Exhibit 10.1
The CIT Group/
Equipment Financing
X.X. Xxx 000
000 XXX Xxxxx
Xxxxxxxxxx, XX 00000-0000
May 14, 1997
Via Fax and Mail
Mr. Xxx Xxxxx V.P. and Treasurer
LSB Industries
00 Xxxxx Xxxxxxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Dear Xx. Xxxxx:
Reference is made to (a) that certain Loan and Security Agreement, dated
October 31, 1994 (as Amended, the "Agreement") , between DSN Corporation, an
Oklahoma corporation ("Debtor") and The CIT Group/Equipment Financing, Inc., a
New York corporation ("CIT") and (b) the defined terms within. Debtor has
advised CIT that LSB Industries, Inc. (LSB), a guarantor of Debtor's
obligation to CIT, was not in compliance with:
Section 6.10 of the Agreement, in that, as of Xxxxx 00,
0000, XXX did not maintain a tangible net worth of
$67,000,000.00 and $78,000,000.00 after adding treasury
stock. Further, LSB did not maintain a Leverage requirement
of 3.00x (actual as of March 31, 1997 was 3.37x)
Debtor has requested, that not withstanding anything to the contrary in the
Agreement, the CIT waive the above instances of non-compliance and agree to
reset LSB's covenant level requirements for the remainder of 1997.
The new Covenants are as follows:
Minimum Tangible Net Worth (after subtracting Treasury Stock)
(000's omitted)
June, 1997 $61,750
September, 1997 62,522
December, 1997 60,647
Minimum Tangible Net Worth (before subtracting Treasrury Stock)
June 1997 $72,000
September, 1997 75,000
December, 1997 76,000
Maximum Leverage Allowed
June, 1997 3.11x
September, 1997 2.96x
December, 1997 3.02x
CIT hereby waives, as of this date, the above instances of non-compliance,
provided that such waiver is subject to the following conditions:
(1) that this waiver is stricly limited to the specific covenants
under section 6.10 of the Agreement, as amended, set forth above
and is strictly limited only to such instances of non-compliance
through and including March 31, 1997.
(2) that Debtor pay a fee in the amount of $10,000.00 within 5
business days of the above date to cover waiver and amendment.
The amended covenants shall remain in place throughout 1997, after which they
shall revert to the original levels as set forth in the Agreement.
Sincerely,
The CIT Group/Equipment Financing, Inc.
By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Vice President
Acknowledged and Agreed:
DSN Corporation
By:______________________
Title____________________
LSB Industries
By:______________________
Title:___________________
