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Loan and Security Agreement - MetLife Capital Corp. and International Environmental Corp.

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MetLife Capital                                      Loan and Security Agreement

THIS LOAN AND SECURITY AGREEMENT entered into as of the 14th day of March, 1995,
by and between MetLife Capital Corporation, a Delaware corporation, whose
address is C-97550, 10900 NE 4/th/ Street, Suite 500, Bellevue, Washington 98009
("Lender") and International Environmental Corporation, a ______________, whose
address is 16 S. Pennsylvania, Oklahoma City, OK 73107 ("Borrower").

     WHEREAS, Lender has agreed to make a commercial loan or loans to Borrower;
and

     WHEREAS, as a condition to making the loans, and in order to secure the
repayment thereof, Lender has required Borrower to execute and deliver to Lender
this Loan and Security Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
accuracy of which are hereby acknowledged, Borrower and Lender agree as follows:

     1.   Creation of Security Interest.  As security for the due and punctual
          -----------------------------                                       
payment of any and all of the present and future obligations of the Borrower to
Lender, whether direct or contingent or joint or several, Borrower hereby
conveys, assigns and grants to Lender a continuing security interest in all of
Borrower's rights, title and interests in and to the equipment described in the
Supplemental Security Agreement from time to time ("Equipment") including all
present and future additions, attachments and accessories thereto, except
accounts and inventory, all substitutions therefor and replacements thereof and
all proceeds thereof, including all proceeds of insurance (such Equipment and
property hereinafter called "Collateral").

     2.   The Loans.  (a) Subject to the terms and conditions of this Loan and
          ---------                                                           
Security Agreement, Lender agrees to make a loan or loans to Borrower in
principal amount stated in the loan commitment letter issued by Lender to
Borrower (each such loan or loans shall be referred to as "the Loan Amount").

     (b)  The Loan Amount shall be repaid by Borrower as a term loan or term
          loans ("Term Loan"). The Term Loan shall be evidenced by a promissory
          note or notes in the form attached hereto as Exhibit "A" ("Term
          Note"0. The payment provisions of each Term Note shall be stated
          therein.

     (c)  If requested by Borrower, and in accordance with the terms and
          conditions of Section 3 hereof, Lender shall make interim fundings to
          Borrower of a Term Loan as partial advances of the Loan Amount
          ("Interim Loans"). The Interim Loans shall either be for the payment
          of the acquisition cost of any items of Equipment delivered and
          commitment to Borrower prior to the expiration date of
<PAGE>
 
          Lender's loan commitment to Borrower ("Commitment Expiration Date") or
          to fund progress payments to the vendor or manufacturer of the
          Equipment. If the making of progress payments was agreed to by Lender
          in its commitment or approval to make the loan or loans to Borrower.
          The Interim Loans shall be evidenced by promissory notes in the form
          attached hereto as Exhibit "B" ("Interim Note"). Interest on all
          Interim Loans shall be payable as provided therein. The principal
          amount due under the Interim Loans shall be due as provided in the
          Interim Notes, at which time, provided no Event of Default hereunder
          has occurred and is continuing or event which with the passing of time
          or giving of notice or both would become an Event of Default hereunder
          has occurred and is continuing, Lender shall consolidate all Interim
          Loans and convert them to a Term Loan evidenced by a Term Note or
          Notes. Whether or not a Term Loan is evidenced by one or more Term
          Notes shall be as agreed between Lender and Borrower, or in the
          absence of such an agreement, as decided by Lender, in the exercise of
          its reasonable business judgment.

     (d)  In the event that the amount loaned pursuant to the Interim Loans is
          less than the Loan Amount, subject to Borrower's compliance with the
          terms and conditions of this Loan and Security Agreement (including
          the satisfaction of the conditions of the borrowing set forth in
          Section 7 of this Loan and Security Agreement, including but not
          limited to providing Lender with a description of the items of
          Equipment), Lender shall disburse to Borrower the balance of the Loan
          Amount on the same date that the Interim Loans are converted into a
          term loan.

     3.   Method For Borrowing On Interim Loan.  Borrower shall give Lender at
          ------------------------------------                                
least five (5) business days written notice of a request for the disbursement of
an Interim Loan ("Request"), specifying the date on which the Interim Loan is to
be disbursed.  Such Request shall be in the form attached hereto as Exhibit "C."
Such Request shall be accompanied by an original copy of the invoice or invoices
to be paid from the Interim Loan.  Such Request shall constitute a
representation and warranty by the Borrower that (i) as of the date of the
Request no Event of Default or event which with the passing of time or the
giving of notice or both would constitute an Event of Default hereunder has
occurred and is continuing and (ii) in the event items of Equipment have been
delivered to the Borrower, Borrower has unconditionally accepted the Equipment
from the vendor thereof.  Subject to the conditions of this Loan and Security
Agreement, Lender shall disburse the Interim Loan to the invoicing party, or if
Borrower shall have paid the amount of such invoice, 

                                      -2-
<PAGE>
 
Lender shall reimburse Borrower, upon receipt of proof of payment from Borrower.

     4.   Cross-Collateral/Cross Default.  All Collateral shall secure the
          ------------------------------                                  
payment and performance of all of Borrower's liabilities and obligations to
Lender hereunder and under any of the loan documents relating hereto including,
but not limited to, all Interim Notes and all Term Notes (the Loan and Security
Agreement, the Interim Notes, the Term Notes, the Supplemental Security
Agreement(s) and all other loan documents may be referred to herein collectively
as the "Loan Documents").  Lender's security interest in the Collateral shall
not be terminated until and unless all of Borrower's obligations to Lender under
any of the Loan Documents are fully paid and performed.  The occurrence of an
Event of Default hereunder and an Event of Default hereunder shall be deemed to
be an event of default under any other of the Loan Documents

     5.   Representations and Warranties.  Borrower hereby represents and
          ------------------------------                                 
warrants as follows:

     (a)  Power and Authorization.  Borrower has the full power and (corporate)
          authority to execute, deliver and perform Borrower's obligations under
          the Loan Documents. The execution and delivery of the Loan Documents
          have been authorized by all requisite corporate (or partnership)
          action on the part of Borrower. The execution, delivery and
          performance of the Loan Documents have not constituted and will not
          constitute a breach, default or violation of or under Borrower's
          articles of incorporation, by-laws (partnership agreement), or any
          other agreement, indenture, contact, lease, law, order, decree,
          judgment, or injunction to which Borrower is a party or may be bound
          and have not resulted and will not result in the creation of any lien
          upon the Equipment pursuant to any agreement, indenture, lease,
          contract or other instrument to which Borrower is a party, except the
          lien created by this Loan and Security Agreement.

     (b)  Existence.  If Borrower is a corporation, Borrower (i) is duly
          incorporated, validly existing and in good standing under the laws of
          its state of incorporation, (ii) has all corporate powers and all
          governmental licenses, authorizations, consents and approvals required
          to carry on its business as now conducted, and (iii) is duly qualified
          to transact business as a foreign corporation in each jurisdiction
          where the Equipment will be located and in the jurisdiction where its
          principal place of business is located. If Borrower is a partnership,
          Borrower (i) has been duly formed as a (limited or general)
          partnership under the laws of the state of its organization, (ii) is
          comprised of the general partner(s) 

                                      -3-
<PAGE>
 
          listed on the Schedule of Partners attached to this Loan and Security
          Agreement, and (iii) is in good standing under the laws of the state
          of its formation.

     (c)  Binding Effect.  This Loan and Security Agreement constitutes the
          valid and binding agreement of the Borrower; the Interim Notes and the
          Term Note, when executed and delivered, will constitute the valid and
          binding obligations of the Borrower; and the Loan Documents are
          enforceable in accordance with the terms except as (i) the
          enforceability thereof may be limited by the bankruptcy laws, and (ii)
          rights of acceleration and the availability of equitable remedies may
          be limited by equitable principles of general applicability.

     (d)  Litigation.  Other than as disclosed in SEC filings, there is no
          action, suit or proceeding pending against, or to the knowledge of the
          Borrower, threatened against or affecting the Borrower, before any
          court or arbitrator or any governmental body, agency or official which
          has not been previously disclosed to the Lender in writing and in
          which there is a reasonable possibility of an adverse decision which
          could materially adversely affect the business, financial condition or
          results of operations of the Borrower or which would in any manner
          draw into question the validity of any of the Loan Documents.

     (e)  Filing of Tax Returns.  The Borrower has filed all tax returns
          required to have been filed and has paid all taxes shown to be due and
          payable on such returns, including interest and penalties, and all
          other taxes which are payable by it, to the extent the same have
          become due and payable. The Borrower knows of no proposed tax
          assessment against it and all tax liabilities of the Borrower are
          adequately provided for.

     (f)  Title.  The Borrower has or shall have at the time it executes the
          Term Note good and indefeasible title to the collateral free and clear
          of all liens other than the Lender's lien.

     (g)  Compliance with Law.  The business and operations of the Borrower have
          been and are being conducted in accordance with all applicable laws,
          rules and regulations, other than violations which could not (either
          individually or collectively) have a material adverse effect on the
          financial condition or operations of the Borrower.

     (h)  Full Disclosure.  All documents, records, instruments, certificates,
          statements (including, but not by way of 

                                      -4-
<PAGE>
 
          limitation, financial statements of Borrower) and information provided
          to Lender by Borrower in connection with this Loan and Security
          Agreement are true and accurate in all material respects and do not
          contain any untrue statement, or fail to contain any statement of a
          material fact necessary to make the statements contained herein or
          therein not misleading. There is no fact known to the Borrower that
          Borrower has not disclosed in writing which could materially and
          reasonably adversely affect the financial condition or operations of
          Borrower.

     (i)  Security Interest.  The security interest granted to Lender hereunder
          is a valid, first priority security interest in the Collateral and has
          been or promptly after the execution of the Supplemental Security
          Agreement describing the Collateral will be, perfected in accordance
          with the requirements of all states in which any item of the
          Collateral is located.

     (j)  Personal Property.  Under the laws of the state(s) in which the
          Collateral is to be located, the Collateral is deemed to consist
          solely of personal property.

     (k)  Pollution and Environmental Control.  Borrower has obtained all
          permits, licenses and other authorizations which are required under,
          and is in material compliance with, all federal, state, and local laws
          and regulations relating to pollution, reclamation, or protection of
          the environment, including laws relating to emissions, discharges,
          releases or threatened releases of pollutants, contaminants, or
          hazardous or toxic materials or wastes into air, water, or land, or
          otherwise relating to the manufacture, processing, distribution, use,
          treatment, storage, disposal, transport, or handling of pollutants,
          contaminants or hazardous or toxic materials or wastes. Borrower shall
          maintain all such permits, licenses, and authorizations current.

     6.   Covenants.  Borrower hereby agrees and covenants as follows:
          ---------                                                   

     (a)  Payment.  Borrower shall pay the indebtedness secured hereby as
          provided herein and in the Interim Notes and Term Notes.

     (b)  Location of Collateral.  Borrower will keep the Collateral located at
          the location or locations stated on the Supplemental Security
          Agreements, provided, however, that Borrower may change the location
          of the collateral with Lender's prior written consent.

                                      -5-
<PAGE>
 
     (c)  No Liens.  Except for the security interest granted hereby or under
          any other agreement under which Lender is the secured party, whether
          as mortgagees, beneficiary or otherwise. Borrower shall keep the
          Collateral free and clear of any security interest, lien or
          encumbrance of any kind and Borrower shall not sell, assign (by
          operation of law or otherwise) exchange or otherwise dispose of any of
          the Collateral.

     (d)  Insurance.  Borrower shall procure and continuously maintain and pay
          for (a) all risk physical damage and property insurance covering loss
          or damage to the equipment for not less than the full replacement
          value thereof naming Lender as loss payee and (b) bodily injury and
          property damage combined single limit liability insurance, all in such
          amounts and against such risks and hazards as are reasonably required
          by Lender, with insurance companies and pursuant to contracts or
          policies and with deductibles satisfactory to Lender. All contracts
          and policies shall include provisions for the protection of Lender
          notwithstanding any act or neglect of or breach or default by
          Borrower, shall provide for payment of insurance proceeds to Lender,
          shall provide that they may not be modified, terminated or canceled
          unless Lender is given at least thirty (30) days' advance written
          notice thereof, and shall provide that the coverage is "primary
          coverage" for the protection of Borrower or Lender notwithstanding any
          other coverage carried by Lender protecting against similar risks.
          Borrower shall promptly notify any appropriate insurer and Lender of
          each and every occurrence, which may become the basis of a claim or
          cause of action against the insured and provide Lender with all data
          pertinent to such occurrence. Borrower shall furnish Lender with
          certificates of such insurance or copies of policies upon request and
          shall furnish Lender with renewal certificates not less than thirty
          days prior to the renewal date. Proceeds of all insurance are payable
          first to Lender to the extent of its interest.

     (e)  Financing Statements.  At the request of Lender, Borrower will join
          Lender in executing one or more financing statements pursuant to the
          Uniform Commercial Code and other documents deemed necessary by Lender
          under applicable law to record or perfect its security interest in the
          Collateral, including continuation statements, in form satisfactory to
          Lender and will pay the cost of filing the same in all public offices
          wherever filing is deemed by the Lender to be necessary or desirable.
          Borrower hereby authorizes Lender, in such jurisdictions where such
          action is authorized by law, to effect any 

                                      -6-
<PAGE>
 
          such recordation or filing of financing statements or other documents
          without Borrower's signature thereto.

     (f)  Change of Name or Address.  Borrower will immediately notify Lender in
          writing of any change in its place of business or the adoption or
          change of any trade name or fictitious business name, and will upon
          request of Lender, execute any additional financing statements or
          other similar documents necessary to perfect or maintain its security
          interest.

     (g)  Use of Equipment, Maintenance.  Borrower will cause the Equipment to
          be used in a careful and proper manner, will comply with and conform
          to all governmental laws, rules and regulation relating thereto, and
          will cause the Equipment to be operated in accordance with the
          manufacturer's or supplier's instructions or manuals and only by
          competent and duly qualified personnel. Borrower will cause the
          Equipment to be kept and maintained in good repair, condition and
          working order and will furnish all parts, replacements, mechanisms,
          devices and servicing required therefor so that the value, condition
          and operating efficiency thereof will at all times be maintained and
          preserved, normal wear and tear excepted. All such repairs, parts,
          mechanisms, devices and replacements shall immediately, without
          further act, become part of the Equipment and subject to the security
          interest created by this Loan and Security Agreement. Borrower will
          not make any improvement, change, addition or alteration to the
          Equipment if such improvement, change, addition or alteration will
          impair the originally intended function or use of the Equipment or
          impair the value of the Equipment as it existed immediately prior to
          such improvement, change, addition or alteration. Any part added to
          the Equipment in connection with any improvement, change or alteration
          shall immediately, without further act, become part of the Equipment
          and subject to the security interest created by this Loan and Security
          Agreement.

     (h)  Inspection.  Lender may at any reasonable time or times inspect the
          Equipment and may at any reasonable time or times inspect the books
          and records of Borrower.

     (i)  Taxes.  Borrower shall promptly pay, when due, all charges, fees,
          assessments and taxes (excluding all taxes measured by Lender's
          income) which may now or hereafter be imposed upon the ownership,
          leasing, possession, sale or use of the Collateral.

                                      -7-
<PAGE>
 
     (j)  Performance by Lender.  If Borrower fails to perform any agreement or
          obligation contained herein, Lender may itself perform, or cause the
          performance of such agreement or obligation. Borrower will pay or
          reimburse Lender, on demand, for any and all fees, including
          reasonable attorneys' fees, costs and expenses of whatever kind or
          nature incurred by Lender in connection with (i) the creation,
          preservation and protection of Lender's security interest in the
          Collateral, including, without limitation, all fees and taxes in
          connection with the recording or filing of instruments and documents
          in public offices, (ii) payments or discharge of any taxes or liens
          upon or in respect of the Collateral, (iii) premiums for insurance
          with respect to the Equipment, and (iv) this Loan and Security
          Agreement and with protecting, maintaining or preserving the
          Collateral and Lender's interests therein, whether through judicial
          proceedings or otherwise, or in connection with defending or
          prosecuting any actions, suits or proceedings arising out of or
          related to the Loan and Security Agreement and the Loan Documents or
          in connection with any debt restructuring, loan workout negotiations
          or bankruptcy, or insolvency case or proceedings. All such amounts
          shall constitute obligations of Borrower secured by the Collateral in
          the event that Borrower fails to perform any of its agreements
          contained herein, Borrower will, on demand, reimburse Lender for all
          such expenditures, together with interest thereon from the date of
          such expenditure until fully reimbursed at the rate of two percent
          (2%) per month on the outstanding balance of such expenditures or the
          highest rate permitted by law, whichever is less.

     (k)  Power of Attorney.  Borrower hereby irrevocably appoints Lender
          Borrower's attorney-in-fact, with full authority in the place and
          stead of Borrower and in the name of Borrower or otherwise, from time
          to time in the Lender's discretion, to take any action and to execute
          any instrument which Lender may deem necessary or advisable to
          accomplish the purposes of this Loan and Security Agreement,
          including, without limitation: (i) to obtain, compromise and adjust
          insurance required to be paid to Lender; (ii) to ask, demand, collect,
          sue for, recover, receive, and give acquittance and receipts for
          moneys due and to become due under or in respect of any of the
          Collateral not to include accounts or inventory; (iii) to receive,
          endorse, and collect any drafts or other instruments, documents, and
          chattel paper in connection with clause (i) or (ii) above; and (iv) to
          file any claims or take any action or institute any proceedings which
          Lender may deem necessary or desirable for the 

                                      -8-
<PAGE>
 
          collection of any of the Collateral or otherwise to enforce the rights
          of Lender with respect to any of the Collateral.

     (l)  No Duties.  The powers conferred on Lender hereunder are solely to
          protect its interest in the Collateral and shall not impose any duty
          upon it to exercise any such powers except as required by law.

     (m)  Financial Data.  Borrower will furnish to Lender and will cause any
          guarantor of Borrower's obligations to furnish to Lender on request
          (i) annual balance sheet and profit and loss statements prepared in
          accordance with generally accepted accounting principles and practices
          consistently applied and, if Lender so requires, accompanied by the
          annual audit report of an independent certified public accountant
          reasonably acceptable to Lender, and (ii) all other financial
          information and reports that Lender may from time to time reasonably
          request, including, if Lender so requires, income tax returns of
          Borrower and any guarantor of Borrower's obligations hereunder.

     7.   Conditions of Borrowing.  Lender shall not be obligated to make any
          -----------------------                                            
loan hereunder unless:

     (a)  The Interim Notes or Term Notes evidencing such loan shall have been
          duly executed and delivered to Lender;

     (b)  Borrower shall have executed and delivered to Lender the Supplemental
          Security Agreement describing the Collateral and stating, except with
          respect to progress payment fundings, the location thereof;

     (c)  Except with respect to progress fundings, Lender shall have received
          evidence (as described in Section 6d hereof) that insurance has been
          obtained in accordance with the provisions of this Loan and Security
          Agreement;

     (d)  Lender shall have received any and all third party consents, waivers
          or releases deemed necessary or desirable by it in connection with the
          loan and the Collateral being financed, including, without limitation,
          Uniform Commercial Code lien releases and the consent and waiver, in
          form and substance satisfactory to Lender, of each and every realty
          owner, landlord and mortgagee holding an interest in or encumbrance on
          the real property where any of the Collateral is to be located;

     (e)  All filings, recordings and other actions deemed necessary or
          desirable by Lender in order to establish, protect, preserve and
          perfect its security interest in 

                                      -9-
<PAGE>
 
          the Collateral being financed by such loan as a valid perfected first
          priority security interest shall have been duly effected, including,
          without limitation, the filing of financing statements and the
          recordation of landlord (owners) and/or mortgagee waivers or
          disclaimers, all in form and substance satisfactory to Lender, and all
          fees, taxes and other charges relating to such filings and recordings
          shall have been paid by Borrower;

     (f)  The representations and warranties contained in this Loan and Security
          Agreement shall be true and correct in all respects on and as of the
          date of the making of any loan hereunder with the same effect as if
          made on and as of such date;

     (g)  In the sole judgment of Lender, there shall have been no material
          adverse change in the financial condition, business or operations of
          Borrower from the earliest date of any financial statement, credit
          report, business report or similar document submitted to Lender for
          its review;

     (h)  All Loan documents shall be satisfactory to Lender's attorneys; and

     (i)  Lender shall have received, in form and substance satisfactory to
          Lender, such other documents as Lender shall require, including, but
          not limited to a Request, proof of payment, vendor invoices and
          certificates of authority and incumbency.

     8.   Default.  The occurrence of any of the following events, following the
          -------                                                               
giving of any required notice and/or the expiration of any applicable period of
grace, shall constitute an event of default ("Event of Default") hereunder:

     (a)  Borrower's default in payment of any installment of the principal of
          or interest on any Interim Note or Term Note when and after the same
          shall become due and payable, whether at the due date thereof or by
          acceleration or otherwise, which default shall continue unremedied for
          ten (10) days; or after written notice thereof.

     (b)  The failure by Borrower to make payment of any other amount payable
          hereunder or under any Interim Note or Term Note, and the continuance
          of such failure for more than ten (10) days after written notice
          thereof by Borrower to Lender; or

                                      -10-
<PAGE>
 
     (c)  The failure by Borrower to perform or observe any covenant, condition,
          obligation or agreement to be performed or observed by it hereunder,
          which failure shall continue unremedied for thirty (30) days after
          written notice thereof by Lender to Borrower; or

     (d)  The occurrence of a default described in Section 4 hereof or after ten
          (10) days written notice; or

     (e)  Any warranty, representation or statement made or furnished with
          respect to the Borrower or the Collateral to Lender by or on behalf of
          Borrower, in connection with this Loan and Security Agreement, or the
          indebtedness secured hereby, shall prove to have been false in any
          adverse, material respect when made or furnished; or

     (f)  Borrower shall become insolvent or bankrupt or make an assignment for
          the benefit of creditors or consent to the appointment of a trustee or
          receiver; or a trustee or a receiver shall be appointed for Borrower
          or for a substantial part of its property without its consent and
          shall not be dismissed for a period of sixty (60) days; or bankruptcy,
          reorganization, liquidation, insolvency or dissolution proceedings
          shall be instituted by or against Borrower and, if instituted against
          Borrower, shall be consented to or be pending and not dismissed for a
          period of sixty (60) days; or any execution or writ of process shall
          be issued under any action or proceeding against Borrower in such
          capacity whereby any of the Collateral may be taken or restrained;
          Borrower shall cease doing business as a going concern; or, without
          the prior written consent of Lender, Borrower shall sell, transfer or
          dispose of all or substantially all of its assets or property; or

     (g)  The liquidation, merger, consolidation, reorganization, conversion to
          an "S" status or dissolution, if Borrower is a corporation or
          partnership, of Borrower, if in Lender's reasonable opinion, such act
          shall materially and adversely affect Borrower's ability to perform
          under any of the Loan Documents; or

     (h)  Any item of Collateral is seized or levied on under legal or
          governmental process or for any reason Lender deems itself insecure.
          Lender shall be entitled to deem itself insecure when some event
          occurs, fails to occur or is threatened which significantly impairs
          the prospects that any of Borrower's obligations to Lender will be
          paid when due, which significantly impairs the value of the Collateral
          to Lender or which significantly affects the financial or business
          condition of Borrower.

                                      -11-
<PAGE>
 
               The occurrence of an Event of Default shall terminate any
          commitment or obligation by Lender to make any of the loans
          contemplated by this Loan and Security Agreement.

     9.  Remedies Upon Default.  Upon the occurrence of an Event of Default
         ---------------------                                             
hereunder, Lender may, at its option, do any one or more of the following:

     (a)  Declare all obligations of Borrower to Lender to be immediately due
          and payable, whereupon all unpaid principal of and interest on said
          indebtedness and other amounts declared due and payable shall be and
          become immediately due and payable;

     (b)  Take possession of all or any of the Collateral and exclude therefrom
          Borrower and all others claiming under Borrower, and thereafter hold,
          store, use, operate, manage, maintain and control, make repairs,
          replacements, alterations, additions and improvements to and exercise
          all rights and powers of Borrower in respect to the Collateral or any
          part thereof. In the event Lender demands, or attempts to take
          possession of the Collateral in the exercise of any rights under this
          Loan and Security Agreement, Borrower promises and agrees to promptly
          turn over and deliver complete possession thereof to Lender;

     (c)  Require Borrower to assemble the Collateral, or any portion thereof,
          at a place designated by Lender and reasonably convenient to both
          parties, and promptly to deliver such Collateral to Lender, or an
          agent or representative designated by it;

     (d)  Sell, lease or otherwise dispose of the Collateral at public or
          private sale, without having the Collateral at the place of sale, and
          upon terms and in such manner as Lender may determine (and Lender may
          be a purchaser at any sale); and

     (e)  Exercise any remedies of a secured party under the Uniform Commercial
          Code as adopted in the state where the Collateral is located or any
          other applicable law.

               Except as to portions of the Collateral which are perishable or
          threaten to decline speedily in value or are of a type customarily
          sold on a recognized market, Lender shall give Borrower at least ten
          (10) days prior written notice of the time and place of any public or
          private sale of the Collateral or other intended disposition thereof
          to be made. Such notice may be 

                                      -12-
<PAGE>
 
          mailed to Borrower at the address set forth in the first paragraph of
          this Loan and Security Agreement. Borrower hereby specifically agrees
          (to the extent that applicable law and public policy allows it to
          effectively do so) that any 0public or private sale held in accordance
          with the terms of this Loan and Security Agreement shall, for the
          purpose of the Uniform Commercial Code as adopted in the state where
          the Collateral is located and for all other purposes, be deemed to
          have been conducted in a commercially reasonable manner and in good
          faith.

               The proceeds of any sale under Section 9(d) shall be applied as
          follows:

          (i)       To the repayment of the costs and expenses of retaking,
                    holding and preparing for the sale and the selling of the
                    Collateral (including legal expenses and attorneys' fees)
                    and the discharge of all assessments, encumbrances, charges
                    or liens, if any, on the Collateral prior to the lien hereof
                    (except any taxes, assessments, encumbrances, charges or
                    liens subject to which such sale shall have been made);

          (ii)      To the payment of the whole amount then due and unpaid of
                    the indebtedness of Borrower to Lender;

          (iii)     To the payment of other amounts then secured hereunder; and

          (iv)      The surplus, if any shall be paid to the Borrower or to
                    whomsoever may be lawfully entitled to receive the same.

               Lender shall have the right to enforce one or more remedies
          hereunder, successively or concurrently, and such action shall not
          operate to estop or prevent Lender from pursuing any further remedy
          which it may have, and any repossession or retaking or sale of the
          Collateral pursuant to the terms hereof shall not operate to release
          Borrower until full payment of any deficiency has been made in cash.

     10.  Limitation on Interest.  It is the intent of the parties to this Loan
          ----------------------                                               
and Security Agreement to contract in strict compliance with applicable usury
laws from time to time in effect. In furtherance thereof, the parties stipulate
and agree that none of the terms and provision contained in the Loan Documents
shall ever be construed to create a contract to pay for the use, 

                                      -13-
<PAGE>
 
forbearance or detention of money at a rate in excess of the maximum interest
rate permitted to be charged by applicable law from time to time in effect.

     11.  Personal Property Taxes.  No item of Equipment will be attached or
          -----------------------                                           
affixed to realty or any building without Lender's prior knowledge and written
consent and waiver of the landlord and the mortgagee, if any, of the real
property.  If so requested by Lender, Borrower will affix tags supplied by
Lender, reflecting the Lender's security interest in the Equipment.

     12.  Loss and Damage.  Borrower shall bear the risk of damage, loss, theft,
          ---------------                                                       
or destruction, partial or complete of the Equipment, whether or not such loss
or damage is covered by insurance, except that while Borrower is not in default,
Lender agrees to apply toward payment of obligations of Borrower insurance
proceeds payable to Lender by reason of such damage, loss, theft, or
destruction.  In the event of any damage, loss, theft or destruction, partial or
complete, of any item of Equipment, Borrower shall promptly notify Lender in
writing and at the option of Lender (a) repair or restore the Equipment in good
condition and working order, or (b) replace the Equipment with similar equipment
in good repair, condition and working order, or (c) pay Lender, in cash, an
amount equal to the unamortized equipment cost for the item or if the Equipment
was not purchased with the loan proceeds, the pro rata portion of the
outstanding principal balance due under the Interim Note or Term Note, as the
case may be, and all other amounts relating to that item of Equipment then due
and owing hereunder, and upon payment of that amount, Lender's lien shall be
terminated with respect to that item of Equipment only, and Lender will release
its interest in that item of Equipment.

     13.  Assignment.  Borrower may not assign or transfer any rights under this
          ----------                                                            
Loan and Security Agreement or to the Collateral without Lender's prior written
consent.

     14.  Indemnification.  Borrower shall indemnify and hold harmless Lender
          ---------------                                                    
from and against any and all claims, losses, liabilities, causes of action,
costs and expenses (including the fees of Lender's attorneys) ("Claims") in any
way relating to or arising out of this Loan and Security Agreement, the other
Loan Documents or the Collateral, except for any Claims resulting solely and
directly from Lender's gross negligence or willful misconduct.

     15.  Notices.  Whenever Borrower or Lender shall desire to give or serve
          -------                                                            
any notice, demand, request or other communication shall be in writing and shall
be effective only if the same is physically delivered or is by certified mail,
postage prepaid, return receipt requested, or by overnight courier, postage
prepaid, mailed to the parties at the addresses set forth in the first paragraph
of this Loan and Security Agreement, with a copy to 

                                      -14-
<PAGE>
 
Lender's Vice President of Credit. Any party hereto may change its address for
such notices by delivering or mailing to the other parties hereby, as aforesaid,
a notice of such change.

     16.  No Waiver by Lender.  By exercising or failing to exercise any of its
          -------------------                                                  
rights, options or elections hereunder, Lender shall not be deemed to have
waived any breach or default on the part of Borrower or to have released
Borrower from any of the obligations secured hereby, unless such waiver or
release is in writing and is signed by Lender.  In addition, the waiver by
Lender of any breach hereof for default in payment of an indebtedness secured
hereby shall not be deemed to constitute a waiver of any succeeding breach or
default.

     17.  Further Agreements.  From time to time, Borrower will execute such
          ------------------                                                
further instruments as Lender may reasonably require, in order to protect,
preserve, and maintain the security interest granted hereby.

     18.  Binding upon Successors.  All agreements, covenants, conditions and
          -----------------------                                            
provisions of this Loan and Security Agreement shall apply to and bind the
successors and assigns of all parties hereto.

     19.  Governing Laws.  This Loan and Security Agreement shall be governed by
          --------------                                                        
the laws of the State of Washington.

     20.  Amendment.  This Loan and Security Agreement can be modified or
          ---------                                                      
rescinded only by a writing expressly referring to this Loan and Security
Agreement, signed by both of the parties hereto.

     21.  Invalidity of Provisions.  Every provision of this Loan and Security
          ------------------------                                            
Agreement is intended to be severable.  In the event that any term or provision
hereof is declared by a court to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable, then to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.

                                      -15-
<PAGE>
 
     IN WITNESS WHEREOF, Borrower and Lender have duly executed this Loan and
Security Agreement the day and year first above written.

Lender:                      Borrower: International Environmental
                                         Corporation
_____________________                  ----------------------------

By:__________________        By: /s/ Tony M. Shelby
                                 ----------------------------------

(Print Name):________        (Print Name:)_________________________

Title: Vice President        Title: V. P.
       --------------               -------------------------------
                              Social Security Number: _____________
                              (If Borrower is an individual)

                              Federal tax identification number:
                              73-0754306
                               _________________

                                      -16-
<PAGE>
 
                               ADDENDUM NO. ONE

Addendum No. One to that certain Loan and Security Agreement dated March 14,
1995, by and between MetLife Capital Corporation ("Lender") and International
Environmental Corporation ("Borrower").

                                  WITNESSETH

WHEREAS, the parties desire to enter into the Loan and Security Agreement
provided that this Addendum No. One is executed contemporaneously therewith:

NOW THEREFORE, it is agreed as follows:

     FINANCIAL COVENANTS: Unless otherwise agreed in writing to MetLife,
Borrower covenants and agrees that until payment in full of the loan obligation
the following financial covenants shall hold true:

     1) BORROWER shall maintain Total Stockholder's Equity, as stated in
     Borrower's annual audited financial statements, of not less than $25.0
     million.

     2) Total Stockholder's Equity of Borrower shall at all times exceed
     "Advances to Affiliates."

     3) At any time during the term of this transaction, all Financial Covenants
     may be waived in exchange for the corporate guaranty of LSB Industries,
     Inc.

IN WITNESS WHEREOF, parties have executed this Addendum No. One this 14/th/ day
of March, 1995.

LENDER:                             BORROWER:

MetLife Capital Corporation         International Environmental
                                    Corporation

By: /s/                             By: /s/ Tony M. Shelby
    -----------------------             ------------------------
Its: V.P.                           Its: V.P.
    -----------------------             ------------------------

                                      -1-
<PAGE>
 
                                         SUPPLEMENTAL SECURITY AGREEMENT NO. ONE

This Supplemental Security Agreement is executed by International Environmental
Corporation ("Borrower") pursuant to the terms of a Loan and Security Agreement
dated March 14, 1995, between Borrower and MetLife Capital Corporation
("Lender").  All capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings given to such terms in the Loan and
Security Agreement.

     In order to provide security for the payment and performance of Borrower's
obligations under the Loan Documents, Borrower has granted to Lender a first
priority security interest in the Collateral.  In addition to said grant,
Borrower intends by this Supplemental Security Agreement to grant to Lender a
first priority security interest in the items of Equipment identified herein.

     1.  To further secure the payment and performance of all of Borrower's
obligations to lender under the Loan Documents, Borrower hereby grants to Lender
a first priority security interest in the items of Collateral described below,
including all present and future additions, attachments and accessories thereto,
all substitutions therefor and replacements thereof and all proceeds thereof,
including all proceeds of insurance:

                                                        Cost or
                                                        Appraised
Qty.   Model/Mfr.   Description          Serial No.     Value

                    Used Manufacturing                $1,500,000.00
                    Equipment

2.   Borrower hereby (a) affirms that the representations and warranties set
     forth in Section 5 of the Loan and Security Agreement are true and correct
     as of the date hereof; (b) represents and warrants that Lender has a first
     priority security interest in the Collateral; and (c) represents and
     warrants that the above described equipment will be maintained at the
     following location(s):

3.   The Loan Amount for loans to be made pursuant to this Supplemental Security
     Agreement is $1,500,000.00.

4.   The Commitment expiration Date for loans to be made pursuant to this
     Supplemental Security Agreement is March 30, 1995.

5.   The amount of liability insurance required to be maintained by Borrower
     pursuant to Section 6(d) of the Loan and Security Agreement is
     $1,000,000.00.

                                      -1-
<PAGE>
 
6.   All of the terms and provisions of the Loan and Security Agreement are
     hereby incorporated in and made a part of this Supplemental Security
     Agreement to the same extent as if fully set forth herein.

     In witness whereof, Borrower has executed and delivered this Supplemental
Security Agreement this 14/th/ day of March, 1995.

                    Borrower: International Environmental
                              Corporation


                    By:       /s/ Tony M. Shelby
                              ---------------------------

                    (Print Name):________________________

                    Title:          V.P.
                              ---------------------------

                                      -2-