UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF
1934
Date of
report (Date of earliest event reported): March 26, 2010
LSB INDUSTRIES, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-7677
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73-1015226
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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16 South Pennsylvania Avenue,
Oklahoma City, Oklahoma
(Address of principal executive offices) |
73107
(Zip
Code) |
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Registrant's telephone number,
including area code (405) 235-4546
Not applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive Agreement.
The
information required by this Item 1.01 is set forth in Item 2.03, which is
incorporated herein by reference.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
On
March 26, 2010, Climate Master, Inc. (“Climate Master”), a subsidiary of
LSB Industries, Inc. (the “Company”), exercised its option to purchase the
building in which Climate Master conducts its primary manufacturing
operations. The option price was $5 million. Climate
Master funded the option price through a loan from Coppermark Bank pursuant to a
promissory note in the original principal amount of $5 million (the
“Note”). The Note has a 10 year term, with payments amortized over a
15 year period. The Note bears interest at the annual rate of 6.95%
for the initial five years of the Note. The interest rate for the
remaining five years of the term of the Note will be adjusted to the greater of
6.95% or the Five Year Fixed Rate of the Federal Home Loan Bank, plus 4% at the
time of the adjustment. The Note is secured by the Climate Master
building. The Company and the Company’s subsidiary, ThermaClime,
Inc., have guaranteed the payment of the Note.
Item
9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit Description
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99.1
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Promissory
Note, dated March 26, 2010, executed by
Climate Master, Inc. in favor of Coppermark
Bank,
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Dated:
March 31, 2010
LSB
INDUSTRIES, INC.
By: /s/ Tony M. Shelby
Tony M.
Shelby,
Executive
Vice President of
Finance,
Chief
Financial Officer
PROMISSORY
NOTE
$5,000,000.00 Oklahoma
City, Oklahoma
March 26,
2010
FOR VALUE RECEIVED, the undersigned,
CLIMATE MASTER, INC., a Delaware corporation (hereafter called the "Borrower"),
promises to pay to the order of COPPERMARK BANK, a state banking
association (the payee, its successors and assigns are hereafter called the
"Lender"), at 3333 Northwest Expressway, Post Office Box 25676, Oklahoma City,
Oklahoma 73125, or at such other place as might be designated in writing by the
Lender, the principal sum of FIVE MILLION DOLLARS ($5,000,000.00), together
with interest thereon at the Stated Rate of interest (as hereinafter
defined). From the date of this Note until March 26, 2015, this Note
will bear interest at a Stated Rate of interest of six and ninety-five
one-hundredths percent (6.95%) per annum. Commencing on March 26,
2015 (the “Adjustment Date”), and continuing for its remaining term, this Note
will bear interest at a Stated Rate of interest equal to the greater of (i) the
Five Year Fixed Rate of the Federal Home Loan Bank in effect on the Adjustment
Date, plus four percent (4%), as determined and calculated by the Lender at such
time, or (ii) the rate of six and ninety-five one-hundredths percent (6.95%) per
annum. Interest will be calculated on the basis of the actual days elapsed based
on a per diem charge computed over a year composed of three hundred sixty
(360) days.
The principal balance of this Note and
interest accrued thereon will be repaid in one hundred twenty (120) consecutive
monthly installments commencing on April 26, 2010, and on the same day of each
calendar month thereafter, with each installment, except the last, to be in the
amount required to fully amortize the face amount of this Note, with interest
thereon at the applicable Stated Rate, in monthly installments over a fifteen
(15) year period. The first sixty (60) installments due under this
Note, commencing on April 26, 2010, and ending on March 26, 2015, shall each be
in the amount of $45,094.00. After the adjusted Stated Rate is
calculated and determined on the Adjustment Date, the Lender will notify the
Borrower of the amount of each of the immediately following fifty-nine (59)
monthly installments thereafter due hereunder until maturity, taking into
consideration the Stated Rate then in effect, the unpaid principal balance of
this Note at such time, and the remaining term of this
Note. The final installment will be due and payable on
March 26, 2020, and will be in the amount equal to the entire unpaid principal
balance of this Note and all interest accrued thereon and, absent earlier
default hereunder, this Note will mature on such date.
The
Borrower shall have the right to prepay this Note in full or part at any time
provided that all accrued and unpaid interest on this Note is also paid at the
time of prepayment and further provided that, at the time of prepayment, the
Borrower will also pay to the Lender a prepayment premium equal to (i) two and
one-half percent (2½%) of the amount prepaid during the first loan year, (ii)
two percent (2%) of the amount prepaid during the second loan year, (iii) one
and one-half percent (1½%) of the amount prepaid during the third loan year,
(iv) one percent (1%) of the amount prepaid during the fourth loan year, and (v)
one-half percent (0.5%) of the amount
prepaid
during the fifth loan year. All partial prepayments will be applied
to the last maturing installments due hereunder in inverse order. Any
payment of this Note made after a default hereunder and acceleration of the
principal balance hereof during the first five (5) loan years of the term of
this Note will be deemed and considered a prepayment by the Borrower hereunder
and subject to the foregoing prepayment premium. As used in this
paragraph, the term “loan year” shall mean a twelve (12) month period,
commencing on the date of this Note, and each subsequent twelve (12) month
period thereafter during the first five years of the term of this
Note. Notwithstanding the foregoing, no prepayment premium shall be
required or paid on any prepayment of this Note with condemnation or insurance
proceeds received as a result of a condemnation or casualty damage to the
property covered by the hereinafter described Mortgage securing payment of this
Note which Lender requires be used in payment of this Note instead of for
restoration or repair of such property.
On execution of this Note, the
Borrower will pay to the Lender a non-refundable origination fee in the amount
of $25,000.00, and will also pay for all fees, expenses and charges with respect
to the loan evidenced by this Note including, without limitation, fees of the
title insurer, survey costs, recording and filing fees, Oklahoma mortgage tax,
fees and expenses of the Lender’s legal counsel, and all other out-of-pocket
fees, expenses and taxes involved in the closing of this loan.
The
Borrower agrees that if, and as often as, this Note is placed in the hands of an
attorney for collection or to defend or enforce any rights of the Lender under
this Note, the Loan Documents (as hereafter defined) or otherwise relating to
the indebtedness hereby evidenced, the Borrower will pay the Lender’s reasonable
attorneys' fees, all court costs and all other expenses incurred in connection
therewith.
Any sum
not paid within ten (10) days after the date when due hereunder (whether by
reason of maturity, acceleration or otherwise) will bear interest at the
greater of (i) six percent in excess of the Stated Rate then in effect, or (ii)
the rate of fifteen percent (15%) per annum; and such interest which has
accrued will be paid at the time of and as a condition precedent to
curing any default. During the existence of any default, the Lender
may apply payments received on any amount due hereunder or under the terms of
any instrument now or hereafter evidencing or securing payment of this
indebtedness as the Lender determines from time to time. Any
payment not made within ten (10) days after the date that it is due hereunder
will be subject to Lender’s then-current late charge to cover Lender’s costs
incurred as a result of delinquent payments.
This Note is issued by the Borrower and
accepted by the Lender pursuant to a lending transaction negotiated,
consummated and to be performed in Oklahoma City, Oklahoma County,
Oklahoma. This Note is to be construed according to the
internal laws of the State of Oklahoma.
Payment
of this Note is secured by a Mortgage (with Power of Sale) of even date herewith
covering real property owned by the Borrower and located in Oklahoma County,
Oklahoma (the “Mortgage”). On the breach by Borrower of any provision
of this Note, the Mortgage or any of the other loan documents executed in
connection herewith (collectively, the
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“Loan
Documents”) which is not cured to the reasonable satisfaction of the Lender
within ten (10) days after the date written notice of such default is sent by
the Lender to the Borrower then, at the option of the Lender, the entire
indebtedness evidenced by this Note will become immediately due,
payable and collectible then or thereafter as the Lender might elect,
regardless of the date of maturity of this Note. Failure by the
Lender to exercise such option will not constitute a waiver of the right to
exercise the same in the event of any subsequent default.
In the event the Lender reasonably
requests that the Borrower execute any documents or provide any information for
the purpose of correcting any of the Loan Documents to accurately describe or
evidence this loan between the Borrower and the Lender and/or enable the Lender
to seek a guaranty or obtain insurance for said loan, then, within thirty (30)
days after the date of the Lender’s written request, the Borrower agrees to
fully comply with each such request and, in the event of Borrower’s failure to
comply with such request within such thirty (30) day period, the Borrower will
pay on demand by Lender all costs, expenses and legal fees incurred by the
Lender as a result of such failure by the Borrower. By acceptance of
this Note, the Lender agrees that it will not sell or assign this Note or any
right to participate therein to any third party provided, however, that such
agreement shall not apply to any sale or merger of the Lender itself or to any
sale of this Note or a participation interest therein as may be required or
directed by any governmental or regulatory agency having jurisdiction over the
Lender.
The
Borrower represents and warrants that the entire final agreements between the
Borrower and the Lender pertaining to the loan evidenced by this Note are
contained within this Note, the Mortgage and the other Loan Documents executed
in connection therewith, and that there are no oral agreements or promises
existing between the Borrower and the Lender pertaining to the subject matter
hereof. This Note, the Mortgage and related Loan Documents represent
the final agreements between the Borrower and the Lender, and the Borrower and
the Lender agree that this Note the Mortgage and such other Loan Documents shall
not be contradicted by any evidence of prior, contemporaneous, or subsequent
oral agreements pertaining to the loan evidenced by this Note.
The Borrower and the Lender hereby
voluntarily and knowingly waive any and all rights to a trial by jury in any
action, proceeding or counterclaim brought by either the Borrower or the
Lender on any matter whatsoever arising out of, in connection with, or related
to this Note or any of the other Loan Documents.
The
makers, endorsers, sureties, guarantors and all other persons who might become
liable for all or any part of this obligation severally waive presentment for
payment, protest and notice of nonpayment. Such parties consent to
any extension of time (whether one or more) of payment hereof, release of all or
any part of the collateral securing payment hereof or release of any party
liable for the payment of this obligation. Any such extension or
release may be made without notice to any such party and without discharging
such party's liability hereunder.
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IN WITNESS WHEREOF, the Borrower has
executed this instrument on the date first above written.
CLIMATE
MASTER, INC., a Delaware corporation
By: /s/ David R. Goss
David R.
Goss, Vice President
(the
“Borrower”)
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