Document:

exv4w1

 

EXHIBIT 4.1

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

     THIS SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (hereinafter referred to as the
“Amendment”) is made and entered into as of the 19th day of December, 2006, between and among, on
the one hand, the lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, INC., a
California corporation (f/k/a Foothill Capital Corporation), as the arranger and administrative
agent for the Lenders (“Agent”), and, on the other hand, PCI CHEMICALS CANADA COMPANY, a
Nova Scotia unlimited liability company, and PIONEER AMERICAS LLC, a Delaware limited liability
company (hereinafter each individually is referred to as a “Borrower” and collectively as
the “Borrowers”).

RECITALS

     A. Agent, the Lenders and the Borrowers have entered into that certain Loan and Security
Agreement, dated as of December 31, 2001 (as amended by that certain (i) First Amendment to Loan
and Security Agreement dated as of April 15, 2002, (ii) Second Amendment to Loan and Security
Agreement dated as of June 3, 2002, but effective as of May 31, 2002, (iii) Third Amendment to Loan
and Security Agreement dated as of July 29, 2002, (iv) Fourth Amendment to Loan and Security
Agreement dated as of December 10, 2002, (v) Fifth Amendment to Loan and Security Agreement dated
as of July 1, 2003, and (vi) Sixth Amendment to Loan and Security Agreement dated as of December
31, 2003, herein the “Agreement”).

     B. Agent, the Lenders and the Borrowers desire to amend the Agreement as hereinafter set
forth.

     NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01. Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meaning as in the Agreement, as amended hereby.

ARTICLE II

AMENDMENTS

     Section 2.01. Amendment to Section 3.5. Section 3.5 is hereby amended and
restated in its entirety to read as follows:

     “3.5 Term. This Agreement shall become effective upon the execution and
delivery hereof by Borrowers, Agent, and the Lenders and shall continue in full force and
effect for a term ending on December 31, 2007 (the “Maturity Date”). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without notice upon
the occurrence and during the continuation of an Event of Default.”

ARTICLE III

CONDITIONS PRECEDENT

     Section 3.01. Conditions. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent, unless specifically waived by Agent:

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT — Page 1

 

 

(a) Borrowers shall pay to Agent a closing fee of U.S. $15,000, which fee shall be
due and payable in full upon the execution of this Amendment;

(b Agent shall have received the following documents, each in form and substance
satisfactory to Agent:

     (i) This Amendment, duly executed by Borrowers, together with the Consent and
Ratification (the “Ratification”) hereto, duly executed by the Guarantors;

     (ii) Officers’ Certificates dated as of the date of this Amendment, in form and
substance satisfactory to Agent, certified by the Secretary of the Borrowers and the
Guarantors certifying among other things, that the Borrowers’ and Guarantors’ Board
of Directors have met and have adopted, approved, consented to and ratified
resolutions which authorize the execution, delivery and performance by Borrowers of
this Amendment, and the Guarantors of the Ratification, and each other document,
instrument and agreement executed in connection with or relating to the Agreement,
this Amendment or the Ratification (hereinafter individually referred to as a “Loan
Document” and collectively referred to as the “Loan Documents”);

(c) The representations and warranties contained herein, in the Agreement, as
amended hereby, and/or in each other Loan Document shall be true and correct as of
the date hereof, as if made on the date hereof;

(d) No Event of Default shall have occurred and be continuing and no Default shall
exist, unless such Event of Default or Default has been specifically waived in
writing by Agent; and

(e) All corporate proceedings taken in connection with the transactions contemplated
by this Amendment and all documents, instruments and other legal matters incident
thereto, shall be satisfactory to Agent.

ARTICLE IV

RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

     Section 4.01. Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and
except as expressly modified and superseded by this Amendment, the terms and provisions of the
Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force
and effect. Borrowers and the Agent agree that the Agreement, as amended hereby, and the other
Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their
respective terms.

     Section 4.02. Representations and Warranties. Borrowers hereby represent and warrant
to Agent as follows:

     (a) the execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been authorized
by all requisite corporate action on the part of Borrowers and do not and will not
conflict with or violate any provision of any Applicable Law, the Articles of
Incorporation/Organization or Bylaws/Operating Agreement of Borrower or any agreement,
document, judgment, license, order or permit applicable to or binding upon any of the
Borrowers or their respective Property; no consent, approval, authorization or order of and
no notice to or filing with, any court or governmental authority or third person is required
in connection with the execution, delivery or performance of this Amendment or to consummate
the transactions contemplated hereby;

     (b) the representations and warranties contained in the Agreement, as amended hereby,
and any other Loan Document are true and correct on and as of the date hereof as

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT — Page 2

 

 

though made
on and as of the date hereof, except to the extent such representations and warranties
relate to an earlier date;

     (c) Borrowers are in full compliance with all covenants and agreements contained in the
Agreement, as amended hereby, and the other Loan Documents; and

     (d) Borrowers have not amended their respective Articles of Incorporation/Organization
or Bylaws/Operating Agreement or other organizational documents since the date of the
execution of the Agreement.

ARTICLE V

MISCELLANEOUS

     Section 5.01. Survival of Representations and Warranties. All representations and
warranties made in the Agreement or any other document or documents relating thereto,
including, without limitation, any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents,
and no investigation by Agent or any closing shall affect the representations and warranties or the
right of Agent to rely upon them.

     Section 5.02. Reference to Agreement. Each of the Loan Documents, including the
Agreement and any and all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Agreement, as amended
hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean
a reference to the Agreement, as amended hereby.

     Section 5.03. Expenses of Agent. As provided in the Agreement, each Borrower agrees
to pay on demand all reasonable costs and expenses incurred by Agent in connection with the
preparation, negotiation and execution of this Amendment and the other Loan Documents executed
pursuant hereto and any and all amendments, modifications, and supplements hereto, including,
without limitation, the reasonable costs and fees of Agent’s legal counsel, and all reasonable
costs and expenses incurred by Agent in connection with the enforcement or preservation of any
rights under the Agreement, as amended hereby, or any other Loan Document, including, without
limitation, the reasonable costs and fees of Agent’s legal counsel.

     Section 5.04. RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE
ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO
SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR THE LENDERS. EACH
BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE
LENDERS, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL,
AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE
AGAINST THE AGENT AND THE LENDERS, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY OF THE OBLIGATIONS, INCLUDING, WITHOUT
LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN
EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT — Page 3

 

 

     Section 5.05. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder
of this Amendment and the effect thereof shall be confined to the provision so held to be invalid
or unenforceable.

     Section 5.06. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.

     Section 5.07. Successors and Assigns. This Amendment is binding upon and shall inure
to the benefit of Agent, the Lenders and the Borrowers and their respective successors and assigns,
except the Borrowers may not assign or transfer any of their rights or obligations hereunder
without the prior written consent of Agent.

     Section 5.08. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original, but all of which
when taken together shall constitute one and the same instrument.

     Section 5.09. Effect of Waiver. No consent or waiver, express or implied, by Agent
to or for any breach of or deviation from any covenant or condition of the Agreement shall be
deemed a consent or waiver to or of any other breach of the same or any other covenant, condition
or duty.

     Section 5.10. Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of this Amendment.

     Section 5.11. FINAL AGREEMENT. THE AGREEMENT, AS AMENDED HEREBY AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATED TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[The Remainder of this Page Intentionally Left Blank]

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT — Page 4

 

 

     IN WITNESS WHEREOF, the Borrowers, Agent and the Lenders have caused this Amendment to be
executed on the date first written above by their duly authorized officers.

	 	 	 	 	 	 	 
	 	 	PCI CHEMICALS CANADA COMPANY	 	 
	 	 	a Nova Scotia unlimited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Gary L. Pittman
 

Gary L. Pittman
	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	PIONEER AMERICAS LLC	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO FOOTHILL, INC.,	 	 
	 	 	a California corporation (f/k/a Foothill Capital Corporation),

as Agent and as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Terri Le	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Terri Le	 	 
	 

	 	Title:
	 	Vice President	 	 

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT — Page 5

 

 

CONSENT AND RATIFICATION

     The undersigned, Pioneer Companies, Inc., Pioneer (East), Inc., Pioneer Licensing, Inc.,
Imperial West Chemical Co., KNA California, Inc., Pioneer Water Technologies, Inc., and KWT, Inc.
(each a “Guarantor” and collectively the “Guarantors”) have executed that certain
continuing general guaranty dated as of December 31, 2001 (the “Guaranty”), in favor of WELLS FARGO
FOOTHILL, INC., a California corporation (f/k/a Foothill Capital Corporation), as the arranger and
administrative agent for the Lenders (as defined in the Guaranty). The Guarantors hereby consent
and agree to the terms of the Seventh Amendment to Loan and Security Agreement dated as of December
19, 2006 (the “Amendment”), executed by PCI CHEMICALS CANADA COMPANY, a Nova Scotia
unlimited liability company, and PIONEER AMERICAS LLC, a Delaware limited liability company
(hereinafter each individually is referred to as a “Borrower” and collectively as the
“Borrowers”), the Lenders and Agent, a copy of which is attached hereto, and the
undersigned agree that the Guaranty shall remain in full force and effect and shall continue to be
the legal, valid and binding obligation of the Guarantors in enforceable against the Guarantors in
accordance with its terms. Furthermore, each Guarantor hereby agrees and acknowledges that (a) the
Guaranty is a “Loan Document” as such term is defined in the Amendment and as such term is defined
in the Agreement, (b) the Guaranty is not subject to any claims, defenses or offsets, (c) nothing
contained in this Amendment or any other Loan Document shall adversely affect any right or remedy
of Agent under the Guaranty, (d) the execution and delivery of the Amendment shall in no way
reduce, impair or discharge any obligations of the undersigned as guarantors pursuant to the
Guaranty and shall not constitute a waiver by Agent of any of Agent’s rights against the
undersigned, (e) by virtue hereof and by virtue of the Guaranty, each Guarantor hereby guarantees
to Agent the prompt and full payment and full and faithful performance by the Borrowers of the
entirety of the Obligations (as defined in the Agreement) on the terms and conditions set forth in
the Agreement as amended by the Amendment and any time further modified or amended, (f) the
Guarantors’ consent is not required to the effectiveness of the Amendment, and (g) no consent by
the Guarantors is required for the effectiveness of any future amendment, modification, forbearance
or other action with respect to the Agreement or any present or future Loan Document.

	 	 	 	 	 	 	 
	 	 	Pioneer Companies, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman
 

	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Pioneer (East), Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial Officer	 	 

CONSENT AND RATIFICATION OF SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT — Page 1

 

 

	 	 	 	 	 	 	 
	 	 	Pioneer Licensing, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman
 

	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial
Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Imperial West Chemical Co.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial
Officer	 	 
	 
	 	 	 	 	 	 
	 	 	KNA California, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial
Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Pioneer Water Technologies, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial
Officer	 	 
	 
	 	 	 	 	 	 
	 	 	KWT, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary L. Pittman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gary L. Pittman	 	 
	 

	 	Title:
	 	Sr. Vice President and Chief Financial
Officer	 	 

CONSENT
AND RATIFICATION OF SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT — Page 2<PAGE>
                                                                    Exhibit 10.1

                                 LSB CORPORATION
                      2006 STOCK OPTION AND INCENTIVE PLAN

                           RESTRICTED STOCK AGREEMENT

     A. THIS RESTRICTED STOCK AGREEMENT, dated __________________, is for a
total of ____________________ shares (the "Shares") of common stock, par value
$.10 per share (the "Common Stock"), of LSB Corporation (the "Company") granted
to ____________________ (the "Grantee"), effective as of ______________________
(the "Grant Date") and subject in all respects to the terms and conditions of
the LSB Corporation 2006 Stock Option and Incentive Plan (the "Plan"), which is
incorporated herein by reference. All capitalized terms in this Agreement that
are not defined herein have the meanings given to them in the Plan.

     B. Upon the Grantee's execution and delivery to the Company of this
Agreement, the Shares shall be fully vested and not forfeitable, except as
provided in Paragraph L of this Restricted Stock Agreement.

     C. The Shares awarded hereunder shall be subject to a one-year restriction
on transfer provided in this Restricted Stock Agreement and shall hereinafter be
referred to as the "Restricted Stock." Except for Permitted Transfers (as
defined below), no Transfer (as defined below) of any Share of the Restricted
Stock, or any interest in the Restricted Stock, may be made by the Grantee or
any other holder of the Restricted Stock to any Person (as defined below),
whether voluntarily or by operation of law, before ___________________ (the
"Anniversary Date").

     D. As a condition precedent to any Permitted Transfer of the Restricted
Stock, or any interest in the Restricted Stock, by the Grantee or any other
holder of the Restricted Stock, the transferee shall be required to execute a
counterpart of this Agreement and agree to be bound by the terms hereof as if
the transferee were the Grantee. Each transferee shall hold the Restricted
Stock, or any interest in the Restricted Stock, subject to all of the provisions
of this Agreement, including Paragraph L, and shall make no further Transfer
except as permitted under this Agreement.

     E. The Restricted Stock shall be evidenced by one or more certificates,
each of which shall be inscribed conspicuously with the following restrictive
legend:

          REFERENCE IS MADE TO THAT CERTAIN RESTRICTED STOCK AGREEMENT DATED
          DECEMBER 21, 2006 (THE "AGREEMENT") TO WHICH LSB CORPORATION (THE
          "COMPANY") IS A PARTY. THE TRANSFER OF THE STOCK REPRESENTED BY THIS
          INSTRUMENT (AS DEFINED IN THE AGREEMENT) IS RESTRICTED AS STATED IN
          THE AGREEMENT. A COPY OF THE

<PAGE>

          AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL EXECUTIVE
          OFFICES OF THE COMPANY.

     F. The Grantee and any other holder of the Restricted Stock shall have the
right to vote and to receive any dividend declared on the Restricted Stock,
provided in each case that the applicable record date is prior the Repurchase
Date (as defined below), if applicable.

     G. Upon the execution of this Restricted Stock Agreement, the Grantee shall
receive a certificate or certificates representing the Restricted Stock. Upon
receipt of the certificate representing the Restricted Stock, the Grantee shall
execute and return to the Company a stock power or powers endorsed in blank
covering all the Restricted Stock. The certificate or certificates representing
the Restricted Stock, together with such stock power(s), shall be held by the
Company's Chief Financial Officer, as escrow agent (the "Escrow Agent"), until
the earlier of the Anniversary Date or the Repurchase Date.

     H. In the event a Change in Control occurs before the Anniversary Date, the
transfer restrictions on the Restricted Stock provided under this Agreement
shall terminate and each holder of the Restricted Stock shall be entitled to
receive promptly from the Escrow Agent, as provided in Paragraph I hereof, the
certificate(s) representing the Restricted Stock.

     I. As soon as practical after the earlier of the Anniversary Date or the
occurrence of a Change in Control, the Escrow Agent shall deliver to the each
holder of the Restricted Stock (or if the Anniversary Date occurs after such
holder's death, to such holder's beneficiary) the certificate(s) representing
the Restricted Stock then registered in such holder's name. Upon delivery of
such certificate(s) to the holder or beneficiary, such holder shall execute and
return to the Company an Acknowledgment of Receipt of Shares, in the form
attached hereto.

     J. The Grantee acknowledges and agrees that the Company or a Subsidiary may
be obligated to withhold federal, state and local income taxes and social
security and other payroll taxes, as applicable, to the extent that the Grantee
realizes ordinary employment income in connection with the grant of the
Restricted Stock. The Grantee agrees that the Company or a Subsidiary may
withhold amounts needed to cover such taxes from payments otherwise due and
owing to the Grantee and also agrees that upon demand the Grantee will promptly
pay to the Company or a Subsidiary having such obligation any additional amount
as may be necessary to satisfy such withholding tax obligation.

     K. A copy of the Plan governing this Restricted Stock Award is attached
hereto. The Grantee is invited to review all the provisions of the Plan
governing this Restricted Stock Award.

     L. In accordance with Section 9 of the Plan, if, on or before the
Anniversary Date, the Grantee's employment or other service relationship with
the Company or its Subsidiaries is terminated by the Company or any Subsidiary
for cause or if the Company's Board of Directors otherwise determines that the
Grantee has materially violated any other obligation or covenant to the Company
or any Subsidiary that the Grantee was required to fulfill or satisfy, then the
Company shall have the right to repurchase from the Grantee at a price of $.10
per Share all of the Shares of Restricted Stock, whether held by the Grantee or
transferred by the Grantee to one or more transferees as permitted by the
Agreement. As used in this Agreement, the term

                                      -2-

<PAGE>

"Repurchase Date" means that date, after the Grantee's employment or other
service relationship with the Company or its Subsidiaries is terminated by the
Company or any Subsidiary, on which the Company repurchases the Restricted
Stock.

     M. As used in this Agreement, the following terms have the meanings
ascribed to them in this Paragraph:

          "Family Member" of an individual means the spouse, lineal descendants
     (whether adopted or natural), parents, grandparents, siblings, aunts,
     uncles, nieces, nephews, cousins and the spouses of any of them and any
     family limited partnership or trust or other fiduciary relationship
     established solely for the benefit of such individual and/or such
     individual's spouse, lineal descendants, parents, grandparents, siblings,
     aunts, uncles, nieces, nephews, cousins and the spouses of any of them.

          "Permitted Transfer" means a Transfer of the Restricted Stock by a
     holder thereof (a) upon the death of such holder, by intestate succession,
     will or a similar document executed by such holder, or while such holder is
     living, to a Family Member of such holder or (b) to a trust established for
     the benefit of such holder and/or one or more Family Members of such
     holder.

          "Person" means a natural person, corporation, trust, partnership,
     joint venture, association, limited liability company or other business or
     other legal entity of any kind.

          "Transfer" means, as a noun, any direct or indirect, voluntary or
     involuntary, exchange, sale, bequeath, pledge, mortgage, hypothecation,
     encumbrance, distribution, transfer, gift, assignment or other disposition
     or attempted disposition of, and, as a verb, directly or indirectly,
     voluntarily or involuntarily, to exchange, sell, bequeath, pledge,
     mortgage, hypothecate, encumber, distribute, transfer, give, assign or in
     any other manner whatsoever dispose or attempt to dispose of.

Dated:

ATTEST:                                     LSB CORPORATION

By:                                         By:
   ----------------------------------          ---------------------------------

                                      -3-

<PAGE>

     The Grantee acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto, and represents that the Grantee is familiar with the terms and
provisions thereof. The Grantee hereby accepts this Restricted Stock Award
subject to all the terms and provisions contained therein and in the Plan. The
Grantee hereby agrees to accept as binding, conclusive, and final all decisions
and interpretations of the Board of Directors of the Company upon any questions
arising under the Plan and/or the Restricted Stock Award.

Dated:
       --------------------

                                              By:
                                                 -------------------------------
                                                 Grantee

                                      -4-

<PAGE>

                       ACKNOWLEDGMENT OF RECEIPT OF SHARES

     I hereby acknowledge the delivery to me by LSB Corporation (the "Company")
on ___________, of a stock certificate representing ____________________ shares
(the "Shares") of common stock, par value $.10 per share, of LSB Corporation
(the "Company") granted to me pursuant to the terms and conditions of the LSB
Corporation 2006 Stock Option and Incentive Plan, which Shares were transferred
to me on the Company's stock record books effective ____________________.

Dated:
       --------------------

                                           -------------------------------------
                                           Grantee's name

                                           -------------------------------------
                                           Grantee's signature

                                      -5-

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