and agrees that this Amendment constitutes a "Loan Document" under the Loan Agreement. Accordingly, it shall be an Event of Default under the Loan Agreement (i) if any representation or warranty made by a Borrower under or in connection with this Amendment shall have been untrue, false or misleading in any material respect when made or (ii) if Borrowers fail to perform, keep, or observe any term, provision, condition, covenant, or agreement contained in this Amendment.
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Waiver of Jury Trial. EACH BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.
Borrowers:
CLIMACHEM, INC.,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
CLIMATE MASTER, INC.,
a Delaware corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
CLIMATECRAFT, INC.,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
CLIMACOOL, CORP.,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
INTERNATIONAL ENVIRONMENTAL CORPORATION,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
ACP INTERNATIONAL, LIMITED,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
KOAX CORP., an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
LSB CHEMICAL CORP.,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
THE ENVIRONMENTAL GROUP, INC.,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
EL DORADO CHEMICAL COMPANY,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
SLURRY EXPLOSIVE CORPORATION,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
TRISON CONSTRUCTION, INC.,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
UNIVERSAL TECH CORPORATION,
an Oklahoma corporation
By:
Xxxx X. Xxxxxx
Title:
Vice President
Agent and Lender:
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
Xxxxxxx Xxxxxx
Title:
Vice President
Lender:
CONGRESS FINANCIAL CORPORATION (SOUTHWEST),
a Texas corporation
By:
Xxxx Xxxxxxx Xx.
Title:
Vice President
