<SEC-DOCUMENT>0001193125-16-680812.txt : 20160812
<SEC-HEADER>0001193125-16-680812.hdr.sgml : 20160812
<ACCEPTANCE-DATETIME>20160812170057
ACCESSION NUMBER:		0001193125-16-680812
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20160808
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20160812
DATE AS OF CHANGE:		20160812

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LSB INDUSTRIES INC
		CENTRAL INDEX KEY:			0000060714
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL INORGANIC CHEMICALS [2810]
		IRS NUMBER:				731015226
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-07677
		FILM NUMBER:		161828983

	BUSINESS ADDRESS:	
		STREET 1:		16 S PENNSYLVANIA
		CITY:			OKLAHOMA CITY
		STATE:			OK
		ZIP:			73101
		BUSINESS PHONE:		4052354546

	MAIL ADDRESS:	
		STREET 1:		16 SOUTH PENNSYLVANIA
		CITY:			OKLAHOMA CITY
		STATE:			OK
		ZIP:			73101
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d242514d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
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 <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:4pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>UNITED STATES </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>WASHINGTON, D.C. 20549 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>FORM 8-K
</B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>CURRENT REPORT </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>PURSUANT
TO SECTION 13 OR 15(d) </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>OF THE SECURITIES EXCHANGE ACT OF 1934 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Date of Report (Date of earliest event reported): August&nbsp;8, 2016 </B></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:24pt; font-family:Times New Roman" ALIGN="center"><B>LSB INDUSTRIES, INC. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Exact name of registrant as specified in its charter) </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><B>Delaware</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>1-7677</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>73-1015226</B></TD></TR>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(State or other jurisdiction</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>of incorporation)</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Commission</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>File Number)</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(I.R.S. Employer</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>Identification No.)</B></P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>16 South Pennsylvania Avenue, </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Oklahoma City, Oklahoma 73107 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Registrant&#146;s telephone number, including area code: (405)&nbsp;235-4546 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Not Applicable </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>Former
name or former address, if changed since last report </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </TD></TR></TABLE> <P STYLE="font-size:10pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Item&nbsp;1.01. Entry into a Material Definitive Agreement </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On August&nbsp;8, 2016, LSB Industries, Inc. (the &#147;Company&#148;) entered into a letter agreement (the &#147;Letter Agreement&#148;) with
LSB Funding LLC (&#147;LSB Funding&#148;) and Security Benefit Corporation (&#147;Security Benefit&#148;), modifying and supplementing certain provisions of the Note Purchase Agreement, dated as of November&nbsp;9, 2015 (the &#147;Note Purchase
Agreement&#148;), by and among the Company, the subsidiaries of the Company party thereto as guarantors and LSB Funding and the Securities Purchase Agreement, dated as of December&nbsp;4, 2015 (the &#147;Securities Purchase Agreement&#148;), by and
among the Company, LSB Funding and Security Benefit Corporation. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As previously disclosed, on July&nbsp;1, 2016, the Company sold all of
its outstanding shares of stock in its wholly-owned subsidiary, The Climate Control Group, Inc., to a subsidiary of NIBE Industrier AB (publ) (the &#147;Climate Control Sale&#148;). The use of proceeds from the Climate Control Sale is subject to the
Indenture, dated August&nbsp;7, 2013 (the &#147;Indenture&#148;), by and among the Company, the subsidiaries of the Company party thereto as guarantors and UMB Bank, n.a., as trustee, the Note Purchase Agreement, and the Securities Purchase
Agreement. Under the terms of the Note Purchase Agreement, the Company is required to use the proceeds of the Climate Control Sale to offer to purchase the maximum aggregate principle amount of the applicable notes and Indenture Obligations (as
defined in the Note Purchase Agreement) on or before August&nbsp;15, 2016 (such offers to purchase, &#147;Purchase Offers&#148;). The Securities Purchase Agreement, in Section&nbsp;4.03, also contains limitations on the ways in which the Company may
use the proceeds of the Climate Control Sale. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Letter Agreement modifies the timing of the obligation under the Note Purchase
Agreement to make Purchase Offers and provides that, until the Company is required to make Purchase Offers in accordance with the Letter Agreement, the Company will not be in breach of Section&nbsp;4.03 of the Securities Purchase Agreement. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the full
text of the Letter Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Item&nbsp;9.01. Financial
Statements and Exhibits. </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; width:39.10pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>Exhibit&nbsp;No.</B></P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" NOWRAP> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; width:39.50pt; font-size:8pt; font-family:Times New Roman"><B>Description</B></P></TD></TR>


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<TD VALIGN="top" NOWRAP>10.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Letter Agreement, dated as of August&nbsp;8, 2016, among LSB Industries, Inc., LSB Funding LLC and Security Benefit Corporation</TD></TR>
</TABLE>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><U>SIGNATURES </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dated: August&nbsp;12, 2016 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3">LSB INDUSTRIES, INC.</TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Mark T. Behrman</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Name:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Mark T. Behrman</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Title:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Executive Vice President of Finance and Chief Financial Officer</TD></TR>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>EXHIBIT INDEX </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom" NOWRAP> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; width:39.50pt; font-size:8pt; font-family:Times New Roman"><B>Description</B></P></TD></TR>


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<TD VALIGN="top" NOWRAP>10.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Letter Agreement, dated as of August&nbsp;8, 2016, among LSB Industries, Inc., LSB Funding LLC and Security Benefit Corporation</TD></TR>
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<DOCUMENT>
<TYPE>EX-10.1
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<FILENAME>d242514dex101.htm
<DESCRIPTION>EX-10.1
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Exhibit 10.1 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>EXECUTION COPY </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">LSB Funding
LLC </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">350 Park Avenue, 14th Floor </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">New York, New York 10022 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">August&nbsp;8, 2016 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">LSB Industries, Inc. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">16 South Pennsylvania Avenue </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Oklahoma City, Oklahoma 73107 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attention: Mark T. Behrman </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"><B>Re: Certain
amendments to the Note Purchase Agreement referred to below </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Reference is made to (a)&nbsp;that certain Note Purchase Agreement, dated as of November&nbsp;9, 2015 (as amended, restated, supplemented, or
otherwise modified from time to time, the &#147;<U>Note Purchase Agreement</U>&#148;), among LSB Industries, Inc., a Delaware corporation (the &#147;<U>Company</U>&#148;), the Guarantors (as defined therein) party thereto and LSB Funding LLC
(together with its successors and assigns, the &#147;<U>Purchaser</U>&#148;), pursuant to which the Company has issued and sold to the Purchaser, and the Purchaser has purchased from the Company, $50,000,000 of the Company&#146;s 12.0% Senior
Secured Notes due 2019 (the &#147;<U>Notes</U>&#148;) and (b)&nbsp;that certain Securities Purchase Agreement, dated as of December&nbsp;4, 2015 (as amended, restated, supplemented, or otherwise modified from time to time, the &#147;<U>Securities
Purchase Agreement</U>&#148;), among the Company, the Purchaser and Security Benefit Corporation (the &#147;<U>Purchaser Guarantor</U>&#148;), pursuant to which the Company has issued and sold to the Purchaser, and the Purchaser has purchased from
the Company, among other Securities (as defined therein), 210,000 shares of the Company&#146;s Series E Cumulative Redeemable Class C Preferred Stock, no par value per share (the &#147;<U>Series E Preferred Shares</U>&#148;). In consideration of the
mutual covenants and agreements set forth below, the parties hereto have entered into this letter agreement (this &#147;<U>Letter Agreement</U>&#148;) to modify and supplement the Note Purchase Agreement and the Securities Purchase Agreement.
Capitalized terms used but not defined in this Letter Agreement are used as defined in the Note Purchase Agreement. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Company intends
to seek consents from the holders of the Indenture Obligations to amend the terms of the Indenture in order to permit the Company to redeem all or a material portion of outstanding Series E Preferred Shares (the &#147;<U>Series E
Redemption</U>&#148;) pursuant to a consent solicitation process (the &#147;<U>Consent Solicitation</U>&#148;). The Company intends to use the proceeds of the sale of its Climate Control Business consummated on July&nbsp;1, 2016 to fund such Series
E Redemption. In connection with the foregoing, the parties hereto agree as follows: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1. <U>Extension of time period to satisfy Required
Offer Provisions</U>. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Subject to the other terms and provisions thereof, Section&nbsp;4.06(I)(c) and Section&nbsp;4.06(II)(c) of the Note
Purchase Agreement require the Company, in connection with the sale of </P>

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the Climate Control Business, to make a Net Proceeds Offer or Net ABL Proceeds Offer, as applicable, on or prior to August&nbsp;15, 2016. The parties hereto agree that, notwithstanding any term
of the Note Purchase Agreement to the contrary, the Company shall not be required to make a Net Proceeds Offer or Net ABL Proceeds Offer in connection with the sale of the Climate Control Business until (i)&nbsp;if the Consent Solicitation has
commenced on or prior to September&nbsp;30, 2016 pursuant to the delivery of a consent solicitation statement and related letter of transmittal and consent each in form and substance reasonably satisfactory to the Purchaser, November&nbsp;30, 2016
and (ii)&nbsp;otherwise, October&nbsp;30, 2016. For the avoidance of doubt, all other requirements of Section&nbsp;4.06 relating to the timing or procedure of any Net Proceeds Offer or Net ABL Proceeds Offer shall be adjusted accordingly, and the
failure to comply with any of the requirements of Section&nbsp;4.06 prior to the applicable dates set forth in the immediately preceding sentence will not result in a Default or Event of Default under the Note Purchase Agreement. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2. <U>Asset Sale Provisions of the Securities Purchase Agreement</U>. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The parties hereto further agree that, (a)&nbsp;until the date the Company is required to make a Net Proceeds Offer or Net ABL Proceeds Offer,
as applicable, in accordance with Section&nbsp;1 of this Letter Agreement, any non-compliance with the provisions of Section&nbsp;4.03 of the Securities Purchase Agreement with respect to the Climate Control Business shall be waived and shall not
constitute a default or event of default under the Securities Purchase Agreement, and (b)&nbsp;to the extent the Series E Redemption is consummated and at least 75% of the issued and outstanding Series E Preferred Shares are redeemed,
Section&nbsp;4.03 of the Securities Purchase Agreement shall have no further force and effect with respect to the Climate Control Business. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3. <U>Miscellaneous</U>. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Each
party hereto represents and warrants to the other party hereto that this Letter Agreement has been duly authorized on the part of such party by all corporate or other applicate entity action and, when executed and delivered by all parties hereto,
will constitute a valid and legally binding obligation of such party, enforceable against it in accordance with its respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors&#146; rights generally and the effect of rules of law governing the availability of equitable remedies. The Purchaser represents and warrants to the Company that either (a)&nbsp;it has not
transferred or assigned any of its rights with respect to the Notes or Series E Preferred Shares to any other person or (b)&nbsp;to the extent it has transferred or assigned any of its rights with respect to the Notes or Series E Preferred Shares to
any other person, the agreements made by the Purchaser herein are binding on behalf of such other person. The parties hereto agree that the terms and provisions of Article 11 (Miscellaneous) of the Note Purchase Agreement shall apply, mutatis
mutandis, to this Letter Agreement. The Company hereby covenants and agrees to reimburse the Purchaser for all costs, fees and expenses (including reasonable fees of legal counsel) incurred thereby in connection with the review, negotiation,
execution and delivery of this Letter Agreement and the Consent Solicitation. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">[Signature pages follow.] </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">- 2 - </P>


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<TD VALIGN="top" COLSPAN="3">Very truly yours,</TD></TR>
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<TD HEIGHT="16" COLSPAN="3"></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>LSB Funding LLC</B></TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Anthony D. Minella</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Name: Anthony D. Minella</TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Title: Manager</TD></TR>
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<TD HEIGHT="16" COLSPAN="3"></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>Security Benefit Corporation</B></TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Anthony D. Minella</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Name: Anthony D. Minella</TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Title: Chief Investment Officer</TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">[Signature Page to Letter Agreement] </P>

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<TD VALIGN="top" COLSPAN="3">Acknowledged and Agreed,</TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>LSB Industries. Inc.,</B> a Delaware corporation</TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Mark T. Behrman</P></TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Name: Mark T. Behrman</TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Title: Executive Vice President of Finance and Chief Financial Officer</TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">[Signature Page to Letter Agreement] </P>
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