Exhibit 10.1

EXECUTION VERSION

 

 

STOCK PURCHASE AGREEMENT

BY AND AMONG

Consolidated Industries L.L.C.,

The Climate Control Group, Inc.,

NIBE Energy Systems Inc.

AND,

solely for purposes of Sections 6.8, 6.19 and 11.15

LSB Industries, Inc.,

AND

solely for purposes of Section 11.16

NIBE Industrier AB (publ)

Dated as of May 11, 2016

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

         Page  

ARTICLE I

  DEFINITIONS      1   

Section 1.1

      Definitions      1   

Section 1.2

      Other Interpretive Provisions      22   

ARTICLE II

  PURCHASE AND SALE OF THE SHARES: CLOSING AND MANNER OF PAYMENT      23   

Section 2.1

      Agreement to Purchase and Sell the Shares      23   

Section 2.2

      Time and Manner of Payment of Transaction Price      23   

Section 2.3

      Adjustments to the Purchase Price and Related Matters      24   

Section 2.4

      Manner of Delivery of the Shares      27   

Section 2.5

      Withholding      27   

ARTICLE III

  REPRESENTATIONS AND WARRANTIES OF THE SELLER      27   

Section 3.1

      Ownership of the Shares; Good Title Conveyed      27   

Section 3.2

      Due Organization; Qualification      27   

Section 3.3

      Authorization; Noncontravention      27   

Section 3.4

      Consents and Approvals      28   

ARTICLE IV

  REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE COMPANY      28   

Section 4.1

      Corporate Power      29   

Section 4.2

      Authorization; Noncontravention      29   

Section 4.3

      Capitalization      29   

Section 4.4

      Subsidiaries      30   

Section 4.5

      Consents and Approvals      30   

Section 4.6

      CCG Financial Statements; No Undisclosed Material Liabilities      30   

Section 4.7

      Absence of Certain Changes      31   

Section 4.8

      Compliance with Laws; Permits      31   

Section 4.9

      Litigation      31   

Section 4.10

      Taxes      32   

Section 4.11

      Employee Benefit Plans      33   

Section 4.12

      Labor and Employment      35   

Section 4.13

      Environmental Matters      36   

Section 4.14

      Intellectual Property      37   

Section 4.15

      Broker’s or Finder’s Fee      39   

Section 4.16

      Material Contracts      40   

Section 4.17

      Insurance      40   

Section 4.18

      Related Party Transactions      40   

Section 4.19

      Property      41   

Section 4.20

      Title to Assets; Tangible Assets      43   

 

i

--------------------------------------------------------------------------------

Section 4.21

      Bank Accounts      44   

Section 4.22

      Customers and Suppliers      44   

Section 4.23

      Accounts Receivable      44   

Section 4.24

      Disputed Accounts Payable      44   

Section 4.25

      Books and Records      44   

Section 4.26

      Product Warranties, Product Warranty and Liability Claims, Returns      44
  

Section 4.27

      Indemnification Obligations      45   

Section 4.28

      Powers of Attorney      45   

ARTICLE V

  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER      45   

Section 5.1

      Due Organization and Corporate Power      45   

Section 5.2

      Authorization; Noncontravention      46   

Section 5.3

      Consents and Approvals      46   

Section 5.4

      Funds      46   

Section 5.5

      Independent Review; No Reliance      46   

Section 5.6

      Solvency      47   

Section 5.7

      Purchase for Investment      47   

ARTICLE VI

  COVENANTS      48   

Section 6.1

      Access to Information      48   

Section 6.2

      Confidentiality      49   

Section 6.3

      Conduct of the Business of the CCG Entities Pending the Closing Date     
49   

Section 6.4

      Filings; Other Actions      52   

Section 6.5

      Use of LSB Business Marks and Certain IP Matters      53   

Section 6.6

      Director and Officers’ Indemnification; Release      54   

Section 6.7

      Public Announcements      55   

Section 6.8

      Tax Matters      56   

Section 6.9

      Resignation of Officers, Managers and Directors      59   

Section 6.10

      Notification of Certain Matters      60   

Section 6.11

      Third-Party (Non-Governmental Entity) Consents      60   

Section 6.12

      [Reserved]      61   

Section 6.13

      Existing Letters of Credit      61   

Section 6.14

      Other Agreements      61   

Section 6.15

      Employee Matters      61   

Section 6.16

      Seller’s Access to Information      64   

Section 6.17

      Insurance      65   

Section 6.18

      Separation/TSA Cooperation      65   

Section 6.19

      Non-Competition; Non-Solicitation      66   

Section 6.20

      Title Insurance      67   

Section 6.21

      Purchaser R&W Insurance      68   

 

ii

--------------------------------------------------------------------------------

ARTICLE VII

  CONDITIONS TO THE CLOSING      68   

Section 7.1

      Conditions to Obligations of the Purchaser and the Seller      68   

Section 7.2

      Conditions to Obligations of the Seller      68   

Section 7.3

      Conditions to Obligations of the Purchaser      69   

ARTICLE VIII

  CLOSING      69   

Section 8.1

      Closing      69   

Section 8.2

      Seller Closing Deliveries      70   

Section 8.3

      Purchaser Closing Deliveries      70   

ARTICLE IX

  TERMINATION AND ABANDONMENT      70   

Section 9.1

      Termination      70   

Section 9.2

      Effect of Termination      72   

Section 9.3

      Payment      73   

ARTICLE X

  INDEMNIFICATION      73   

Section 10.1

      Survival of Representations, Warranties and Covenants      73   

Section 10.2

      Seller’s Indemnification Obligations      74   

Section 10.3

      Limitation on the Seller’s Indemnification Obligations      75   

Section 10.4

      Purchaser’s Indemnification Obligations      79   

Section 10.5

      Non-Third Party Claims Procedures      81   

Section 10.6

      Third Party Claims Procedures      81   

Section 10.7

      Recoveries from Third Persons; Duplicative Recoveries      83   

ARTICLE XI

  MISCELLANEOUS      83   

Section 11.1

      Fees and Expenses      83   

Section 11.2

      Extension; Waiver      83   

Section 11.3

      Notices      83   

Section 11.4

      Entire Agreement      85   

Section 11.5

      Binding Effect; Benefit; Assignment      85   

Section 11.6

      Amendment and Modification      85   

Section 11.7

      Headings      85   

Section 11.8

      Counterparts      85   

Section 11.9

      Governing Law      85   

Section 11.10

      Disclosure Letters      85   

Section 11.11

      Consent to Jurisdiction; Waiver of Jury Trial      86   

Section 11.12

      Severability      87   

Section 11.13

      Specific Performance      87   

Section 11.14

      Conflicts and Privilege      87   

Section 11.15

      Seller Guarantee      88   

Section 11.16

      Purchaser Guarantee      89   

 

iii

--------------------------------------------------------------------------------

Annexes

 

Annex A    The Standards Annex B    Sample Working Capital Calculation Annex C
   Severance Policies and Agreements Annex D    Sample Estimated Statement
Calculation Annex E    Illustration Schedule – Indemnification

Exhibits

 

Exhibit A    Form of Transition Services Agreement

 

iv

--------------------------------------------------------------------------------

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT, dated as of May 11, 2016 (this “Agreement”), is
made and entered into by and among Consolidated Industries L.L.C., an Oklahoma
limited liability company (the “Seller”), The Climate Control Group, Inc., an
Oklahoma corporation (the “Company”), NIBE Energy Systems Inc., a Delaware
corporation (the “Purchaser”), and, solely for purposes of Sections 6.8, 6.19
and 11.15 hereof, LSB Industries, Inc., a Delaware corporation (“LSB”) and
solely for purposes of Section 11.16 hereof, NIBE Industrier AB (publ) (“NIBE”).

W I T N E S S E T H:

WHEREAS, on the terms and subject to the conditions hereinafter set forth, the
parties desire to enter into this Agreement, pursuant to which the Seller shall
sell, and the Purchaser shall purchase, all of the outstanding shares of stock
of the Company (the “Shares”) with the purpose of acquiring the Business (as
defined herein), for the consideration and on the terms set forth in this
Agreement; and

WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the transactions contemplated hereby.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants,
representations, warranties and agreements herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. When used in this Agreement, the following terms shall
have the respective meanings specified therefor below.

“Accounting Experts” shall have the meaning set forth in Section 2.3(g).

“Adjustment Escrow” means the portion of the Escrow Account designated for the
Adjustment Escrow Amount to be held by the Escrow Agent in accordance with the
terms of the Escrow Agreement.

“Adjustment Escrow Amount” means $2,000,000.

“Affiliate” of any Person shall mean, when used with reference to a specific
Person, any Person that at the time of determination of Affiliate status
directly or indirectly, whether through one or more intermediaries, controls, is
controlled by or is under common control with such specific Person. As used in
this definition, “control” (and, with correlative meanings, “controlled by” and
“under common control with”) means the possession, directly or indirectly, of
the power to direct the management or policies of a Person (whether through
ownership of securities or partnership or other ownership interests, by Contract
or otherwise).

“Affiliate Transaction” shall have the meaning set forth in Section 4.18(b).

--------------------------------------------------------------------------------

“Agreement” shall have the meaning set forth in the preamble hereto.

“Ancillary Agreements” shall have the meaning set forth in Section 6.14.

“Antitrust Laws” shall have the meaning set forth in Section 6.4(b).

“Assets” shall have the meaning set forth in Section 4.20(a).

“Assigned Contracts” shall have the meaning set forth in Section 4.18(c).

“Authorized Representatives of the Purchaser” shall mean the Purchaser’s
directors, officers, employees, counsel, accountants, financial advisors,
consultants and other authorized representatives designated by the Purchaser
(through a written notice addressed to the Company) for the purpose of
Section 6.1.

“Bankruptcy Event” shall mean any of the following actions by the Company or any
other CCG Entity:

(i) commencement of a voluntary case or filing a request or petition to initiate
bankruptcy proceedings or to have any CCG Entity adjudicated as bankrupt;

(ii) consenting to the entry of an order for relief (or taking any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any such order) against any CCG Entity in an involuntary case;

(iii) consenting to the appointment (or taking any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any such
appointment) of a custodian, receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with the
reorganization or liquidation of any CCG Entity or for any substantial part of
any CCG Entity’s property;

(iv) making a general assignment (or taking any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any such general
assignment) for the benefit of any CCG Entity’s creditors; or

(v) proposing or agreeing to an accord or composition in bankruptcy between any
CCG Entity and any CCG Entity’s creditors.

“Business” shall mean the climate control business conducted by the CCG
Entities, including without limitation the design, manufacture and sale of a
broad range of HVAC products that include standard and custom designed water
source and geothermal heat pumps, hydronic fan coils, large custom air handlers,
modular geothermal and other chillers, primarily used in
commercial/institutional and residential new buildings construction, renovation
of existing buildings and replacement of existing systems.

“Business Day” shall mean any day except a Saturday, a Sunday or any other day
on which commercial banks are required or authorized to close in Oklahoma City,
Oklahoma, United States.

 

2

--------------------------------------------------------------------------------

“Cash” shall mean, as of immediately prior to the Closing, the amount of all
cash in any CCG Entity’s bank accounts, net of any outstanding (uncleared)
checks, drafts and wire transfers, plus deposits in transit and excluding
amounts held as restricted balances.

“CCG Entities” shall mean The Climate Control Group, Inc., International
Environmental Corporation, ClimaCool Corp., ClimateCraft, Inc., Climate Master,
Inc., Koax Corp. and ThermaClime Technologies, Inc.

“CCG Entities Indebtedness” shall mean, as of any time, without duplication, the
aggregate amount of all of the following, whether or not included as
indebtedness or liabilities in accordance with GAAP: (i) all short-term and
long-term indebtedness of any CCG Entity (including the principal amount thereof
or, if applicable, the accreted amount thereof, any prepayment amounts, and the
amount of accrued and unpaid interest thereon), whether or not represented by
bonds, debentures, notes or similar instruments, for the repayment of money
borrowed, (ii) all deferred indebtedness of any CCG Entity for the payment of
the purchase price of property, assets or services purchased, but excluding
trade accounts payable, customer advance payments and other current liabilities
in each case arising in the ordinary course of business, (iii) all obligations
of any CCG Entity under conditional sale or other title retention agreements
relating to any property purchased by any CCG Entity, (iv) all direct or
contingent obligations of any CCG Entity arising under or in respect of letters
of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds, and other financial products and services, including
(x) similar facilities issued for the account of any CCG Entity pursuant to
which the applicable bank or similar entity has paid obligations for which any
CCG Entity is required to repay and (y) treasury management and commercial
credit card, merchant card and purchase or procurement card services, (v) any
payment obligation of any CCG Entity under any and all Swap Contracts, (vi) all
obligations for borrowed money of any Person other than a CCG Entity secured by
any Lien existing on property owned by a CCG Entity, whether or not indebtedness
secured thereby shall have been assumed, but excluding any obligations incurred
under any LSB Debt Instruments, (vii) all obligations of a CCG Entity under any
lease of property, personal or real, which obligations are required to be
classified as capitalized leases under GAAP and (viii) all guaranties,
endorsements, assumptions and other contingent obligations of any CCG Entity in
respect of, or to purchase or to otherwise acquire, indebtedness for borrowed
money of others, provided that the amount of any such contingent obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such contingent obligation is made
(subject to any limitation therein). CCG Entities Indebtedness shall not include
any Excluded CCG Entities Indebtedness.

“CCG Financial Statements” shall mean, collectively, (a) the audited balance
sheet of the CCG Entities as a consolidated group as of December 31, 2015, and
the audited statements of income, changes in stockholders’ equity, and cash
flows of the CCG Entities as a consolidated group for the year ended on
December 31, 2015, together with the reports of the Company’s independent
auditors thereupon, including notes to the audited financial statements,
(b) unaudited balance sheets of the CCG Entities as a consolidated group as of
December 31, 2013 and December 31, 2014, and the unaudited statements of income,
changes in stockholders’ equity, and cash flows of the CCG Entities as a
consolidated group for the years ended on December 31, 2013 and December 31,
2014, (c) the unaudited balance sheets of each CCG Entity as of December 31,
2013 and December 31, 2014, and the unaudited statements of income, changes in
stockholders’ equity, and cash flows of each CCG Entity for the years ended

 

3

--------------------------------------------------------------------------------

on December 31, 2013 and December 31, 2014, and (d) the unaudited balance sheet
of the CCG Entities as a consolidated group as of March 31, 2016, and the
unaudited statements of income, changes in stockholders’ equity, and cash flows
of the CCG Entities as a consolidated group for the three (3)-month period ended
on March 31, 2016.

“Closing” shall mean the consummation of the transactions contemplated by this
Agreement.

“Closing Date” shall mean the date and time at which the Closing occurs.

“Closing Statement” shall have the meaning set forth in Section 2.3(d).

“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.

“Commitment” shall mean (i) options, warrants, rights of first refusal or first
offer, convertible securities, exchangeable securities, subscription rights,
conversion rights, exchange rights, calls, puts, voting trusts, registration
rights or other rights, agreements or commitments relating to the issuance,
disposition or acquisition of a Person’s capital stock or Voting Debt or
securities convertible into or exchangeable or exercisable for its equity
securities or other Contracts that could require a Person to issue equity
securities or to sell equity securities it owns in another Person, (ii) Voting
Debt or any other securities convertible into, exchangeable or exercisable for,
or representing the right to subscribe for any equity securities of a Person or
owned by a Person, (iii) statutory pre-emptive rights or pre-emptive rights
granted under a Person’s organizational documents or any other pre-emptive
rights and (iv) equity appreciation rights, phantom equity, profit
participation, or other similar rights with respect to a Person.

“Company” shall have the meaning set forth in the preamble hereto.

“Company Disclosure Letter” shall mean the disclosure letter, dated as of the
date of this Agreement, delivered by the Company to the Purchaser upon or prior
to entering into this Agreement.

“Company Intellectual Property” shall mean all Intellectual Property used in or
necessary for the operation of the Business.

“Company Material Adverse Effect” shall mean any change, effect, occurrence or
development that:

(a) has or would reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), business, properties, assets, liabilities or
results of operations of the CCG Entities, taken as a whole, provided that to
the extent any effect is caused by or results from any of the following, it
shall not be taken into account in determining whether there has been a material
adverse effect:

(i) changes in conditions in the U.S. economy or capital or financial markets
generally, including changes in interest or exchange rates;

 

4

--------------------------------------------------------------------------------

(ii) changes that are the result of factors generally adversely affecting the
industries in which the CCG Entities conduct business;

(iii) changes in GAAP or authoritative interpretation thereof;

(iv) changes in general legal, regulatory, political, economic or business
conditions;

(v) the negotiation, execution, announcement or performance of this Agreement or
the consummation of the transactions contemplated by this Agreement, including
any loss, or threatened loss of, or adverse impact on, the relationships
(contractual or otherwise) with, customers, suppliers, distributors, partners or
Employees of the CCG Entities (provided that this clause (v) shall be
disregarded for purposes of the “Company Material Adverse Effect” qualifiers
contained in the representations and warranties set forth in Section 4.2 and
Section 4.5);

(vi) the commencement, occurrence, continuation or escalation of any war, armed
hostilities or acts of terrorism involving any geographic region in which the
CCG Entities conduct business;

(vii) any action required to be taken by the CCG Entities pursuant to the terms
of the Agreement or any action taken by the CCG Entities with the Purchaser’s
consent;

(viii) any change in applicable Laws or the application or authoritative
interpretation thereof, including the effects of any duties on products of the
type manufactured by the CCG Entities; and

(ix) any changes, including rescission, cancellation, expiration, moratorium or
non-renewal, of any government incentives, rebates or subsidies relating to the
Business (including, but not limited to, geothermal, climate control or other
tax credits

except in the case of clauses (i), (ii), (iv) and (ix) to the extent that such
adverse effect has a materially greater adverse effect on the CCG Entities as
compared to other companies operating in the same industries and markets in
which the CCG Entities operate;

or

(b) would, or would reasonably be expected to, have a material adverse effect on
the ability of any CCG Entity to perform its obligations under this Agreement or
to consummate the transactions contemplated hereby on a timely basis.

For purposes of this Agreement, except to the extent excluded by clauses (a)(i)
through (ix) above, a Company Material Adverse Effect relating to the financial
condition or results of operations of the CCG Entities taken as a whole shall be
deemed to exist or have occurred where the aggregate of any such changes,
effects, occurrences or developments arising prior to the Closing or resulting
in inaccuracies in a representation or warranty by the Seller or the Company
herein, would reasonably be expected to result in (A) Damages of $75,000,000 or
more in the aggregate within 12 months of the Closing, or (B) earnings before
interest and taxes for any twelve month period ending at the end of a calendar
quarter during 2016 being reduced by more

 

5

--------------------------------------------------------------------------------

than $7,500,000. For the avoidance of doubt, a Company Material Adverse Effect
shall be deemed not to exist or to have occurred as a result of any changes,
effects, occurrences or developments covered by the immediately preceding
clauses (A) and (B) if the thresholds specified in the prior sentence are not
exceeded.

“Competing Person” shall have the meaning set forth in Section 6.19(a).

“Confidential Information” shall mean all information, notes, analyses,
compilations, forecasts, studies and other documents and records that are
subject to the confidentiality obligations created by the Confidentiality
Agreement.

“Confidentiality Agreement” shall have the meaning set forth in Section 6.2(a).

“Consolidated Group” shall mean any affiliated, combined, consolidated, unitary
or similar group with respect to any Taxes, including any affiliated group
within the meaning of Section 1504 of the Code electing to file consolidated
federal Income Tax returns and any similar group under foreign, state or local
law.

“Consolidated Taxes” means all Taxes of or with respect to the Seller
Consolidated Group.

“Contracts” shall mean all binding written or oral agreements, contracts,
licenses, leases, or other binding written or oral commitments, arrangements or
plans (including any amendments and other modifications thereto).

“Costs” shall have the meaning set forth in Section 6.6(a).

“Covered Employees” shall have the meaning set forth in Section 6.15(a).

“Covered Flex Plan Employees” shall have the meaning set forth in
Section 6.15(f).

“D&O Indemnitee” or “D&O Indemnitees” shall have the meaning set forth in
Section 6.6(a).

“Damages” shall mean all claims, assessments or deficiencies, levies, losses,
fines, penalties, damages, judgments (at equity or law), awards, charges,
obligations, liabilities, costs and expenses (including amounts paid in
settlement, court costs, and reasonable and documented attorneys’, accountants’,
investigators’, and experts’ fees and expenses), response, removal or
remediation costs under any Environmental Law, including CERCLA and any
analogous state Superfund statute; provided that an Indemnified Party’s internal
personnel time, overhead and other internal costs and expenses shall not
constitute Damages.

“Deductible” shall have the meaning set forth in Section 10.3(a).

“Disclosure Letter Update” shall have the meaning set forth in Section 6.10.

“DOJ” means the United States Department of Justice.

 

6

--------------------------------------------------------------------------------

“Employee” shall mean, on any given date, each individual who is employed by a
CCG Entity as of such date (including those who are actively employed and are on
leave, long or short term disability or other absence from employment).

“Employee Plans” shall have the meaning set forth in Section 4.11(a).

“Enforceability Exceptions” shall mean applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the enforcement of
creditors’ rights generally and general equitable principles relating to
enforceability, regardless of whether such enforceability is considered in a
proceeding at law or in equity.

“Environmental Laws” shall mean all Laws relating to pollution or protection of
the environment (including ambient air, surface water, ground water, land
surface or subsurface strata, and natural resources), including those related to
emissions, discharges, exposures, releases or threatened releases of Hazardous
Materials, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
but shall not include the Occupational Safety and Health Act, or regulations
(including process safety management standards) promulgated by the Occupational
Safety & Health Administration.

“Environmental Reports” shall mean environmental site assessment reports,
studies, analyses, compliance audits or assessments that relate to the business
of any CCG Entity or any real property owned, operated or leased by CCG Entity.

“Environmental Tests” shall have the meaning set forth in Section 10.3(s).

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means, with respect to any Person, any trade or business,
whether or not incorporated, which, together with such Person, is treated as a
single employer under section 414 of the Code.

“Escrow Account” shall have the meaning set forth in Section 2.2(b).

“Escrow Agent” means JPMorgan Chase Bank, N.A. or another financial institution
mutually agreed by the parties hereto.

“Escrow Agreement” means that certain Escrow Agreement, dated as of the Closing
Date, by and among the Purchaser, the Seller and the Escrow Agent.

“Escrow Amount” means the sum of the Adjustment Escrow Amount and the
Indemnification Escrow Amount.

“Estimated Statement” shall have the meaning set forth in Section 2.3(a).

“Excluded CCG Entities Indebtedness” shall mean any of the items described in
clauses (i) through (viii) of the definition of CCG Entities Indebtedness to the
extent that, at or prior to the Closing, all obligations of the CCG Entities
thereunder and all Liens securing such obligations and encumbering any of the
assets of the CCG Entities are either released or paid in full at the sole cost
and expense of the Seller or its Affiliates.

 

7

--------------------------------------------------------------------------------

“Excluded Transaction Expenses” shall mean any of the expenses described in the
definition of Transaction Expenses to the extent that, at the Closing, all
obligations of the CCG Entities thereunder are either released or paid in full
at the sole cost and expense of the Seller or its Affiliates (other than the CCG
Entities).

“Final Release Date” shall have the meaning set forth in Section 10.1.

“First Extended Termination Date” shall have the meaning set forth in
Section 9.1(c)(ii).

“Fraud” means intentional or willful misrepresentation of material facts which
constitute common law fraud under applicable laws.

“FTC” means the United States Federal Trade Commission.

“Fundamental Representations” shall have the meaning set forth in Section 10.1.

“GAAP” shall mean United States generally accepted accounting principles.

“Government Contract” shall mean any Contract entered into between any CCG
Entity and (i) the United States government, (ii) any prime contractor to the
United States government (in its capacity as such) or (iii) any subcontractor
with respect to any Contract described in clauses (i) or (ii).

“Governmental Entity” shall mean any federal, state, local, or foreign
government, any political subdivision thereof or any court, authority,
administrative or regulatory agency, department, instrumentality, body or
commission or other governmental authority or agency, any self-regulating entity
or any self-regulatory organization (including, any stock exchange).

“Hazardous Materials” shall mean any material, substance or waste that is
regulated, classified or otherwise characterized under or pursuant to any
Environmental Law as “hazardous,” “toxic,” a “pollutant,” a “contaminant,”
“radioactive,” “solid waste” or words of similar meaning or effect, including
petroleum and any petroleum product, asbestos, polychlorinated biphenyls, radon,
lead-based paint, chlorofluorocarbons and all other ozone-depleting substances.

“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.

“HSR Fee” shall mean an amount equal to the filing fee required in connection
with notification under the HSR Act.

“Identified Employee” shall have the meaning set forth in Section 6.15(i).

“Indemnified Benefits Matters” shall mean any excise taxes or penalties imposed
as a result of any failure to provide required election notices to continue
coverage under the Seller’s group health plan in a timely manner, as required by
COBRA, and for any claims for reimbursement of medical expenses from any
qualified beneficiary who did not receive such an election notice within the
time period required by COBRA.

 

8

--------------------------------------------------------------------------------

“IEC” shall have the meaning set forth in Section 6.8(a)(i).

“Income Tax” shall mean any federal, state, local or foreign Tax measured by or
imposed on net income.

“Indemnification Escrow Amount” means $2,730,000.

“Indemnification Escrow Fund” means the portion of the Escrow Account designated
for the Indemnification Escrow Amount to be held by the Escrow Agent in
accordance with the terms of the Escrow Agreement.

“Indemnified Party” shall mean a Purchaser Indemnitee or Seller Indemnitee who
is entitled to indemnification from another party hereto pursuant to Article X.

“Indemnified Taxes” shall mean any and all Taxes imposed on the Company or for
which the Company is otherwise liable that (i) are allocated or attributable to
or incurred or payable by the Company for any Pre-Closing Tax Period (which, in
the case of a Straddle Period, shall be determined in a manner consistent with
Section 6.8(b)(iv), together with any interest, penalty or additions to Tax
accruing after the Closing Date on Taxes described in this clause (i),
(ii) arise under Treasury Regulation Section 1.1502-6 or any similar provision
of state, local or foreign Law by virtue of the Company having been a member of
a Consolidated Group prior to the Closing, (iii) are imposed by reason of the
Company having liability for Taxes of another Person arising under principles of
transferee or successor liability or by contract, other than customary lease
agreements, as a result of activities or transactions taking place at or prior
to the Closing, (iv) arise from or are attributable to any breach of any Tax
covenant in Section 6.3(m) and Section 6.8, or (v) arise from the inclusion of
any income or gain by the Company in any Post-Closing Tax Period (x) under
Section 453 of the Code (or any similar provision of state, local or foreign
Law) in respect of any transaction occurring prior to the Closing, (y) under
Section 108(i) of the Code (or any similar provision of state, local or foreign
Law) in respect of any reacquisition occurring at or prior to the Closing, or
(z) as a result of any change in accounting method Section 481 of the Code (or
any similar provision of state, local or foreign Law) as a result of the manner
in which any item was improperly reported by the Company with respect to any
Pre-Closing Tax Period, in each of the above cases, to the extent such Taxes
exceed the accrual in respect thereof shown on the Closing Statement as finally
determined. The amount of any Indemnified Taxes shall be computed without regard
to any net operating loss, net capital loss or other Tax deduction, credit or
benefit that is attributable to, arises from or relates to any Post-Closing Tax
Period.

“Indemnifying Party” shall mean a party hereto who is required to provide
indemnification under Article X to another party hereto.

“Information Systems” means the computer software, computer firmware, computer
hardware (whether general purpose or special purpose), telecommunications,
equipment, controlled networks, peripherals and computer systems, including any
outsourced systems and processes under a CCG Entity’s control, and other similar
or related items of automated, computerized and/or software systems that are
owned or controlled by a CCG Entity and used or relied on in connection with the
Business, but excluding the Internet. For the avoidance of doubt, any co-located
systems shall be deemed to be under the control of the applicable CCG Entity.

 

9

--------------------------------------------------------------------------------

“Initial Termination Date” shall have the meaning set forth in
Section 9.1(c)(ii).

“Intellectual Property” means all of the following in any jurisdiction
throughout the world, and all intellectual property rights therein and thereto:
(i) patents and patent applications and any reissue, continuation,
continuation-in-part, division, revision, extension or reexamination thereof,
(ii) trademarks, service marks, logos, slogans (and all translations,
adaptations, derivations and combinations of the foregoing), trade dress, trade
names, domain names, and other indicia of commercial source or origin, including
registrations and applications for registration thereof, and all goodwill
associated with any of the foregoing (“Trademarks”), (iii) copyrights and rights
in copyrightable works, including registrations and applications for
registration thereof, (iv) trade secrets and confidential information, including
trade secrets and confidential information regarding patent disclosures,
invention disclosures and inventions (whether or not patentable and whether or
not reduced to practice), know-how, software, customer and supplier lists, data,
databases, processes, protocols, specifications, designs, plans, proposals,
techniques, drawings, specifications, and other forms of technology, and (v) any
other intellectual property rights.

“Interfering Activities” shall mean (i) encouraging, soliciting, or inducing, or
in any manner attempting to encourage, solicit, or induce, any Person employed
by, as an employee or agent of, or a service provider to, any CCG Entity to
terminate (or, in the case of an employee, agent or service provider, terminate
or reduce) such Person’s employment, agency or service, as the case may be, with
any CCG Entity; (ii) knowingly hiring any Person who was employed by, an
employee or agent of, or a service provider to, any CCG Entity, within the six
(6) month period prior to the date of such hiring; or (iii) encouraging,
soliciting or inducing, or in any manner attempting to encourage, solicit or
induce any customer, supplier, licensee or other business relation (or any
direct or indirect subsidiary of any such customer, supplier, licensee or other
business relation) of a CCG Entity known by LSB or the Seller, or knowable after
a reasonable inquiry from such Person, to be a customer, supplier, licensee or
other business relation (or any direct or indirect subsidiary of any such
customer, supplier, licensee or other business relation) of a CCG Entity to
cease doing business with or reduce the amount of business conducted with
(including by providing similar services or products to any such Person) any CCG
Entity with respect to the business conducted on the Closing Date by the CCG
Entities. For purposes of the foregoing, general solicitations of employment
published in a journal, newspaper, internet or other publication of general
circulation or listed on any job site and not specifically directed to any
employees of a CCG Entity shall not be deemed to constitute solicitation of such
employees so long as no such employees who are known by LSB or the Seller, after
reviewing such employee’s resume and after inquiry to the employee, to be an
employee of a CCG Entity are in fact hired during the Restrictive Covenant
Period.

“Knowledge of the Company” shall mean the actual knowledge of those individuals
listed in Section 1.1(b) of the Company Disclosure Letter.

“Koax” shall have the meaning set forth in Section 6.8(a)(i).

 

10

--------------------------------------------------------------------------------

“Laws” shall mean all laws, statutes, rules, codes, regulations, ordinances,
orders, judgments or decrees of, or issued by, Governmental Entities.

“Laws relating to Employment” shall have the meaning set forth in
Section 4.12(c).

“Leased Real Property” shall have the meaning set forth in Section 4.19(a).

“Leases” shall have the meaning set forth in Section 6.14(b).

“Liability Cap” shall have the meaning set forth in Section 10.3(b).

“Lien” shall mean any mortgage, deed of trust, hypothecation, lien, pledge,
encumbrance, charge, security interest, judgment lien, easement, servitude or,
in each case, any other similar encumbrance of any nature or kind whatsoever.

“LSB” shall have the meaning set forth in the preamble hereto.

“LSB Business Marks” shall mean any Trademarks containing or comprising, the
terms “LSB”, “LSB Industries” or “LSB Industries, Inc.” and any “LSB”, “LSB
Industries” or “LSB Industries, Inc.” logo, symbol, graphic or similar design
mark used or held for use (whether alone or in combination with other terms) in
connection with the Business.

“LSB Debt Instruments” means:

(a) the Indenture, dated as of August 7, 2013, among LSB, Seller, the Company,
subsidiaries of LSB that are signatories thereto, and UMB Bank, n.a., as
trustee, and each of the other Note Documents (as defined therein), including
without limitation, the Security Agreement, dated as of August 7, 2013, by LSB
and the other grantors that are signatories thereto in favor of UMB Bank, N.A.
as Collateral Agent, as supplemented by Supplement No. 1 to Security Agreement,
dated as of February 12, 2014;

(b) the Second Amended and Restated Loan and Security Agreement, dated as of
December 31, 2013, among LSB, Seller, the Company, subsidiaries of LSB that are
signatories thereto, the lenders signatories thereto, and Wells Fargo Capital
Finance, LLC, as arranger and administrative agent, as amended by Amendment
No. 1 to the Second Amended and Restated Loan and Security Agreement and Partial
Release, dated as of June 11, 2015, and Amendment No. 2 to the Second Amended
and Restated Loan and Security Agreement, dated as of November 9, 2015, and each
of the other Loan Documents (as defined therein); and

(c) the Note Purchase Agreement, dated as of November 9, 2015, among LSB,
Seller, the Company, subsidiaries of LSB that are signatories thereto, and LSB
Funding LLC, and each of the other Notes Documents (as defined therein),
including without limitation, the Joinder to Security Agreement, dated
November 9, 2015, by LSB Funding LLC, and acknowledged and agreed to by UMB
Bank, n.a., as Collateral Agent, LSB and the guarantors that are signatories
thereto.

“LSB Debt Released Liens” shall have the meaning set forth in the definition of
Permitted Liens.

 

11

--------------------------------------------------------------------------------

“LSB Flex Plan” shall have the meaning set forth in Section 6.15(f).

“LSB Payables” shall mean all trade payables or similar balance sheet items owed
by a CCG Entity, on the one hand, to LSB, the Seller or any of their respective
Affiliates (other than a CCG Entity), on the other hand, that would not
constitute CCG Entities Indebtedness.

“LSB Receivables” shall mean all trade receivables or similar balance sheet
items owed by LSB, the Seller or any of their respective Affiliates (other than
a CCG Entity), on the one hand, to a CCG Entity, on the other hand.

“Material Contracts” shall mean (i) the Assigned Contracts and (ii) the
following Contracts to which a CCG Entity is a party or by which any CCG
Entity’s properties or assets are bound:

(a) each Contract (other than Contracts that have been fully performed by all
parties thereto and other than spot sales or purchases in the ordinary course of
business substantially on a CCG Entity’s standard terms that are to be settled
within ninety (90) days of agreeing to such sale or purchase), for the sale or
distribution of products, supplies, goods, materials, equipment, software,
technology or services to one or more CCG Entities requiring payments by one or
more CCG Entities, in the aggregate, equal to or greater than (A) $200,000 over
the remaining term of such Contract or (B) $100,000 for the twelve (12) month
period ended March 31, 2016;

(b) each Contract (other than Contracts that have been fully performed by all
parties thereto and other than spot sales or purchases in the ordinary course of
business substantially on a CCG Entity’s standard terms that are to be settled
within ninety (90) days of agreeing to such sale or purchase), including without
limitation each Contract with an original equipment manufacturer, for the sale
or distribution of products, supplies, goods, materials, equipment, software,
technology or services by one or more CCG Entities requiring payments to one or
more CCG Entities, in the aggregate, equal to or greater than (A) $200,000 over
the remaining term of such Contract or (B) $100,000 for the twelve (12) month
period ended March 31, 2016;

(c) each Contract (A) that restricts or otherwise affects the ability of a CCG
Entity to compete, in any jurisdiction, in any line of business or with any
Person or would so restrict or affect the ability of the Purchaser or its
Affiliates (including a CCG Entity) after the Closing, or (B) that contains
exclusivity obligations or restrictions binding on a CCG Entity or that would be
binding on the Purchaser or any of its Affiliates (including a CCG Entity) after
the Closing, or (C) that any CCG Entity has entered into with any of the 25
largest customers of the Business based on sales during the twelve (12) month
period ended December 31, 2015 and the three (3) month period ended March 31,
2016 that contains “most-favored-nation” or similar pricing obligations or
restrictions binding on a CCG Entity or that would be binding on the Purchaser
or any of its Affiliates (including a CCG Entity) after the Closing;

(d) each collective bargaining agreement or other Contract with any labor union;

(e) each Contract granting any rights of first refusal, first negotiation or
first offer with respect to assets that are material to the conduct of the
Business;

 

12

--------------------------------------------------------------------------------

(f) each Contract to which a CCG Entity is a party for the purchase or sale of
any material asset (other than in the ordinary course of business) for which
there are material outstanding obligations with respect to any CCG Entity;

(g) each Real Property Lease;

(h) any Contract relating to (A) CCG Entities Indebtedness or (B) Excluded CCG
Entities Indebtedness;

(i) any Swap Contract;

(j) each Contract that grants or imposes any Lien (other than Permitted Liens)
on the material property, plant and equipment of a CCG Entity, the Owned Real
Property or the Leased Real Property;

(k) each Employee Plan, including all single employer or multiemployer pension,
profit sharing, retirement, bonus, vacation, option, annuity, bond purchase,
deferred compensation, group life, health and accident insurance and other
welfare benefit plans, Contracts, or commitments;

(l) each Contract between a CCG Entity, on the one hand, and Seller or its
Affiliates (other than a CCG Entity), on the other hand;

(m) each Contract relating to software or information technology, including
Contracts regarding support, maintenance and repair of information-technology
assets, that is material to the Business;

(n) each Contract relating to capital expenditure items for one or more CCG
Entities (A) in excess of $250,000 by such CCG Entity(ies) for a single project
or (B) in excess of $500,000 by such CCG Entity(ies) in the aggregate;

(o) any joint venture, partnership, limited liability company or other similar
Contracts (including shareholders’ agreements) with any other Person (including
any agreement providing for joint research, development or marketing);

(p) any Contract or series of related Contracts, including any option agreement,
relating to the acquisition or disposition of any business, capital stock or
assets of any other Person or any material property real or personal (whether by
merger, sale of stock, sale of assets or otherwise);

(q) any Contract (including any “take-or-pay” or keepwell agreement) under which
(A) any Person has directly or indirectly guaranteed any liabilities or
obligations of a CCG Entity or (B) a CCG Entity has directly or indirectly
guaranteed any liabilities or obligations of any other Person (in each case
other than endorsements for the purpose of collection in the ordinary course of
business);

(r) any Contract with a Significant Customer or Significant Supplier;

(s) any Government Contract;

 

13

--------------------------------------------------------------------------------

(t) any Contract (other than employment Contracts or Employee Plans) to which a
CCG Entity is a party with any current officer or director of a CCG Entity;

(u) any employment or consulting Contract to which a CCG Entity is a party
(other than Employee Plans) for employees, officers, directors or consultants
(A) whose compensation thereunder, during any given calendar year, is in excess
of $100,000, (B) which provides for a severance payment in excess of $25,000 or
(B) which provides for one or more payments in the event of a change of control;

(v) any Contract relating to the licensing of Intellectual Property by any CCG
Entity to a third party or by a third party to any CCG Entity, and all other
agreements affecting the CCG Entities’ ability to use or disclose Intellectual
Property in connection with the Business, but not including (A) off the shelf
software license agreements with an annual cost of less than $50,000,
(B) non-disclosure or confidentiality agreements entered into as part of
proposed mergers, acquisitions or similar transactions, or (C) Contracts
described in subsection (m) above; and

(w) any other Contract that (A) if terminated or subject to a default by any
party thereto, would, individually or in the aggregate, be materially adverse to
the CCG Entities or (B) subjects any CCG Entity to material liability, or (C) is
otherwise material to the CCG Entities taken as a whole but not otherwise
required to be disclosed in Section 4.16 of the Company Disclosure Letter by
clauses (i) through (v) above.

“New Title Coverage” shall have the meaning set forth in Section 6.20.

“NIBE” shall mean NIBE Industrier AB (publ).

“Non-Disclosure Agreement” shall have the meaning set forth in Section 6.2(b).

“Notice of Claim” shall have the meaning set forth in Section 10.5.

“Notice of Dispute” shall have the meaning set forth in Section 2.3(f).

“Notices” shall have the meaning set forth in Section 11.3(a).

“Off-Balance Sheet Liabilities” means, with respect to any Person as of any date
of determination thereof, without duplication and to the extent not included as
a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase
facility), the unrecovered investment of purchasers or transferees of assets so
transferred and the principal amount of any recourse, repurchase or debt
obligations incurred in connection therewith; and (b) the monetary obligations
under any financing lease or so-called “synthetic,” tax retention or off-balance
sheet lease transaction which, upon the application of any bankruptcy,
insolvency, reorganization, fraudulent conveyance, arrangement, moratorium or
other similar Laws relating to or affecting the rights of creditors generally to
such Person or any of its Subsidiaries, would be characterized as indebtedness.

 

14

--------------------------------------------------------------------------------

“Open Source License” means (i) any license that is, or is substantially similar
to, a license approved by the Open Source Initiative and listed at
http://www.opensource.org/licenses, which licenses include all versions of the
Reciprocal Public License, GNU GPL, the GNU LGPL, the GNU Affero GPL, the MIT
license, the Eclipse Public License, the Common Public Attribution License, the
CDDL, the Mozilla Public License, the Academic Free License, the BSD license and
the Apache license and (ii) any license that requires or that conditions any
rights granted in such license upon: (A) the disclosure, distribution or
licensing of any other software; (B) a requirement that any other licensee of
the software be permitted to modify, make derivative works of, or reverse
engineer any such other software; (C) a requirement that such other software be
redistributable to other licensees; or (D) the grant of any patent rights
including non-assertion or patent license obligations.

“Open Source Software” means any software that is licensed pursuant to an Open
Source License, whether or not source code is available or included in such
license.

“Owned Intellectual Property” shall have the meaning set forth in
Section 4.14(a).

“Owned Real Property” shall have the meaning set forth in Section 4.19(b).

“Payment” shall have the meaning set forth in Section 9.3.

“Permits” shall have the meaning set forth in Section 4.8.

“Permitted Liens” shall mean, with respect to a CCG Entity, the following Liens:

(a) Liens for Taxes, assessments, or other charges or levies imposed by
Governmental Entities that either have not become due and payable or the amount
or validity of which is being contested in good faith by appropriate proceedings
and for which adequate reserves are maintained on the CCG Financial Statements
in accordance with GAAP;

(b) pledges or deposits made in the ordinary course of business to secure
obligations under workers’ compensation laws or similar legislation, including
Liens of judgments thereunder which are not currently delinquent or
dischargeable;

(c) workers’, mechanics’, suppliers’, carriers’, warehousemen’s, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of business which
are not delinquent or which are being contested in good faith by appropriate
proceedings and for which adequate reserves are maintained on the CCG Financial
Statements in accordance with GAAP;

(d) deposits securing or in lieu of surety, appeal or customs bonds in
proceedings to which a CCG Entity is a party that do not materially interfere
with the conduct of the Business;

(e) Liens created by or resulting from any litigation or legal proceeding which
is currently being contested in good faith by appropriate proceedings and for
which adequate reserves are maintained on the financial statements and books of
the Company in accordance with GAAP;

(f) landlords’ Liens under Real Property Leases to secure payments not yet due
and payable;

(g) recorded Liens, rights-of-way, easements, licenses, zoning or other
restrictions on the use of real property (including the Real Property), or minor
irregularities in title thereto, which do not, individually or in the aggregate,
materially and adversely affect, impair or interfere with the occupancy, use,
value, ownership or transferability of the property affected thereby;

 

15

--------------------------------------------------------------------------------

(h) Liens under the LSB Debt Instruments that (A) as of the date of this
Agreement are reasonably expected to be released at the Closing with respect to
the CCG Entities, and (B) are released at or prior to the Closing with respect
to the CCG Entities (“LSB Debt Released Liens”); and

(i) any other Lien incurred in the ordinary course of business that does not
materially impair the value of any property or the use, enjoyment, ownership or
transferability of such property.

“Person” shall mean and include an individual, a partnership, a limited
liability partnership, a joint venture, a corporation, a limited liability
company, a trust, a business trust, an unincorporated organization or a
Governmental Entity.

“Policy” or “Policies” shall have the meaning set forth in Section 4.17.

“Post-Closing Tax Period” shall mean any Tax period beginning after the Closing
Date and, with respect to a Straddle Period, the portion of such Tax period
beginning after the Closing Date.

“Pre-Closing Tax Period” shall mean any Tax period ending on or before the
Closing Date and, with respect to a Straddle Period, the portion of such Tax
period ending on the Closing Date.

“Pre-Closing Tax Returns” shall have the meaning set forth in
Section 6.8(b)(ii).

“Proceedings” shall have the meaning set forth in Section 4.9.

“Product Liability Claim” shall mean any liability, obligation or claim in
connection with a product liability claim relating to or arising from any
Product manufactured, assembled, processed, distributed, marketed, licensed or
sold by a CCG Entity prior to Closing.

“Product” shall mean any product manufactured, assembled, processed,
distributed, marketed, licensed or sold by a CCG Entity prior to Closing.

“Product Warranty Claims” shall mean product warranty claims proceedings or
causes of action for refunds, recalls, credits, adjustments or replacements
relating to or arising from any Product manufactured, assembled, processed,
distributed, marketed, licensed or sold by a CCG Entity prior to Closing.

“Prohibitive Order” shall have the meaning set forth in Section 7.1(a).

“Proprietary Information” shall have the meaning set forth in Section 6.19(d).

“Purchase Price” shall mean an amount equal to $364,000,000.00 U.S. Dollars.

“Purchaser” shall have the meaning set forth in the preamble hereto.

 

16

--------------------------------------------------------------------------------

“Purchaser DC Plan” shall have the meaning set forth in Section 6.15(d).

“Purchaser Flex Plan” shall have the meaning set forth in Section 6.15(f).

“Purchaser Guaranteed Obligations” shall have the meaning set forth in
Section 11.16.

“Purchaser Indemnification Claim” shall have the meaning set forth in
Section 10.3(d).

“Purchaser Indemnitees” shall mean the Purchaser, its Affiliates (including,
after the Closing, the CCG Entities) and the officers, directors, managers,
employees, agents and representatives of the Purchaser or its Affiliates
(including, after the Closing, the CCG Entities), and the heirs, executors,
successors and permitted assigns of any of the foregoing.

“Purchaser Liability Cap” means $74,730,000.

“Purchaser Material Adverse Effect” shall mean any event, change, occurrence,
effect, fact or circumstance having a material adverse effect on the ability of
the Purchaser to perform its obligations under this Agreement or to consummate
the transactions contemplated hereby on a timely basis.

“Purchaser R&W Insurance Policy” shall mean the representation and warranty
insurance policy issued as of the Closing Date to the Purchaser by the Purchaser
R&W Insurance Provider in connection with the transactions contemplated by this
Agreement.

“Purchaser R&W Insurance Provider” shall mean, together, Ironshore Insurance
Services LLC and Chubb Transactional Risk.

“Purchaser Related Party” shall mean (a) the Purchaser, (b) any former, current
and future holders of any equity, partnership or limited liability company
interest, controlling persons, directors, officers, employees, agents,
attorneys, Affiliates, members, managers, general or limited partners,
stockholders and assignees of any Person named in foregoing clause (a), and
(b) any former, current and future holders of any equity, partnership or limited
liability company interest, controlling persons, directors, officers, employees,
agents, attorneys, Affiliates, members, managers, general or limited partners,
stockholders and assignees of any of the foregoing.

“Purchaser Severance Costs” means (i) all Severance Costs paid to Identified
Employees in excess of $1,500,000 in the aggregate and (ii) all Severance Costs
paid to Employees that are not Identified Employees with respect to a
termination of employment or separation from service on or following the
Closing; provided, however, that in determining the amount of Purchaser
Severance Costs pursuant to clause (i) above, no Severance Cost shall be taken
into account that is (A) a payment made pursuant to the Retention Awards, or
(B) in excess of the amounts specified to be paid to an Identified Employee in
the Severance Policies and Agreements. Notwithstanding the foregoing, Purchaser
Severance Costs shall include any payments or Damages payable (i) to any
Identified Employee pursuant to the WARN Act in excess of the amounts specified
to be paid to an Identified Employee in the Severance Policies and Agreements
and (ii) to any Employee that is not an Identified Employee.

“Real Property” shall mean the Owned Real Property and the Leased Real Property.

 

17

--------------------------------------------------------------------------------

“Real Property Lease” shall mean each lease, sublease and other written Contract
pursuant to which a CCG Entity is granted the right to use or occupy, now or in
the future, any real property or any portion thereof, including any and all
modifications, amendments and supplements thereto and any assignments and
guarantees thereof.

“Registered Intellectual Property” shall have the meaning set forth in
Section 4.14(a).

“Release” shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment.

“Reserved Amount” or “Reserved Amounts” shall have the meaning set forth in
Section 10.3(e).

“Restrictive Covenant Period” shall have the meaning set forth in
Section 6.19(a).

“Retention Award” shall include the cash retention bonus agreements and
restricted stock awards granted by LSB to certain Employees prior to the Closing
Date.

“Scrape Excluded Representation” means each of Section 4.6(a) and Section 4.7.

“Second Extended Termination Date” shall have the meaning set forth in
Section 9.1(c)(ii).

“Section 338(h)(10) Elections” shall have the meaning set forth in
Section 6.8(a)(i).

“Section 4.13 Knowledge Period” means the period beginning on May 11, 2006 and
ending on May 11, 2011.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

“Seller” shall have the meaning set forth in the preamble hereto.

“Seller 401(k) Plan” shall mean the LSB Industries, Inc. 401(k) Plan.

“Seller Consolidated Group” shall mean the Consolidated Group of which LSB is
the parent for U.S. federal income tax purposes and the CCG Entities are
members.

“Seller Consolidated Return” shall mean any Tax Return of the Seller
Consolidated Group.

“Seller Guaranteed Obligations” shall have the meaning set forth in
Section 11.15.

“Seller Indemnitees” shall mean the Seller and its Affiliates (excluding, after
the Closing, the CCG Entities) and the officers, directors, managers, employees,
agents and representatives of the Seller or its Affiliates (excluding, after the
Closing, the CCG Entities), and the heirs, executors, successors and permitted
assigns of any of the foregoing.

 

18

--------------------------------------------------------------------------------

“Seller Material Adverse Effect” shall mean any event, change, occurrence,
effect, fact or circumstance having a material adverse effect on the ability of
the Seller to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby on a timely basis.

“Seller Severance Costs” means (A) all payments made pursuant to Retention
Awards and (B) all Severance Costs paid to (i) Identified Employees (including
any Person identified in Section 6.15(i) of the Company Disclosure Letter as to
be deemed an Identified Employee) up to a maximum of $1,500,000 in the aggregate
(ignoring for purposes of this clause (B)(i) any payment made pursuant to any
Retention Award) and (ii) Employees that are not Identified Employees with
respect to a termination of employment or separation from service prior to the
Closing. Notwithstanding the foregoing, Seller Severance Costs shall not include
any payments or Damages payable (i) to any Identified Employee pursuant to the
WARN Act in excess of the amounts specified to be paid to an Identified Employee
in the Severance Policies and Agreements or (ii) to any Employee that is not an
Identified Employee.

“Severance Costs” means any liability, payment, increase in payment, or
acceleration of vesting paid or payable to any Employee as a result of a
termination of employment or separation from service with a CCG Entity,
including, for the avoidance of doubt, any payments or Damages payable pursuant
to the WARN Act or COBRA.

“Severance Policies and Agreements” means, collectively, (i) the severance
practices or policies applicable to the Employees in effect on the date of this
Agreement (including, but not limited to, the routine severance schedule
approved by the Board of Directors of LSB prior to the date of this Agreement)
and described on Annex C attached hereto, and (ii) any written agreements in
effect on the date of this Agreement applicable to any Employee providing for
any payment, increase in payment, or acceleration of vesting as a result of
termination of employment or separation from service with a CCG Entity.

“Shared Contracts” shall have the meaning set forth in Section 4.18(c).

“Shares” shall have the meaning set forth in the first recital hereto.

“Significant Customers” shall have the meaning set forth in Section 4.22.

“Significant Suppliers” shall have the meaning set forth in Section 4.22.

“Standards” shall have the meaning set forth in the definition of Working
Capital.

“Straddle Period” shall mean any Tax period beginning on or before and ending
after the Closing Date.

“Straddle Tax Returns” shall have the meaning set forth in Section 6.8(b)(ii).

“Subsidiary” shall mean, with respect to any Person, any entity in which such
Person or any of its Subsidiaries owns or has the power to vote more than fifty
percent (50%) of the equity interests in such entity having general voting power
to participate in the election of the governing body of such entity.

 

19

--------------------------------------------------------------------------------

“Survival Period” shall have the meaning set forth in Section 10.1.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Tax” or “Taxes” shall mean any taxes, assessments, fees, and other governmental
charges imposed by any Governmental Entity, including income, profits, gross
receipts, net proceeds, alternative or add on minimum, ad valorem, value added,
turnover, sales, use, property, personal property (tangible and intangible),
environmental, stamp, leasing, lease, user, excise, duty, franchise, capital
stock, transfer, registration, license, withholding, social security (or
similar), unemployment, disability, payroll, employment, social contributions,
fuel, excess profits, occupational, premium, windfall profit, severance,
estimated, or other charge of any kind whatsoever, including any interest,
penalty, or addition thereto, and the liability for the payment of any amounts
described in the foregoing arising from being or having been a member of a
Consolidated Group or a party to any Tax Agreement on or before the Closing.

“Tax Accountant” shall have the meaning set forth in Section 6.8(b)(iii).

“Tax Agreement” shall have the meaning set forth in Section 4.10(e).

“Tax Proceeding” shall have the meaning set forth in Section 6.8(c).

“Tax Returns” shall mean any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

“Termination Date” shall mean the Initial Termination Date (or the First
Extended Termination Date or the Second Extended Termination Date if properly
extended by the Purchaser in accordance with Section 9.1(c)(ii).

“Third Party Claim” shall mean any claim, demand, notice, action, suit,
proceeding, arbitration, audit, complaint, investigation, dispute or like matter
which is asserted or threatened by a Person other than a Purchaser Indemnitee, a
Seller Indemnitee or their successors and permitted assigns, against any
Indemnified Party or to which any Indemnified Party is subject and that may give
rise to a right of indemnification under Article X.

 

20

--------------------------------------------------------------------------------

“Title Documents” shall have the meaning set forth in Section 6.20.

“Title Insurer” shall mean First American Title Company, 501 North Walker,
Suite 170, Oklahoma City, Oklahoma 73102.

“Trademarks” shall have the meaning set forth in the definition of “Intellectual
Property.”

“Transaction Expenses” shall mean an amount equal to all attorneys’,
accountants’, investment banking and other professional or advisor fees and any
brokers’, finders’ or similar fees (including any audit fees and other fees and
expenses incurred in connection with the preparation of the CCG Financial
Statements) incurred by a CCG Entity prior to the Closing in connection with
this Agreement, the transactions contemplated by this Agreement or the proposed
sale of the Shares and not paid before the payment contemplated in
Section 2.3(c). Transaction Expenses shall also include the underwriting fee and
premium for the Purchaser R&W Insurance Policy up to a maximum of $2,500,000,
with any excess over such amount to be paid directly by the Purchaser.
Transaction Expenses shall not include any Excluded Transaction Expenses.

“Transaction Price” shall mean the aggregate sum of the Purchase Price, plus
(i) the amount of Cash, plus (ii) the LSB Receivables (as of immediately prior
to the Closing), minus (iii) the LSB Payables (as of immediately prior to the
Closing), minus (iv) the amount of CCG Entities Indebtedness as of immediately
prior to the Closing, minus (v) the amount of Transaction Expenses. The amount
of the Transaction Price shall also be reduced by the amount, if any, by which
the Working Capital Target exceeds the amount of Working Capital, or increased
by the amount, if any, by which the amount of Working Capital exceeds the
Working Capital Target. Solely for the purposes of determining the Transaction
Price at the Closing, the Transaction Price shall be based on the Estimated
Statement determined in accordance with Section 2.3(a). The Transaction Price
shall be subject to adjustment following the Closing as provided in
Section 2.3(f). In calculating the various adjustments to the Transaction Price,
no single item shall be given duplicative effect.

“Transfer Taxes” shall have the meaning set forth in Section 6.8(e).

“Transferred Account Balances” shall have the meaning set forth in
Section 6.15(f).

“Transition Services Agreement” shall have the meaning set forth in
Section 6.14(a).

“Treasury” shall mean U.S. Department of the Treasury.

“United States” or “U.S.” means the United States of America.

“U.S. Dollars”, “U.S. $”, “Dollars” and “$” means the lawful currency of the
United States.

“Voting Debt” shall mean indebtedness having general voting rights and debt
convertible into securities having such rights.

“WARN Act” shall mean the Worker Adjustment and Retraining Notification Act of
1988, and any similar state or local law.

 

21

--------------------------------------------------------------------------------

“Working Capital” shall mean the sum of the current assets (excluding current
LSB Receivables, Cash, any asset that would constitute a Transaction Expense,
any income Taxes receivable, any deferred Tax assets and any asset related to
commodity, interest rate or foreign currency hedges), minus the sum of the
current liabilities (including other trade accounts payable, customer advance
payments and other current liabilities in each case arising in the ordinary
course of business, but excluding current LSB Payables, CCG Entities
Indebtedness, Transaction Expenses, any liability related to commodity, interest
rate or currency hedges, any income Taxes payable and any deferred Tax
liabilities) of the CCG Entities, in each case determined as of immediately
prior to the Closing in accordance with this Agreement and, to the extent not
inconsistent with this Agreement, GAAP applied on a basis consistent with the
preparation of the CCG Financial Statements for the twelve (12) month period
ended December 31, 2015 (i.e., using the adjustments, methodologies and
judgments as set forth on Annex A attached hereto and that were used in the
preparation of such CCG Financial Statements) (the “Standards”). In calculating
the Working Capital, (i) there should be no change in the classification to a
current asset of any particular asset that has not previously been characterized
as a current asset, or the classification to a long term liability of any
particular liability that has not previously been characterized as a long term
liability (in each case, other than any such change resulting solely from the
passage of time between the date hereof and the Closing) or which is of a type
that has not previously been characterized as current or long term, as the case
may be, (ii) except as described in clause (iii) below, no reserve reflected in
the balance sheet contained in the CCG Financial Statements for the twelve
(12) month period ended December 31, 2015 shall be increased, reduced or
eliminated except due to a reduction or elimination by reason of payment or cash
settlement, or changes to the reserve made in accordance with the Company’s
existing accounting policies and procedures as set forth on Annex A attached
hereto and (iii) the entire workers’ compensation and general liability
insurance reserves shall be included as current liabilities, regardless of the
manner in which it has historically been carried. For illustration, attached as
Annex B is a sample calculation of Working Capital of the CCG Entities as of
March 31, 2016 based on the unaudited balance sheet of the CCG Entities as of
March 31, 2016.

“Working Capital Target” shall mean $45,000,000.

Section 1.2 Other Interpretive Provisions.

(a) The words “hereof”, “herein”, “hereunder” and words of similar import, when
used in this Agreement, refer to this Agreement as a whole and not to any
particular provision of this Agreement.

(b) The term “control” (including the terms “controlled by” and “under common
control with”) shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by Contract or otherwise.

(c) The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term.

 

22

--------------------------------------------------------------------------------

(d) Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation”.

(e) The terms “day” and “days” mean and refer to calendar day(s).

(f) The terms “year” and “years” mean and refer to calendar year(s).

(g) The word “or” is inclusive and not exclusive.

(h) Any agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.

(i) All Article, Section, Annex, Exhibit and Schedule references herein are to
Articles, Sections, Exhibits and Schedules of this Agreement, unless otherwise
specified.

(j) This Agreement shall not be construed as if prepared by one particular
party, but rather according to its fair meaning as a whole, as if all parties
had prepared it and, in the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as jointly drafted by
the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

ARTICLE II

PURCHASE AND SALE OF THE SHARES: CLOSING AND MANNER OF PAYMENT

Section 2.1 Agreement to Purchase and Sell the Shares. On the terms and subject
to the conditions contained in this Agreement, at the Closing, the Seller shall
sell, assign, transfer and deliver to the Purchaser, and the Purchaser shall
purchase and acquire from the Seller, the Shares, free and clear of all Liens.

Section 2.2 Time and Manner of Payment of Transaction Price. At the Closing, the
Purchaser shall pay an amount equal to the Transaction Price (consisting of
adjustments to the Purchase Price as specified in the definition of “Transaction
Price”), and will make the following disbursements in cash:

(a) to the Seller, by wire transfer of immediately available funds to an account
designated by the Seller to the Purchaser not less than two (2) Business Days
prior to Closing, an amount equal to the Transaction Price less the Escrow
Amount, and

(b) to the Escrow Agent, by wire transfer of immediately available funds to an
account designated by the Escrow Agent to the Purchaser not less than two
(2) Business Days prior to Closing, the Escrow Amount into an escrow account
(the “Escrow Account”) to be held by the Escrow Agent in accordance with the
terms of the Escrow Agreement.

 

23

--------------------------------------------------------------------------------

Section 2.3 Adjustments to the Purchase Price and Related Matters.

(a) Preparation of Estimated Statement. No later than six (6) Business Days
prior to the Closing Date, the Seller shall provide to the Purchaser a statement
(the “Estimated Statement”) setting forth in reasonable detail and with
reasonable supporting documentation the calculation of the Transaction Price,
including calculations of (i) the estimated amount of Cash, (ii) the estimated
amount of Working Capital, (iii) the estimated amount of CCG Entities
Indebtedness, LSB Receivables and LSB Payables, in each case as of immediately
prior to Closing and (iv) the estimated amount of Transaction Expenses. The
Seller shall cause the Estimated Statement to be prepared in accordance with
this Agreement and, to the extent not inconsistent with this Agreement and
otherwise applicable to the particular calculation, GAAP on a basis consistent
with the Standards. For illustration, attached as Annex D is a sample
calculation of the Estimated Statement as of March 31, 2016 based on the
unaudited balance sheet of the CCG Entities as of March 31, 2016 (assuming for
purposes thereof that the Closing occurred on such date).

(b) Release of Obligations and Liens for CCG Entities Excluded Indebtedness. At
the Closing, the Seller shall deliver to the Purchaser evidence as to the
release or payment in full of all Excluded CCG Entities Indebtedness and showing
that all Liens securing Excluded CCG Entities Indebtedness (for the avoidance of
doubt, including LSB Debt Instruments) and encumbering any asset of any CCG
Entity have been released or are being released concurrently with the Closing.

(c) Payment of Transaction Expenses. At the Closing, the Seller shall deliver to
the Purchaser evidence, in form and substance reasonably satisfactory to the
Purchaser, that (x) each CCG Entity has been released from all Excluded
Transaction Expenses or (y) all Excluded Transaction Expenses have been repaid
by the Seller.

(d) Closing Statement Preparation. Promptly following the Closing, but in no
event later than ninety (90) days after the Closing, the Purchaser shall prepare
or cause to be prepared and deliver to Seller a statement (the “Closing
Statement”) setting forth in reasonable detail and with reasonable supporting
documentation its calculation of the Transaction Price, including calculations
of (i) the amount of Cash, (ii) the amount of Working Capital, (iii) the amount
of CCG Entities Indebtedness, LSB Receivables and LSB Payables, in each case as
of immediately prior to Closing and (iv) the amount of Transaction Expenses. The
Purchaser shall prepare the Closing Statement in accordance with this Agreement
and, to the extent not inconsistent with this Agreement and otherwise applicable
to the particular calculation, GAAP on a basis consistent with the Standards. If
the Purchaser does not deliver the Closing Statement when required, the Seller
may prepare and deliver a Closing Statement to the Purchaser within one hundred
and twenty (120) days after the Closing, and, in such case, the Purchaser shall
have the Seller’s objection rights under Section 2.3(f). If neither the
Purchaser nor the Seller prepares and delivers a Closing Statement as provided
herein, then the Estimated Statement shall be deemed also to be the final
Closing Statement binding on the parties hereto.

(e) Access to Information. Each of the Seller and the Purchaser and the Company
shall grant the other parties and their authorized accounting and legal
representatives reasonable access to such work papers and books and records or
other documents and information as any such other party or its representatives
may reasonably request relating to the

 

24

--------------------------------------------------------------------------------

calculation of the Transaction Price and shall make appropriate officers
reasonably available to assist each other party or its representatives and
respond to questions, in each case as such other party may reasonably request in
connection with its review of the estimated Closing Statement, the Closing
Statement and the Notice of Dispute.

(f) Notices of Disputes. The Seller shall have a period of forty-five (45) days
after the delivery of the Closing Statement by the Purchaser to give the
Purchaser written notice of any dispute regarding the amounts reflected in the
Closing Statement. If the Seller does not give the Purchaser written notice of a
dispute, the Closing Statement shall be deemed to have been accepted and agreed
to by the Seller in the form in which it was delivered, and shall be final and
binding upon the parties hereto. Any written notice of a dispute regarding the
Closing Statement shall set forth in reasonable detail the elements and amounts
with which the Seller disagrees (a “Notice of Dispute”). The Seller shall be
deemed to have agreed to all other elements and amounts contained in the Closing
Statement not specifically disputed. During the forty-five (45) day period
following the delivery of a Notice of Dispute, the Purchaser and the Seller
shall make reasonable good faith efforts to attempt to resolve such dispute and
agree in writing upon the final content of the disputed Closing Statement or to
stipulate to such portion thereof with respect to which there is no dispute.

(g) Dispute Resolution. If the parties cannot resolve or stipulate to all
disputes relating to the Closing Statement within the forty-five (45) day period
referenced above, the matters with respect to which no resolution or stipulation
can be reached (and, for avoidance of doubt, only such matters) shall be
submitted to and resolved by the independent accounting firm of PwC or another
independent recognized international accounting firm mutually agreed by the
parties, provided that it has not provided auditing, consulting or other
services to any of the parties hereto during the three years prior to the date
hereof, or if such firm is unable or unwilling to serve, by a nationally
recognized independent accounting firm mutually acceptable to the Seller and the
Purchaser (the “Accounting Experts”), who shall act as experts and not as
arbitrators. The Purchaser and the Seller shall each promptly enter into a
customary engagement letter with the Accounting Experts and shall instruct the
Accounting Experts that the written determination (which shall contain the
underlying reasoning) of the Accounting Experts with respect to such unresolved
disputed items and the accuracy of the Closing Statement as a result of the
resolution of such disputed items shall be completed and distributed to the
Purchaser and the Seller as soon as practicable after the engagement of the
Accounting Experts; provided that the Purchaser and the Seller shall use
commercially reasonable efforts to cause the Accounting Experts to make a
determination within forty-five (45) days (or such other time as the Seller and
the Purchaser shall agree in writing) after its engagement. The Purchaser and
the Seller shall instruct the Accounting Experts that its determination shall be
made in accordance with this Agreement and, to the extent not inconsistent with
this Agreement and otherwise applicable to the particular calculation, GAAP on a
basis consistent with the Standards. In no event shall the Accounting Experts’
determination of the unresolved disputed items be for an amount outside the
range of the Seller’s and the Purchaser’s disputed amounts. The Purchaser and
the Seller and their respective accountants shall each make readily available to
the Accounting Experts all work papers and books and records relating to the
unresolved disputed items as the Accounting Experts may reasonably request to
perform their function. The Purchaser and the Seller shall cooperate with the
Accounting Experts in connection with this Section 2.3(g). Without limiting the
generality of the foregoing, the Purchaser and the Seller shall each provide (or
cause to be

 

25

--------------------------------------------------------------------------------

provided) to the Accounting Experts all information and records, and to make
available at any proceeding all personnel, as are reasonably necessary to permit
the Accounting Experts to resolve any disputes pursuant to this Section 2.3(g).
Each of the Purchaser and the Seller may submit information or make
presentations to the Accounting Experts relating to the item or items in dispute
so long as a copy of any such submission is provided simultaneously to the other
party and so long as both parties are allowed to be present during any such
presentation. The decision of the Accounting Experts shall be final and binding
on all parties and the Closing Statement as determined by the Accounting Experts
(including the final amounts of Cash, Transaction Expenses, CCG Entities
Indebtedness, LSB Receivables and LSB Payables, in each case as of immediately
prior to Closing and Working Capital contained therein) shall constitute the
final and binding Closing Statement. The fees, costs and expenses of the
Accounting Experts shall be borne equally by the Purchaser and the Seller.

(h) Transaction Price True-Up Payment.

(i) If the Transaction Price, as finally determined as provided in
Section 2.3(d) or Section 2.3(g), as applicable, is less than the Transaction
Price as set forth in the Estimated Statement, then the Seller and the Purchaser
shall deliver a joint written authorization to the Escrow Agent within two
(2) Business Days from the date on which the Transaction Price is finally
determined in accordance with Section 2.3(d) or Section 2.3(g), instructing the
Escrow Agent to release from the Adjustment Escrow (A) to the Purchaser an
amount in cash equal to the amount of such deficiency and (B) to the Seller the
remainder, if any, of the funds designated for the Adjustment Escrow. If the
deficiency exceeds the amount held for the Adjustment Escrow, then the Seller
shall pay to the Purchaser by wire transfer of immediately available funds to an
account designated by the Purchaser to the Seller the amount of any such
additional deficiency within three (3) Business Days after the final
determination of the Transaction Price.

(ii) If the Transaction Price, as finally determined as provided in
Section 2.3(d) or Section 2.3(g), as applicable, exceeds the Transaction Price
as set forth in the Estimated Statement, then the Seller and the Purchaser shall
deliver a joint written authorization to the Escrow Agent directing the Escrow
Agent to release to the Seller all of the funds designated for the Adjustment
Escrow, and the Purchaser shall pay the Seller by wire transfer of immediately
available funds to the account specified in Section 2.2 (or to such other
account as the Seller may indicate by written notice to the Purchaser delivered
at least two (2) Business Days in advance) the amount of the excess within six
(6) Business Days after the final determination of the Transaction Price. If the
Purchaser fails to pay such excess by such date, on and after that date the
Seller may deliver a written authorization to the Escrow Agent directing the
Escrow Agent to release to the Seller an amount in cash equal to such excess
from the Indemnification Escrow Fund, and the Indemnification Escrow Amount (and
Seller’s indemnification obligations with respect to such amount) shall be
permanently reduced by such amount. If the excess exceeds the amount held in the
Indemnification Escrow Account, then the Purchaser shall pay to the Seller by
wire transfer of immediately available funds the amount of any such additional
excess within six (6) Business Days after the final determination of the
Transaction Price to the account specified in Section 2.2 (or to such other
account as the Seller may indicate by written notice to the Purchaser delivered
at least two (2) Business Days in advance).

 

26

--------------------------------------------------------------------------------

(iii) If the Transaction Price, as finally determined as provided in
Section 2.3(d) or Section 2.3(g), as applicable, is equal to the Transaction
Price as set forth in the Estimated Statement, then the Seller and the Purchaser
shall deliver a joint written authorization to the Escrow Agent directing the
Escrow Agent to release to the Seller all of the funds designated for the
Adjustment Escrow.

Section 2.4 Manner of Delivery of the Shares. At the Closing, the Seller shall
deliver certificates representing the Shares to the Purchaser, duly endorsed in
blank or accompanied by stock powers duly endorsed in blank, and otherwise in
proper form for transfer.

Section 2.5 Withholding. Notwithstanding any other provision of this Agreement,
and for the avoidance of doubt, (a) each payment made pursuant to this Agreement
shall be made net of any Taxes required by applicable Law to be deducted or
withheld from such payment and (b) any amounts deducted or withheld from any
such payment shall be remitted to the applicable taxing authority and shall be
treated for all purposes of this Agreement as having been paid.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLER

Except as disclosed on the Company Disclosure Letter (subject to Section 11.10),
the Seller hereby represents and warrants to the Purchaser, as of the date of
this Agreement and as of the Closing Date (except in each case to the extent
that such representations and warranties speak only as of a specific date, as of
such date), as follows:

Section 3.1 Ownership of the Shares; Good Title Conveyed.

(a) The Seller is the owner, beneficially and of record, of the Shares. The
delivery to the Purchaser of the Shares pursuant to this Agreement will transfer
to the Purchaser all right, title and interest in and to such Shares, free and
clear of all Liens.

(b) The stock certificates, stock powers, endorsements and assignments to be
executed and delivered by the Seller to the Purchaser at the Closing will be
valid and binding obligations of the Seller, enforceable in accordance with
their respective terms, and will effectively vest in the Purchaser title to, and
ownership of, the Shares at Closing pursuant to and as contemplated by this
Agreement free and clear of all Liens.

Section 3.2 Due Organization; Qualification. The Seller is a limited liability
company duly formed and validly existing under the laws of Oklahoma. The Seller
is duly qualified or licensed to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed would not have, individually or in the
aggregate, a Seller Material Adverse Effect.

Section 3.3 Authorization; Noncontravention. Each of the Seller and its
Affiliates has the requisite corporate (or partnership or limited liability
company, as applicable) power and authority to execute and deliver this
Agreement and any Ancillary Agreement to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the transactions

 

27

--------------------------------------------------------------------------------

contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and any Ancillary Agreement to which it is a party by each of the
Seller and its Affiliates and the consummation by the Seller and its Affiliates
of the transactions contemplated hereby and thereby have been duly authorized
and approved by all necessary board and stockholder (or manager and member, as
applicable) action on the part of the Seller and any such Affiliate. This
Agreement has been duly executed and delivered by the Seller and LSB and,
assuming that this Agreement constitutes the valid and binding obligations of
the Purchaser, constitutes the valid and binding obligation of the Seller and
LSB, enforceable against them in accordance with the terms hereof, except as
such enforcement may be limited by the Enforceability Exceptions. The execution
and delivery of this Agreement by Seller do not, and the consummation of the
transactions contemplated by this Agreement and the execution and delivery of
the Ancillary Agreements will not, (a) conflict with any of the provisions of
the articles of organization, the operating agreement, the articles/certificate
of incorporation, the bylaws or any other organizational document of the Seller
and its Affiliates, in each as amended, (b) require any consent, approval or
authorization of, declaration or filing with, notice to, or action by, any
Person under, conflict with, result in a breach of or default (with or without
due notice or lapse of time or both) under, or cause or permit termination,
cancellation, acceleration or other change of any right or obligation or, the
loss of any benefit under, any Contract to which the Seller or any of its
Affiliates is a party or by which the Seller, any of its Affiliates or any of
their assets is bound or subject, or any material permits affecting the assets
or business of the Seller, (c) result in the creation or imposition of any Lien,
other than Permitted Liens or Liens in favor of the Purchaser, on the assets of
the Seller or any of its Affiliates, or (d) contravene any domestic or foreign
Laws or any writ, judgment, injunction, decree, determination or award currently
in effect, except, in the case of clauses (b), (c) and (d) above, would not
have, individually or in the aggregate, a Seller Material Adverse Effect.

Section 3.4 Consents and Approvals. No consent, approval or authorization of, or
declaration or filing with, or notice to, any Governmental Entity which has not
been received or made, is required to be obtained by the Seller or any of its
Affiliates in connection with the execution and delivery of this Agreement and
any Ancillary Agreement by the Seller and any of its Affiliates to which it is a
party, or the consummation by the Seller and any of its applicable Affiliates of
any of the transactions contemplated hereby and thereby, except for (a) such
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the HSR Act and the competition
Laws of other jurisdictions, (b) the consents, approvals, authorizations, filing
or notices set forth in Section 3.4 of the Company Disclosure Letter and (c) any
other consents, approvals, authorizations, filings or notices which, if not made
or obtained, would not have, individually or in the aggregate, a Seller Material
Adverse Effect.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE COMPANY

Except as disclosed on the Company Disclosure Letter (subject to Section 11.10),
the Seller and the Company, jointly and severally, hereby represent and warrant
to the Purchaser, as of the date of this Agreement and as of the Closing Date
(except in each case to the extent that such representations and warranties
speak only as of a specific date, as of such date), as follows:

 

28

--------------------------------------------------------------------------------

Section 4.1 Corporate Power. Each CCG Entity is a corporation duly formed and
validly existing under the laws of the state of organization. Accurate and
complete copies of the certificates of incorporation and the bylaws of each CCG
Entity, as amended, have been made available to the Purchaser. Each CCG Entity
is duly qualified or licensed to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed would not have, individually or in the
aggregate, a Company Material Adverse Effect.

Section 4.2 Authorization; Noncontravention. Each CCG Entity has the requisite
corporate power and authority to execute and deliver this Agreement and each
Ancillary Agreement to which it is a party, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and any
Ancillary Agreement to which it is a party by a CCG Entity and the consummation
by it of the transactions contemplated hereby and thereby have been duly
authorized and approved by all necessary corporate action on the part of the
applicable CCG Entity and, to the extent necessary, any Affiliate of such CCG
Entity. No vote of, or consent by, the holders of any class or series of capital
stock or Voting Debt (if any) issued by the Company is necessary to authorize
the execution and delivery by the Company of this Agreement or the Ancillary
Documents contemplated to be executed by the Company or the consummation by it
of the transactions contemplated hereby and thereby. This Agreement has been
duly executed and delivered by the Company and, assuming that this Agreement
constitutes the valid and binding obligations of the Purchaser, constitutes the
valid and binding obligations of the Company enforceable against it in
accordance with its terms, except as such enforcement may be limited by the
Enforceability Exceptions. Except as set forth in Section 4.2 of the Company
Disclosure Letter, the execution and delivery by a CCG Entity of this Agreement
and each Ancillary Agreement to which it is a party do not, and the consummation
of the transactions contemplated by this Agreement and each Ancillary Agreement
to which it is a party will not, (a) conflict with any of the provisions of the
certificates of incorporation or the bylaws of such CCG Entity, as amended,
(b) require any consent, approval or authorization of, declaration or filing
with, notice to, or action by, any Person under, conflict with, result in a
breach of or default (with or without due notice or lapse of time or both) or
cause or permit termination, cancellation, acceleration or other change of any
right or obligation or the loss of any benefit under, any material Permits or
Contract to which a CCG Entity is a party or by which a CCG Entity or any Asset
is bound or subject, (c) result in the creation of any Liens other than
Permitted Liens on any Assets or (d) contravene any domestic or foreign Laws
applicable to the Seller or its Affiliates or any writ, judgment, injunction,
decree, determination or award currently in effect and binding on the Seller or
its Affiliates, except, in the case of clauses (b), (c) and (d) above, as would
not have, individually or in the aggregate, a Company Material Adverse Effect.

Section 4.3 Capitalization. The Shares constitute all of the issued and
outstanding stock in the Company and there are no outstanding Commitments
regarding the stock of the Company. The Shares are issued and outstanding and
are owned by the Seller free and clear of any Liens (other than LSB Debt
Released Liens). The Shares have been duly authorized and validly issued and are
fully paid and non-assessable. There are no outstanding Commitments that would
permit any Person to acquire any stock in the Company.

 

29

--------------------------------------------------------------------------------

Section 4.4 Subsidiaries. Section 4.4 of the Company Disclosure Letter
identifies each Subsidiary of the Company or of any other CCG Entity. Except as
set forth in Section 4.4 of the Company Disclosure Letter, no CCG Entity owns or
holds any equity interests, or Commitments with respect to equity interests, in
any other Person. The shares of each CCG Entity identified in Section 4.4 of the
Company Disclosure Letter constitute all of the issued and outstanding stock in
such CCG Entity and there are no outstanding Commitments regarding the stock of
such CCG Entity. Other than the Shares, the stock of each CCG Entity identified
in Section 4.4 of the Company Disclosure Letter is issued and outstanding, owned
by the applicable CCG Entity identified in Section 4.4 of the Company Disclosure
Letter free and clear of any Liens (other than LSB Debt Released Liens), has
been duly authorized and validly issued, and is fully paid and non-assessable.
There are no outstanding Commitments that would permit any Person, other than a
CCG Entity, to acquire any stock in a CCG Entity identified in Section 4.4 of
the Company Disclosure Letter.

Section 4.5 Consents and Approvals. No consent, approval or authorization of, or
declaration or filing with, or notice to, any Governmental Entity which has not
been received or made, is required to be obtained by any CCG Entity in
connection with the execution and delivery of this Agreement and any Ancillary
Agreement to which such CCG Entity is a party by such CCG Entity or the
consummation by such CCG Entity of any of the transactions contemplated hereby
and thereby, except for (a) such filings, permits, authorizations, consents and
approvals set forth in Section 4.5 of the Company Disclosure Letter, and other
applicable requirements of, the HSR Act and (b) any other approvals, consents,
approvals, authorizations, declarations, filings or notices which, if not made
or obtained, would not have, individually or in the aggregate, a Company
Material Adverse Effect.

Section 4.6 CCG Financial Statements; No Undisclosed Material Liabilities.

(a) The CCG Financial Statements have been delivered or made available to the
Purchaser. The CCG Financial Statements (i) have been prepared from the books
and records of the CCG Entities (which books and records are accurate and
complete in all material respects), (ii) have been prepared in accordance with
GAAP, consistently applied, except as disclosed in Section 4.6(a) of the Company
Disclosure Letter and (iii) fairly present, in all material respects, the
financial condition and results of operations and cash flows of the CCG Entities
as of the dates thereof and its results of operations for the periods then
ended, all in accordance with GAAP, consistently applied.

(b) Except as set forth in Section 4.6(b) of the Company Disclosure Letter, the
CCG Entities have in place a system of internal accounting controls with respect
to the business of the CCG Entities which, to the Knowledge of the Company, is
sufficient to provide reasonable assurance that (i) transactions are recorded as
necessary to permit the preparation of financial statements in conformity with
GAAP and (ii) recorded accountability for items is compared with actual levels
at reasonable intervals and appropriate action is taken with respect to any
differences.

(c) Except as set forth in Section 4.6(c) of the Company Disclosure Letter, for
the last thirty-six (36) months, neither the Seller nor any of its Affiliates
(including any CCG Entity) nor, to the Knowledge of the Company, any employee,
officer or representative of the Seller or any of its Affiliates (including any
CCG Entity) has received notice of any material

 

30

--------------------------------------------------------------------------------

complaint, allegation, assertion or claim regarding the accounting or auditing
practices, procedures, methodologies or methods of any CCG Entity or any CCG
Entity’s internal accounting controls, including any material complaint,
allegation, assertion or claim that a CCG Entity has engaged in questionable
accounting or auditing practices.

(d) Except as set forth in Section 4.6(d) of the Company Disclosure Letter, the
CCG Entities have no liabilities or obligations required to be reflected or
reserved against on a balance sheet of any CCG Entity prepared in accordance
with GAAP, whether known, unknown, absolute, accrued, contingent or otherwise
and whether due or to become due, except liabilities or obligations
(i) reflected or reserved against on the CCG Financial Statements, (ii) incurred
after December 31, 2015 in the ordinary course of business consistent with past
practice, (iii) as would not, individually or in the aggregate, be materially
adverse to the CCG Entities, and (iv) specifically contemplated by this
Agreement and incurred after the date hereof. None of the CCG Entities has any
Off-Balance Sheet Liabilities.

Section 4.7 Absence of Certain Changes. Except as disclosed in Section 4.7 of
the Company Disclosure Letter, since January 1, 2016, (a) each CCG Entity has
conducted its business in the ordinary course of business consistent with past
practice, (b) there has not been and does not exist any event, occurrence,
development or state of circumstances or facts which, individually or in the
aggregate, has had or could be expected to have a Company Material Adverse
Effect, (c) there has not been any damage, destruction or loss (whether or not
covered by insurance) to any assets of any CCG Entity in excess of $50,000
individually or $250,000 in the aggregate and (d) nothing has occurred that
would have been prohibited by Section 6.3 if the terms of such section had been
in effect as of and after January 1, 2016.

Section 4.8 Compliance with Laws; Permits. Except as set forth in Section 4.8 of
the Company Disclosure Letter, and except as related to compliance with
Environmental Laws or other environmental matters (which is the subject of
Section 4.13), Laws relating to Taxes (which is the subject of Section 4.10),
Laws relating to labor and employment (which is the subject of Section 4.12) and
Laws relating to employee benefits (including, without limitation, ERISA) (which
is the subject of Section 4.11), (a) each CCG Entity is, and has been for the
last twenty-four (24) months, in compliance in all material respects with all
Laws applicable to such CCG Entity, (b) no CCG Entity has, in the last
twenty-four (24) months, received any written communication from any
Governmental Entity that alleges that any CCG Entity is not in compliance in any
material respect with any Law that has not been resolved, and (c) each CCG
Entity holds all licenses, franchises, permits, certificates, approvals and
authorizations from Governmental Authorities necessary for the lawful conduct of
the Business (collectively, “Permits”), except where the failure to hold the
same would not have a Company Material Adverse Effect.

Section 4.9 Litigation. Except as related to Environmental Laws or other
environmental matters (which is the subject of Section 4.13), Laws relating to
Taxes (which is the subject of Section 4.10), Laws relating to labor and
employment (which is the subject of Section 4.12), and Laws relating to employee
benefits (including, without limitation, ERISA) (which is the subject of
Section 4.11), and except as set forth in Section 4.9 of the Company Disclosure
Letter, there is no pending or, to the Knowledge of the Company, threatened
legal or administrative proceedings, cease and desist letters, mediations,
citations, summonses, subpoenas, hearings, claims, suits, actions, arbitrations
or investigations of any nature, in Law or

 

31

--------------------------------------------------------------------------------

in equity, by or before any court or other Governmental Entity or arbitrator or
mediator (“Proceedings”) against or involving any CCG Entity or any CCG Entity’s
assets or rights, nor is there any injunction, order, judgment, ruling or decree
imposed upon any CCG Entity, in each case, that, if decided adversely to the
applicable CCG Entity, would have a Company Material Adverse Effect.

Section 4.10 Taxes. Except as set forth in Section 4.10 of the Company
Disclosure Letter:

(a) Each CCG Entity has timely filed, or has caused to be timely filed on its
behalf (taking into account any valid extension of time within which to file),
all material Tax Returns required to be filed. Each such Tax Return (other than
a Seller Consolidated Return) is accurate and complete in all material respects,
and each Seller Consolidated Return (to the extent related to the CCG Entities)
is accurate and complete in all material respects.

(b) All material Taxes owed by any member of the Seller Consolidated Group that
are or have become due (whether or not shown on any Tax Return) for which any
CCG Entity could have liability have been timely paid in full, and all material
Tax withholding and deposit requirements imposed on any member of the Seller
Consolidated Group for which any CCG Entity could have liability have been
satisfied in full in all material respects.

(c) No assessment, deficiency or adjustment has been asserted or proposed, and
no audits or administrative or judicial proceedings are being conducted, with
respect to any material Taxes or Tax Returns of the Seller Consolidated Group
for which any CCG Entity could have liability. There is no written agreement or
other document waiving or extending, or having the effect of waiving or
extending, the statute of limitations or the period of assessment or collection
of any material Taxes of the Seller Consolidated Group for which any CCG Entity
could have liability, and no written power of attorney with respect to any such
Taxes has been filed or entered into with any Governmental Entity which has not
been previously terminated. No jurisdiction (whether within or outside the
United States) in which a CCG Entity has not filed a particular type of Tax
Return or paid a particular type of material Tax has asserted in writing that
such CCG Entity is required to file such Tax Return or pay such type of Tax in
such jurisdiction.

(d) There are no Liens (other than Liens described in clause (a) of the
definition of Permitted Liens) on any of the assets of a CCG Entity that arose
in connection with any failure (or alleged failure) to pay any material Tax.

(e) No CCG Entity is a party to or bound by any Tax sharing agreement, Tax
indemnity agreement or other contractual agreement relating primarily to Taxes
other than customary lease agreements (“Tax Agreement”). Other than the Seller
Consolidated Group, in the past four years no CCG Entity has been a member of a
Consolidated Group nor has any CCG Entity had any liability for the Taxes of any
Person (whether under Treasury Regulation Section 1.1502-6 or any similar
provision of state, local or foreign Law, as a transferee or successor, pursuant
to a Tax Agreement or otherwise). No CCG Entity has received or applied for a
Tax ruling or entered into a closing agreement pursuant to Section 7121 of the
Code (or any predecessor provision or any similar provision of state or local
Law), in either case that would be binding upon a CCG Entity after the Closing
Date.

 

32

--------------------------------------------------------------------------------

(f) Notwithstanding any other provision of this Agreement (including any
provision set forth in Section 4.10), no CCG Entity makes any representation or
warranty with respect to the existence, availability, amount, usability or
limitations (or lack thereof) of any net operating loss, net operating loss
carryforward, capital loss, capital loss carryforward, basis amount or other Tax
attribute (whether federal, state, local or foreign) of any CCG Entity after the
Closing Date. The representations and warranties set forth in this Section 4.10
are the sole representations and warranties relating to Taxes and no other
representations or warranties contained in this Agreement shall be construed to
cover any matter involving Taxes.

(g) No CCG Entity will be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date, as a result of any (i) change in method
of accounting for a taxable period ending on or prior to the Closing Date under
Section 481 of the Code (or any corresponding provision of state, local or
foreign income Tax law), (ii) installment sale or open transaction disposition
made on or prior to the Closing Date, or (iii) any election pursuant to
Section 108(i) of the Code (or any similar provision of state, local or foreign
law) made with respect to any Pre-Closing Tax Period. No CCG Entity has
participated in a “listed transaction” within the meaning of Treasury
Regulations Section 1.6011-4(c). No CCG Entity has been a “distributing
corporation” or a “controlled corporation” within the meaning of Section 355 of
the Code (x) in the two years prior to the date of this Agreement or (y) in a
distribution that could otherwise constitute a “plan” or “series of related
transactions” in conjunction with the transaction contemplated by this
Agreement. No CCG Entity is a party to a “gain recognition agreement” within the
meaning of the Treasury Regulations under Section 367 of the Code. No
withholding of Taxes is required in connection with the payment of the
Transaction Price.

(h) The Seller has not elected to be classified as an association for federal
income tax purposes pursuant to Section 301.7701-3 of the Treasury Regulations
and has at all times been disregarded as an entity separate from LSB.

Section 4.11 Employee Benefit Plans.

(a) Section 4.11(a) of the Company Disclosure Letter sets forth a list of
(i) material “employee benefit plans” (within the meaning of Section 3(3) of
ERISA), and all material stock option, stock purchase, stock appreciation
rights, phantom stock, bonus, incentive, deferred compensation, retiree health
or life insurance, retirement, supplemental retirement, severance or other
benefit plans, programs or arrangements, that are maintained, contributed to or
sponsored by any CCG Entity or any of their Affiliates in which any Employee
participates immediately prior to the Closing for the benefit of any Employee,
but not to include the Retention Awards, which are specifically excluded
herefrom, and (ii) material employment, retention, termination, change in
control, severance or other similar contracts or agreements pursuant to which
any CCG Entity has any material obligation with respect to any Employee, as
applicable (the plans, programs, arrangements, contracts and agreements
described in clauses (i) and (ii) above are hereinafter referred to as the
“Employee Plans”). Accurate and complete copies of all plan documents, summary
plan descriptions, the most recent applicable Internal Revenue Service
determination letter and the most recently filed IRS Form 5500 have been
provided to the Purchaser. No CCG Entity or any of their ERISA Affiliates has
communicated to any Employee or former Employee any intention or commitment to
amend or modify any Employee Plan or to establish or implement any other
employee or retiree benefit or compensation plan or arrangement.

 

33

--------------------------------------------------------------------------------

(b) Each of the Employee Plans, the Seller 401k Plan and each “employee benefit
plan” (within the meaning of 3(3) of ERISA) sponsored, maintained or contributed
to by any CCG Entity or any of their affiliates in which any Employee
participates, has been maintained in material compliance with its terms and with
the requirements prescribed by ERISA, the Code and all other applicable Laws.
Except as disclosed in Section 4.11(b) of the Company Disclosure Letter, all
contributions to each Employee Plan have been timely made, except where such
failure would not result in liability to the Purchaser or any of its Affiliates
(including any CCG Entity after the Closing), and all required governmental
reports have been timely filed.

(c) Except as set forth in Section 4.11(c) of the Company Disclosure Letter, the
Internal Revenue Service has issued a favorable determination or opinion letter,
or time to apply for such a letter still exists, with respect to the form of
each Employee Plan that is intended to be qualified and tax-exempt under the
provisions of Sections 401(a) and 501(a) of the Code and such Employee Plans
have not been amended thereafter in any way that would adversely affect their
qualification; further, to the Knowledge of the Company, no fact or circumstance
exists that would materially and adversely affect the qualification or
tax-exempt status of an Employee Plan that is intended to be tax-exempt.

(d) No act, omission or transaction has occurred which would result in
imposition on any CCG Entity of (i) breach of fiduciary duty liability damages
under Section 409 of ERISA, (ii) a civil penalty assessed pursuant to
subsections (c), (i) or (l) of Section 502 of ERISA or, with respect to any
Employee Plan, Section 6652 of the Code or (iii) a material tax imposed pursuant
to Chapter 43 of Subtitle D of the Code. No CCG Entity nor any of their ERISA
Affiliates have been involved in any transaction that could cause any CCG Entity
to be subject to liability under section 4069 of ERISA.

(e) None of the Employee Plans is subject to Section 302 of ERISA or Section 412
of the Code, and no CCG Entity has any liability for plans previously subject to
these Sections. No Employee Plan is subject to Title IV of ERISA, no CCG Entity
nor any of its Subsidiaries or ERISA Affiliates has any liability under Title IV
of ERISA and there are no facts or circumstances that could reasonably be
expected to give rise to such liability.

(f) There are no actions, suits or claims pending (other than routine claims for
benefits) or, to the Knowledge of the Company, threatened against, or with
respect to, any of the Employee Plans or their assets and there is no matter
pending (other than routine qualification determination filings) with respect to
any of the Employee Plans before the Internal Revenue Service, the Department of
Labor or the Pension Benefit Guaranty Corporation.

(g) Each CCG Entity and each of their ERISA Affiliates has complied in all
material respects with the health care continuation requirements of Parts 6 and
7 of Title I of ERISA with regard to current or former Employees.

 

34

--------------------------------------------------------------------------------

(h) Since 1990, none of the CCG Entities nor any of their ERISA Affiliates has
sponsored, participated in, or had any obligation to (or has any other liability
with respect to) any “multiemployer plan” (as such term is defined in
Section 3(37) of ERISA).

(i) All Employee Plans that are non-qualified deferred compensation programs are
in compliance or have been amended to comply with Section 409A of the Code and
have been administered in material compliance with Code Section 409A since
January 1, 2008, or are “grandfathered” from compliance and are exempt from the
Code Section 409A requirements.

(j) The CCG Entities have not provided, and the CCG Entities have no obligation
to provide, any medical, life or similar benefits to current or future retired
or terminated employees, their spouses or dependents following termination of
employment, except as required by any applicable Law.

(k) Except as set forth in Section 4.11(k) of the Company Disclosure Letter, the
consummation of the transactions contemplated by this Agreement will not (either
alone or together with any other event) entitle any Employee to severance pay or
accelerate the time of payment or vesting or trigger any payment of funding
(through a grantor trust or otherwise) of compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant
to, any Employee Plan which, in the aggregate, would result in the imposition of
sanctions imposed under Sections 280G and 4999 of the Code.

Section 4.12 Labor and Employment.

(a) Except as set forth in Section 4.12(a) of the Company Disclosure Letter,
(i) no CCG Entity has agreed to recognize any labor union or other collective
bargaining representative, nor has any labor union or other collective
bargaining representative been certified as the exclusive bargaining
representative of any Employees of any CCG Entity, (ii) no CCG Entity is a party
to or bound by any collective bargaining agreement applicable to any Employees
and no collective bargaining agreements are being negotiated, (iii) there is no
labor strike or labor dispute, slow down, lockout or stoppage actually pending
or, to the Knowledge of the Company, threatened against any CCG Entity, and no
CCG Entity has experienced any labor strikes or material labor disputes,
slowdowns, lockouts or stoppages since January 1, 2012, (iv) no CCG Entity has
engaged in any unfair labor practices, and no unfair labor practice charges or
complaints before any Governmental Entity are pending or, to the Knowledge of
the Company, threatened against any CCG Entity and (v) to the Knowledge of the
Company, no labor union or other collective bargaining representative claims to
or is seeking to represent any Employees and no union organizational campaign or
representation petition is currently pending with respect to any Employees.

(b) Except as disclosed in Section 4.12(b) of the Company Disclosure Letter,
since January 1, 2012, there have not been any plant closings, mass layoffs or
other terminations of Employees which would create any obligations upon or
liabilities for any CCG Entity under the WARN Act.

 

35

--------------------------------------------------------------------------------

(c) Except as set forth in Section 4.12(c) of the Company Disclosure Letter,
each CCG Entity (i) has, during the last twenty-four (24) months, been in
material compliance with all Laws relating to employment, equal employment
opportunity, affirmative action, nondiscrimination, nonretaliation, wrongful
discharge, civil rights, hiring, background checks, immigration, work
authorization, compensation, wages, hours, worker classification, temporary
labor, benefits, leaves of absence, employee breaks, sick time, vacation, paid
time off, collective bargaining, the collection and payment of withholding and
social security taxes and similar Taxes, occupational safety and health,
workers’ compensation, unemployment compensation, substance abuse testing, work
force reductions and plant closing, labor relations, collective bargaining,
representation, unfair labor practices, employee privacy, and COBRA, including,
but not limited to, the Fair Labor Standards Act or other federal, state or
local laws regulating hours of work, wages, overtime and other working
conditions, and any state laws with respect to tortious employment conduct, such
as slander, false light, invasion of privacy, negligent hiring or retention,
intentional infliction of emotional distress, assault and battery, or loss of
consortium (“Laws relating to Employment”), and (ii) no CCG Entity has, in the
last twenty four (24) months, received any communication from any Governmental
Entity that alleges that any CCG Entity is not in compliance with any Law
relating to Employment that has not been resolved.

(d) Except as set forth in Section 4.12(d) of the Company Disclosure Letter,
(i) there is no pending or, to the Knowledge of the Company, threatened legal or
administrative proceeding, claim, suit, action, arbitration, grievance or
investigation against or involving any CCG Entity or any CCG Entity’s assets or
rights relating to labor or employment matters, (ii) there is no injunction,
order, judgment, ruling or decree imposed upon any CCG Entity relating to labor
or employment matters, and (iii) to the Knowledge of the Company, no event has
occurred or circumstance exists that may constitute or result in a violation by
any CCG Entity of, or a failure on the part of any CCG Entity to comply with,
any Law relating to Employment.

Section 4.13 Environmental Matters.

(a) Except as set forth in Section 4.13(a) of the Company Disclosure Letter and
except for those matters that would not have a Company Material Adverse Effect:

(i) each CCG Entity is and for the five (5) years preceding the date of this
Agreement, has been in compliance with all applicable Environmental Laws;

(ii) each CCG Entity has obtained and is in compliance with the requirements of
all Permits required under applicable Environmental Laws for the continued
conduct of the business of such CCG entity in the manner now conducted;

(iii) there is no investigation, suit, claim, action or proceeding relating to
or arising under Environmental Laws pending, or, to the Knowledge of the
Company, threatened, against any CCG Entity or any real property currently or,
to the Knowledge of the Company, formerly owned, operated or leased by any CCG
Entity;

(iv) no CCG Entity has received any notice of nor entered into any obligation,
liability, order, settlement, judgment, injunction or decree involving
uncompleted, outstanding or unresolved requirements arising under Environmental
Laws;

 

36

--------------------------------------------------------------------------------

(v) there have been no Releases of Hazardous Materials (i) in the five (5) years
preceding the date of this Agreement or (ii) to the Knowledge of the Company,
during the Section 4.13 Knowledge Period, in each case at, on, under or from any
real property currently or, to the Knowledge of the Company, formerly owned,
operated or leased by any CCG Entity that have resulted or could reasonably be
expected to result in a claim, liability or obligation to conduct remedial
action under any Environmental Law; and

(vi) No CCG Entity has received in the five (5) years preceding the date of this
Agreement any information request or notice of potential responsibility under
the Comprehensive Environmental Response, Compensation and Liability Act (or its
state law equivalents) with respect to Hazardous Materials used, generated or
transported at or from any real property currently or, to the Knowledge of the
Company, formerly owned, operated or leased by any CCG Entity.

(b) Each CCG Entity has made available to the Purchaser accurate and complete
copies of all material Environmental Reports within such CCG Entity’s or its
Affiliates’ possession relating to the business of such CCG Entity and any real
property owned, operated, leased or used by such CCG Entity or its predecessors
in interest that have been prepared (i) within the five (5) years preceding the
date of this Agreement, and (ii) to the Knowledge of the Company, during the
Section 4.13 Knowledge Period, in each case a list of which is set forth in
Section 4.13(b) of the Company Disclosure Letter.

(c) This Section 4.13 contains the Company’s sole and exclusive representations
and warranties regarding Environmental Laws, Environmental Reports, Hazardous
Materials, Releases, and any other environmental matter.

Section 4.14 Intellectual Property. Except as set forth in Section 4.14 of the
Company Disclosure Letter:

(a) Set forth in Section 4.14(a) of the Company Disclosure Letter is a list of
(i) all issued patents, patent applications, trademark registrations, trademark
applications, copyright registrations, and applications for copyright
registration, and domain names (A) owned by any CCG Entity, or (B) owned by
Seller or any of its Affiliates that are not a CCG Entity and that is used in or
necessary for the operation of the Business (hereafter “Registered Intellectual
Property”) and (ii) software owned by (A) each CCG Entity that is material to
the Business or (B) that is owned by Seller or any of its Affiliates that are
not a CCG Entity and that is used in or necessary for the operation of the
Business (the items identified in the subclauses (i) and (ii) together, the
“Owned Intellectual Property”). Each CCG Entity solely and exclusively (except
with respect to trade secrets or confidential information or copyrights
independently developed by third parties without access to the applicable Owned
Intellectual Property) owns all right, title and interest in and to its Owned
Intellectual Property. No CCG Entity has permitted any Liens on any Intellectual
Property owned by and used in the Business, except Permitted Liens or
non-exclusive licenses granted in the ordinary course of business.

(b) All Registered Intellectual Property is (i) valid, (ii) subsisting (except
for the registered Trademarks designated as abandoned in Section 4.14(b) of the
Company Disclosure Letter), and (iii) enforceable. There are no claims pending
or, to the Knowledge of the Company, threatened that challenge the validity or
the enforceability of any Owned Intellectual Property, and no CCG Entity has
received any demand, claim or notice from any Person which challenges the
validity of any such Owned Intellectual Property which claim has

 

37

--------------------------------------------------------------------------------

not been settled, resolved or expressly abandoned by the claimant. The CCG
Entities own, or have the right to use pursuant to a written license set forth
on Section 4.16 of the Company Disclosure Letter (except for (A) off the shelf
software license agreements with an annual cost of less than $50,000) and
(B) non-disclosure or confidentiality agreements entered into as part of
proposed mergers, acquisitions or similar transactions), all Company
Intellectual Property. Immediately subsequent to the Closing, each CCG Entity
will have identical rights in the Owned Intellectual Property as the rights such
CCG Entity held in such Owned Intellectual Property immediately prior to the
Closing.

(c) All Persons who have participated in the creation or development of any
Intellectual Property for or on behalf of the Business, that is material to or
necessary to the operation of the Business have executed and delivered to a CCG
Entity a written agreement (i) providing for the non-disclosure by such Person
of any confidential information of the Business, and (ii) providing for the
assignment by such Person to a CCG Entity of any Intellectual Property arising
out of such Person’s employment by, engagement by or contract in connection with
the Business.

(d) Neither the activities of any CCG Entity nor the conduct of the Business
infringe upon or misappropriate, or have infringed upon or misappropriated, any
Intellectual Property of any third party. There are no claims pending that any
CCG Entity or the conduct of the Business is infringing or misappropriating the
Intellectual Property of a third party, and neither the Seller nor any CCG
Entity or any other Affiliate of the Seller has received any demand, claim or
notice from any Person which alleges that any CCG Entity or the Business is
infringing or misappropriating, or has infringed or misappropriated in the last
five (5) years, the Intellectual Property of a third party which claim has not
been settled, resolved or expressly abandoned by the claimant. To the Knowledge
of the Company, no third party is infringing or misappropriating, or has
infringed or misappropriated in the last five (5) years, any Owned Intellectual
Property.

(e) All Registered Intellectual Property has been duly registered or issued to
such CCG Entity by the appropriate Governmental Entity, and all pending patent
applications and trademark and copyright applications included in the Registered
Intellectual Property have been duly recorded in the name of such CCG Entity by
the appropriate Governmental Entity. The CCG Entities have paid all fees
required to maintain the Registered Intellectual Property (except for the
registered Trademarks designated as abandoned in Section 4.14(b) of the Company
Disclosure Letter). None of the registrations or uses in connection with the
Business of the domain names included in the Registered Intellectual Property
have been disturbed or placed “on hold,” nor has the Seller, any CCG Entity or
any other Affiliate of the Seller received written notice of any claim asserted
against the Seller, any CCG Entity or any other Affiliate of the Seller adverse
to the Business’ rights to such domain names.

(f) Each CCG Entity has taken commercially reasonable steps to protect its
rights in material confidential information and trade secrets owned or used in
connection with the Business.

 

38

--------------------------------------------------------------------------------

(g) Except as set forth on Section 4.14(g) of the Company Disclosure Letter, no
CCG Entity, nor the Seller or any of its other Affiliates with respect to the
Business, has granted any exclusive license to any third party to use any
Intellectual Property owned by a CCG Entity and primarily related to the
Business.

(h) No CCG Entity, nor the Seller or any other Affiliate of the Seller in
connection with the Business, is a party to or bound by any Contract pursuant to
which any CCG Entity, or the Seller or any other Affiliate of the Seller in
connection with the Business, has granted, or may be obligated to grant in the
future, to any party a source code license or option or other right to use or
acquire any Business source code, including any Contracts that provide for
source code escrow arrangements for Business source code.

(i) The CCG Entities’ use of any Open Source Software in connection with the
Business (including using, linking, incorporating or embedding such Open Source
Software into or distributing Open Source Software with any Product) does not
and will not, with respect to any Products, obligate the Purchaser or any of its
Affiliates (including after Closing, any CCG Entity) to (i) disclose or
distribute in source code form any portion of any software owned by a CCG
Entity, (ii) license or otherwise make available on a royalty-free basis any
portion of any software owned by a CCG Entity, (iii) grant any patent rights
owned by a CCG Entity to any Person, including non-assertion rights, or
(iv) permit any licensee of any software owned by a CCG Entity to modify, make
derivative works of, or reverse engineer any portion of such software.

(j) With respect to the Information Systems: (i) the CCG Entities have taken
reasonable steps and implemented commercially reasonable procedures to ensure
that the Information Systems are free from contaminants in all material
respects, including the use of commercially available antivirus software with
the intention of protecting the Information Systems from becoming infected by
viruses and other harmful code; (ii) there have been no successful unauthorized
intrusions or breaches of the security of the Information Systems that have
resulted or could reasonably be expected to result in any material harm to the
Business in the past three (3) years prior to the Closing; and (iii) the CCG
Entities have implemented or are in the process of implementing (or in the
exercise of reasonable business judgment have determined that implementation is
not yet in the best interest of the Business) commercially reasonable security
patches or security upgrades that are generally available for the Information
Systems.

(k) No claims have been asserted or, to the Company’s Knowledge, threatened with
respect to the CCG Entities or the Business by any Person alleging a violation
by the CCG Entities (or the Seller in connection with the Business) of any
applicable data privacy Laws or their own policies with respect to the privacy
of employees, users or customers or their employees’, users’ or customers’
personally identifiable information.

Section 4.15 Broker’s or Finder’s Fee. Except for Credit Suisse Securities (USA)
LLC, the fees and expenses of which will be paid by the Seller or LSB, no
broker, investment banker, financial advisor or other Person is entitled from
any CCG Entity to any broker’s, finder’s, financial advisor’s or other similar
fee or commission, or to the reimbursement of expenses from any CCG Entity, in
connection with the transactions contemplated by this Agreement.

 

39

--------------------------------------------------------------------------------

Section 4.16 Material Contracts. Set forth in Section 4.16 of the Company
Disclosure Letter is an accurate and complete list of all Material Contracts to
which any CCG Entity is a party. Except as disclosed in Section 4.16 of the
Company Disclosure Letter:

(a) Neither any CCG Entity nor, to the Knowledge of the Company, any other party
thereto, is in breach of any Material Contract or default (with or without due
notice or lapse of time or both) thereunder (or, to the Knowledge of the
Company, is alleged to be in breach or default), or has given or received notice
of breach or default to or from any other party thereto and, to the Knowledge of
the Company, no event or circumstance has occurred that, with notice or lapse of
time or both, would constitute a breach or an event of default under any such
Material Contract or result in a termination thereof or would cause or permit
the acceleration of or other changes to any right or obligation or the loss of
any benefit thereunder, except for such default, breach, acceleration, change of
or to any rights, obligations or losses of benefits that would not, individually
or in the aggregate, result in a Company Material Adverse Effect;

(b) Each Material Contract is valid and binding on each CCG Entity party thereto
and, to the Knowledge of the Company, valid and binding on each counterparty
thereto, and each Material Contract is in full force and effect as to the CCG
Entity party thereto, except to the extent limited by the effect of
Enforceability Exceptions; and

(c) No written notice has been received from any counterparty to any Material
Contract alleging that such contract is not valid and binding as to such
counterparty or that such contract is not in full force and effect as to such
counterparty.

Section 4.17 Insurance. Section 4.17 of the Company Disclosure Letter contains
an accurate and complete list of all current insurance policies of each CCG
Entity or that relate to any Assets, the Business or the employees, officers or
directors of a CCG Entity of any kind, other than insurance policies that are
also Employee Plans (collectively, the “Policies”). All such Policies are valid
and are in full force and effect, all premiums with respect thereto covering all
periods up to and including the date of the Closing have been or will be paid or
accrued, no notice of cancellation or termination has been received with respect
to any such Policy or other form of insurance and each CCG Entity is in material
compliance with the terms of the Policies to which it is a party. To the
Knowledge of the Company, there is no material claim pending under any such
Policy as to which coverage has been questioned, denied or disputed by any
insurer and all claims and reportable incidents under any Policy have been
reported.

Section 4.18 Related Party Transactions.

(a) Except as disclosed in Section 4.18(a) of the Company Disclosure Letter, no
Affiliate, stockholder, member, officer, director, manager or employee or any
family member or relative of any such Affiliate, stockholder, member, officer,
director, manager or employee of (i) LSB, (ii) the Seller or (iii) any CCG
Entity (A) is a party to any Contract with any CCG Entity, (B) has any material
interest in any property (real or personal or mixed, tangible or intangible)
used by any CCG Entity for the conduct of the Business, (C) has any ownership
interest in any Person that competes with, or does business with, or has any
contractual arrangement with any CCG Entity (excluding investments in securities
in a Person whose securities are publicly traded) or (D) to the Knowledge of the
Company, serves as an officer, director or employee of any such competing
Person.

 

40

--------------------------------------------------------------------------------

(b) Section 4.18(b) of the Company Disclosure Letter lists all Contracts and
other commitments or transactions to or by which any CCG Entity, on the one
hand, and the Seller or any of its Affiliates (other than any CCG Entity), on
the other hand, are parties or are otherwise bound or affected and that (i) were
entered into in the last 24 months; (ii) are currently pending or in effect; or
(iii) involve continuing obligations or liabilities that, individually or in the
aggregate, are material to the Business (each, an “Affiliate Transaction”).

(c) Section 4.18(c) of the Company Disclosure Letter lists (i) all Contracts
with any third parties to which the Seller or any of its Affiliates (other than
any CCG Entity) is a party and under which any CCG Entity receives material
benefits (collectively, the “Shared Contracts”) and (ii) all such Contracts that
are primarily related to, primarily used or primarily held for use by or in
connection with the business of any CCG Entity, other than any confidentiality,
non-solicitation and similar agreements with any Person entered into in
connection with any proposed sale of the Business (“Assigned Contracts”).

(d) Except as disclosed in Section 4.18(d) of the Company Disclosure Letter,
since December 31, 2015, there has not been any accrual of liability by any CCG
Entity to Seller or any of its Affiliates (other than another CCG Entity) or
other transactions between a CCG Entity and the Seller or any of its Affiliates
(other than another CCG Entity), except in the ordinary course of business of
such CCG Entity and consistent with past practice.

Section 4.19 Property.

(a) Leased Real Property. Set forth in Section 4.19(a) of the Company Disclosure
Letter is a complete list of the address and description of each Real Property
Lease, the names of the lessor and CCG Entity that is lessee thereunder, the
rental amount currently being paid, the expiration of the term thereof, and the
current use of such property for each leasehold or sub-leasehold estate in, or
other right to use or occupy, any land, buildings, structures or improvements
(collectively, the “Leased Real Property”). The Seller has delivered or made
available to the Purchaser true, correct and complete copies of each Real
Property Lease. Except as set forth in Section 4.19(a) of the Company Disclosure
Letter, with respect to each of the Real Property Leases, (i) each Real Property
Lease is legal, valid, binding and enforceable, except as the same may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
arrangement, moratorium or other similar Laws relating to or affecting the
rights of creditors generally, or by general equitable principles, against the
applicable CCG Entity and, to the Knowledge of the Company, the landlord
thereunder, is in full force and effect, and has not been amended or modified
(except to the extent disclosed in Section 4.19(a) of the Company Disclosure
Letter); (ii) no CCG Entity nor, to the Knowledge of the Company, any other
party to any Real Property Lease is in breach or default under any Real Property
Lease and no event has occurred or circumstance exists which, with the delivery
of notice, passage of time or both, would constitute a breach of any Real
Property Lease, except in each such case where such breach or default would not,
individually or in the aggregate, result in a Company Material Adverse Effect;
and (iii) each CCG Entity has a good and valid leasehold interest in all Leased
Real Property, free and clear of all Liens (other than Permitted Liens). All
work, improvements, alterations, installations and decorations required to be
done to date by the landlord under any Real Property Lease have been accepted or
waived by the CCG Entity that is a party to such Real Property Lease. Leasing,
broker’s and finder’s commissions of any kind due and owing or to become due and
owing to anyone by any CCG Entity with respect to the Leased Real Property do
not exceed $50,000 in the aggregate. Except to the extent disclosed in
Section 4.19(a) of the Company Disclosure Letter, all premises under the Real
Property Leases, to the Company’s Knowledge, comply with all applicable Laws
including the Americans with Disabilities Act and similar local or state Laws.

 

41

--------------------------------------------------------------------------------

(b) Owned Real Property. Set forth in Section 4.19(b) of the Company Disclosure
Letter is an accurate and complete list of the addresses and recorded property
descriptions of all of each CCG Entity’s right, title and interest in real
property owned by such CCG Entity (such real property, together with any
buildings, structures and improvements located thereon, and any other real
property interests pertaining thereto, the “Owned Real Property”). With respect
to Owned Real Property, the Seller has delivered or made available to the
Purchaser true, complete and correct copies of the deeds and other instruments
(as recorded) by which the CCG Entity acquired such Owned Real Property, and
copies of all title insurance policies, opinions, abstracts, surveys, and
non-public records in the possession of the Seller or any CCG Entity and
relating to the Owned Real Property. Except as set forth in Section 4.19(b) of
the Company Disclosure Letter, with respect to such Owned Real Property:
(i) each CCG Entity has good and valid fee simple title to the Owned Real
Property free and clear of all Liens, options, rights of first refusal,
conditions, restrictions, leases, covenants or transfer restrictions (other than
Permitted Liens) and (ii) there is no condemnation, expropriation or other like
proceeding in eminent domain pending or, to the Knowledge of the Company,
threatened, against any Owned Real Property or any portion thereof or of any
sale or other disposition of the Owned Real Property or any part thereof in lieu
of condemnation and (iii) to the Knowledge of the Company, there is no other
proceeding relating to any Owned Real Property that would materially and
adversely affect the current use or possession of any Owned Real Property. Each
CCG Entity has sufficient title to such easements, rights of way and other
rights appurtenant to each Owned Real Property as are necessary to permit
ingress and egress to and from the Owned Real Property to a public way. The Real
Property is all the real property used or held for use by the Company and the
CCG Entities in connection with the operation of the Business. Except as set
forth in Section 4.19(b) of the Company Disclosure Letter, to the Knowledge of
the Company, there are no Liens, options, rights of first refusal, conditions,
restrictions, leases, covenants or transfer restrictions (other than Permitted
Liens) affecting title to the Owned Real Property, other than as disclosed in
the Policies for Title Insurance listed in Section 4.19(b) of the Company
Disclosure Letter.

(c) Improvements. The improvements located on the Real Property are in good
condition, repair and working order, except for ordinary wear and tear and
except as would not reasonably be expected to have a Company Material Adverse
Effect. The Real Property has been maintained in a manner consistent with
commercially reasonable standards generally followed with respect to similar
properties.

(d) Proceedings. There is no action, proceeding or investigation pending or, to
the Company’s Knowledge, threatened against the Real Property or any part
thereof before any court or governmental department, commission, board, agency
or instrumentality (including, without limitation, any proceedings with respect
to Taxes or assessments to be levied against the Owned Real Property or
proceedings regarding the annexation of the Owned Real Property by any
municipality); and neither the Company nor any other CCG Entity knows of any
basis for any such action, proceeding or investigation, except where such
action, proceeding or investigation would not reasonably be expected to have a
Company Material Adverse Effect.

 

42

--------------------------------------------------------------------------------

(e) Notice of Violations. No CCG Entity has received from any Governmental
Entity written notice of any violation of any zoning, building, fire or health
code or any other statute, ordinance rule or regulation applicable (or alleged
to be applicable) to the Real Property, or any part thereof, that will not have
been corrected prior to Closing solely at the Company’s or any other CCG
Entity’s expense, except such violations as would not reasonably be expected to
have a Company Material Adverse Effect. Except as set forth in Section 4.19(e)
of the Company Disclosure Letter, the use and operation of the Real Property in
the conduct of the Business do not violate in any material respect any Law,
covenant, condition, restriction, easement, license, permit or agreement.

(f) Zoning. To the Knowledge of the Company, there is no plan, study or effort
by any Governmental Entity which in any way affects or would affect the present
use or zoning of the Real Property.

(g) Utilities. The Real Property has commercially reasonable access to those
utilities (including gas, electricity, telephone, water and sanitary and storm
sewers, as applicable) reasonably necessary for the conduct of the operations of
the CCG Entities as currently conducted.

(h) No Space Leases or Options. Except as set forth in Section 4.19(e) of the
Company Disclosure Letter, (i) no CCG Entity has leased, subleased or granted to
any Person any right to possess, lease or occupy any portion of the Owned Real
Property or such CCG Entity’s right, title, or interest in any Leased Real
Property and (ii) no CCG Entity owns, holds, has granted or is obligated under
any option, right of first offer, right of first refusal or other contractual
right to purchase, acquire, sell or dispose of the Owned Real Property or such
CCG Entity’s right, title, or interest in any Leased Real Property or any
portion thereof or interest therein or any other real property.

Section 4.20 Title to Assets; Tangible Assets.

(a) Except as related to Real Property (which is the subject of Section 4.19),
each CCG Entity has good and valid title to, or otherwise has the right to use
pursuant to a valid and enforceable lease, license or similar contractual
arrangement, all of the material tangible property, plants and equipment that
are used or held for use in connection with the Business as presently conducted
or as are reflected on the CCG Financial Statements (collectively, the
“Assets”), except for inventory sold in the ordinary course of business
consistent with past practice, in each case free and clear of any Liens (other
than Permitted Liens) and except as would not reasonably be expected to have a
Company Material Adverse Effect. The plants, buildings, structures and material
equipment included in the Assets are in sufficient operating condition to
conduct the operations of the CCG Entities as currently conducted, subject only
to ordinary wear and tear and except as would not reasonably be expected to have
a Company Material Adverse Effect. The assets of the CCG Entities (excluding the
Real Property, which is the subject of Section 4.19) constitute all of the
material assets used to conduct the operations of the Business as currently
conducted.

 

43

--------------------------------------------------------------------------------

(b) Except as disclosed on Section 4.20(b) of the Company Disclosure Letter, the
tangible personal property owned, leased or used by each of the Designated CCG
Entity (i) is in good operating condition and repair consistent with age,
reasonable wear and tear excepted, and (ii) is located at the Real Property.

Section 4.21 Bank Accounts. Section 4.21 of the Company Disclosure Letter sets
forth the names and locations of each bank, brokerage firm or other financial
institution at which a CCG Entity has an account (giving account numbers) or
safe deposit box and the names of all persons authorized to draw thereon or have
access thereto, and the names of all persons, if any, holding powers of attorney
or comparable delegation authority from the applicable CCG Entity.

Section 4.22 Customers and Suppliers. Section 4.22 of the Company Disclosure
Letter sets forth (a) a list of the 10 largest customers of the Business based
on sales during the twelve (12) month periods ending December 31, 2015 and
December 31, 2014 (the “Significant Customers”), and (b) the 10 largest
suppliers of the Business based on purchases during the twelve (12) month
periods ending December 31, 2015 and December 31, 2014 (the “Significant
Suppliers”). Since June 30, 2015, no CCG Entity has received any written notice
that (i) any Significant Customer has materially reduced, or will materially
reduce, the use of products or services of the Business or (ii) there has been
any change in the terms and conditions of sale of raw materials, supplies or
other products or services (other than general and customary price increases)
from a Significant Supplier which has been or would be reasonably expected to
have a Company Material Adverse Effect. To the Knowledge of the Company, no
change of the type described in clause (b) of the preceding sentence is
reasonably expected to occur after the Closing Date.

Section 4.23 Accounts Receivable. All accounts receivable of the CCG Entities
reflected on the latest balance sheet part of the CCG Financial Statements or
otherwise are valid, represent bona fide sales actually made in the ordinary
course of business and, except as otherwise disclosed on Section 4.23 of the
Company Disclosure Letter, to the Company’s Knowledge, are collectible net of
any reserves shown on the latest balance sheet part of the CCG Financial
Statements.

Section 4.24 Disputed Accounts Payable. Except as disclosed on Section 4.24 of
the Company Disclosure Letter, there are no material amounts, either
individually or in the aggregate, alleged to be owed by any CCG Entity, or other
alleged obligations of any CCG Entity, which a CCG Entity has disputed or
determined to dispute or refuse to pay.

Section 4.25 Books and Records. The minute books and stock or equity records of
the CCG Entities will be made available to the Purchaser at least two Business
Days prior to the Closing Date.

Section 4.26 Product Warranties, Product Warranty and Liability Claims, Returns.

(a) Each Product manufactured, assembled, processed, distributed, marketed,
licensed, sold or delivered by a CCG Entity has been so manufactured, assembled,
processed, distributed, marketed, licensed, sold or delivered in conformity with
all applicable Laws, Contracts, and all express and implied warranties and,
except as otherwise described on Section 4.26(a) of the Company Disclosure
Letter, no CCG Entity has any liability not reserved in accordance with GAAP
(and to the Company’s Knowledge there is no basis for any present or future
action against any CCG Entity giving rise to any such liability) for replacement
or repair

 

44

--------------------------------------------------------------------------------

thereof or other damages in connection therewith beyond such CCG Entity’s
applicable standard terms and conditions for sale. No Product manufactured,
assembled, processed, distributed, marketed, licensed, sold or delivered by a
CCG Entity is subject to any guaranty, warranty, or other indemnity or similar
liability beyond the applicable standard terms and conditions of sale.

(b) Section 4.26(b) of the Company Disclosure Letter includes copies of each CCG
Entity’s standard terms and conditions of sale (containing, applicable guaranty,
warranty, and similar liability indemnity provisions). Except as described on
Section 4.26(b) of the Company Disclosure Letter, no CCG Entity has given or
made any warranties to any Person with respect to any Products which may still
be in effect at any time after Closing. There have been no Product Warranty
Claims or Product Liability Claims investigations made with respect to any
product warranties which have not been fully settled and resolved or any
unresolved known warranty claims which have not been reserved in accordance with
GAAP against on the CCG Financial Statements. The Company has no Knowledge of
any basis for any other Product Warranty Claims or Product Liability Claims.

(c) Section 4.26(c) of the Company Disclosure Letter is a complete and accurate
list of the Product Warranty Claims and Product Liability Claims and claim
experience by Product, in each case in excess of $50,000, for the Products since
January 1, 2013.

Section 4.27 Indemnification Obligations. To the Knowledge of the Company, there
is no event, circumstance or other basis that could give rise to any
indemnification obligation of any CCG Entity to its officers and directors under
the organizational documents or any Contract between and CCG Entity and any of
its officers or directors.

Section 4.28 Powers of Attorney. Except as disclosed on Section 4.28 of the
Company Disclosure Letter, no CCG Entity has any powers of attorney outstanding
(other than a power of attorney issued in the ordinary course of business with
respect to Tax matters).

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Seller and the Company, as
of the date of this Agreement and as of the Closing Date (except in each case to
the extent that such representations and warranties speak only as of a specific
date, as of such date), as follows:

Section 5.1 Due Organization and Corporate Power. The Purchaser is a corporation
duly formed and validly existing under the laws of Delaware and has the
requisite corporate power and authority to carry on its business as now being
conducted. The Purchaser is duly qualified or licensed to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed would not
have, individually or in the aggregate, a Purchaser Material Adverse Effect.

 

45

--------------------------------------------------------------------------------

Section 5.2 Authorization; Noncontravention. The Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and each
Ancillary Agreement to which it is a party, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and any
Ancillary Agreement to which it is a party by the Purchaser and the consummation
by the Purchaser of the transactions contemplated hereby and thereby have been
duly authorized and approved by all necessary board and stockholder action on
the part of the Purchaser and to the extent required, any Affiliate of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and, assuming that this Agreement constitutes the valid and binding obligations
of the other parties thereto, constitutes the valid and binding obligations of
the Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such enforcement may be limited by the Enforceability Exceptions. The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement will not, (a) conflict with any of
the provisions of the certificate of incorporation, bylaws or any other
organizational document of the Purchaser, as amended, (b) require any consent,
approval or authorization of, declaration or filing with, notice to, or action
by, any Person under, conflict with, result in a breach of or default under
(with or without due notice or lapse of time or both) or cause or permit
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit under, any written Contract or plans to
which the Purchaser is a party or by which the Purchaser or any of its assets is
bound or subject or (c) contravene any domestic or foreign Law or any order,
writ, judgment, injunction, decree, determination or award currently in effect,
which, in the case of clauses (b) and (c) above, would have, individually or in
the aggregate, a Purchaser Material Adverse Effect.

Section 5.3 Consents and Approvals. No consent, approval or authorization of, or
declaration or filing with, or notice to, any Governmental Entity or any other
Person which has not been received or made, is required to be obtained by the
Purchaser in connection with the execution and delivery of this Agreement or any
Ancillary Agreement to which it is a party by the Purchaser or the consummation
by the Purchaser of any of the transactions contemplated hereby or thereby,
except for (a) such filings, permits, authorizations, consents and approvals as
may be required under, and other applicable requirements of, the HSR Act; and
(b) any other consents, approvals, authorizations, filings or notices which, if
not made or obtained, would not have, individually or in the aggregate, a
Purchaser Material Adverse Effect.

Section 5.4 Funds. The Purchaser has, and at all times until the time of the
consummation of the transactions contemplated by this Agreement will have, cash
on hand, or access through existing credit facilities of the Purchaser or any of
its Affiliates to cash, in an aggregate amount sufficient to enable the
Purchaser to timely consummate the transactions contemplated by this Agreement
and to otherwise perform its obligations hereunder, including to pay in full
(a) the Transaction Price, and (b) all fees and expenses payable by the
Purchaser in connection with this Agreement and the transactions contemplated
hereby.

Section 5.5 Independent Review; No Reliance. The Purchaser has conducted its own
independent review and analysis of the Company, and its condition, cash flow and
prospects, including being permitted access to properties and premises of the
CCG Entities. In entering into this Agreement, the Purchaser has relied
exclusively upon its own investigation and analysis and the representations and
warranties contained herein, and the Purchaser:

 

46

--------------------------------------------------------------------------------

(a) acknowledges and agrees that (i) neither the Company nor the Seller nor any
Person on behalf of the Company or the Seller is making any representations or
warranties whatsoever, express or implied, beyond those expressly given in
Article III and Article IV or in any certificate delivered pursuant to this
Agreement and (ii) the Purchaser has not been induced by, or relied upon any
representations, warranties or statements (written or oral), whether express or
implied, made by any Person, that are not expressly set forth in Article III or
in Article IV or in any certificate delivered pursuant to this Agreement; and

(b) agrees, to the full extent permitted by Law, that (except in the case of
fraud or willful misconduct) no director, officer, employee, Affiliate (other
than the Seller and the CCG Entities), agent or representative of the Company or
the Seller shall have any liability or responsibility whatsoever to the
Purchaser on any basis (including in contract or tort, under federal or state
securities laws, or otherwise) based upon any information provided or omitted,
or based on statements or omissions beyond the representations and warranties
expressly given in Article III and Article IV of this Agreement.

Without limiting the generality of the foregoing, the Purchaser acknowledges
that no representations or warranties have been made with respect to any
projections, forecasts, estimates, budgets or prospect information that may have
been made available to the Purchaser, its Affiliates or any of their respective
representatives, beyond those expressly given in Article III and Article IV of
this Agreement.

Section 5.6 Solvency. Assuming the representations and warranties of the CCG
Entities contained in this Agreement are accurate in all material respects, at
and immediately after the Closing, each of the CCG Entities and the Purchaser
(a) will be solvent (in that both the fair value of their respective assets will
not be less than the sum of their respective debts and that the present fair
saleable value of their respective assets will not be less than the amount
required to pay their respective liabilities as they become absolute and
matured), (b) will have adequate capital with which to engage in their
respective businesses and (c) will not have incurred, and does not immediately
plan to incur, debts beyond its ability to pay as they become absolute and
mature.

Section 5.7 Purchase for Investment.

(a) The Purchaser is acquiring the Shares solely for investment for its own
account and not with the view to, or for offer or sale in connection with, any
“distribution” (as such term is used in Section 2(11) of the Securities Act)
thereof. The Purchaser understands that the sale of the Shares has not been
registered under the Securities Act or any state or foreign securities laws by
reason of specified exemptions therefrom that depend upon, among other things,
the bona fide nature of its investment intent as expressed herein and as
explicitly acknowledged hereby and that under such laws and applicable
regulations such securities may not be resold without registration under the
Securities Act or under applicable state or foreign law unless an applicable
exemption from registration is available.

(b) The Purchaser is an “accredited investor” within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act. The Purchaser, by reason of
its business and financial experience in business, has such knowledge,
sophistication and experience in business and financial matters as to be capable
of evaluating the merits and risks of the purchase of the Shares, is able to
bear the economic risk of such investment in the Company, and is able to afford
a complete loss of such investment.

 

47

--------------------------------------------------------------------------------

ARTICLE VI

COVENANTS

Section 6.1 Access to Information.

(a) Subject to applicable Laws, during the period commencing on the date hereof
and ending on the earlier of (i) the Closing Date and (ii) the date on which
this Agreement is terminated pursuant to Section 9.1, the Seller and the
Company, upon reasonable notice, shall afford the Authorized Representatives of
the Purchaser access to such offices, properties, books and records of the CCG
Entities relating to the CCG Entities and such financial and operating data and
other information relating to the CCG Entities as such Authorized
Representatives may reasonably request, and shall allow such Authorized
Representatives to make copies of, such information and documentation (including
Contracts, books and records of the CCG Entities), as the Purchaser may
reasonably request with respect to any CCG Entity for the purpose of verifying
the accuracy of the representations and warranties made by the Company in
Article IV and compliance with the covenants set forth in this Article VI, and
for any other purpose reasonably requested by the Purchaser, which may include
planning the integration of the CCG Entities into the Purchaser’s business
operations, and shall instruct the employees, counsel and financial advisors of
Seller and Seller’s Affiliates to cooperate with the Purchaser in its
investigation of the CCG Entities; provided that such access shall not
unreasonably disrupt the operations of the CCG Entities; and provided further
that the foregoing shall not require the CCG Entities (i) to permit any
inspection, or to disclose any information, that in the reasonable judgment of
the Company would result in the disclosure of any trade secret or violate any
applicable Laws (including antitrust laws of the United States) or any of its
obligations with respect to confidentiality, or (ii) to disclose any privileged
information of the Company in a manner that is reasonably expected to result in
the loss of such privilege, or (iii) to permit or allow the Purchaser to conduct
any environmental study, analyses or assessment involving any facilities of the
CCG Entities. All requests made pursuant to this Section 6.1 shall be directed
to the executive officer or other Person designated by the Seller in writing to
the Purchaser on the date hereof, or as such Person may be changed thereafter by
written notice to the Purchaser.

(b) From and after the date hereof to the Closing Date, without the prior
written consent of the Company, which shall not be unreasonably withheld,
conditioned or delayed, neither the Purchaser nor any of its Affiliates may
contact any suppliers to, or Employees, independent contractors, sales
representatives or customers of, the Company in connection with or pertaining to
the transactions contemplated hereby, provided that an authorized representative
of the Seller is permitted to be present at any meetings, conferences or calls.
For the avoidance of doubt, nothing herein shall restrict the Purchaser or its
Affiliates from contacting any suppliers, Employees, independent contractors,
sales representatives or customers of any CCG Entity on its own in the ordinary
course of the Purchaser’s or its Affiliates’ own businesses; provided, however,
that such contact shall relate solely to the Purchaser’s or its Affiliates’ own
businesses and may not involve any discussions related to the transactions
contemplated hereby.

 

48

--------------------------------------------------------------------------------

Section 6.2 Confidentiality.

(a) Information obtained by the Purchaser and its counsel, accountants,
consultants and other authorized representatives pursuant to this Agreement
shall be subject to the provisions of the Confidentiality Agreement, dated as of
October 19, 2015, by and between LSB and NIBE (the “Confidentiality Agreement”).
The Confidentiality Agreement shall continue in full force and effect until the
Closing, at which time it shall automatically terminate. From and after the
Closing, the Company shall have the right to enforce the rights of the Seller
(or to cause the Seller to enforce its rights) under any confidentiality,
non-solicitation and similar agreements with any Person entered into in
connection with any proposed sale of the Company to the extent that such rights
are related to confidential information of any CCG Entity or the solicitation of
employees, sales representatives and other agents of any Entity, and the Seller
shall deliver to the Purchaser copies of any such agreements.

(b) At Closing, LSB shall provide to Purchaser a copy of each non-disclosure,
confidentiality, non-solicitation or similar agreement entered into by LSB or
any of its Affiliates (i) in connection with a proposed sale of the Business or
(ii) pertaining to the Confidential Information (each such agreement, a
“Non-Disclosure Agreement”). Following the Closing, neither LSB, Seller nor any
of their respective Affiliates shall amend, modify, supplement or waive any
provision of any Non-Disclosure Agreement without the prior written consent of
Purchaser. Following the Closing, at the sole expense of Purchaser, LSB, Seller
and any of their respective Affiliates with rights to enforce a Non-Disclosure
Agreement will do so at the request and under the direction of Purchaser through
legal counsel selected by Purchaser.

Section 6.3 Conduct of the Business of the CCG Entities Pending the Closing
Date. During the period commencing on the date hereof and ending at the earlier
of (x) the Closing Date and (y) the termination of this Agreement pursuant to
Section 9.1, except as expressly required under this Agreement or as otherwise
set forth in Section 6.3 of the Company Disclosure Letter, the CCG Entities
shall, and the Seller shall cause the CCG Entities to (a) conduct the Business
in the ordinary course of business consistent with past practice, and (b) use
their commercially reasonable efforts to preserve intact their business
organizations and relationships with third parties, including their customers,
supplier and others having business dealings with them. Without limiting the
generality of the foregoing, except (A) as expressly required under this
Agreement, (B) as required by applicable Laws or any Governmental Entity or
(C) as otherwise set forth in Section 6.3 of the Company Disclosure Letter or
required under Contracts which are in existence on the date hereof and listed in
Section 6.3 of the Company Disclosure Letter, from the date hereof until the
earlier of (x) the Closing Date and (y) the termination of this Agreement
pursuant to Section 9.1, the CCG Entities shall not, and the Seller shall cause
the CCG Entities not to, take any of the following actions without the prior
written consent of the Purchaser (which consent shall not be unreasonably
withheld, conditioned or delayed):

(a) amend any CCG Entity’s certificate of incorporation or bylaws;

(b) authorize the issuance of or grant any capital stock of any CCG Entity,
transfer, sell or otherwise dispose of, purchase, redeem or subject to any new
Lien (other than Permitted Liens) any capital stock of such CCG Entity or issue
or become obligated with respect to any Commitment with respect to such CCG
Entity;

 

49

--------------------------------------------------------------------------------

(c) sell, transfer or otherwise dispose of, or subject to any new Lien (other
than Permitted Liens), any (i) Owned Real Property or (ii) fixed assets that are
material to the conduct of the Business

(d) make any alterations or changes to the Real Property, except in the ordinary
course of business; or remove any fixtures or other personal property at the
Real Property, except if replaced by fixtures or other personal property of
equal or greater value or utility;

(e) incur any new CCG Entities Indebtedness for borrowed money with any third
party or with the Seller or its Affiliates, other than as reasonably necessary
to meet working capital requirements or in the ordinary course of business or in
replacement of existing CCG Entities Indebtedness, provided that such new CCG
Entities Indebtedness is fully prepayable at the Closing without penalty;

(f) split, combine, divide, distribute, or reclassify any stock of a CCG Entity,
declare, pay, or set aside for payment any non-cash dividend or other non-cash
distribution in respect of a CCG Entity’s stock;

(g) undertake a Bankruptcy Event;

(h) dissolve, liquidate or merge or consolidate a CCG Entity with or into any
other entity;

(i) establish, sponsor, amend or terminate (except for amendments which do not
increase costs to any CCG Entity) any Employee Plan;

(j) complete any acquisition (by merger, consolidation, or acquisition of stock
or assets) of any Person or any division or assets thereof;

(k) increase the compensation payable or paid, whether conditionally or
otherwise, to any director, officer, Employee, consultant or agent other than in
the ordinary course of business consistent with past practices, or enter into or
amend arrangements requiring severance, change of control or other payments in
connection with the transactions contemplated hereby; provided, however, that
under no circumstances shall any CCG Entity increase the compensation of an
officer or employee of a CCG Entity by an amount that exceeds 3% of such officer
or employee’s prior level of compensation;

(l) except as required by GAAP (or interpretations thereof by recognized
accounting boards or institutions) or by applicable Law, change any of the
material accounting principles or practices used by any CCG Entity;

(m) assume, guarantee, endorse, or otherwise become liable or responsible
(whether directly, contingently, or otherwise) for the obligations of any person
other than the CCG Entities (other than endorsements of checks in the ordinary
course) or make any loans, advances (other than advances or loans to Employees
(excluding senior executives) in the ordinary course of business consistent with
past practice and less than $10,000 to any individual), or capital contributions
to, or investments in, any other Person;

 

50

--------------------------------------------------------------------------------

(n) make or change any material Tax election, change any annual Tax accounting
period, adopt or change any material method of Tax accounting, amend any
material Tax Returns or file any claims for material Tax refunds, enter into any
material closing agreement, settle any material Tax claim, audit or assessment
or surrender any right to claim a material Tax refund, offset or other reduction
in Tax liability, provided that this Section 6.3(n) shall not apply to any
Consolidated Tax or Tax Return of any Seller Consolidated Group unless such
action would be reasonably expected to cause any adverse effect (other than a de
minimis one) on any CCG Entity or the Purchaser after the Closing;

(o) engage in any transaction with the Seller or any of its Affiliates (other
than any CCG Entity), other than (i) in the ordinary course of business
consistent with past practices, (ii) the distribution to the Seller of all cash
and other funds of the CCG Entities in a manner consistent with past practices
or (iii) purchase, sale or other trade transactions in the ordinary course
consistent with past practices, in each case on arm’s length terms;

(p) (A) make any material payments or grant any material discounts or any other
consideration to customers or suppliers of any CCG Entity, in each case, other
than in the ordinary course of business consistent with past practice or
(B) otherwise change any billing or cash management practices or methods used by
any CCG Entity, other than in the ordinary course of business;

(q) make any amendment, forgive, cancel, compromise or waive any material claim,
debt or right of any CCG Entity;

(r) enter into, assume, amend, assign or terminate any Material Contract or any
agreement that would be a Material Contract, other than Material Contracts
entered into in the ordinary course of business consistent with past practice
and providing for payments over the term of such agreements of no more than
$250,000 with respect to any single agreement and $1,000,000 in the aggregate;

(s) acquire or dispose of (or enter into any binding agreement to acquire or
dispose of) any real property or any direct or indirect interest in any real
property (including any leasehold interest therein), or enter into a lease of
any real property or sublease or assignment of lease with respect to any real
property;

(t) consent to any alteration or amendment to the zoning classification of any
Owned Real Property;

(u) forgive, cancel or compromise any material debt or claim, or waive or
release any right of material value;

(v) settle or compromise any material litigation, enter into a new line of
business that is material to the CCG Entities;

(w) (i) abandon, permit to lapse, fail to protect (in each case other than in
the ordinary course of business consistent with the applicable CCG Entity’s past
practices), or (ii) assign, sell, license, transfer, or otherwise dispose of any
Company Intellectual Property, other than non-exclusive licenses of Intellectual
Property granted in the ordinary course of business; or

 

51

--------------------------------------------------------------------------------

(x) enter into any Contract with respect to, or authorize, any of the actions
described in the foregoing clauses (a) through (w).

Section 6.4 Filings; Other Actions.

(a) Subject to Section 6.4(b). which shall govern the subject matter thereof,
the Seller, the Company and the Purchaser shall cooperate with each other in
good faith and use their respective commercially reasonable efforts to take or
cause to be taken all actions, and to do or cause to be done all things,
necessary, proper or advisable on its part under this Agreement and applicable
Laws to consummate and make effective the transactions contemplated by this
Agreement as soon as practicable, including using commercially reasonable
efforts to accomplish the following: (i) the satisfaction of the conditions set
forth in Article VII, (ii) the obtaining or making of all necessary consents,
approvals, authorizations, filings or notices with or from any applicable
Governmental Entity, (iii) arranging and obtaining the Purchaser R&W Insurance
Policy; and (iv) the defending of any legal or administrative proceeding, claim,
suit, action, arbitration or investigation challenging this Agreement or seeking
to prevent, delay or impair the consummation of the transactions contemplated
hereby, including seeking to have any injunction, order, judgment, ruling or
decree imposed vacated or reversed.

(b) Promptly following the execution of this Agreement, but in no event later
than ten (10) Business Days following the date of this Agreement, the parties
shall file, or cause to be filed by their respective “ultimate parent entities,”
with the FTC and the DOJ the notifications and other information (if any)
required to be filed under the HSR Act with respect to the transactions
contemplated in this Agreement. In addition, the Company and the Purchaser shall
promptly proceed to prepare and file with the other appropriate Governmental
Entities such additional requests, responses, reports or notifications as may be
required or, in the opinion of the Purchaser or the Seller, advisable, in
connection with this Agreement (including by reasonably promptly responding to
and substantially complying with any Requests for Additional Information and
Documentary Material). With respect to each of the above filings, the Purchaser
and the Seller shall diligently and expeditiously prosecute, and shall cooperate
fully with each other in the prosecution of, such matters including, subject to
applicable Law, by permitting counsel for the other to review in advance, and
consider in good faith the views of the other in connection with any such filing
or any proposed written communication with any Governmental Entity, and by
providing counsel for the other with copies of all filings and submissions made
by such party and all correspondence between such party (and its advisors) and
any Governmental Entity and any other information supplied by such party to a
Governmental Entity or received by such party from such a Governmental Entity in
connection with the transactions contemplated by this Agreement; provided,
however, that (i) materials may be redacted before being so provided (x) to
remove (1) references concerning the valuation of the Company or any other CCG
Entity and (2) individual customer pricing information or other competitively
sensitive information, (y) as necessary to comply with contractual arrangements
and (z) as necessary to avoid disclosure of other competitively sensitive
information or to address reasonable privilege or confidentiality concerns and
(ii) copies of documents filed by a party hereto pursuant to Item 4(c) of the
Notification and Report Form filed with the FTC and the DOJ shall not be
required to be provided to any party hereto (except to the other Party’s Outside
Antitrust Counsel pursuant to a Joint Defense Agreement). Each of the Purchaser
and the Seller shall furnish to the other such necessary information and
reasonable assistance as the other may reasonably request in connection with its
preparation of any such filing or submission.

 

52

--------------------------------------------------------------------------------

The Purchaser and the Seller shall keep each other apprised of the status of any
communications with, and any inquiries or requests for additional information
from, the FTC or the DOJ. In the event a suit is threatened or instituted
challenging the transactions contemplated by this Agreement as violative of the
HSR Act, as amended, the Sherman Act, as amended, the Clayton Act, as amended,
the Federal Trade Commission Act, as amended or any other federal, state or
foreign law or regulation or decree designed to prohibit, restrict or regulate
actions for the purpose or effect of foreign ownership, monopolization or
restraint of trade (collectively, “Antitrust Laws”), the Purchaser shall use
commercially reasonable efforts to take all reasonable actions as may be
required to avoid the filing of or otherwise resolve such suit so as to enable
the Closing to occur as promptly as practicable (including in the event that any
permanent or preliminary injunction or other order is entered or becomes
reasonably foreseeable to be entered in any proceeding that would make
consummation of the transactions contemplated hereby in accordance with the
terms of this Agreement unlawful or that would prevent or delay consummation of
the transactions contemplated hereby, commercially reasonable efforts to vacate,
modify or suspend such injunction or order so as to permit such consummation
prior to the Termination Date); provided, however, that in no event shall
Purchaser or the Seller, the Company or any of their respective Affiliates be
required to (i) sell or otherwise dispose of, hold separate or agree to sell or
dispose of, any assets, categories of assets or businesses of the Purchaser, the
Seller or the Company, their respective Affiliates or any of their respective
Subsidiaries, (ii) amend, modify or terminate existing relationships,
contractual rights or obligations, (iii) amend, modify or terminate existing
licenses or other intellectual property agreements or enter into new licenses or
other intellectual property agreements, or (iv) take any action that could
reasonably be expected to impair the overall benefit expected to be realized
from the consummation of the transactions contemplated by this Agreement to
avoid, prevent or terminate any action by the FTC or the DOJ that would
restrain, enjoin or otherwise prevent consummation of the transactions described
herein. The Purchaser and the Seller will cooperate to determine strategy, and
will coordinate all activities with respect to seeking any actions, consents,
approvals or waivers of any Governmental Entity and any litigation as
contemplated by this Section 6.4(b). Notwithstanding anything to the contrary in
this Agreement, the Purchaser shall not require the Seller or the Company to,
and the Company and the Seller shall not be required to, take any action with
respect to satisfying any Antitrust Laws which would bind the Company in the
event the Closing does not occur.

(c) All filing fees incurred in connection with the filings made under the HSR
Act, including the HSR Fee, shall be borne by the Purchaser and the Seller
equally.

(d) Prior to the earlier of (i) the Closing Date and (ii) the date on which this
Agreement is terminated pursuant to Section 9.1, each party hereto shall not,
and shall cause its Subsidiaries not to, take any action that would reasonably
be expected to hinder or delay the obtaining of clearance or the expiration of
the required waiting period under the HSR Act or any other applicable Antitrust
Law.

Section 6.5 Use of LSB Business Marks and Certain IP Matters.

(a) The parties expressly agree that the Purchaser is not purchasing, acquiring
or otherwise obtaining any right, title or interest in the LSB Business Marks.
From and after the Closing Date, except as permitted in this Section 6.5,
neither the Purchaser, the Company nor any of their Affiliates will have any
rights to use the LSB Business Marks or any term, logo, symbol, graphic or other
commercial indicia of source confusingly similar thereto without the prior
written consent of the Seller.

 

53

--------------------------------------------------------------------------------

(b) Prior to the Closing Date, the Seller shall cause the Company (or any other
Person designated in writing by the Purchaser) to be recorded as the owner of
the domain names listed in Section 6.5(b) of the Company Disclosure Letter with
the applicable domain name registrars.

(c) Prior to the Closing Date, the Seller shall cause the Registered
Intellectual Property owned by ClimateCraft Technologies, Inc. and set forth on
Section 4.14(a)(2) of the Company Disclosure Letter (i) to be transferred to
ClimateCraft, Inc., (ii) for ClimateCraft, Inc. to be recorded as the owner of
such Registered Intellectual Property, and (iii) terminate that certain
exclusive license agreement between ClimateCraft, Inc. and ClimateCraft
Technologies, Inc., dated as of December 14, 1998, with a full release of
ClimateCraft, Inc. from any and all liabilities in connection with such
agreement.

Section 6.6 Director and Officers’ Indemnification; Release.

(a) For six (6) years from and after the Closing Date, each CCG Entity shall,
and the Purchaser shall cause each CCG Entity to, perform in accordance with and
otherwise give effect to all rights to indemnification (including rights
relating to advancement of expenses) or exculpation existing in favor of each
present and former director, manager and officer of a CCG Entity, determined as
of the Closing Date (each, a “D&O Indemnitee,” and collectively, the “D&O
Indemnitees”), with respect to any costs or expenses (including court costs and
reasonable attorneys’ fees and expenses), judgments, fines, losses, claims,
damages or liabilities (collectively, “Costs”) incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters existing or occurring at
or prior to the Closing Date, whether asserted or claimed prior to, at or after
the Closing Date, to the fullest extent that the applicable CCG Entity would
have been permitted under the law of the jurisdiction of its organization in
effect on the date hereof to indemnify such Person (and advance expenses as
incurred to the same extent that such Persons are currently indemnified by the
applicable CCG Entity pursuant to such CCG Entity’s organizational documents as
in effect on the date hereof (and advance expenses as incurred at least to the
same extent such D&O Indemnitees are currently indemnified by the applicable CCG
Entity pursuant to such CCG Entity’s organizational documents as in effect on
the date hereof under applicable Law, provided that the Person to whom expenses
are advanced provides an undertaking to repay such advances in the event of a
non-appealable determination of a court of competent jurisdiction that such
Person is not entitled to indemnification).

(b) For six (6) years from and after the Closing Date, no CCG Entity shall amend
its organizational documents in any manner so as to modify the indemnification
or exculpation provisions therein in such a manner inconsistent with this
Section 6.6(b) or otherwise adverse to a D&O Indemnitee.

(c) The provisions of this Section 6.6(c) are (i) intended to be for the benefit
of, and shall be enforceable by, each D&O Indemnitee and each D&O Indemnitee’s
heirs, legatees, representatives, successors and assigns, it being expressly
agreed that such Persons shall be third-party beneficiaries of this
Section 6.6(c) and (ii) in addition to, and not in

 

54

--------------------------------------------------------------------------------

substitution for, any other rights to indemnification that any such D&O
Indemnitee may have by contract or otherwise. The obligations of the Purchaser
and the Company under this Section 6.6(c) shall not be terminated or modified in
such a manner as to adversely affect the rights of any D&O Indemnitee to whom
this Section 6.6(c) applies unless (x) such termination or modification is
required by applicable Law or (y) the affected D&O Indemnitee shall have
consented in writing to such termination or modification.

(d) Following the Closing and to the maximum extent permitted by Law, the
Purchaser agrees not to, and to cause its affiliates not to, bring any action
against any D&O Indemnitee in relation to their acts or omissions, in their
respective capacities as director, manager or officer of a CCG Entity prior to
the Closing Date; provided, that nothing contained in this Section 6.6(d) shall
preclude the Purchaser or any Affiliate thereof (including any CCG Entity) from
bringing an action against a D&O Indemnitee in relation to any act(s) or
omission(s) of such D&O Indemnitee that (i) was committed in bad faith or was
the result of Fraud, or (ii) as a result of or in connection with which such D&O
Indemnitee gained or received, directly or indirectly, any financial profit or
other advantage to which such D&O Indemnitee obtained as a result of Fraud or
criminal acts.

(e) In the event that the Purchaser, a CCG Entity or any of their respective
successors or assigns (i) consolidates with or merges into any other Person and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all of its
properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Purchaser and
the applicable CCG Entity shall assume all of the obligations thereof set forth
in this Section 6.6(e).

Section 6.7 Public Announcements. Prior to the Closing, the parties hereto shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement and the Ancillary Agreements and shall not issue any such press
release or make any such public statement without the prior consent of the other
parties, which shall not be unreasonably withheld, conditioned or delayed;
provided that a party may, without the prior consent of the other parties, issue
such press release or make such public statement (x) if it is required to do so
by law, regulation or the rules of any regulatory authority (including any
recognized stock exchange) or (y) in the case it is compelled to do so in
connection with legal proceedings or pursuant to a subpoena, order, requirement
or an official request issued by a court of competent jurisdiction or by any
administrative, legislative, regulatory or self-regulating authority (including
any recognized stock exchange) or entity towards such party, and (to the extent
reasonably practicable having regard to the disclosing party’s obligation to
make disclosure and the nature of the proposed disclosure) the disclosing party
provides advance written notice to the other party of the proposed disclosure
and cooperates in good faith with respect to the timing, manner and content of
the disclosure.

 

55

--------------------------------------------------------------------------------

Section 6.8 Tax Matters.

(a) Section 338(h)(10) Elections.

(i) With respect to each CCG Entity other than International Environmental
Corporation (“IEC”) and Koax Corp. (“Koax”), LSB and the Purchaser shall jointly
file timely elections under section 338(h)(10) of the Code to treat the sale of
the Shares and the deemed sale of the stock of the other CCG Entities (other
than IEC and Koax) as sales by the Company and such other CCG Entities of all of
their respective assets (the “Section 338(h)(10) Elections”) and shall, upon the
Purchaser’s request, make any such available elections under any substantially
similar state or local Law. LSB shall take such actions as are deemed necessary
to effect the Section 338(h)(10) Elections (including, without limitation, the
timely filing of Internal Revenue Service Form 8023 (Elections Under Section 338
for Corporations Making Qualified Stock Purchases)).

(ii) The Seller and the Purchaser shall agree, no later than 30 days after the
delivery of the Closing Statement, upon an initial allocation of the Transaction
Price (plus the liabilities of the CCG Entities with respect to which a
Section 338(h)(10) Election is to be made plus any other relevant tax items)
among the CCG Entities and for the deemed sale of assets resulting from the
Section 338(h)(10) Elections, setting forth the estimated fair market values of
the assets of each of the CCG Entities with respect to which a
Section 338(h)(10) Election is to be made. The Purchaser shall prepare draft
Forms 8883 (Asset Allocation Statement under Section 338) (or successor forms)
with respect to each such CCG Entity and provide such draft Forms 8883 to the
Seller no later than ninety (90) days prior to the due date of such Forms 8883.
If, within fifteen (15) days after the receipt of the draft Forms 8883, the
Seller notifies the Purchaser in writing that the Seller disagrees with a draft
Form 8883, then the parties shall attempt in good faith to resolve their
disagreement within the forty-five (45) days following the Seller’s notification
to the Purchaser of such disagreement. If the Seller does not so notify the
Purchaser within fifteen (15) days of receipt of a draft Form 8883, or upon
resolution of the disputed items by the parties, the draft Form 8883 shall
become a “Final Form 8883.” If the parties are unable to resolve their
disagreement within the forty-five (45) days following any such notification by
the Seller, then the parties shall submit all such disputed items for resolution
to the Accounting Experts whose decision shall be final and binding upon the
parties and whose fees and expenses shall be borne equally by the parties. Any
Form 8883 delivered by the Accounting Experts shall be a Final Form 8883. The
parties shall act in good faith to cause the Accounting Experts to deliver a
Final Form 8883 within twenty (20) days after such submission. The parties shall
(i) be bound by all Final Forms 8883 for purposes of determining any Taxes and
prepare and file their Tax Returns on a basis consistent with the Final Forms
8883, unless otherwise required because of a change in applicable Tax Law. No
later than fifteen (15) days prior to the date such Forms 8883 and any related
documentation are required to be filed under the applicable Laws, LSB shall
execute and deliver to the Purchaser a Final Form 8883 with respect to each of
the CCG Entities (other than IEC and Koax). With respect to any amounts paid by
the Purchaser after the Closing Date, the Seller and the Purchaser agree that
such amounts shall be characterized as goodwill. LSB, on behalf of the Seller,
and the Purchaser agree to file a Supplemental Form 8883 on a timely manner, as
specified in the instructions to Form 8883.

(iii) Each of the Purchaser, LSB and the Seller agrees that it shall not, and
shall not permit any of its Affiliates to modify or revoke the
Section 338(h)(10) Elections or any form filed in connection therewith, or any
such available election under any substantially similar state or local Law if
requested by the other, without the written consent of such other.

(iv) The Purchaser, LSB and the Seller shall, and shall cause their respective
Affiliates to, file all Tax Returns in a manner consistent with the information
contained in all Final Forms 8883 (including any Supplemental Form 8883) or any
form filed in connection therewith, unless otherwise required because of a
change in applicable tax Law.

 

56

--------------------------------------------------------------------------------

(b) Tax Returns.

(i) Notwithstanding any other provision contained herein, LSB shall in a timely
manner prepare or cause to be prepared and file or cause to be filed all Seller
Consolidated Returns and pay all Consolidated Taxes. All such Tax Returns to the
extent related to the CCG Entities shall be filed consistent with most recent
past practice unless failure to do so would not reasonably be expected to cause
any adverse effect (other than a de minimis one) on any CCG Entity or the
Purchaser. For the avoidance of doubt, the Parties intend that any federal
income Tax deductions incurred by the Company on the Closing Date related to the
transactions contemplated by this Agreement (including the payment of CCG
Entities Indebtedness and Transaction Expenses) shall be treated as arising in
the Pre-Closing Tax Period.

(ii) The Seller shall prepare or cause to be prepared all Tax Returns (other
than Seller Consolidated Returns) of the CCG Entities for all tax periods that
end on or before the Closing Date (“Pre-Closing Tax Returns”) and for all
Straddle Periods (“Straddle Tax Returns”). Straddle Tax Returns shall be
prepared on a basis consistent with most recent past practice except to the
extent otherwise required by applicable Laws. For each Pre-Closing Tax Return or
Straddle Tax Return required to be filed after the Closing Date, no later than
fifteen (15) days prior to the due date (including any applicable extensions)
thereof, the Seller shall deliver a copy of such Tax Return, together with all
supporting documentation and work papers, to Purchaser for its reasonable review
and comment. The Seller shall provide the Purchaser with such Pre-Closing Tax
Return or Straddle Tax Return, as applicable, (fully prepared and completed by
the Seller, and revised by the Seller to incorporate the Purchaser’s reasonable
comments) and the Purchaser shall cause such Tax Return to be executed and
timely filed with the appropriate Governmental Entity and provide a copy of such
executed and filed Tax Return to the Seller.

(iii) If the Purchaser objects to any item on a Tax Return prepared by the
Seller pursuant to Section 6.8(b)(ii), the Purchaser shall, within fifteen days
after delivery of such Tax Return, notify the Seller in writing that it so
objects, specifying with particularity any such item and stating the specific
factual or legal basis for any such objection. If a notice of objection is duly
delivered, Purchaser and Seller shall negotiate in good faith and use their
commercially reasonable efforts to resolve such items. In the event of any
disagreement that cannot be resolved between Purchaser and Seller, such
disagreement shall be resolved by an accounting firm of national or
international reputation mutually agreeable to Seller and Purchaser (the “Tax
Accountant”), and any such determination by the Tax Accountant shall be final.
The fees and expenses of the Tax Accountant shall be borne equally by Purchaser
and Seller. If the Tax Accountant does not resolve any differences between
Seller and Purchaser with respect to such Tax Return at least five days prior to
the due date therefor, such Tax Return shall be filed as prepared by the Seller
and amended to reflect the Tax Accountant’s resolution. The preparation and
filing of any Tax Return that does not relate to a Pre-Closing Tax Period or
Straddle Period shall be exclusively within the control of the Purchaser.

 

57

--------------------------------------------------------------------------------

(iv) In the case of Taxes (other than Consolidated Taxes) that are payable with
respect to any Straddle Period, the portion of any such Taxes that is
attributable to the portion of the period ending on the Closing Date shall be:

(A) in the case of Taxes that are either (x) based upon or related to income or
receipts or (y) imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible), deemed equal
to the amount that would be payable if the Tax period of the applicable CCG
Entity ended with (and included) the Closing Date; provided that exemptions,
allowances or deductions that are calculated on an annual basis (including
depreciation and amortization deductions) shall be allocated between the period
ending on and including the Closing Date and the period beginning after the
Closing Date in proportion to the number of days in each period; and

(B) in the case of Taxes that are imposed on a periodic basis with respect to
the assets or capital of the applicable CCG Entity, deemed to be the amount of
such Taxes for the entire Straddle Period (or, in the case of such Taxes
determined on an arrears basis, the amount of such Taxes for the immediately
preceding period), multiplied by a fraction the numerator of which is the number
of calendar days in the portion of the period ending on and including the
Closing Date and the denominator of which is the number of calendar days in the
entire period.

(v) Unless otherwise required by Law, after the Closing, LSB and the Seller
shall not, and shall not permit any of their Affiliates to, amend any Tax
Returns or change any Tax elections or accounting methods with respect to any
CCG Entity relating to any Pre-Closing Tax Period to the extent such amendment
or change would reasonably be expected to have a material cost to the Purchaser
or any CCG Entity without the consent of the Purchaser, which consent shall not
be unreasonably withheld, conditioned or delayed.

(vi) Unless otherwise required by Law, the Purchaser shall not amend any
Pre-Closing Tax Returns or Straddle Tax Returns without the prior written
consent of the Seller to the extent such amendment would reasonably be expected
to have a material cost to the Seller.

(c) Books and Records; Cooperation. The Purchaser and the Seller shall cooperate
fully as and to the extent reasonably requested by the other party in connection
with the filing of Tax Returns, any audit, litigation, examination or other
proceeding (each a “Tax Proceeding”) and claim for refund, the determination of
a Tax liability or a right to refund with respect to Taxes imposed on or with
respect to the assets, operations or activities of any CCG Entity. Such
cooperation shall include the retention and (upon the other party’s request) the
provision of records and information that are reasonably relevant to any such
Tax Return, Tax Proceeding, Tax refund or Tax determination and making Employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Notwithstanding the above, the
control and conduct of any Tax Proceeding that is a Third Party Claim shall be
governed by Section 10.6.

(d) Tax Contests. Notwithstanding Section 10.6, any Tax Proceeding relating to a
Seller Consolidated Return or Consolidated Taxes shall be exclusively controlled
by Seller. Any other Tax Proceeding constituting a Third Party Claim shall be
subject to the provisions of Section 10.6.

 

58

--------------------------------------------------------------------------------

(e) Transfer Taxes. The Purchaser shall be responsible for all state and local
transfer, sales, use, stamp, registration or other similar Taxes (the “Transfer
Taxes”), if any, resulting from the transactions contemplated by this Agreement.
The Purchaser and the Seller shall cooperate in good faith to minimize, to the
extent permissible under applicable Laws, the amount of any such Transfer Taxes
and shall cooperate and timely make all filings, returns, reports, and forms
with respect to such Transfer Taxes. The Purchaser and the Seller shall execute
and deliver to each other at the Closing any appropriate exemption certificate
relating to any available exemption from Transfer Taxes.

(f) Tax Refunds. The amount of any refunds of Taxes of any CCG Entity for which
Seller is responsible pursuant to Section 10.2(b) (other than to the extent such
refund results from the carryback of a Tax attribute of any CCG Entity relating
to a Post-Closing Tax Period and other than any such refunds reflected on the
Closing Statement as finally determined) shall be for the account of the Seller
to the extent provided in this Section 6.8(f). All other refunds of Taxes of any
CCG Entity shall be for the account of the Purchaser. The amount of any refund
of Taxes of any CCG Entity for any Straddle Period shall be equitably
apportioned between the Purchaser and the Seller in accordance with the
principles set forth in Section 6.8(b)(iv). Each party shall forward, and shall
cause its Affiliates to forward, to the party entitled to receive a refund of
Tax pursuant to this Section 6.8(f) the amount of such refund within thirty
(30) days after such refund is received, net of any costs or expenses or any
Taxes incurred by such party or its Affiliates in procuring such refund. The
Purchaser shall make and shall cause the CCG Entities to make elections under
Section 172(b)(3) and other relevant provisions of the Code, and under any
comparable provision of any state, local or foreign tax law in any state,
locality or foreign jurisdiction in which the CCG Entities are included in a
Seller Consolidated Return, to relinquish the entire carryback period with
respect to any net operating loss, capital loss, or tax credit of the CCG
Entities in any Tax period beginning after the Closing Date that could be
carried back to a Pre-Closing period of the CCG Entities; provided, however,
that with respect to any such item for which an election cannot be made under
applicable Law, the Purchaser shall be entitled to receive (and the Seller shall
be required to pay to the Seller) the Tax refund received or Tax benefit that
results from such carryback.

(g) Tax Agreements; Powers of Attorney. Prior to the Closing Date, Seller shall
terminate all Tax Agreements to which any CCG Entity is a party such that no CCG
Entity shall have no obligations thereunder following the Closing.

(h) Consolidated Return Elections. Seller shall cause the Seller Consolidated
Group to make (or refrain from making, as applicable) Tax elections (including
on a protective basis) so that the CCG Entities shall suffer no reduction in tax
basis or other attributes pursuant to Treasury Regulations Section 1.1502-36.

Section 6.9 Resignation of Officers, Managers and Directors. Unless directed
otherwise by the Purchaser in writing, the Company and the Seller shall cause
all officers and directors of the CCG Entities to deliver their written
resignations to the Purchaser or to otherwise by removed from office to be
effective on or before the Closing.

 

59

--------------------------------------------------------------------------------

Section 6.10 Notification of Certain Matters. The Company shall give prompt
written notice to the Purchaser of: (a) the occurrence, or failure to occur, of
any event of which it has Knowledge that causes or would be reasonably likely to
cause any representation or warranty of the Company or the Seller contained in
this Agreement to be inaccurate in any material respect at any time from the
date of this Agreement to the Closing determined as if such representation or
warranty were made at such time and (b) the failure of the Company or the Seller
to comply with or satisfy in any material respect any covenant to be complied
with by such party hereunder (a “Disclosure Letter Update”). No Disclosure
Letter Update shall have any effect for the purposes of indemnification
hereunder or, except as provided below, relieve the Seller or the Company from
any breach or violation of this Agreement. Notwithstanding any provision in this
Agreement to the contrary, unless the Purchaser provides the Company with a
written termination notice pursuant to Section 9.1(d)(i) within seven
(7) Business Days after the expiration of any applicable cure period, if any, in
respect of a breach described in a Disclosure Letter Update delivered pursuant
to this Section 6.10 and which uncured breach would otherwise give rise to a
termination right by the Purchaser under Section 9.1(d)(i), then the Purchaser,
in respect of such uncured breach, shall be deemed to have waived its right to
terminate this Agreement or prevent the consummation of the transactions
contemplated by this Agreement pursuant to Section 9.1(d)(i) or Section 7.3 and
such breach shall not be deemed to be a breach that would prevent the Company or
the Seller from delivering the certificate referenced in Section 8.2(b) or
terminating this Agreement pursuant to Section 9.1(c).

Section 6.11 Third-Party (Non-Governmental Entity) Consents.

(a) The parties hereto shall give any notices to third parties (who are not
Governmental Entities) and use, and cause their Subsidiaries to use, their
commercially reasonable efforts (including cooperating to the fullest extent
reasonably practicable with the efforts of the other parties) to obtain any
consents and approvals from such third parties triggered in connection with the
consummation of the transactions contemplated hereby (regardless of whether such
consents are conditions to the closing of this Agreement); provided that the
Seller shall be required to pay a fee to obtain a Person’s consent (if required
in order to obtain such consent) only with respect to Contracts listed in
Section 7.3(c) of the Company Disclosure Letter; provided further (subject to
the foregoing proviso) that the Seller shall not be required to pay a fee to a
Person in order to obtain such Person’s consent or to amend any existing
Contract with such Person or to enter into any new Contract with such Person in
order to obtain such Person’s consent.

(b) With respect to any Material Contract for which any consent necessary in
connection with the consummation of the transactions contemplated hereby has not
been obtained prior to the Closing, in the event that the Closing occurs,
(i) the Seller shall, at the Purchaser’s request, use commercially reasonable
efforts to obtain any such consent after the Closing until either such consent
has been obtained or the Seller and the Purchaser mutually agree, in good faith,
that such consent cannot reasonably be obtained and (ii) the Seller shall use
commercially reasonable efforts to provide the Purchaser with the same benefits
arising under any such Material Contract that is an Assigned Contract, including
performance by the Seller as agent if legally and commercially feasible,
provided that the Purchaser shall provide the Seller with such access to the
premises, books and records and personnel of Purchaser and the Company as is
reasonably necessary to enable the Seller to perform its obligations under such
Assigned Contract, and the Purchaser shall pay or satisfy the corresponding
liabilities for the enjoyment of such benefits to the extent the Company would
have been responsible therefor if such consent had been obtained prior to the
Closing.

 

60

--------------------------------------------------------------------------------

Section 6.12 [Reserved]

Section 6.13 Existing Letters of Credit. The Purchaser shall use commercially
reasonable efforts to cause the Seller and its Affiliates (other than the CCG
Entities) to be released in full from any letters of credit, surety bonds,
guarantees and other contractual obligations of the Seller and its Affiliates
(other than the CCG Entities) set forth on Section 6.13 of the Company
Disclosure Letter, effective as of the Closing. The Seller shall, and shall
cause its Affiliates (including the Company) to, cooperate with and to provide
reasonable assistance to the Purchaser as may be reasonably requested by the
Purchaser in connection with the actions contemplated by this Section 6.13.

Section 6.14 Other Agreements. Concurrently with the Closing, the Company shall,
on the one hand, and, as applicable, the Seller shall, or shall cause one or
more of its Affiliates to, on the other hand, enter into the following
agreements (together, the “Ancillary Agreements”).

(a) a Transition Services Agreement in a form and substance attached as Exhibit
A to this Agreement (the “Transition Services Agreement”), and

(b) two leases, in the form and substance as may be further negotiated by the
parties in good faith based on drafts exchanged prior to the date of this
Agreement (the “Leases”) for the lease of the premises occupied by certain CCG
Entities at 15 S. Virginia Avenue, Oklahoma City, Oklahoma and 518 N. Indiana
Avenue, Oklahoma City, Oklahoma.

Section 6.15 Employee Matters.

(a) The Purchaser shall take such action as may be necessary so that on and
after the Closing and at all times prior to the first anniversary of the Closing
Date, the Covered Employees (as defined below) shall, for so long as their
employment with the Company or any of its Affiliates continues during such
period, be provided employee benefits, plans and programs (including deferred
compensation, pension, life insurance, welfare, profit sharing, severance,
salary continuation and fringe benefits, but excluding 401(k), incentive
compensation arrangements and retention awards) which, in the aggregate, are
(i) not materially less favorable than those currently provided to Covered
Employees by the Seller immediately prior to the Closing or (ii) are
substantially the same as those made available by the Purchaser to similarly
situated employees of the Purchaser. Any costs (including without limitation
vendor and broker costs) associated with replicating current employee benefits,
plans and programs for this purpose that are incurred prior to the Closing shall
be borne by the Seller. For all purposes of this Agreement, “Covered Employees”
shall mean all Employees immediately prior to the Closing Date other than the
Identified Employees. For purposes of eligibility to participate and vesting in
all benefits provided by the Purchaser or the CCG Entities on and after the
Closing, the Covered Employees will be credited with their years of service with
the CCG Entities and prior employers to the extent service with the CCG Entities
and prior employers is taken into account under the Employee Plans. The
eligibility of Covered Employees to participate in any welfare benefit plan or
program of the Purchaser and the CCG Entities on and after the Closing shall not
be subject to any eligibility waiting periods, evidence of insurability
requirements or any exclusions or

 

61

--------------------------------------------------------------------------------

limitations for any pre-existing conditions except to the extent such individual
was or would have been subject to such exclusion under similar Employee Plans.
The Purchaser shall cause each Covered Employee to be given credit under any
welfare benefit plan or program of the Purchaser or the CCG Entities for all
amounts paid by such Covered Employee under any benefit plans or programs
offered by the CCG Entities or any Affiliate of the CCG Entities prior to the
Closing for the plan year that includes the Closing Date for purposes of
applying deductibles, co-payments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the
applicable plan or program maintained by the Purchaser for the plan year in
which the Closing Date occurs. At the Purchaser’s request, the Seller will cause
the CCG Entities to provide the Purchaser with information reasonably necessary
(including employment records and payroll records) to permit the Purchaser to
give effect to and to comply with this Section 6.15(a), subject to applicable
Law.

(b) For a period of ninety-one (91) days (inclusive) following the Closing Date,
the Purchaser and the CCG Entities shall not implement any plant closing, mass
layoff or other termination of employees that, either alone or in the aggregate
(with any other termination of employees by the CCG Entities prior to the
Closing Date), would create any obligations upon or liabilities for Seller or
its Affiliates under the WARN Act. Following the Closing Date, the Purchaser and
the Company and each of their respective Subsidiaries hereby agree to indemnify
the Seller and its officers, directors, employees, consultants, stockholders and
Affiliates for, and to hold each of them harmless from and against, all Damages
(which shall not include, for avoidance of doubt, Seller Severance Costs) that
any of them may suffer by reason of or in connection with any claim, proceeding
or suit brought against any of them under the WARN Act, or other Law relating to
Employment, which relate to actions taken by the Purchaser or the CCG Entities
or any of their respective Affiliates at any time after the Closing (including
any discharge or constructive discharge of any of the employees of the CCG
Entities with regard to any site of employment or one or more facilities or
operating units within any site of employment of the CCG Entities) or to the
Purchaser’s pre-Closing identification of any Identified Employee.

(c) The Seller shall bear and be responsible for all liabilities and obligations
under any written retention bonus, transaction bonus or similar arrangement of
the CCG Entities, the Seller, LSB or any of their respective Affiliates entered
into prior to the Closing applicable to any Employee whereby payment is
triggered by the transactions contemplated hereby, including, without
limitation, the Retention Awards, and shall ensure that such bonuses are paid in
accordance with their terms in effect as of the Closing Date.

(d) Effective as of the Closing Date, each Covered Employee shall cease active
participation in and benefit accrual under, and each CCG Entity shall cease to
be a contributing sponsor of, and participating employer in, any benefit plans,
programs or arrangements, including the Seller 401k Plan, that are sponsored or
maintained by Seller or LSB. Prior to the Closing, Seller or its Affiliates
shall fully fund, through the Closing, all employee contributions and employer
matching contributions required pursuant to the terms of the Seller 401(k) Plan
with respect to Covered Employees. Effective as soon as administratively
possible following the Closing Date, Purchaser shall cause, or cause its
Affiliates to cause, the Covered Employees to participate in a defined
contribution plan intended to qualify under Section 401(a) of the Code that
includes a cash or deferred arrangement which meets the requirements of
Section 401(k) of the Code (the “Purchaser DC Plan”). The terms of the Purchaser
DC Plan

 

62

--------------------------------------------------------------------------------

shall provide that Covered Employees shall have the right to make direct
rollovers to the applicable Purchaser DC Plan of their accounts in the Seller
401k Plan, including if the entire account balance is rolled over, a direct
rollover of any notes evidencing loans made to such Covered Employees with
respect to the transferred accounts.

(e) To the extent that such coverage constitutes Seller Severance Costs, Seller
shall provide COBRA continuation coverage (within the meaning of Section 4980B
of the Code and the Treasury regulations thereunder) to all Identified Employees
who are M&A qualified beneficiaries (within the meaning assigned to such term
under Q&A-4 of Treasury regulation Section 54.4980B-9) with respect to the
transactions contemplated by this Agreement for the duration of the period to
which such individuals are entitled to such coverage. Seller shall take any and
all necessary actions to ensure that Purchaser and its affiliates are not
required to provide such continuation coverage to the extent of Seller Severance
Costs to any such individual at any time. Purchaser shall reimburse Seller for
the cost to Seller of providing COBRA continuation coverage to the Identified
Employees in excess of the limits of the Seller Severance Costs to the extent
such limits are exceeded.

(f) Effective as of the Closing Date: (a) to the extent such balances are not
actually transferred, each Covered Employee’s account balance, if any, in the
health care flexible spending account and dependent care spending account
(whether positive or negative, collectively, the “Transferred Account Balances”)
under the health care flexible spending and dependent care spending plan(s) of
LSB or its Affiliates (collectively, the “LSB Flex Plan”) shall be credited or
debited for booking purposes, as applicable, to one or more comparable plans of
the Company, the Purchaser or their Affiliates (collectively, the “Purchaser
Flex Plan”); (b) the elections, contribution levels and coverage levels of the
Covered Employees who participated in the LSB Flex Plan prior to Closing (the
“Covered Flex Plan Employees”) shall apply under the Purchaser Flex Plan in the
same manner as under the LSB Flex Plan; and (c) the Covered Flex Plan Employees
shall be reimbursed from the Purchaser Flex Plan for claims incurred at any time
during the plan year of the Purchaser Flex Plan in which the Closing occurs that
are submitted to the Purchaser Flex Plan from or after Closing on the same basis
and the same terms and conditions as under the LSB Flex Plan.

(g) Except as provided in Section 6.15(e), the Seller agrees that any claims for
welfare benefits incurred before the Closing Date with respect to any Employees
(or their covered dependents or beneficiaries) shall be the responsibility of
the Seller or the insurers of the Seller’s welfare plans and the Purchaser
agrees that any claims for welfare benefits incurred on or after the Closing
Date with respect to any Employees (or their covered dependents or
beneficiaries) shall be the responsibility of the Purchaser or the insurers of
Purchaser’s welfare plans. For the avoidance of doubt, with respect to health
care services provided in connection with in-patient hospitalization, such claim
is deemed to incurred on the first day on which hospitalization occurs. In the
event of an employee’s death or permanent disability, the claim for welfare
benefits shall be deemed to be incurred on the date the employee dies or is
deemed permanently disabled under the applicable plan.

(h) The provisions of this Section 6.15 are solely for the benefit of the
Company, the Seller and the Purchaser, and no current or former Employee or any
other individual shall be regarded for any purpose as a third-party beneficiary
of this Section 6.15. In no event shall the terms of this Section 6.15 be deemed
to (i) establish, amend, or modify any

 

63

--------------------------------------------------------------------------------

Employee Plan, any “employee benefit plan” as defined in Section 3(3) of ERISA,
or any other benefit plan, program, agreement or arrangement maintained or
sponsored by Seller, the Company or any of their respective Affiliates,
(ii) alter or limit the ability of the Purchaser or any of its Subsidiaries
(including any CCG Entity) to amend, modify or terminate any Employee Plan,
employment agreement or any other benefit or employment plan, program, agreement
or arrangement after the Closing Date, or (iii) confer upon any current or
former Employee, officer, partner, member, director or consultant, any right to
employment or continued employment or continued service with Purchaser or any of
its Subsidiaries (including any CCG Entity), preclude the ability of Purchaser
or any of its Subsidiaries (including any CCG Entity) to terminate the
employment or services of any Employee, officer, partner, member, director or
consultant for any reason, or constitute or create an employment agreement with
any such Person.

(i) Not less than ten (10) Business Days prior to the Closing, the Purchaser
shall identify in writing to the Seller each Employee that Purchaser determines
will be terminated from employment with a CCG Entity effective at the Closing
(each such Employee along with any other Employees Purchaser otherwise requests
that Seller terminate, an “Identified Employee”). Seller shall take all action
necessary or appropriate to cause each Identified Employee to be terminated from
employment with the applicable CCG Entity effective at the Closing. Seller may
cause the employment of any Identified Employee to be transferred to an
Affiliate of the Seller (other than a CCG Entity). Seller shall be responsible
for and shall bear all Seller Severance Costs. Purchaser shall be responsible
for and shall bear all Purchaser Severance Costs.

Section 6.16 Seller’s Access to Information. From and after the Closing, the
Purchaser shall (and shall cause the CCG Entities to) hold all the books and
records of the CCG Entities existing on the Closing Date and not to destroy or
dispose of any such books or records for a period of five (5) years from the
Closing, and thereafter, if it desires to destroy or dispose of such books and
records, to offer first in writing at least ninety (90) days prior to such
destruction or disposal to surrender them to the Seller. During that five year
period, the Purchaser shall (and shall cause the CCG Entities to), during normal
business hours, and upon reasonable notice, make available and provide the
Seller and its representatives (including counsel and independent auditors) with
access to the facilities and properties of the CCG Entities and to all
information, files, documents and records (written and computer) that are not
otherwise protected by legal privilege relating to the CCG Entities or any of
their businesses or operations for any and all periods prior to or including the
Closing Date that they may reasonably require with respect to any reasonable
business purpose (including any Tax matter) or in connection with any claim,
dispute, action, cause of action, investigation or proceeding of any kind by or
against any person, and shall (and shall cause the CCG Entities to) cooperate
fully with the Seller and its representatives (including counsel and independent
auditors) in connection with the foregoing, at the sole cost and expense of the
Seller, including by making tax, accounting and financial personnel and other
appropriate employees and officers of the CCG Entities reasonably available to
the Seller and its respective representatives (including counsel and independent
auditors), with regard to any reasonable business purpose.

 

64

--------------------------------------------------------------------------------

Section 6.17 Insurance.

(a) The Seller shall cause to be maintained through the Closing the Policies (or
other policies providing substantially similar insurance coverage). Prior to
Closing, the Seller shall purchase “tail” insurance policies that meet the
following criteria: (1) naming the D&O Indemnitees and CCG Entities as insureds;
(2) containing a claims period of at least six (6) years from the Closing;
(3) issued by the current insurers or an insurance carrier with the same or
better credit rating as the current insurers; (4) for (a) directors & officers
liability with stand alone policy limits of $20 million ($250,000 self insured
retention), (b) employment practices liability with stand alone policy limits
(including entity coverage) of $10 million ($100,000 self insured retention),
(c) fiduciary with stand alone policy limits of $5 million ($0 self insured
retention) and (d) lawyers’ professional liability with stand alone policy
limits of $1 million ($10,000 self insured retention) coverages (or for such
lesser amount of coverage as Purchaser may agree to in its sole discretion); and
(5) otherwise in a scope at least as favorable as the existing policies or
towers of policies with respect to acts, omissions, or wrongful acts that
allegedly took place at or prior to the Closing and upon terms and coverage
substantially identical to those set forth in the existing policies. The
premiums for such “tail” insurance policies shall be borne by the Seller up to a
maximum of $250,000, with any excess over such amount to be paid directly by the
Purchaser at the time such policies are bound. The Purchaser shall not, and
shall cause the CCG Entities not to, cancel or change the Policies or the “tail”
policies purchased in accordance with this provision in any respect, except as
required by applicable Law. At Closing, the Seller shall provide to the
Purchaser full copies of all historical general liability insurance policies in
full that are in the Seller’s possession, as well as any secondary evidence of
the Seller’s historical general liability insurance.

(b) Following the Closing, Purchaser shall have the right to pursue insurance
recovery from the insurers under all such Policies, tails and historical general
liability insurance policies for matters or claims existing, occurring or
wrongful acts that allegedly took place at or prior to Closing relating in any
way to any CCG Entity. Additionally, following the Closing: (1) the Seller shall
not, and shall cause its Affiliates not to, seek to change any rights or
obligations of any CCG Entity under such Policies, tails and/or general
liability insurance; (2) the Seller shall, and shall cause its Affiliates to,
cooperate with the CCG Entities in making claims under such Policies, tails
and/or general liability insurance; and (3) Seller shall, and shall cause its
Affiliates to, promptly pay over to the applicable CCG Entity any amounts that
Seller or any such Affiliate may receive under such Policies, tails or general
liability insurance with respect to losses experienced by such CCG Entity to the
extent such losses were borne by such CCG Entity.

Section 6.18 Separation/TSA Cooperation. As soon as possible after the date
hereof, the parties shall cooperate in good faith to (i) plan for the separation
of, and separate, as of the Closing, logically and physically the CCG Entities’
systems and data from those of the Seller and its Affiliates (other than the CCG
Entities), including the Seller and LSB making available to the Purchaser human
resources and other data reasonably requested by the Purchaser related to the
CCG Entities and (ii) finalize Schedule A to the Transition Services Agreement
setting forth the Transition Services (as defined in the Transition Services
Agreement), respectively. Each party shall bear its own costs incurred in
connection with the activities contemplated in this Section 6.18 prior to the
Closing.

 

65

--------------------------------------------------------------------------------

Section 6.19 Non-Competition; Non-Solicitation.

(a) LSB and the Seller acknowledge and agree that (A) the agreements and
covenants contained in this Section 6.19 (i) impose a reasonable restraint on
LSB and the Seller in light of the activities and business of the CCG Entities
on the date of the execution of this Agreement and the current plans of the CCG
Entities, (ii) are reasonable and valid in geographical and temporal scope and
in all other respects, and (iii) are essential to protect the value of the
Business and (B) they have obtained knowledge, contacts, know-how and experience
and that such knowledge, contacts, know-how and experience could be used to the
substantial advantage of a competitor of the CCG Entities and to the detriment
of the CCG Entities. LSB and the Seller also acknowledge that the Purchaser has
agreed to purchase the Shares in reliance on the covenants made by LSB and the
Seller in this Section 6.19, and that the Purchaser would not have agreed to
purchase the Shares in the absence of the covenants made by LSB and the Seller
in this Section 6.19. Subject to Section 6.19(b), from and after the Closing and
until the third (3rd) anniversary of the Closing Date (the “Restrictive Covenant
Period”), LSB and the Seller shall not, and shall cause their respective
Affiliates not to, (i) engage in the Business in the United States or (ii) own
an interest in, or manage, operate, control, or participate in or be connected
with, as a director, officer, employee, partner, member, stockholder,
consultant, agent or otherwise, any Person engaged in the Business (“Competing
Person”), in each case, directly or indirectly, alone or in conjunction with any
other Person. Notwithstanding anything to the contrary in this Agreement, for
purposes of this Section 6.19, “Affiliates” of LSB and the Seller shall not
include any Person solely based on being a stockholder or director of LSB. Each
of LSB and the Seller further agrees that, during the Restrictive Covenant
Period, it shall not, directly or indirectly, for its own account or for the
account of any other Person, engage in Interfering Activities.

(b) Notwithstanding anything in this Section 6.19 to the contrary, nothing
contained in this Section 6.19 shall prohibit or restrict LSB, the Seller or any
of their respective Affiliates from collectively owning up to an aggregate of
three percent (3%) of the outstanding shares of any class of capital stock of
any publicly traded Competing Person so long as none of LSB, the Seller or any
of their respective Affiliates participates in the management of such Competing
Person.

(c) Each of LSB and the Seller hereby agrees and stipulates, on behalf of itself
and each of its Affiliates, that in any action or claim brought by LSB, the
Seller or any of their respective Affiliates, or in any action or claim brought
against LSB, the Seller or any of their respective Affiliates, involving the
provisions of Section 6.19(a), each of LSB and the Seller hereby waives, and
hereby agrees to cause its Affiliates to waive, any claim or defense that the
non-competition covenants provided in Section 6.19(a) are unenforceable, void or
voidable, for any reason, including, but not limited to, fraud,
misrepresentation, illegality, unenforceable restraint of trade, failure of
consideration, illusory contract, mistake or any other substantive legal
defense.

(d) From and after the date hereof and until the tenth (10th) anniversary of the
Closing Date, LSB and the Seller shall, and shall cause their respective
Affiliates and representatives (in such capacity) to keep confidential any
knowledge and information relating to any CCG Entity or any portion of the
Business which is not publicly available, including information which (i) is in
the nature of competitively sensitive information the disclosure of which could
harm the competitive advantage of any CCG Entity or its successors with respect
to the operation of the Business or provides a competitive advantage to a
competitor of any CCG Entity or its successors, or (ii) could otherwise
materially harm any CCG Entity’s ownership or operation of the Business (each of
the foregoing, the “Proprietary Information”) which LSB, the

 

66

--------------------------------------------------------------------------------

Seller or any of their respective Affiliates (other than the CCG Entities)
obtained with respect to the CCG Entities or their respective representatives
unless and to the extent (x) publicly available (other than as a result of an
act or omission of LSB, the Seller or any of their respective Affiliates or
representatives), (y) required by the rules of any national or international
securities exchange or other self-regulatory entity applicable to LSB, the
Seller or any of their respective Affiliates or representatives, or (z) as
requested pursuant to a subpoena, court order, civil investigative demand or
similar judicial process or other oral or written request issued by a court of
competent jurisdiction or by international, national, state or local
governmental or regulatory body.

(e) If any court of competent jurisdiction shall at any time deem the duration
or the geographic scope of any of the provisions of this Section 6.19
unenforceable, the other provisions of this Section 6.19 shall nevertheless
stand and the duration and/or geographic scope set forth herein shall be deemed
to be the longest period and/or greatest size permissible by Law under the
circumstances, and the parties hereto agree that such court shall reduce the
time period and/or geographic scope to permissible duration or size.

(f) Without limiting the remedies available to the Purchaser, LSB and the Seller
acknowledge that a breach by LSB or the Seller of any of the covenants contained
in this Section 6.19 may result in material irreparable injury to the Purchaser
and the CCG Entities for which there is no adequate remedy at Law, that it may
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat thereof, the Purchaser or any CCG Entity shall
be entitled to seek a temporary restraining order and/or a preliminary or
permanent injunction, without the necessity of proving irreparable harm or
injury as a result of such breach or threatened breach hereof, restraining LSB
and/or the Seller from engaging in activities prohibited by this Section 6.19 or
such other relief as may be required specifically to enforce any of the
covenants in this Section 6.19.

(g) Each covenant in this Section 6.19 shall be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of LSB or the Seller against the Purchaser or any of
its Affiliates, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Purchaser of each such covenant.
The covenants contained in this Section 6.19 shall not be affected by any breach
of any other provision hereof by any party hereto. LSB, the Seller and Purchaser
intend that the covenants in this Section 6.19 shall be deemed to be a series of
separate covenants, one for each and every county of the United States.

Section 6.20 Title Insurance. The Purchaser shall have the right to procure,
with any title premiums, other title charges and survey costs being at the
Purchaser’s sole cost and expense, an owner’s policy of title insurance (or
endorsements to any existing owner’s policy of title insurance issued to any CCG
Entity) for each Owned Real Property (the “New Title Coverage”), and the Seller
shall use commercially reasonable efforts to cooperate with the Purchaser in
connection therewith, including by the Seller providing to Title Insurer, at or
prior to Closing, (a) one or more owner’s affidavits in form and substance
customary for the jurisdiction in which the applicable Owned Real Property is
located; (b) a non-imputation affidavit from the Seller in form and substance
reasonably acceptable to the Seller; (c) one or more survey affidavits in form
and substance customary for the jurisdiction in which the applicable Owned Real
Property is located; and (d) such other information or documents as Title
Insurer may reasonably request from the Seller in connection with the
Purchaser’s efforts to

 

67

--------------------------------------------------------------------------------

procure the New Title Coverage (collectively, the “Title Documents”); provided,
however, in no event shall (i) obtaining the New Title Coverage be a condition
to the Purchaser’s obligations to consummate the transactions contemplated
hereby and (ii) any Title Document expand the Seller’s obligations or
liabilities or decrease its rights or benefits under this Agreement.

Section 6.21 Purchaser R&W Insurance.

(a) Not more than five Business Days after the date of this Agreement, the
Seller shall pay to the applicable Purchaser R&W Insurance Provider the
underwriting fee and premiums necessary to bind the Purchaser R&W Insurance
Policy. Prior to or in connection with the Closing, the Seller shall pay the
applicable Purchaser R&W Insurance Provider the remaining premiums necessary for
the issuance of the Purchaser R&W Insurance Policy up to a maximum of $2,500,000
(inclusive of the underwriting fee and premiums paid to bind the policy), with
any excess over such amount to be paid directly by the Purchaser.

(b) The Purchaser shall execute and cause to be executed all certifications
attached to the Purchaser R&W Insurance Policy or otherwise as may be reasonably
required by the Purchaser R&W Insurance Provider.

(c) Following the Closing Date, the Purchaser shall not amend or modify the
Purchaser R&W Insurance Policy in any manner that would adversely affect the
Seller.

ARTICLE VII

CONDITIONS TO THE CLOSING

Section 7.1 Conditions to Obligations of the Purchaser and the Seller. The
respective obligations of the Purchaser and the Seller to consummate the
transactions contemplated hereby are subject to the satisfaction at or prior to
the Closing of the following conditions:

(a) no Governmental Entity shall have enacted, issued, promulgated or enforced
or entered any statute, rule, regulation, executive order, decree, injunction,
temporary restraining order or any other order of any nature to the effect that
the transactions contemplated hereby may not be consummated as provided herein
(a “Prohibitive Order”);

(b) the waiting period applicable to the consummation of the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
earlier terminated; and

(c) the Purchaser R&W Insurance Policy shall be in full force and effect in
accordance with its terms.

Section 7.2 Conditions to Obligations of the Seller. The obligations of the
Seller to consummate the transactions contemplated hereby are further subject to
the satisfaction (or waiver by the Seller) at or prior to the Closing of the
following conditions:

(a) the representations and warranties of the Purchaser contained in Article V
shall be accurate in all respects (if and to the extent qualified by the term
“material”, “in all material respects”, “Purchaser Material Adverse Effect” or
any other similar qualification based

 

68

--------------------------------------------------------------------------------

upon materiality) or in all material respects (if and to the extent not modified
by any such qualification), as of the Closing as though made at and as of such
time or, in the case of representations and warranties made as of a specific
date, as of such date, except where any such failure of such representations and
warranties to be accurate would not, individually or in the aggregate,
constitute or result in a Purchaser Material Adverse Effect;

(b) the Purchaser shall have performed in all material respects its obligations
hereunder required to be performed by it at or prior to the Closing; and

(c) the Purchaser shall have delivered, or caused to be delivered, to the Seller
the items identified in Section 8.3.

Section 7.3 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated hereby are further subject
to the satisfaction (or waiver by the Purchaser) at or prior to the Closing of
the following conditions:

(a) the representations and warranties of the Seller and the Company contained
in Article III and Article IV shall be accurate in all respects (if and to the
extent qualified by the term “material”, “in all material respects”, “Seller
Material Adverse Effect”, “Company Material Adverse Effect” or any other similar
qualification based upon materiality) or in all material respects (if and to the
extent not modified by any such qualification), as of the Closing as though made
at and as of such time or, in the case of representations and warranties made as
of a specific date, as of such date, except where any such failure of such
representations and warranties to be accurate would not, individually or in the
aggregate, constitute or result in a Company Material Adverse Effect or a Seller
Material Adverse Effect, as applicable;

(b) the Seller and the Company shall have performed in all material respects
their obligations hereunder required to be performed by each of them at or prior
to the Closing;

(c) the Company shall have received all consents, authorizations or approvals or
delivered all notices required under the Contracts listed in Section 7.3(c) of
the Company Disclosure Letter, in each case in form and substance reasonably
satisfactory to the Purchaser, and no such consents, authorizations, approvals
or notices shall have been revoked;

(d) the Seller shall have delivered, or caused to be delivered, to the Purchaser
the items identified in Section 8.2; and

(e) no change, effect, event, development or occurrence shall have occurred or
come to exist since the date hereof that has had or would, individually or in
the aggregate, have a Company Material Adverse Effect or a Seller Material
Adverse Effect.

ARTICLE VIII

CLOSING

Section 8.1 Closing. Unless otherwise agreed to by the Seller and the Purchaser,
the Closing shall occur at 9:00 a.m. local time on the date that is not later
than the sixth (6th) Business Day after the date on which all conditions to
Closing (other than conditions the fulfillment of which are to occur at the
Closing, but subject to the satisfaction or waiver of such conditions) are
satisfied or waived. The Closing shall take place at the Dallas, Texas office of
Vinson & Elkins L.L.P., located at 2001 Ross Avenue, Suite 3700, Dallas, Texas
75201, or at such other time or place as the Seller and the Purchaser may agree.

 

69

--------------------------------------------------------------------------------

Section 8.2 Seller Closing Deliveries. At the Closing, the Seller shall deliver,
or cause to be delivered, to the Purchaser the following:

(a) certificates representing the Shares, duly endorsed in blank or accompanied
by stock powers duly endorsed in blank, and otherwise in proper form for
transfer;

(b) a certificate as to compliance with the conditions set forth in
Section 7.3(a), Section 7.3(b) and Section 7.3(e), duly executed by an
authorized representative of the Seller;

(c) the Transition Services Agreement duly executed by any of the Seller and its
affiliates that is a party thereto;

(d) for each Owned Real Property for which the Purchaser elects to obtain New
Title Coverage pursuant to Section 6.20, the applicable Title Documents;

(e) a statement meeting the requirements of Section 1.1445-2(b) of the Treasury
Regulations promulgated under the Code, to the effect that the Seller is not a
“foreign person” within the meaning of Section 1445 of the Code and the Treasury
Regulations promulgated thereunder;

(f) the Leases contemplated by Section 6.14(b) duly executed by any of the
Seller and its affiliates that is a party thereto; and

(g) UCC-3 financing statements and mortgage releases for the Owned Real Property
providing for the termination of Liens with respect to the LSB Debt Instruments
and any other applicable Excluded CCG Entities Indebtedness under
Section 2.3(b).

Section 8.3 Purchaser Closing Deliveries. At the Closing, the Purchaser shall
deliver, or cause to be delivered, to the Seller the following:

(a) the Transaction Price in accordance with Section 2.2; and

(b) a certificate as to compliance with the conditions set forth in
Section 7.2(a) and Section 7.2(b), duly executed by an authorized officer of the
Purchaser.

ARTICLE IX

TERMINATION AND ABANDONMENT

Section 9.1 Termination. This Agreement may be terminated at any time prior to
the Closing and the transactions contemplated hereby may be abandoned:

(a) by unanimous written agreement of the Purchaser and the Seller;

 

70

--------------------------------------------------------------------------------

(b) by the Seller or Purchaser if at any time prior to the Closing Date there
shall be a Prohibitive Order and such Prohibitive Order shall have become final
and nonappealable;

(c) by the Seller if:

(i) at any time prior to the Closing Date, (A) there shall be a breach of any
representation or warranty of the Purchaser in this Agreement or (B) there shall
be a breach by the Purchaser of any of its covenants or agreements contained in
this Agreement, in each case, such that the conditions set forth in Section 7.2
would not be satisfied if such breach is occurring or continuing as of the
Closing; provided that such breach has not been waived by the Seller, provided
further that (x) such breach is incapable of being cured by the Purchaser or
(y) if capable of being cured, shall not have been cured by the Purchaser within
thirty (30) days after written notice thereof from the Seller specifying the
nature of such breach and requesting that it be cured, provided further that
such breach is continuing at the time of termination, and provided further that
neither the Seller nor the Company is then in breach of this Agreement so as to
cause any of the conditions set forth in Section 7.1 or Section 7.3 not to be
satisfied;

(ii) the Closing shall not have occurred by November 11, 2016 (the “Initial
Termination Date”; provided, that if all of the conditions set forth in
Section 7.1 and Section 7.3 have been satisfied or waived (other than the
condition set forth in Section 7.1(b) and other than those conditions that by
their nature cannot be satisfied other than at the Closing, each of which
conditions is capable of being satisfied at the date of termination of this
Agreement if the Closing were to occur at that time (except those conditions
which are unsatisfied solely as the result of the passage of the Initial
Termination Date)), the Purchaser (by delivery of written notice to the Seller
prior to 5:30 p.m. local time in Oklahoma City, Oklahoma no more than seven
calendar days and no fewer than two calendar days prior to the Initial
Termination Date), upon a good faith determination in its sole discretion that
the condition set forth in Section 7.1(b) is reasonably capable of being
satisfied on or prior to the ten month anniversary of signing, may extend the
Initial Termination Date to a date that is not more than sixty calendar days
after the Initial Termination Date (as extended, the “First Extended Termination
Date”); provided, further, that no more than seven calendar days and no fewer
than two calendar days prior to the First Extended Termination Date, if all of
the conditions set forth in Section 7.1 and Section 7.3 have been satisfied or
waived (other than the condition set forth in Section 7.1(b) and other than
those conditions that by their nature cannot be satisfied other than at the
Closing, each of which conditions is capable of being satisfied at the date of
termination of this Agreement if the Closing were to occur at that time (except
those conditions which are unsatisfied solely as the result of the passage of
the First Extended Termination Date)), the Purchaser (by delivery of written
notice to the Seller prior to 5:30 p.m. local time in Oklahoma City, Oklahoma no
more than seven calendar days and no fewer than two calendar days prior to the
First Extended Termination Date), upon a good faith determination in its sole
discretion that the condition set forth in Section 7.1(b) is reasonably capable
of being satisfied on or prior to the ten month anniversary of signing, may
extend the First Extended Termination Date to a date that is not more than sixty
calendar days after the First Extended Termination Date (as extended, the
“Second Extended Termination Date”); provided, further, that notice extending
the termination date provided by Purchaser’s counsel via electronic mail to
Seller’s counsel shall be deemed sufficient notice; provided further that the
Seller shall not have the right to terminate this Agreement pursuant to this
Section 9.1(c)(ii) if either the Seller or the Company is in material breach of
this Agreement; or;

 

 

71

--------------------------------------------------------------------------------

(iii) (A) all of the conditions set forth in Section 7.1 and Section 7.3 have
been satisfied or waived (other than those conditions that by their nature
cannot be satisfied other than at the Closing, each of which conditions is
capable of being satisfied at the date of termination of this Agreement if the
Closing were to occur at that time), (B) the Seller shall have given irrevocable
written notice to the Purchaser that it stands and will stand, ready, willing
and able to consummate the Closing, (C) the Purchaser fails to consummate the
Closing by the time the Closing should have occurred pursuant to Section 8.1 and
(D) the Seller shall have given the Purchaser written notice at least one
(1) Business Day prior to such termination stating the Seller’s intention to
terminate this Agreement pursuant to this Section 9.1(c)(iii); or

(d) by the Purchaser if:

(i) at any time prior to the Closing Date, (A) there shall be a breach of any
representation or warranty by the Seller or the Company in this Agreement, or
(B) there shall be a breach by the Seller or the Company of any of their
covenants or agreements contained in this Agreement, in each case, such that the
conditions set forth in Section 7.3 would not be satisfied if such breach is
occurring or continuing as of the Closing; provided that such breach has not
been waived by the Purchaser, provided further that (x) such breach is incapable
of being cured by the Seller or the Company, as the case may be, or (y) if
capable of being cured, shall not have been cured by the Seller or the Company,
as the case may be, within thirty (30) days after written notice thereof from
the Purchaser, provided further that such breach is continuing at the time of
termination, and provided further that the Purchaser is not then in breach of
this Agreement so as to cause any of the conditions set forth in Section 7.1 or
Section 7.2 not to be satisfied, or

(ii) the Closing shall not have occurred by the Initial Termination Date (or the
First Extended Termination Date or the Second Extended Termination Date if
properly extended by the Purchaser in accordance with Section 9.1(c)(ii));
provided that the Purchaser may not terminate this Agreement pursuant to this
Section 9.1(d)(ii) if it is in material breach of this Agreement.

Section 9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.1 by any party hereto, written notice thereof
shall forthwith be given to the other parties specifying the provision hereof
pursuant to which such termination is made, this Agreement shall become void and
have no effect (other than this Section 9.2, Section 6.2 (Confidentiality),
Section 9.3 (Payment), and Article XI (Miscellaneous)) and, subject to this
Section 9.2, Section 9.3 (Payment) and Section 11.13, there shall be no
liability hereunder on the part of the parties hereto except for liability
arising out of a breach of this Agreement. In addition, if this Agreement is
terminated:

(a) the Purchaser shall return all documents, work papers and other materials
furnished by the Seller, the Company, any of their Affiliates, or any of their
respective representatives or advisors relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof, to the Seller, or
destroy all such documents, work papers and other materials and certify in
writing to the Seller that such destruction has been completed, in each case in
accordance with this Agreement and the Confidentiality Agreement;

 

72

--------------------------------------------------------------------------------

(b) the Purchaser shall not disclose, and shall keep strictly confidential, all
Confidential Information in accordance with the terms of the Confidentiality
Agreement; and

(c) all filings, applications and other submissions made pursuant hereto shall,
at the option of the filing party and to the extent practicable, be withdrawn
from the Governmental Entity or other Person to which made.

Section 9.3 Payment. In the event that this Agreement is terminated (x) by the
Seller or the Company (i) pursuant to Section 9.1(c)(ii), and if as of the date
of termination (A) the condition set forth in Section 7.1(b) has not been
satisfied, including but not limited to the waiting period applicable to the
consummation of the transactions contemplated by this Agreement under the HSR
Act is still pending as of such date of termination (or the condition set forth
in Section 7.1(a) has not been satisfied as the result of a Prohibitive Order
issued to enforce any antitrust or competition law of the United States of
America) and (B) all other conditions to closing have been, or are readily
capable of being, satisfied, or (ii) pursuant to Section 9.1(b) as the result of
a Prohibitive Order issued to enforce any antitrust or competition law of the
United States of America that has become final and nonappealable, or (y) by the
Purchaser pursuant to Section 9.1(d)(ii), then the Purchaser shall promptly, but
in no event later than two days after the date of such termination, pay the
Seller an expense reimbursement in the agreed amount of $4,000,000 (the
“Payment”) in cash by wire transfer of immediately available funds to an account
to be indicated by the Seller. Notwithstanding anything to the contrary in this
Agreement, the parties agree that if this Agreement is terminated under
circumstances in which Purchaser is obligated to pay the Payment under this
Section 9.3 and the Payment is actually paid in full, the payment of the Payment
shall be the sole and exclusive remedy available to the Seller with respect to
this Agreement and the transactions contemplated herein, and, upon payment of
the Payment pursuant to this Section 9.3, the Purchaser and its Affiliates and
their respective directors, officers, employees, shareholders and other
representatives shall have no further liability with respect to this Agreement
or the transactions contemplated herein to the Seller or any of their respective
Affiliates or representatives. Each of the parties hereto acknowledges that the
Payment is not intended to be a penalty, but rather is liquidated damages in a
reasonable amount that will compensate the Seller in the circumstances in which
such Payment is due and payable for the efforts and resources expended and
opportunities foregone while negotiating this Agreement and in reliance on this
Agreement and on the expectation of the consummation of the transactions
contemplated hereby, which amount would otherwise be impossible to calculate
with precision. In no event shall Purchaser be entitled to payment of the
Payment on more than one occasion.

ARTICLE X

INDEMNIFICATION

Section 10.1 Survival of Representations, Warranties and Covenants. All
representations and warranties contained in this Agreement and any certificate
delivered pursuant to this Agreement shall survive the Closing until 11:59 p.m.
local time in Oklahoma City, Oklahoma on the eighteen (18) month anniversary of
the Closing Date (the “Final Release

 

73

--------------------------------------------------------------------------------

Date”), at which time they (and the right to commence any claim with respect
thereto under this Article X) shall terminate, and thereafter no party hereto
shall be under any liability whatsoever with respect to any such representation
or warranty; provided, however, that (a) the representations and warranties
contained in Section 4.13 (Environmental Matters) shall survive the Closing
until the date that is the five (5) year anniversary of the Closing Date,
(b) the representations and warranties contained in Section 4.10 (Taxes) and
Section 4.11 (Employee Benefits Plans) shall survive the Closing until the date
that is thirty (30) days after the expiration of the statute of limitations
applicable to any claim of breach of such representations and warranties, and
(c) the representations and warranties contained in Section 3.1 (Ownership of
the Shares), Section 3.3 (Authorization; Noncontravention), Section 4.1
(Corporate Power), Section 4.2 (Authorization; Noncontravention), Section 4.3
(Capitalization), Section 4.4 (Subsidiaries) and Section 4.15 (Broker’s or
Finder’s Fee), Section 5.1 (Due Organization and Corporate Power) and
Section 5.2 (Authorization; Noncontravention) (collectively, such
representations and warranties, the “Fundamental Representations”) shall survive
the Closing indefinitely (in any such case, the “Survival Period”). In addition,
all covenants and agreements contained in this Agreement, including the
indemnification covenants and obligations contained in this Article X, shall
survive the Closing until the expiration of the statute of limitations
applicable to the respective matters contained therein. Notwithstanding the
preceding sentences, any breach of representations, warranties, covenants or
agreements in respect of which indemnity may be sought under this Agreement
shall survive the time at which it would otherwise terminate pursuant to the
preceding sentences, if notice of the inaccuracy or breach thereof giving rise
to such right of indemnity shall have been given to the party against whom such
indemnity may be sought prior to such time.

Section 10.2 Seller’s Indemnification Obligations. Subject to the provisions of
this Article X, from and after the Closing, the Seller shall indemnify, defend
and hold harmless the Purchaser Indemnitees from, against and in respect of, and
pay or reimburse the Purchaser Indemnitees for, any and all Damages (whenever
arising or incurred) arising out of or relating to:

(a) any breach of any representation or warranty made by the Company or the
Seller in this Agreement or any certificate delivered hereunder (including the
certificate delivered pursuant to Section 8.2(b);

(b) Indemnified Taxes and Indemnified Benefits Matters;

(c) any breach of any covenant, agreement or undertaking made by the Company to
the extent such covenant, agreement or undertaking is required to be performed
or satisfied by the Company prior to the Closing or the Seller in this Agreement
or any certificate delivered hereunder (including the certificate delivered
pursuant to Section 8.2(a)); and

(d) any CCG Entities Indebtedness outstanding as of immediately prior to the
Closing and any Transaction Expenses, in each case, not taken into account in
connection with the calculation and payment of the Transaction Price at Closing
or after Closing pursuant to Section 2.3(b).

For the purposes of determining under this Section 10.2 (i) whether any
representation made by the Company or the Seller herein is inaccurate or whether
there has been a breach of any warranty and (ii) the amount of any Damages
arising from such inaccuracy or breach, such

 

74

--------------------------------------------------------------------------------

representation and warranty (excluding each Scrape Excluded Representation)
shall be considered without regard to any qualification by or reference to the
words “Company Material Adverse Effect,” “Seller Material Adverse Effect,”
“material,” “materiality,” “in all material respects” or any similar words or
qualifications contained therein (other than any qualification or reference
contained in the definition of any defined term used herein).

Section 10.3 Limitation on the Seller’s Indemnification Obligations. The
Seller’s indemnification obligations pursuant to the provisions of Section 10.2
are subject to the following limitations:

(a) Purchaser Indemnitees shall not be entitled to recover under Section 10.2(a)
(except with respect to any breach relating to the representations and
warranties contained in Section 4.10 (Taxes) or the Fundamental Representations)
any Damages until the total amount which Purchaser Indemnitees would recover
under Section 10.2(a) (except for the representations and warranties contained
in Section 4.10 (Taxes) or the Fundamental Representations) exceeds $2,730,000
(the “Deductible”), at which point the Seller shall be liable only for the
amounts in excess of the Deductible; provided that the Seller shall not be
liable to indemnify Purchaser Indemnitees for any individual claim or claims
relating to the same set of facts and circumstances pursuant to Section 10.2(a)
until Purchaser Indemnitees have suffered aggregate Damages arising out of such
claim or claims relating to the same set of facts and circumstances equaling or
exceeding $36,000, in which case the Seller shall be liable for all Damages
arising out of such claim or claims subject to the limitations of this
Section 10.3; and provided further that all claims for which the Seller is not
required to indemnify Purchaser Indemnitees because the associated Damages do
not equal or exceed $36,000 shall also not count towards the Deductible;

(b) Purchaser Indemnitees shall not be entitled to recover from Seller under
Section 10.2(a) (except with respect to any breach relating to the
representations and warranties contained in Section 4.10 (Taxes) or Fundamental
Representations) any Damages to the extent the aggregate claims under
Section 10.2(a) (except for the representations and warranties contained in
Section 4.10 (Taxes) or the Fundamental Representations) of Purchaser
Indemnitees exceed $2,730,000 (the “Liability Cap”).

(c) The aggregate liability of the Seller for Damages of Purchaser Indemnitees
under Section 10.2 shall not exceed the amount of the final Transaction Price.

(d) Indemnification Escrow Fund. To provide a fund against which a Purchaser
Indemnitee may assert claims of indemnification under this Article X (each a
“Purchaser Indemnification Claim”), the Indemnification Escrow Amount shall be
deposited into escrow pursuant to the Escrow Agreement in accordance with
Section 2.2(b). The Indemnification Escrow Fund shall be held and distributed in
accordance with this Article X and the Escrow Agreement. Each Purchaser
Indemnification Claim shall be made only in accordance with this Article X and
the Escrow Agreement. A Purchaser Indemnitee shall seek monetary recourse for
Purchaser Indemnification Claims solely as set forth in Section 10.3(h).

(e) Reserved Amounts in the Indemnification Escrow Fund; Release in respect of
Claims. In the event any Purchaser Indemnification Claim is made by a Purchaser
Indemnitee pursuant to a Notice of Claim delivered to the Seller prior to the
Final Release Date,

 

75

--------------------------------------------------------------------------------

the Purchaser and the Seller shall negotiate in good faith to determine a
reasonable amount to be reserved and held in deposit in the Indemnification
Escrow Fund in respect of such Notice of Claim (a “Reserved Amount”). If the
Purchaser and Seller are unable to reach agreement as to the Reserved Amount by
the Final Release Date, then the Reserved Amount with respect to such Notice of
Claim shall be a reasonable amount determined in good faith by the Purchaser.
Upon the agreement by the Seller and the Purchaser Indemnitee or as finally
determined by a court of competent jurisdiction in respect of any Notice of
Claim, any amounts payable with respect to any Damage in a Notice of Claim to
the Purchaser Indemnitee shall be payable in accordance with Section 10.3(h).
The Seller and the Purchaser shall deliver executed instructions directing the
Escrow Agent to deliver to the Purchaser such amount.

(f) Release from Escrow.

(i) On the Final Release Date or promptly thereafter, the Seller and the
Purchaser shall deliver executed instructions, directing the Escrow Agent to,
subject to the terms set forth in the Escrow Agreement, disburse to the Seller
the remaining portion of the Indemnification Escrow Amount which exceeds any
Reserved Amounts in respect of Purchaser Indemnification Claims pending, but not
yet paid.

(ii) Following the Final Release Date, from time to time, upon resolution of any
Purchaser Indemnification Claim and the payment of amounts, if any, determined
to be payable to the Purchaser from the Indemnification Escrow Amount, the
Seller and the Purchaser shall jointly instruct the Escrow Agent to release to
the Seller the excess of the then-current balance in the Indemnification Escrow
Fund over the aggregate Reserved Amounts in respect of all remaining unresolved
Purchaser Indemnification Claims made prior to the Final Release Date, subject
to the terms of the Escrow Agreement.

(g) No Escrow Offsets. Purchaser Indemnitees may not offset funds held in or to
be released from (i) the Adjustment Escrow against any claims against Seller,
LSB or any of their respective Affiliates, including Purchaser Indemnification
Claims or (ii) the Indemnification Escrow Fund against any claims against
Seller, LSB or any of their respective Affiliates, including Purchaser claims
pursuant to Section 6.16 or Section 6.19.

(h) Sources of Recovery for Section 10.2(a) Claims; Required Recourse to
Purchaser R&W Insurance Policy. Notwithstanding anything to the contrary in this
Agreement, the parties agree that recovery for Purchaser Indemnification Claims
pursuant to Section 10.2(a) shall be subject to the following requirements:

(i) Until the Final Release Date and while funds remain in the Indemnification
Escrow Account, the Purchaser Indemnitees may seek recovery from the
Indemnification Escrow Account for Purchaser Indemnification Claims arising
under Section 10.2(a). After the Final Release Date, subject to Section 10.3(e),
or at the point when no funds remain in the Indemnification Escrow Account,
neither the Seller, LSB nor any of their respective Affiliates shall have any
liability for any Damages arising pursuant to Section 10.2(a) except with
respect to any breach relating to a representation or warranty contained in
Section 4.10 (Taxes) or a Fundamental Representation.

 

76

--------------------------------------------------------------------------------

(ii) With respect to any breach relating to any representation or warranty
contained in Fundamental Representations, at the point (i) when no funds remain
in the Indemnification Escrow Account and (ii) no recovery is allowed under the
Purchaser R&W Insurance Policy, the Purchaser Indemnitees may seek recovery from
the Seller subject to the applicable limitations contained in this Article X;
provided, however, that after the point when no funds remain in the
Indemnification Escrow Account and prior to seeking recovery under the Purchaser
R&W Policy with respect to any such breaches, the Purchaser Indemnitees may (and
shall) seek recovery directly from the Seller in an amount up to, but not
exceeding, $2,730,000 (which together with the Indemnification Escrow Amount is
reflective of the required retention amount under the Purchaser R&W Policy).

(iii) With respect to any breach relating to any representation or warranty
contained in Section 4.10 (Taxes), at the point when (i) no funds remain in the
Indemnification Escrow Account, and (ii) no recovery is allowed under the
Purchaser R&W Insurance Policy, the Purchaser Indemnitees may seek recovery from
the Seller subject to the applicable limitations contained in this Article X;
provided, however, that after the point when no funds remain in the
Indemnification Escrow Account and prior to seeking recovery under the Purchaser
R&W Policy with respect to any such breaches, the Purchaser Indemnitees may (and
shall) seek recovery directly from the Seller in an amount up to, but not
exceeding, $2,730,000 (which together with the Indemnification Escrow Amount is
reflective of the required retention amount under the Purchaser R&W Policy).

(i) Indemnification Exclusive Remedy.

(i) From and after the Closing, except (i) as otherwise provided in Section 2.3,
(ii) in the event of Fraud, or (iii) claims by Purchaser Indemnitees for
recovery under the Purchaser R&W Insurance Policy, the indemnification pursuant
to the provisions of this Article X and Section 6.8 shall be the exclusive
remedy of the parties in respect of this Agreement or the transactions
contemplated by this Agreement including for any misrepresentation or breach of
any representation or warranty, covenant, agreement or undertaking contained
herein or in any certificate executed and delivered pursuant to the provisions
hereof; provided, that notwithstanding anything to the contrary contained in
this Agreement, none of the limitations set forth in this Article X shall apply
to any action for specific performance, injunctive relief, or other equitable
remedy. For illustration purposes only, attached as Annex E are certain recovery
scenarios, subject to the restrictions and limitations in this Agreement.

(ii) Except as provided in Section 10.3(i)(i), no party hereto shall have any
liability, and no party hereto shall make any claim for any loss, whether legal
or equitable, and the parties hereto hereby waive any right of contribution
against each other, arising out of this Agreement relating to Environmental Laws
(including the federal Superfund or Comprehensive Environmental Response,
Compensation and Liability Act and analogous state laws Superfund laws), whether
based on contract, tort or strict liability.

(j) For purposes of computing the aggregate amount of claims against the Seller,
the amount of each claim by a Purchaser Indemnitee shall be deemed to be an
amount equal to, and any payments by the Seller pursuant to Section 10.2 shall
be limited to, the amount of Damages that remain after deducting therefrom any
insurance proceeds and any indemnity, contributions or other similar payment, in
each case, that are actually collected by a Purchaser Indemnitee from any third
party with respect thereto.

 

77

--------------------------------------------------------------------------------

(k) The Seller shall have no obligation to indemnify any Purchaser Indemnitees
from and against any Damages arising out of the breach of any of the
representations or warranties made herein unless, within the Survival Period,
Purchaser Indemnitee delivers to the Seller a Notice of Claim pursuant to
Section 10.5 or Section 10.6 relating to the breach which gives rise to such
Damages.

(l) In the event of any matter giving rise to an indemnity obligation of the
Seller pursuant to Section 10.2, the Purchaser will take, or cause the
applicable CCG Entities to take, reasonable commercial measures to mitigate the
consequences of the matter as required by applicable law.

(m) From and after the Closing, the Seller shall not have (and hereby releases)
any right of contribution, indemnification or other recourse against the Company
or any other CCG Entity with respect to any pre-Closing breach by the Company or
the Seller of any of their respective representations, warranties, covenants or
agreements.

(n) The Seller shall not have any liability pursuant to Section 10.2 in respect
of any amount of Damages to the extent reflected on the final Closing Statement
as a deduction in determining the Transaction Price hereunder or to the extent
reflected as a reserve in the Working Capital as finally determined pursuant to
this Agreement.

(o) In any claim for indemnification hereunder, the Seller shall not be required
to indemnify any Purchaser Indemnitee for special, incidental, exemplary or
indirect damages, or for any punitive damages unless, in each case actually paid
to a third party.

(p) The obligation to indemnify the Purchaser’s officers, directors, employees
and other Purchaser Indemnitees in accordance with this Article X shall be
enforceable exclusively by the Purchaser and nothing herein shall grant such
officers, directors, employees or other Purchaser Indemnitees any individual
rights, remedies, obligations or liabilities with respect to this Agreement. For
the avoidance of doubt, the parties may amend or modify the terms hereof in any
respect without the consent of such officers, directors, employees and other
Purchaser Indemnitees.

(q) The Purchaser shall treat any payments that the Seller makes or receives
pursuant to this Article X as an adjustment to or refund of (as applicable) the
Transaction Price for federal Tax purposes, unless a final determination (which
shall include the execution of a Form 870-AD or successor form) with respect to
the Purchaser and the Seller causes such payment not to be treated as an
adjustment to or refund of the Transaction Price for federal Tax purposes.

(r) The rights and remedies of any party in respect of any inaccuracy or breach
of any representation, warranty, covenant or agreement shall in no way be
limited by the fact that the act, omission, occurrence or other state of facts
or circumstances upon which any claim of any such inaccuracy or breach is based
may also be the subject matter of any other representation, warranty, covenant
or agreement as to which there is no inaccuracy or breach.

 

78

--------------------------------------------------------------------------------

The representations, warranties and covenants of the Seller and the Company and
the Purchaser Indemnitees’ rights to indemnification with respect thereto shall
not be affected or deemed waived by reason of any investigation made by or on
behalf of the Purchaser (including by any of its Affiliates, and its and their
advisors, consultants or representatives) or by reason of the fact that the
Purchaser, any of its Affiliates, or its and their advisors, consultants or
representatives knew or should have known that any such representation or
warranty is, was or might be inaccurate or by reason of the Purchaser’s waiver
of any condition set forth in Article VII.

(s) The Seller shall have no obligation to indemnify any Purchaser Indemnitees
from and against any Damages arising out of any environmental sampling, testing
or investigation of the soil, groundwater, surface water, sediments, air, or any
other environmental media (“Environmental Tests”) by the Purchaser or its
Affiliates, or authorized representatives or agents of the Purchaser or its
Affiliates, after the Closing on any of the Company’s properties unless the
Environmental Tests are conducted (i) to comply with the specific and reasonably
determined requirements of applicable Environmental Laws or environmental
Permits, (ii) in response to a request, claim, demand or investigation by a
Governmental Entity, which request, claim, demand or investigation has not been
invited or deliberately initiated by the Purchaser or any of Purchaser’s
Affiliates, or (iii) to respond to any environmental conditions that pose or
could reasonably be expected to pose, in the reasonable judgment of Purchaser or
its Affiliates, a material risk of harm to the health, safety and welfare of the
public, the Purchaser’s and its Affiliate’s employees, or the environment.

Section 10.4 Purchaser’s Indemnification Obligations.

(a) Subject to the provisions of this Article X, from and after the Closing, the
Purchaser shall indemnify, defend and hold harmless the Seller Indemnitees from,
against and in respect of, and pay or reimburse the Seller Indemnitees for, any
and all Damages (whenever arising or incurred) arising out of or relating to:

(i) any breach of any representation or warranty made by the Purchaser in this
Agreement or any certificate delivered hereunder (including the certificate
delivered pursuant to Section 8.3(b)); and

(ii) any breach of any covenant, agreement or undertaking made by the Purchaser
or, after the Closing, the Company in this Agreement or any certificate
delivered hereunder (including the certificate delivered pursuant to
Section 8.3(b)).

For the purposes of determining under this Section 10.4 the amount of any
Damages arising from such inaccuracy or breach, such representation and warranty
shall be considered without regard to any qualification by or reference to the
words “Purchaser Material Adverse Effect,” “material,” “materiality,” “in all
material respects” or any similar words or qualifications contained therein
(other than any qualification or reference contained in the definition of any
defined term used herein).

 

79

--------------------------------------------------------------------------------

(b) The Purchaser’s indemnification obligations pursuant to the provisions of
Section 10.4(a)(i) are subject to the following limitations:

(i) Seller Indemnitees shall not be entitled to recover under Section 10.4(a)(i)
(except with respect to any breach relating to the representations and
warranties contained in the Fundamental Representations) any Damages until the
total amount which Seller Indemnitees would recover under Section 10.4(a)(i)
(except for the representations and warranties contained in the Fundamental
Representations) exceeds the Deductible, at which point the Purchaser shall be
liable only for the amounts in excess of the Deductible; provided that the
Purchaser shall not be liable to indemnify Seller Indemnitees for any individual
claim or claims relating to the same set of facts and circumstances pursuant to
Section 10.4(a)(i) until Seller Indemnitees have suffered aggregate Damages
arising out of such claim or claims relating to the same set of facts and
circumstances equaling or exceeding $36,000, in which case the Purchaser shall
be liable for all Damages arising out of such claim or claims subject to the
limitations of this Section 10.4; and provided further that all claims for which
the Purchaser is not required to indemnify Seller Indemnitees because the
associated Damages do not equal or exceed $36,000 shall also not count towards
the Deductible;

(ii) Seller Indemnitees shall not be entitled to recover under
Section 10.4(a)(i) (except with respect to any breach relating to the
representations and warranties contained in the Fundamental Representations) any
Damages to the extent the aggregate claims under Section 10.4(a)(i) (except for
the representations and warranties contained in the Fundamental Representations)
of Seller Indemnitees exceed the Purchaser Liability Cap.

(iii) The aggregate liability of the Purchaser for Damages of Seller Indemnitees
under Section 10.4(a) shall not exceed the amount of the final Transaction
Price.

(iv) For purposes of computing the aggregate amount of claims against the
Purchaser, the amount of each claim by a Seller Indemnitee shall be deemed to be
an amount equal to, and any payments by the Purchaser pursuant to this
Section 10.4 shall be limited to, the amount of Damages that remain after
deducting therefrom any insurance proceeds and any indemnity, contributions or
other similar payment, in each case, that has actually been collected by a
Seller Indemnitee from any third party with respect thereto.

(v) The Purchaser shall have no obligation to indemnify any Seller Indemnitees
from and against any Damages arising out of the breach of any of the
representations or warranties made herein unless, within the Survival Period,
Seller Indemnitee delivers to the Purchaser a Notice of Claim pursuant to
Section 10.5 or Section 10.6 relating to the breach which gives rise to such
Damages.

(vi) In the event of any matter giving rise to an indemnity obligation of the
Purchaser pursuant to this Section 10.4, the Purchaser will take reasonable
commercial measures to mitigate the consequences of the matter as required by
applicable law.

(vii) In any claim for indemnification hereunder, the Purchaser shall not be
required to indemnify any Seller Indemnitee for special, incidental or exemplary
damages, or for any punitive damages unless, in each case actually paid to a
third party.

 

80

--------------------------------------------------------------------------------

(viii) The obligation to indemnify the Seller’s officers, directors, employees
and other Seller Indemnitees in accordance with this Article X shall be
enforceable exclusively by the Seller and nothing herein shall grant such
officers, directors, employees or other Seller Indemnitees any individual
rights, remedies, obligations or liabilities with respect to this Agreement. For
the avoidance of doubt, the parties may amend or modify the terms hereof in any
respect without the consent of such officers, directors, employees and other
Seller Indemnitees.

(ix) The Seller shall treat any payments that the Purchaser makes or receives
pursuant to this Article X as an adjustment to or refund of (as applicable) the
Transaction Price for federal Tax purposes, unless a final determination (which
shall include the execution of a Form 870-AD or successor form) with respect to
the Purchaser and the Seller causes such payment not to be treated as an
adjustment to or refund of the Transaction Price for federal Tax purposes.

Section 10.5 Non-Third Party Claims Procedures. In the event an Indemnified
Party claims a right to payment pursuant hereto, such Indemnified Party shall
send written notice of such claim to the appropriate Indemnifying Party (a
“Notice of Claim”). Such Notice of Claim shall specify the legal and factual
basis for such claim. The failure by any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
that it may have to such Indemnified Party with respect to any claim made
pursuant to Section 10.2 or Section 10.4, as applicable, except to the extent
the Indemnifying Party is actually prejudiced by such failure, it being
understood that any Notice of Claim for claims in respect of a breach of a
representation or warranty must be delivered prior to the expiration of the
applicable Survival Period for such representation or warranty.

Section 10.6 Third Party Claims Procedures.

(a) Following the receipt of notice of a Third Party Claim, the party receiving
the notice of the Third Party Claim shall promptly (i) notify the other party of
its existence setting forth with reasonable specificity the facts and
circumstances of which such party has received notice and (ii) if the party
giving such notice is an Indemnified Party, specifying the legal and factual
basis hereunder upon which the Indemnified Party’s claim for indemnification is
asserted; provided that the failure to so notify the Indemnifying Party shall
relieve the Indemnifying Party from liability hereunder with respect to such
claim only if, and only to the extent that, such failure to so notify the
Indemnifying Party results in (x) the forfeiture by the Indemnifying Party of
rights and defenses otherwise available to the Indemnifying Party with respect
to such claim or (y) actual material prejudice to the Indemnifying Party with
respect to such claim. The Indemnifying Party shall have the right, upon written
notice delivered to the Indemnified Party within thirty (30) days following its
receipt of notice of a Third Party Claim, to the extent permitted by applicable
Law, to assume the defense of such Third Party Claim, including the employment
of counsel reasonably satisfactory to the Indemnified Party, and shall be solely
responsible for the payment of the fees and disbursements of such counsel. The
Indemnified Party may take any actions reasonably necessary to defend such Third
Party Claim after it notifies the Indemnifying Party of such Third Party Claim
prior to the time that it receives notice from the Indemnifying Party of its
election in accordance with the preceding sentence to assume the defense of such
Third Party Claim. In the event, however, that the Indemnifying Party declines
or fails or is not entitled hereunder to assume the defense of the Third Party
Claim

 

81

--------------------------------------------------------------------------------

as provided herein or to employ counsel reasonably satisfactory to the
Indemnified Party, in either case within such thirty (30) day period, then the
Indemnified Party shall be entitled to assume and control such defense and, for
the avoidance of doubt, any Damages in respect of such Third Party Claim shall
include the reasonable and documented fees and disbursements of counsel for the
Indemnified Party as incurred. If the Indemnified Party in good faith determines
that the Third Party Claim involves an issue or matter which could reasonably
have a material adverse effect on the Business or the assets of the Indemnified
Party, the Indemnified Party shall have the right at all times to take over and
control the defense, settlement, negotiation or litigation relating to any such
Third Party Claim at the sole cost of the Indemnifying Party, provided that if
the Indemnified Party does so take over and control, the Indemnified Party shall
not settle such Third Party Claim without the written consent of the
Indemnifying Party, such consent not to be unreasonably withheld or delayed.

(b) In any Third Party Claim for which indemnification is being sought
hereunder, the Indemnified Party or the Indemnifying Party, whichever is not
assuming the defense of such action, shall have the right to participate in such
matter and to retain its own counsel at such party’s own expense; provided that
the Indemnifying Party shall pay the fees and expenses of such separate counsel
if (i) the employment of separate counsel shall have been authorized in writing
by the Indemnifying Party in connection with the defense of such claim, (ii) the
Indemnified Party shall have been advised by counsel that there may be defenses
available to the Indemnified Party that are different from or additional to
those available to the Indemnifying Party or (iii) the Indemnified Party’s
counsel shall have advised the Indemnified Party in writing, with a copy
delivered to the Indemnifying Party, that there is a conflict of interest that
could make it inappropriate under applicable standards of professional conduct
to have common counsel.

(c) The Indemnifying Party or the Indemnified Party (as the case may be) shall
at all times use reasonable efforts to keep the other Party reasonably apprised
of the status of the defense of any matter the defense of which it is
maintaining and to cooperate in good faith with each other with respect to the
defense of any such matter.

(d) No Indemnified Party may settle or compromise any claim or consent to the
entry of any judgment with respect to which indemnification is being sought
hereunder without the prior written consent of the Indemnifying Party (which
shall not be unreasonably withheld, conditioned or delayed). No Indemnifying
Party may settle or compromise any claim or consent to the entry of any judgment
with respect to which indemnification is being sought hereunder without the
prior written consent of the Indemnified Party (which shall not be unreasonably
withheld, conditioned or delayed), unless such settlement, compromise or consent
(x) includes, as a condition of such settlement, compromise or consent, a
complete and unconditional release of each Indemnified Party from any and all
liability arising out of such claim, (y) does not contain any finding, admission
or statement suggesting any wrongdoing, violation of Law, or liability on behalf
of the Indemnified Party and (z) does not contain any equitable order, judgment
or term that in any manner affects, restrains or interferes with the business of
the Indemnified Party or otherwise encumbers any of the assets of the
Indemnified Party.

 

82

--------------------------------------------------------------------------------

Section 10.7 Recoveries from Third Persons; Duplicative Recoveries.

(a) In any case where an Indemnified Party recovers from third Persons any
amount in respect of a matter with respect to which an Indemnifying Party has
indemnified it pursuant hereto, such Indemnified Party shall promptly pay over
to the Indemnifying Party the amount so recovered (after deducting therefrom the
full amount of the expenses incurred by it in procuring such recovery), but not
in excess of the sum of (i) any amount previously so paid by the Indemnifying
Party to or on behalf of the Indemnified Party in respect of such matter and
(ii) any amount expended by the Indemnifying Party in pursuing or defending any
claim arising out of such matter. Notwithstanding the foregoing, the Purchaser
Indemnitees shall not be required to pay over to the Seller any amounts
recovered pursuant to the Purchaser R&W Insurance Policy, unless such amounts
are duplicative of amounts paid by the Seller with respect to any Purchaser
Indemnification Claim.

(b) No Indemnified Party may recover Damages from an Indemnifying Party under
this Article X to the extent such recovery would result in duplicative recovery
for the same Damages.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Fees and Expenses. Except as otherwise provided in this Agreement,
all costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.

Section 11.2 Extension; Waiver. The Purchaser (on behalf of itself and after the
Closing, the Company) and the Seller (on behalf itself and, prior to the
Closing, the Company) may (a) extend the time for the performance of any of the
obligations or other acts of such other applicable party, (b) waive any
inaccuracies in the representations and warranties made by any other applicable
party herein or in any document, certificate or writing delivered pursuant
hereto by any other applicable party or (c) waive compliance by such other
applicable party with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. The waiver by any party of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent breach, or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition of this Agreement. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

Section 11.3 Notices.

(a) All notices, consents, demands or other communications (collectively, the
“Notices”) made pursuant to this Agreement shall be in writing, in the English
language and signed and correctly dated by the party sending same. All Notices
shall be delivered personally (by courier or otherwise) or by facsimile (with
written confirmation of successful transmission) or sent by registered or
certified mail (return receipt requested) or by overnight delivery (with
evidence of delivery and postage and other fees prepaid), including by Federal
Express, to the receiving party at the address given below:

 

 

83

--------------------------------------------------------------------------------

If to the Seller or to the Company (prior to Closing), to:

LSB Industries, Inc.

16 South Pennsylvania Avenue

Oklahoma City, Oklahoma 73107

Attention: General Counsel

Fax: (405) 236-1209 (with such fax to be confirmed by telephone to
(405) 510-3576)

With a copy (which shall not constitute notice) to:

Vinson & Elkins L.L.P.

2001 Ross Avenue

Suite 3700

Dallas, Texas 75201-2975

Attention: Robert L. Kimball and Christopher R. Rowley

Fax: (214) 999-7860

If to the Purchaser or to the Company (after the Closing), to:

NIBE Energy Systems Inc.

900 Conservation Way

Fort Wayne, IN 46809

Attention: Kjell Olof Ekermo, President

With a copy (which shall not constitute notice) to:

Advokatfirman Delphi

Stora Nygatan 64

SE-211 37 Malmö, Sweden

Attention: Per-Ivar Svensson

Fax: +46 40 660 79 09

With a copy (which shall not constitute notice) to:

Neal, Gerber & Eisenberg LLP

Two North LaSalle Street, Suite 1700

Chicago, Illinois 60602

Attention: John J. Koenigsknecht and Philippe Y. Blanchard

Fax: (312) 750-6441

(b) Any Notice delivered (i) personally or by registered or certified mail or by
overnight delivery shall be deemed to have been given on the date it is so
delivered, or upon attempted delivery if acceptance of delivery is refused, and
(ii) by facsimile transmission shall be deemed to have been given on the first
Business Day it is received (or on the first Business Day after it is received,
if received on a day other than a Business Day, or if received outside normal
business hours of a Business Day).

 

84

--------------------------------------------------------------------------------

(c) A party may change the address to which Notices hereunder are to be sent to
it by giving Notice of such change of address in the manner provided in
Section 11.3(a) above.

Section 11.4 Entire Agreement. This Agreement (including the schedules and
exhibits hereto), together with the Confidentiality Agreement, contains the
entire understanding of the parties hereto with respect to the subject matter
contained herein and supersedes all prior agreements and understandings, oral
and written, with respect thereto, other than the Confidentiality Agreement.

Section 11.5 Binding Effect; Benefit; Assignment. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, and with respect to the provisions of
Section 6.6, the Persons benefiting from the provisions thereof all of whom are
made intended to be third-party beneficiaries thereof. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of each of the other
parties. Notwithstanding the foregoing, to the extent that the parties hereto
modify any rights under this Agreement that inure to the benefit of Persons that
are not parties hereto, such Persons shall be subject to such modifications.

Section 11.6 Amendment and Modification. Subject to applicable Law, this
Agreement may be amended, modified and supplemented by the parties hereto in any
and all respects but only in a written instrument executed by all parties.

Section 11.7 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only, do not constitute
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.

Section 11.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument. Delivery of an
executed counterpart of the signature page of this Agreement by facsimile or
other electronic transmission (including by PDF) shall be equally as effective
as delivery of a manually executed counterpart of this Agreement.

Section 11.9 Governing Law. This Agreement shall be governed in all respects,
including as to validity, interpretation and effect, by the laws of the State of
Delaware, without giving effect to its conflict of laws principles, to the
extent such principles would require or permit the application of laws of
another jurisdiction.

Section 11.10 Disclosure Letters.

(a) Disclosure of any fact or item in any Section of the Company Disclosure
Letter shall be deemed to have been disclosed with respect to every other
Section to which such disclosure is relevant to the extent that the relevance of
such item to such other Section is reasonably apparent on the face of such item.
The inclusion of any specific item in any Section of the Company Disclosure
Letter is not intended to imply that the items so included or other

 

85

--------------------------------------------------------------------------------

items, are or are not material, and no party shall use the fact of the inclusion
of any such item in any dispute or controversy as to whether any obligation,
item or matter not described herein or included in the Company Disclosure Letter
is or is not material for purposes hereof.

(b) The specification of any dollar amount in the representations and warranties
or otherwise in this Agreement or in the Company Disclosure Letter is not
intended and shall not be deemed to be an admission or acknowledgment of the
materiality of such amounts or items, nor shall the same be used in any dispute
or controversy between the parties to determine whether any obligation, item or
matter (whether or not described herein or included in any schedule) is or is
not material for purposes of this Agreement (other than with respect to any
representation, warranty or provision of this Agreement in which such
specification occurs).

Section 11.11 Consent to Jurisdiction; Waiver of Jury Trial.

(a) The parties hereto hereby irrevocably submit to the exclusive jurisdiction
of the courts of the State of Delaware and the courts of the United States for
the District of Delaware, and the appellate courts thereof, solely in respect of
the interpretation and enforcement of the provisions of this Agreement, and in
respect of the transactions contemplated herein, and hereby irrevocably waive,
and agree not to assert, as a defense in any action for the interpretation or
enforcement hereof or of any such document, that it is not subject thereto, that
it or its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), that such action may not be
brought or is not maintainable in said courts, that such action is brought in an
inconvenient forum or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a Delaware state or federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that delivery of process or other papers in connection with any such action or
proceeding in the manner provided in Section 11.3 hereof or in such other manner
as may be permitted by law, shall be valid and sufficient service thereof.

(b) EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) BETWEEN THE
PARTIES DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT. Each Party certifies and
acknowledges that (i) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (ii) such party
understands and has considered the implication of this waiver, (iii) such party
makes this waiver voluntarily and (iv) such party has been induced to enter into
this Agreement by, among other things, the mutual waivers and certifications in
this Section.

 

86

--------------------------------------------------------------------------------

Section 11.12 Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable term, provision, covenant or restriction or any portion
thereof had never been contained herein.

Section 11.13 Specific Performance.

(a) The parties agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement,
without any bond or other security being required, such requirement being hereby
waived, and to enforce specifically the terms and provisions of this Agreement
by a decree of specific performance without the necessity of proving the
inadequacy of money damages as a remedy, this being in addition to any other
remedy to which they are entitled at law or in equity.

(b) The parties hereto acknowledge that the agreements contained in this
Section 11.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the parties hereto would not
enter into this Agreement. Nothing in this Section 11.3 shall in any way expand
or be deemed or construed to expand the circumstances in which the Purchaser or
any other Purchaser Related Party may be liable under this Agreement or any of
the transactions contemplated hereby.

(c) To the extent any party hereto brings any Proceeding to enforce specifically
the performance of the terms and provisions of this Agreement (other than a
Proceeding to specifically enforce any provision that expressly survives
termination of this Agreement pursuant to Section 9.2 hereof) when such remedy
is expressly available to such party pursuant to the terms of this Agreement,
the Termination Date shall automatically be extended by (i) the amount of time
during which such Proceeding is pending, plus twenty (20) Business Days, or
(ii) such other time period established by the court presiding over such
Proceeding.

Section 11.14 Conflicts and Privilege. The parties agree that, in the event a
dispute arises after the Closing between the Purchaser or the Company, on the
one hand, and the Seller, on the other hand, Vinson & Elkins L.L.P. may
represent the Seller in such dispute even though the interests of the Seller may
be directly adverse to the Company, and even though Vinson & Elkins L.L.P. may
have represented the Company in a matter substantially related to such dispute,
or may be handling ongoing matters for the Company. The parties further agree
that, as to all communications between Vinson & Elkins L.L.P., the Company and
the Seller, that relate in any way to this Agreement, the attorney-client
privilege and the expectation of client confidence belongs to the Seller may be
controlled by the Seller, and shall not pass to or be claimed or controlled by
the Company; provided that the Seller shall not waive such attorney-client
privilege other than to the extent appropriate in connection with the
enforcement or defense of its rights or obligations existing under this
Agreement. Notwithstanding the foregoing, in the event a dispute arises between
the Purchaser or the Company and a Person other than the Seller after the
Closing, the Company may assert the attorney-client privilege to prevent
disclosure of confidential communications by Vinson & Elkins L.L.P. to such
Person.

 

 

87

--------------------------------------------------------------------------------

Section 11.15 Seller Guarantee. All of the Seller’s obligations hereunder are
hereby guaranteed by LSB. LSB hereby acknowledges and agrees that it shall cause
the Seller to comply with all of the Seller’s obligations under this Agreement
(“Seller Guaranteed Obligations”), and in the event the Seller fails to comply
with any such obligations, it shall intervene to perform, or cause to be
performed, such obligations in accordance with the terms of this Agreement. This
is an unconditional guarantee of payment and not of collectability. LSB agrees
that, for so long as the Seller is an affiliate of LSB, the Purchaser and the
Seller may at any time and from time to time, without notice to LSB or LSB’s
further consent, extend the term of this Agreement and make any agreement with
the Seller or any Person liable with respect to any of the Seller Guaranteed
Obligations hereunder for the extension, renewal, payment, compromise, discharge
or release thereof, in whole or in part, or for any modification of the terms
thereof or of any agreement between the Purchaser and the Seller or any such
other Person without in any way impairing or affecting any of its Seller
Guaranteed Obligations hereunder. LSB agrees that its obligations hereunder
shall not be released or discharged, in whole or in part, or otherwise affected
by (a) the failure of any of the Purchaser Related Parties to assert any claim
or demand or to enforce any right or remedy against the Seller or any other
Person liable with respect to any of the Seller Guaranteed Obligations; (b) any
change in the time, place or manner of payment of any Seller Guaranteed
Obligations or any rescission, waiver, compromise, consolidation or other
amendment or modification of any of the terms or provisions of the Agreement or
any other agreement evidencing, securing or otherwise executed in connection
with any of the Seller Guaranteed Obligations; (c) any change in the corporate
existence, structure or ownership of the Seller or any other Person liable with
respect to any of the Seller Guaranteed Obligations; (d) any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the Seller or
any other Person liable with respect to any of the Seller Guaranteed
Obligations; (e) the existence of any right of set-off which LSB may have at any
time against the Purchaser Related Parties, whether in connection with any
Seller Guaranteed Obligations or otherwise; or (f) the adequacy of any other
means the Purchaser may have of obtaining payment of any Seller Guaranteed
Obligations. To the fullest extent permitted by Law, LSB hereby expressly waives
any and all rights or defenses arising by reason of any Law which would
otherwise require any election of remedies by any of the Purchaser Related
Parties. LSB waives promptness, diligence, notice of the acceptance of this
guarantee and of any Seller Guaranteed Obligation, presentment, demand for
payment, notice of non-performance, default, dishonor and protest, notice of the
incurrence of any Seller Guaranteed Obligations and all other notices of any
kind, all defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect, any right to
require the marshalling of assets of the Purchaser or any other Person liable
with respect to the Seller Guaranteed Obligations and all suretyship defenses
generally. LSB acknowledges that it will receive substantial direct and indirect
benefits from the transactions contemplated by the Agreement and that the
waivers set forth in this guarantee are knowingly made in contemplation of such
benefits.

 

88

--------------------------------------------------------------------------------

Section 11.16 Purchaser Guarantee. All of the Purchaser’s obligations hereunder
are hereby guaranteed by NIBE. NIBE hereby acknowledges and agrees that it shall
cause the Purchaser to comply with all of the Purchaser’s obligations under this
Agreement (“Purchaser Guaranteed Obligations”), and in the event the Purchaser
fails to comply with any such obligations, it shall intervene to perform, or
cause to be performed, such obligations in accordance with the terms of this
Agreement. This is an unconditional guarantee of payment and not of
collectability. NIBE agrees that, for so long as the Purchaser is an affiliate
of NIBE, the Purchaser and the Seller may at any time and from time to time,
without notice to NIBE or NIBE’s further consent, extend the term of this
Agreement and make any agreement with the Seller or any Person liable with
respect to any of the Purchaser Guaranteed Obligations hereunder for the
extension, renewal, payment, compromise, discharge or release thereof, in whole
or in part, or for any modification of the terms thereof or of any agreement
between the Purchaser and the Seller or any such other Person without in any way
impairing or affecting any of its Purchaser Guaranteed Obligations hereunder.
NIBE agrees that its obligations hereunder shall not be released or discharged,
in whole or in part, or otherwise affected by (a) the failure of any of the
Seller Related Parties to assert any claim or demand or to enforce any right or
remedy against the Seller or any other Person liable with respect to any of the
Purchaser Guaranteed Obligations; (b) any change in the time, place or manner of
payment of any Purchaser Guaranteed Obligations or any rescission, waiver,
compromise, consolidation or other amendment or modification of any of the terms
or provisions of the Agreement or any other agreement evidencing, securing or
otherwise executed in connection with any of the Purchaser Guaranteed
Obligations; (c) any change in the corporate existence, structure or ownership
of the Purchaser or any other Person liable with respect to any of the Purchaser
Guaranteed Obligations; (d) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Purchaser or any other Person liable with
respect to any of the Purchaser Guaranteed Obligations; (e) the existence of any
right of set-off which NIBE may have at any time against the Seller Related
Parties, whether in connection with any Purchaser Guaranteed Obligations or
otherwise; or (f) the adequacy of any other means the Seller may have of
obtaining payment of any Purchaser Guaranteed Obligations. To the fullest extent
permitted by Law, NIBE hereby expressly waives any and all rights or defenses
arising by reason of any Law which would otherwise require any election of
remedies by any of the Seller Related Parties. NIBE waives promptness,
diligence, notice of the acceptance of this guarantee and of any Purchaser
Guaranteed Obligation, presentment, demand for payment, notice of
non-performance, default, dishonor and protest, notice of the incurrence of any
Purchaser Guaranteed Obligations and all other notices of any kind, all defenses
which may be available by virtue of any valuation, stay, moratorium law or other
similar law now or hereafter in effect, any right to require the marshalling of
assets of the Seller or any other Person liable with respect to the Purchaser
Guaranteed Obligations and all suretyship defenses generally. NIBE acknowledges
that it will receive substantial direct and indirect benefits from the
transactions contemplated by the Agreement and that the waivers set forth in
this guarantee are knowingly made in contemplation of such benefits.

[SIGNATURE PAGE FOLLOWS]

 

89

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its respective officer thereunto duly authorized, as of the date
first above written.

 

Consolidated Industries L.L.C. By:   /s/ Daniel D. Greenwell  

 

Name:   Daniel D. Greenwell Title:   President

Signature Page to

Stock Purchase Agreement

--------------------------------------------------------------------------------

The Climate Control Group, Inc. By:  

/s/ Daniel D. Greenwell

Name:   Daniel D. Greenwell Title:   Executive Vice President

Signature Page to

Stock Purchase Agreement

--------------------------------------------------------------------------------

NIBE Energy Systems Inc. By:  

/s/ Kjell Olof Ekermo

Name:   Kjell Olof Ekermo Title:   President

Signature Page to

Stock Purchase Agreement

--------------------------------------------------------------------------------

Solely for purposes of Sections 6.8, 6.19 and 11.15 LSB Industries, Inc. By:  

/s/ Daniel D. Greenwell

Name:   Daniel D. Greenwell Title:   President and Chief Executive Officer

Signature Page to

Stock Purchase Agreement

--------------------------------------------------------------------------------

 

Solely for purposes of Section 11.16 NIBE Industrier AB (publ) By:  

/s/ Gerteric Lindquist

Name:   Gerteric Lindquist Title:   Chief Executive Officer

Signature Page to

Stock Purchase Agreement