Amendment No. 27 to the Golsen Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Go0UQ0BT4YlrYMhdJUsSPBqZeEzJ2wnJqkHRn8gFNKIxxIbIZwnQtiIwomc5cvBs ylYQK3f6Aw0KI7TGVa6RyQ== 0000948600-01-500103.txt : 20020412 0000948600-01-500103.hdr.sgml : 20020412 ACCESSION NUMBER: 0000948600-01-500103 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20011127 GROUP MEMBERS: BARRY H. GOLSEN GROUP MEMBERS: LINDA F. RAPPAPORT GROUP MEMBERS: SBL CORPORATION GROUP MEMBERS: STEVEN J. GOLSEN GROUP MEMBERS: SYLVIA H. GOLSEN FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLSEN JACK E CENTRAL INDEX KEY: 0001005712 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: P O BOX 705 CITY: OKLAHOMA CITY STATE: OK ZIP: 73101 BUSINESS PHONE: 4052327711 SUBJECT COMPANY: 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: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-17178 FILM NUMBER: 1799940 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 STATE: OK ZIP: 73101 SC 13D/A 1 amend27.htm AMENDMENT NO. 27 TO SCHEDULE 13D Amendment No. 27 to the Golsen Schedule 13D

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 27)

LSB INDUSTRIES, INC.
(Name of Issuer)

COMMON STOCK, PAR VALUE $.10
(Title of Class of Securities)

5021600-10-4
(CUSIP Number)

Jack E. Golsen
16 South Pennsylvania
Oklahoma City, Oklahoma 73107
(405) 235-4546
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

November 8, 2001
(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of his Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]

Check the following box if a fee is being paid with this statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent (5%) of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of less than five percent (5%) of such class. See Rule 13d-7.)

Note: Six (6) copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 5021600-10-4

(1)  Names of Reporting Persons,                  Jack E. Golsen
     S.S. or I.R.S. Identification                ###-##-####
     Nos. of Above Persons

(2)  Check the Appropriate Box if                 (a)   [ ]
     a Member of a Group (See                     (b)   [X]
     Instructions)

(3) SEC Use Only

(4) Source of Funds (See Instruc- Not applicable
tions)

(5)  Check if Disclosure of Legal
     Proceedings is Required Pur-
     suant to Items 2(d) or 2(e)

(6) Citizenship or Place of Organi- USA
zation

                         (7)  Sole Voting Power         374,452

Number of Shares         (8)  Shared Voting Power     3,221,014
Beneficially
Owned by Each            (9)  Sole Dispositive          374,452
Reporting Person              Power
With:
                         (10) Shared Dispositive      3,221,014
                              Power

(11) Aggregate Amount Beneficially 3,595,466
Owned by Each Reporting Person

(12)  Check if the Aggregate Amount                         [X]
      in Row (11) Excludes Certain
      Shares (See Instructions)

(13) Percent of Class Represented 27.68%
by Amount in Row (11)

(14) Type of Reporting Person (See IN
Instructions)

Page 2 of 22 Pages

CUSIP NO. 5021600-10-4

(1)   Names of Reporting Persons,             Sylvia H. Golsen
      S.S. or I.R.S. Identification           ###-##-####
      Nos. of Above Persons

(2)   Check the Appropriate Box if                   (a)   [ ]
      a Member of a Group (See                       (b)   [X]
      Instructions)

(3) SEC Use Only

(4) Source of Funds (See Instruc- Not applicable
tions)

(5)  Check if Disclosure of Legal
     Proceedings is Required Pur-
     suant to Items 2(d) or 2(e)

(6) Citizenship or Place of Organi- USA
zation

                      (7)   Sole Voting Power                     -

Number of Shares      (8)   Shared Voting Power           3,221,014
Beneficially
Owned by Each         (9)   Sole Dispositive                      -
Reporting Person            Power
With:
                      (10)  Shared Dispositive            3,221,014
                            Power

(11) Aggregate Amount Beneficially 3,221,014
Owned by Each Reporting Person

(12)   Check if the Aggregate Amount                            [X]
       in Row (11) Excludes Certain
       Shares (See Instructions)

(13) Percent of Class Represented 25.27%
by Amount in Row (11)

(14) Type of Reporting Person (See IN
Instructions)

Page 3 of 22 Pages

CUSIP NO. 5021600-10-4

(1)   Names of Reporting Persons,          SBL Corporation
      S.S. or I.R.S. Identification        73-1477865
      Nos. of Above Persons

(2)   Check the Appropriate Box if                   (a)   [ ]
      a Member of a Group (See                       (b)   [X]
      Instructions)

(3) SEC Use Only

(4) Source of Funds (See Instruc- SC, BK, AF
tions)

(5)   Check if Disclosure of Legal
      Proceedings is Required Pur-
      suant to Items 2(d) or 2(e)

(6) Citizenship or Place of Organi- Oklahoma
zation

                         (7)    Sole Voting Power              -

Number of Shares         (8)  Shared Voting Power    2,219,309
Beneficially
Owned by Each            (9)  Sole Dispositive               -
Reporting Person              Power
With:
                         (10) Shared Dispositive     2,219,309
                              Power

(11) Aggregate Amount Beneficially 2,219,309
Owned by Each Reporting Person

(12)   Check if the Aggregate Amount                       [X]
       in Row (11) Excludes Certain
       Shares (See Instructions)

(13) Percent of Class Represented 17.41%
by Amount in Row (11)

(14) Type of Reporting Person (See CO
Instructions)

Page 4 of 22 Pages

CUSIP NO. 5021600-10-4

(1)   Names of Reporting Persons,             Golsen Petroleum
             S.S. or I.R.S. Identification              Corporation
             Nos. of Above Persons                      73-079-8005

(2)   Check the Appropriate Box if            (a)   [ ]
      a Member of a Group (See                (b)   [X]
      Instructions)

(3) SEC Use Only

(4) Source of Funds (See Instruc- Not applicable
tions)

(5)   Check if Disclosure of Legal
      Proceedings is Required Pur-
      suant to Items 2(d) or 2(e)

(6) Citizenship or Place of Organi- Oklahoma
zation

                    (7) Sole Voting Power                      -

Number of Shares    (8) Shared Voting Power              193,933
Beneficially
Owned by Each       (9)  Sole Dispositive                       -
Reporting Person         Power
With:
                    (10) Shared Dispositive               193,933
                                                        Power

(11) Aggregate Amount Beneficially 193,933
Owned by Each Reporting Person

(12)   Check if the Aggregate Amount                          [ ]
                in Row (11) Excludes Certain
                Shares (See Instructions)

(13) Percent of Class Represented 1.61%
by Amount in Row (11)

(14) Type of Reporting Person (See CO
Instructions)

Page 5 of 22 Pages

CUSIP NO. 5021600-10-4

(1)   Names of Reporting Persons,                 Barry H. Golsen
              S.S. or I.R.S. Identification               ###-##-####
              Nos. of Above Persons

(2)   Check the Appropriate Box if                (a)   [ ]
              a Member of a Group (See                    (b)   [X]
              Instructions)

(3) SEC Use Only

(4) Source of Funds (See Instruc- Not applicable
tions)

(5)   Check if Disclosure of Legal
      Proceedings is Required Pur-
      suant to Items 2(d) or 2(e)

(6)   Citizenship or Place of Organi-              USA
      zation

(7) Sole Voting Power 308,616

Number of Shares      (8)   Shared Voting Power        2,441,769
Beneficially
Owned by Each         (9)   Sole Dispositive             308,616
Reporting Person            Power
With:
                      (10)  Shared Dispositive         2,441,769
                            Power

(11)   Aggregate Amount Beneficially                   2,750,385
       Owned by Each Reporting Person

(12)   Check if the Aggregate Amount                         [X]
       in Row (11) Excludes Certain
       Shares (See Instructions)

(13) Percent of Class Represented 21.47%
by Amount in Row (11)

(14) Type of Reporting Person (See IN
Instructions)

Page 6 of 22 Pages

CUSIP NO. 5021600-10-4

(1)   Names of Reporting Persons,                  Steven J. Golsen
      S.S. or I.R.S. Identification                ###-##-####
      Nos. of Above Persons

(2)   Check the Appropriate Box if                (a) [ ]
      a Member of a Group (See                    (b) [X]
      Instructions)

(3) SEC Use Only

(4) Source of Funds (See Instruc- Not Applicable
tions

(5)   Check if Disclosure of Legal
      Proceedings is Required Pur-
      suant to Items 2(d) or 2(e)

(6) Citizenship or Place of Organi- USA
zation

                        (7)   Sole Voting Power           246,987

Number of Shares        (8)   Shared Voting Power       2,298,217
Beneficially
Owned by Each           (9)   Sole Dispositive            246,987
Reporting Person              Power
With:
                        (10)  Shared Dispositive       2,298,217
                              Power

(11) Aggregate Amount Beneficially 2,545,204
Owned by Each Reporting Person

(12)  Check if the Aggregate Amount                          [X]
      in Row (11) Excludes Certain
      Shares (See Instructions)

(13) Percent of Class Represented 19.91%
by Amount in Row (11)

(14) Type of Reporting Person (See IN
Instructions)

Page 7 of 22 Pages

CUSIP NO. 5021600-10-4

(1)   Names of Reporting Persons,      Linda Golsen Rappaport
      S.S. or I.R.S. Identification         ###-##-####
      Nos. of Above Persons

(2)   Check the Appropriate Box if            (a) [ ]
      a Member of a Group (See                (b) [X]
      Instructions)

(3) SEC Use Only

(4) Source of Funds (See Instruc- Not applicable
tions)

(5)   Check if Disclosure of Legal
      Proceedings is Required Pur-
      suant to Items 2(d) or 2(e)

(6) Citizenship or Place of Organi- USA
zation

(7) Sole Voting Power 82,552

Number of Shares       (8)   Shared Voting Power    2,441,769
Beneficially
Owned by Each          (9)   Sole Dispositive          82,552
Reporting Person             Power
With:
                       (10)  Shared Dispositive     2,441,769
                             Power

(11) Aggregate Amount Beneficially 2,524,321
Owned by Each Reporting Person

(12)  Check if the Aggregate Amount                       [X]
      in Row (11) Excludes Certain
      Shares (See Instructions)

(13) Percent of Class Represented 19.80%
by Amount in Row (11)

(14) Type of Reporting Person (See IN
Instructions)

Page 8 of 22 Pages

CUSIP NO. 5021600-10-4

This statement constitutes Amendment No. 27 to the Schedule 13D dated October 7, 1985, as amended (the "Schedule 13D"), relating to the common stock, par value $.10 a share ("Common Stock") of LSB Industries, Inc. (the "Company"). All terms not otherwise defined herein shall have the meanings ascribed in the Schedule 13D.

This Schedule 13D is reporting matters with respect to the group consisting of Jack E. Golsen, Sylvia H. Golsen, SBL Corporation ("SBL"), Golsen Petroleum Corporation ("GPC"), a wholly owned subsidiary of SBL, Barry H. Golsen, Steven J. Golsen and Linda Golsen Rappaport.

This Amendment No. 27 is being filed as a result of a change in the facts contained in the Schedule 13D. The change is due to the acquisition by SBL of 1,000,000 shares of the Company's Series D 6% Cumulative, Convertible Class C Preferred Stock ("Series D Preferred") on November 8, 2001, which resulted in an increase in SBL's beneficial ownership of Common Stock by more than 1% of the outstanding Common Stock. In addition to the foregoing, reference is made to Item 5(c) of this Amendment No. 27 for discussion of certain other transactions in the Company's Common Stock that were effected by certain reporting persons during the past 60 days from the filing date of this Amendment No. 27.

Item 1. Security and Issuer.

Item 1 of this Schedule 13D is unchanged.

Item 2. Identity and Background.

         Item 2 of this Schedule 13D is unchanged, except parts 5(b)
         and (c) relating to Steven J. Golsen are amended to read
         as follows:

(b) Business Address: 7300 S.W. 44^th Street
Oklahoma City, OK 73179

         (c)  The principal occupation or employment of Steven J.
              Golsen is Chief Executive Officer and Co-Chairman
              of a subsidiary of the Company having the address
              set forth above.

Item 3. Source and Amount of Funds or Other Consideration.

         On October 17, 1997, Prime Financial Corporation
         ("Prime"), a subsidiary of the Company, borrowed from
         SBL the principal amount of $3,000,000 (the "Prime
         Loan") on an unsecured basis and payable on demand.
         The purpose of the loan was to assist the Company

Page 9 of 22 Pages

CUSIP NO. 5021600-10-4

         by providing additional liquidity. As of October 15,
         2001, the unpaid principal balance on the Prime Loan
         was $1,350,000.

         In order to make the Prime Loan to Prime, SBL and certain
         of its affiliates borrowed the $3,000,000 from a bank
         (collectively, "SBL Borrowings"), and as part of the
         collateral pledged by SBL to the bank in connection with
         such loan, SBL pledged, among other things, its note
         from Prime. Effective April 21, 2000, Prime guaranteed
         on a limited basis the obligations of SBL and its
         affiliates relating to the unpaid principal amount due
         to the bank in connection with the SBL Borrowings, and,
         in order to secure its obligations under the guarantees,
         it pledged to the bank 1,973,461 shares of the Company's
         Common Stock that it holds as treasury stock.

         On October 18, 2001, the Company and Prime entered into
         an agreement (the "Agreement") to take in payment of
         $1,000,000 of the unpaid balance of the debt under the
         Prime Loan, 1,000,000 shares of Series D Preferred, with
         each share of Series D Preferred having, among other
         things,.875 votes and voting as a class with the Common
         Stock, a liquidation preference of $1.00 per share,
         cumulative dividends at the rate of 6%, and
         convertibility into Common Stock on the basis of four
         shares of Series D Preferred into one share of Common
         Stock. The rate of conversion is subject to increase
         or decrease pursuant to the antidilution provisions
         set forth in the Certificate of Designations of the
         Series D Preferred. In connection with the Agreement,
         the Company's limited guaranty to the bank has been
         reduced to $350,000, and the number of shares of
         Company Common Stock pledged by Prime to the lender
         to secure its guaranty has been reduced to 973,450
         shares.

Item 4. Purpose of Transaction.

        The purpose of the transaction giving rise to the
        filing of this Amendment No. 27 is described under
        Item 3 above. The reporting persons do not presently
        have any plans or proposals required to be reported
        under Item 4 of this Schedule 13D.

Page 10 of 22 Pages

CUSIP NO. 5021600-10-4

Item 5. Interest in Securities of the Issuer.

        (a)  The following table sets forth as of the filing
     date of this Amendment 27, the aggregate number and
     percentage of the class of Common Stock of the Company
     identified pursuant to Item 1 beneficially owned by each
     person named in Item 2:

Person Amount Percent(10)

Jack E. Golsen 3,595,466(1)(2)(6)(9) 27.68%

Sylvia H. Golsen 3,221,014(1)(6)(7) 25.27%

SBL 2,219,309(1)(9) 17.41%

GPC 193,933(8)(9) 1.61%

Barry H. Golsen 2,750,385(1)(3)(6) 21.47%

Steven J. Golsen 2,545,204(1)(4)(6) 19.91%

Linda Golsen Rappaport 2,524,321(1)(5)(6) 19.80%

____________________

     (1)  The amount shown includes (i) 1,336,199 shares held
          directly by SBL; (ii) 250,000 shares that SBL has
          the right to acquire upon the conversion of
          1,000,000 shares of the Company's Series D Preferred
          owned of record by SBL; (iii) 400,000 shares that
          SBL has the right to acquire upon the conversion
          of 12,000 shares of the Company's Series B Preferred
          owned of record by SBL; (iv) 39,177 shares that SBL
          has the right to acquire upon the conversion of
          9,050 shares of Class C, Series 2 Preferred Stock
          owned of record by SBL; and (v) 193,933 shares
          beneficially owned by SBL's wholly owned subsidiary,
          GPC, which includes 133,333 shares that GPC has the
          right to acquire upon conversion of 4,000 shares
          of Series B Preferred owned of record by GPC. The
          relationship between Jack E. Golsen, Sylvia H.
          Golsen, Barry H. Golsen, Steven J. Golsen, Linda
          Golsen Rappaport, SBL, and GPC is described in
          more detail in paragraph (b) of this Item 5.

     (2)  The amount shown includes (i) 40,000 shares held
          directly by Jack E. Golsen; (ii) 69,029 shares held
          indirectly by the Jack E. Golsen 1992 Revocable
          Trust; (iii) 4,000 shares that Jack E. Golsen has
          the right to acquire upon conversion of a promissory

Page 11 of 22 Pages

CUSIP NO. 5021600-10-4

          note; (iv) 133,333 shares that J. Golsen has the
          right to acquire upon the conversion of 4,000 shares
          of the Series B Preferred Stock owned of record by
          the Jack E. Golsen 1992 Revocable Trust; (v) 35,400
          shares that Jack E. Golsen may acquire upon the
          exercise of Company incentive stock options; (vi)
          70,600 shares that Jack E. Golsen may acquire upon
          the exercise of Company nonqualified stock options;
          (vii) 1,001,705 shares owned of record by Sylvia H.
          Golsen, wife of Jack E. Golsen; (viii) 10,000 shares
          owned of record by the MG Trust, of which Jack E.
          Golsen is the sole trustee with voting and
          dispositive power over the securities held by such
          trust; and (ix) 12,090 shares indirectly held by an
          estate of which Jack E. Golsen is executor and a
          beneficiary.

     (3)  The amount shown does not include (i) 533 shares
          that Barry Golsen's wife owns, in which Barry
          Golsen disclaims beneficial ownership, and (ii)
          79,840 shares owned of record by the Barry H.
          Golsen 1992 Trust, of which Barry H. Golsen is the
          primary beneficiary, but of which Barry H. Golsen
          has no voting or dispositive control. Such amount
          does include (a) 246,616 shares held directly by
          Barry H. Golsen; (b) 41,954 shares owned of record
          by the Amy G. Rappaport Trust No. J-1, of which
          Barry H. Golsen is a Co-Trustee; (c) 36,954 shares
          owned of record by the Joshua B. Golsen Trust No.
          J-1, of which Barry H. Golsen is a Co-Trustee;
          (d) 35,888 shares owned of record by each of the
          Adam Z. Golsen Trust No. J-1, Stacy L. Rappaport
          Trust No. J-1, Lori R. Rappaport Trust No. J-1 and
          Michelle L. Golsen Trust No. J-1, of which Barry H.
          Golsen is a Co-Trustee; (e) 40,000 shares which
          Barry H. Golsen may acquire upon exercise of
          Company incentive stock options; and (f) 22,000
          shares which Barry H. Golsen may acquire upon
          exercise of a nonqualified stock option.

     (4)  The amount shown does not include 74,840 shares
          owned of record by the Steven J. Golsen 1992 Trust,
          of which Steven J. Golsen is the primary
          beneficiary, but of which Steven J. Golsen has no
          voting or dispositive control. Such amount does
          include (i) 206,987 shares held directly by Steven J.
          Golsen; (ii) 41,954 shares owned of record by the
          Amy G. Rappaport Trust No. J-1, of which Steven J.
          Golsen is a Co-Trustee; (iii) 36,954 shares owned of
          record by the Joshua B. Golsen Trust No. J-1, of
          which Steven J. Golsen is a Co-Trustee; (iv) 26,000
          shares which Steven J. Golsen may acquire upon
          exercise of Company incentive stock options; and

Page 12 of 22 Pages

CUSIP NO. 5021600-10-4

          (v) 14,000 shares which Steven J. Golsen may
          acquire upon exercise of nonqualified stock
          options.

     (5)  The amount shown does not include 124,350 shares
          that Mrs. Rappaport's husband owns and 185,000
          shares which Mrs. Rappaport's husband may acquire
          upon exercise of nonqualified stock options of the
          Company, for which Mrs. Rappaport disclaims
          beneficial ownership. The amount shown does not
          include 79,840 shares owned of record by the
          Linda F. Rappaport 1992 Trust, of which Linda F.
          Rappaport is the primary beneficiary, but of which
          Linda F. Rappaport has no voting or dispositive
          control. Such amount does include (i) 82,552 shares
          held directly by Linda F. Rappaport; (ii) 41,954
          shares owned of record by the Amy G. Rappaport Trust
          No. J-1, of which Linda F. Rappaport is a Co-Trustee;
          (iii) 36,954 shares owned of record by the Joshua B.
          Golsen Trust No. J-1, of which Linda F. Rappaport
          is a Co-Trustee; and (iv) 35,888 shares owned of
          record by each of the Adam Z. Golsen Trust No. J-1,
          of Stacy L. Rappaport Trust No. J-1, Lori R.
          Rappaport Trust No. J-1 and Michelle L. Golsen
          Trust No. J-1 of which Linda F. Rappaport is a
          Co-Trustee.

     (6)  Jack E. Golsen and Sylvia H. Golsen each disclaims
          beneficial ownership of (i) the shares of Common
          Stock owned of record by Barry H. Golsen, the
          shares that Barry H. Golsen has the right to
          acquire under the Company's incentive stock options,
          and the shares considered beneficially owned by
          Barry H. Golsen as a result of his position as
          trustee of certain trusts; (ii) the shares owned
          of record by Steven J. Golsen, the shares that
          Steven J. Golsen has the right to acquire under
          the Company's incentive stock options, and the
          shares considered beneficially owned by Steven J.
          Golsen as a result of his position as trustee of
          certain trusts; and (iii) the shares owned of
          record by Linda Golsen Rappaport, and the shares
          considered beneficially owned by Linda Golsen
          Rappaport as a result of her position as a trustee
          of certain trusts. Barry H. Golsen, Steven J.
          Golsen and Linda Golsen Rappaport disclaim
          beneficial ownership of the shares beneficially
          owned by Jack E. Golsen and Sylvia H. Golsen,
          except for shares beneficially owned by SBL
          and GPC.

     (7)  The amount shown does not include, and Sylvia H.
          Golsen disclaims beneficial ownership of the
          shares of Common Stock listed in footnote (2)
          above as beneficially owned by Jack E. Golsen,

Page 13 of 22 Pages

CUSIP NO. 5021600-10-4

except such amount does not include the 1,001,705
shares held directly by Sylvia H. Golsen.

     (8)  The amount shown includes 60,600 shares held directly
          by GPC and 133,333 shares that GPC has the right to
          acquire upon conversion of 4,000 shares of the
          Company's Series B Preferred Stock owned of record
          by GPC. The relationship between Jack E. Golsen,
          Sylvia H. Golsen, Barry H. Golsen, Steven J. Golsen,
          Linda Golsen Rappaport, SBL, and GPC is described
          in more detail in paragraph (b) of this Item 5.

     (9)  Holders of the Series B Preferred are entitled to
          one vote per share, and holders of the Series D
          Preferred are entitled to .875 votes per share. Both
          vote together with holders of Common Stock. The
          amounts and percentages set forth in the table
          reflect only the voting power of Common Stock into
          which the Series B Preferred and the Series D
          Preferred are convertible.

     (10) The percentage ownership of each reporting person
          is based on 11,924,203 shares of Common Stock
          outstanding, as reported in the Company's Form
          10-Q for the quarter ended September 30, 2001.
          Shares of Common Stock of the Company not
          outstanding, but which may be acquired by a
          reporting person during the next 60 days under
          options, warrants, rights or conversion privileges,
          are considered to be outstanding only for the
          purpose of computing the percentage of the class
          for such reporting person, but are not deemed to be
          outstanding for the purpose of computing the
          percentage of the class by any other person.

        (b)  The following table sets forth, as the filing date
     of this Amendment 27 for each person and entity identified
     under paragraph (a), the number of shares of Common Stock
     as to which the person and entity has (1) the sole power
     to vote or direct the voting, (2) shared power to vote
     or direct the voting, (3) the sole power to dispose or to
     direct the disposition, or (4) shared power to dispose or
     to direct the disposition:

Page 14 of 23

CUSIP NO. 5021600-10-4

                             Sole Voting       Shared Voting
                             and Power of      and Power of
    Person or Entity         Disposition       Disposition

Jack E. Golsen 374,452(1)(5)(12) 3,221,014(2)(3)(13)

Sylvia H. Golsen None 3,221,014(2)(11)

SBL None 2,219,309(2)(12)

GPC None 193,933(4)(12)

Barry H. Golsen 308,616(6) 2,441,769(2)(7)

Steven J. Golsen 246,987(8) 2,298,217(2)(9)

Linda Golsen Rappaport 82,552 2,441,769(2)(10)

____________________

   (1)  The amount shown includes (a) 109,029 shares of
        Common Stock held directly by Jack E. Golsen;
        (b) 4,000 shares of Common Stock that Jack E.
        Golsen has the right to acquire upon conversion
        of a promissory note; (c) 133,333 shares of
        Common Stock that J. Golsen has the right to
        acquire upon the conversion of 4,000 shares of
        the Series B Preferred Stock owned of record by
        him; (d) 35,400 shares that J. Golsen has the
        right to acquire under the Company's incentive
        stock options; (e) 70,600 shares that Jack E.
        Golsen may acquire upon the exercise of
        nonqualified stock options; (f) 10,000 shares
        held of record by the MG Trust, of which Jack E.
        Golsen is the sole trustee who possesses voting
        and dispositive power over the securities held
        by such trust; and (g) 12,090 shares held by an
        estate of which Jack E. Golsen is executor and
        a beneficiary.

(2) See footnote (1) under paragraph (a) of this Item 5.

    (3)  The amount shown includes 1,001,705 shares of Common
         Stock owned of record by Sylvia H. Golsen, the wife
         of Jack E. Golsen.

(4) See footnote (8) under paragraph (a) of this Item 5.

(5) See footnote (6) under paragraph (a) of this Item 5.

Page 15 of 22 Pages

CUSIP NO. 5021600-10-4

    (6)  The amount shown includes (a) 246,616 shares of
         Common Stock held directly by Barry H. Golsen;
         (b) 40,000 shares of Common Stock which Barry H.
         Golsen may acquire upon exercise of incentive
         stock options of the Company; and (c) 22,000
         shares which Barry H. Golsen may acquire upon
         exercise of incentive stock options of the
         Company.

    (7)  The amount shown does not include 79,840 shares of
         Common Stock owned of record by the Barry H. Golsen
         1992 Trust, of which Barry H. Golsen has no voting
         or dispositive power and 533 shares of Common Stock
         that Barry Golsen's wife owns in which Barry Golsen
         disclaims beneficial ownership. Such amount does
         include (a) 41,954 shares of Common Stock owned of
         record by the Amy G. Rappaport Trust No. J-1, of
         which Barry H. Golsen is a Co-Trustee; (b) 36,954
         shares of Common Stock owned of record by the
         Joshua B. Golsen Trust No. J-1, of which Barry H.
         Golsen is a Co-Trustee; and (c) 35,888 shares of
         Common Stock owned of record by each of the Adam Z.
         Golsen Trust No. J-1, Stacy L. Rappaport Trust No.
         J-1, Lori R. Rappaport Trust No. J-1 and Michelle L.
         Golsen Trust No. J-1, of which Barry H. Golsen is a
         Co-Trustee.

    (8)  The amount shown includes (a) 206,987 shares of
         Common Stock held directly by Steven J. Golsen;
         (b) 26,000 shares which Steven J. Golsen may
         acquire upon exercise of incentive stock options
         of the Company; and (c) 14,000 shares which
         Steven J. Golsen may acquire upon exercise of
         nonqualified stock options of the Company.

    (9)  The amount shown does not include 74,840 shares of
         Common Stock owned of record by the Steven J. Golsen
         1992 Trust, of which Steven J. Golsen has no voting
         or dispositive power. Such amount includes (a)
         41,954 shares of Common Stock owned of record by the
         Amy G. Rappaport Trust No. J-1, of which Steven J.
         Golsen is a Co-Trustee; and (b) 36,954 shares of
         Common Stock owned of record by the Joshua B. Golsen
         Trust No. J-1, of which Steven J. Golsen is a
         Co-Trustee.

    (10) The amount shown does not include 124,350 shares
         that Mrs. Rappaport's husband owns and 185,000
         shares which Mrs. Rappaport's husband may acquire
         upon exercise of nonqualified stock options of the
         Company, for which Mrs. Rappaport disclaims
         beneficial ownership. The amount shown does not
         include 79,840 shares owned of record by the
         Linda F. Rappaport 1992 Trust, of which Linda F.
         Rappaport is the primary beneficiary, but of which
         Linda F. Rappaport has no voting or dispositive

Page 16 of 22 Pages

CUSIP NO. 5021600-10-4

         control. Such amount does include (i) 41,954
         shares owned of record by the Amy G. Rappaport
         Trust No. J-1, of which Linda F. Rappaport is a
         Co-Trustee; (ii) 36,954 shares owned of record
         by the Joshua B. Golsen Trust No. J-1, of which
         Linda F. Rappaport is a Co-Trustee; and
         (iii) 35,888 shares owned of record by each of
         the Adam Z. Golsen Trust No. J-1, of Stacy L.
         Rappaport Trust No. J-1, Lori R. Rappaport
         Trust No. J-1 and Michelle L. Golsen Trust
         No. J-1 of which Linda F. Rappaport is a
         Co-Trustee.

(11) See footnotes (6) and (7) under paragraph (a) of this
Item 5.

(12) See footnote (9) under paragraph (a) of this Item 5.

(13) See footnote (6) under paragraph (a) of this Item 5.

         SBL is wholly owned by Sylvia H. Golsen (40% owner),
    Barry H. Golsen (20% owner), Steven J. Golsen (20% owner)
    and Linda Golsen Rappaport (20% owner). GPC is a wholly
    owned subsidiary of SBL. The directors and executive
    officers of SBL and GPC are Jack E. Golsen, Sylvia H.
    Golsen, Barry H. Golsen, Steven J. Golsen and Linda Golsen

    Rappaport. Barry H. Golsen, Steven J. Golsen and Linda
    Golsen Rappaport are the children of Jack E. and Sylvia H.
    Golsen, husband and wife.

        (c)  During the past 60 days from the filing date of
    this report, the following transactions were effected in
    the Common Stock by a reporting person named in response
    to paragraph (a) of this Item 5. Sylvia H. Golsen made
    bona fide charitable gifts of the Company's Common Stock
    in the following amounts: (i) a gift of 10,000 shares on
    October 19, 2001 at a price of $2.85 per share; (ii) a
    gift of 20,000 shares on October 25, 2001 at a price of
    $2.98 per share; and (iii) a gift of 6,000 shares on
    November 1, 2001 at a price of $2.99 per share.

(d) See Item 6 below.

(e) Not applicable.

Item 6. Contracts, Agreements, Underwritings or Relationships
With Respect to Securities of the Issuer.

     Item 6 of the Schedule 13D is unchanged, except as
     follows. Effective October 18, 2001, Prime pledged
     973,450 shares of Common Stock, along with proceeds of
     such shares, to Stillwater National Bank, Stillwater,
     Oklahoma (the "Stillwater Bank") to secure repayment of
     the loan made by Stillwater Bank on October 16, 2001

Page 17 of 22 Pages

CUSIP NO. 5021600-10-4

     to SBL Corporation. In addition to standard default and
     similar provisions contained in the Security Agreement,
     Stillwater Bank retains the right to all dividends paid
     in connection with the collateral. See Item 3 for a
     discussion of the purpose of such pledge.

     Effective December 5, 2000, Sylvia H. Golsen pledged
     370,000 shares of Common Stock, along with proceeds
     of such shares, to Bank of the West, Clinton, Oklahoma
     (the "Bank of the West") to secure repayment of the
     loan made by Bank of the West on December 5, 2000. In
     addition to standard default and similar provisions
     contained in the Security Agreement, Bank of the West
     retains the right to all dividends paid in connection
     with the collateral.

Item 7. Materials to be Filed as Exhibits.

24.1  Powers of Attorney executed by Barry H. Golsen, Steven
      J. Golsen, and Linda Golsen Rappaport are filed as
      Exhibit 6 to Amendment No. 3 to the Schedule 13D and
      are incorporated herein by reference.

99.1  Agreement of the reporting persons as to joint filing
      of this Schedule 13D, is filed as Exhibit 7 to
      Amendment No. 3 to the Schedule No. 13D and is
      incorporated herein by reference.

99.2  Convertible Note between the Company and Jack E. Golsen
      filed as Exhibit (a) to the original Schedule 13D and is
      incorporated herein by reference.

99.3  Issuer's Proxy Statement dated July 14, 1986 setting
      forth the terms of the Company's Series B 12% Cumulative
      Convertible Preferred Stock is filed as Exhibit 1 to
      Amendment No. 1 to the Schedule 13D and is incorporated
      herein by reference.

99.4  Stacy L. Rappaport Trust No. J-1, is filed as Exhibit
      14 to Amendment No. 13 to the Schedule 13D and is
      incorporated herein by reference. The Joshua B. Golsen
      Trust No. J-1, Adam Z. Golsen Trust No. J-1, Amy G.
      Rappaport Trust No. J-1, Lori R. Rappaport Trust No.
      J-1 and Michelle L. Golsen Trust No. J-1 are
      substantially similar to the Stacy L. Rappaport Trust
      No. J-1, except for the names of the trustees, and
      copies of the same will be supplied to the Commission
      upon request.

99.5  Barry H. Golsen 1992 Trust is filed as Exhibit 15 to
      Amendment No. 16 to the Schedule 13D and is incorporated
      herein by reference. The Steven J. Golsen 1992 Trust
      and Linda F. Rappaport 1992 Trust are substantially
      similar to the Barry H. Golsen 1992 Trust, and copies
      of the same will be supplied to the Commission upon
      request.

Page 18 of 22 Pages

CUSIP NO. 5021600-10-4

99.6  Agreement of Sylvia H. Golsen as to joint filing of this
      Schedule 13D is filed as Exhibit 15 to Amendment No. 18
      and is incorporated herein by reference.

99.7  Agreement of SBL Corporation as to the joint filing of
      this Schedule 13D is filed as Exhibit 19 to Amendment
      No. 23, and is incorporated herein by reference.

99.8  Shareholder's Agreement, effective December 1, 1995,
      between Sylvia Golsen and SBL Corporation is filed as
      Exhibit 22 to Amendment No. 24 and is incorporated
      herein by reference.

99.9  Shareholder's Agreement, effective December 1, 1995,
      among Jack E. Golsen, Sylvia Golsen and SBL Corporation
      is filed as Exhibit 23 to Amendment No. 24 and is
      incorporated herein by reference.

99.10 Shareholder's Agreement, effective December 1, 1995,
      among Barry H. Golsen, Sylvia Golsen and SBL Corporation.
      The Shareholder's Agreement is substantially similar
      to the Shareholder's Agreement filed as Exhibit 23 to
      Amendment No. 24, and a copy of the same will be
      supplied to the Commission upon request.

99.11 Shareholder's Agreement, effective December 1, 1995,
      among Steven J. Golsen, Sylvia Golsen and SBL Corporation.
      The Shareholder's Agreement is substantially similar to
      the Shareholder's Agreement filed as Exhibit 23 to
      Amendment No. 24, and a copy of the same will be supplied
      to the Commission upon request.

99.12 Shareholder's Agreement, effective December 1, 1995, among
      Linda F. Rappaport, Sylvia Golsen and SBL Corporation. The
      Shareholder's Agreement is substantially similar to the
      Shareholder's Agreement filed as Exhibit 23 to Amendment
      No. 24, and a copy of the same will be supplied to the
      Commission upon request.

99.13 Security Agreement, dated October 16, 1997, between
      Stillwater National Bank ("SNB") and Sylvia H. Golsen is
      attached as Exhibit 22 to Amendment No. 25 and is
      incorporated herein by reference. The Security Agreements,
      all of which are dated October 16, 1997, between SNB and
      each of SBL Corporation; Sylvia H. Golsen, Trustee of the
      Sylvia H. Golsen 1992 Trust; Heidi Brown Shear, Trustee of
      the Linda F. Rappaport 1992 Trust; Heidi Brown Shear,
      Trustee of the Steven J. Golsen 1992 Trust; Heidi Brown
      Shear, Trustee of the Barry H. Golsen 1992 Trust, Barry H.
      Golsen and Linda F. Rappaport, Trustees of the Michelle L.
      Golsen J-1 Trust; Barry H. Golsen and Steven J. Golsen,
      Trustees of the Amy G. Rappaport J-1 Trust; Barry H.
      Golsen and Steven J. Golsen, Trustees of the Joshua B.
      Golsen J-1 Trust; Barry H. Golsen and Linda F. Rappaport,
      Trustees of the Stacy L. Rappaport J-1 Trust; Barry H.
      Golsen and Linda F. Rappaport, Trustees of the Lori R.
      Rappaport J-1 Trust; and Barry H. Golsen and Linda F.
      Rappaport, Trustees of the Adam Z. Golsen J-1 Trust are
      substantially similar to the foregoing Security Agreement,
      and copies of the same will be supplied to the Commission
      upon request.

Page 19 of 22 Pages

CUSIP NO. 5021600-10-4

99.14 Security Agreement, dated June 16, 1998, between The Bank of
      Union and Jack E. Golsen is attached as Exhibit 24 to
      Amendment No. 25 and is incorporated herein by reference.
      The (a) Security Agreement, dated June 16, 1998, between
      Bank of Union and Sylvia H. Golsen, (b) Security Agreement,
      dated February 5, 1999, between Bank of Union and Sylvia H.
      Golsen, Trustee of the Sylvia H. Golsen 1992 Trust dated
      01-08-93, and (c) Security Agreement, dated December 9,
      1997, between Bank of Union and each of Golsen Petroleum
      Corporation and Jack E. Golsen are substantially similar
      to the Security Agreement filed as Exhibit 24 to Amendment
      No. 25, except as to the number of shares subject to each
        such Security Agreement, and a copy of the same will be
      supplied to the Commission upon request.

99.15 Guaranty Agreement, dated October 16, 1997, between
      SNB and Jack E. Golsen is attached as Exhibit 25 to
      Amendment No. 25 and is incorporated herein by
      reference. The Guaranty Agreements between SNB and
      each of SBL Corporation, Sylvia H. Golsen, Barry H.
      Golsen (and his wife), Steven J. Golsen, and Linda F.
      Rappaport (and her husband, Claude Rappaport) are
      substantially similar to the Guaranty Agreement filed
      as Exhibit 25 to Amendment No. 25, and a copy of the
      same will be supplied to the Commission upon request.

99.16 Security Agreement, dated July 28, 1999, between The
      Bank of Union and Golsen Petroleum Corporation. The
      Security Agreement, dated July 28, 1999, between
      Bank of Union and SBL Corporation is substantially
      similar to the Security Agreement filed as Exhibit
      19 to this Amendment No. 26, except as to the number
      of shares subject to such Security Agreement, and a
      copy of the same will be supplied to the Commission
      upon request.

99.17 Agreement, dated October 18, 2001, between the Company,
Prime Financial Corporation, and SBL Corporation.

99.18 Certificate of Designations of LSB Industries, Inc.,
      filed with the Delaware Secretary of State on
      November 15, 2001, designating the terms of the
      Company's Series D 6% Cumulative, Convertible Class
      C Preferred Stock.

Page 20 of 22 Pages

CUSIP NO. 5021600-10-4

99.19 Promissory Note, dated October 18, 2001, by Prime
Financial Corporation in favor of SBL Corporation.

99.20 Amended Limited Guaranty, dated October 18, 2001,
superseding the Limited Guaranty dated March 5, 1998.

99.21 Specimen Series D Preferred stock certificate.

99.22 Amended and Restated Guaranty Agreement, dated effective
November 8, 2001, by Prime Financial Corporation in favor
of Stillwater National Bank and Trust Company, N.A.

99.23 Security Agreement, dated effective November 8, 2001,
between SBL Corporation and Stillwater National Bank and
Trust Company, N.A.

99.24 Security Agreement, dated December 5, 2000, between
Sylvia H. Golsen and Bank of the West.

99.25  Commercial Pledge Agreement, dated February 2, 2001,
       among SBL Corporation, Jack E. Golsen, Sylvia H.
       Golsen, and BancFirst. A substantially similar
       Commercial Pledge Agreement, dated February 2,
       2001, was entered among Jack E. Golsen, Sylvia H.
       Golsen, and BancFirst, and will be supplied to the
       Commission upon request.

99.26 Commercial Security Agreement, dated August 27, 2001,
between Jack E. Golsen and The Bank of Union.

Page 21 of 22 Pages

CUSIP NO. 5021600-10-4

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

DATED: November 27, 2001.

/s/ Jack E. Golsen
Jack E. Golsen

GOLSEN PETROLEUM CORPORATION

By: /s/ Jack E. Golsen
Jack E. Golsen, President

/s/ Jack E. Golsen *
Barry H. Golsen

/s/ Jack E. Golsen *
Steven J. Golsen

/s/ Jack E. Golsen *
Linda Golsen Rappaport

                                   *Executed by Jack E. Golsen
                                    pursuant to Power of
                                    Attorney

                                    /s/ Jack E. Golsen
                                    Jack E. Golsen

/s/ Sylvia H. Golsen
Sylvia H. Golsen

SBL CORPORATION

By: /s/ Jack E. Golsen
Jack E. Golsen, President

Page 22 of 22 Pages

EX-99.17 3 sbl-ag.htm AGREEMENT (SBL) Exhibit 99.17 - Agreement (LSB-Prime-SBL)

AGREEMENT

THIS AGREEMENT is entered into this 18th day of October, 2001, by and between LSB INDUSTRIES, INC., a Delaware corporation (the "Company"); PRIME FINANCIAL CORPORATION, an Oklahoma corporation ("Prime") and a wholly owned subsidiary of the Company; and SBL CORPORATION, an Oklahoma corporation ("SBL").

W I T N E S S E T H

WHEREAS, all of the issued and outstanding stock of SBL is owned, directly or indirectly, by the following members of the immediate family of Jack E. Golsen ("J. Golsen"), Chairman of the Board of Directors and President of the Company: Sylvia H. Golsen (wife of J. Golsen); Barry H. Golsen (son of J. Golsen and Vice Chairman of the Board of Directors of the Company and President of the Company's Climate Control Business; Steven J. Golsen (son of J. Golsen and an executive officer within the Company's Climate Control Business); and Linda Golsen Rappaport (a daughter of J. Golsen) (collectively, the "Golsen Family");

WHEREAS, Prime is a wholly owned subsidiary of the Company;

WHEREAS, on or about October 16, 1997, SBL and affiliates borrowed from the Stillwater National Bank and Trust Company ("Stillwater Bank") the sum of $3,000,000 ("SBL Loan");

WHEREAS, on or about October 17, 1997, SBL loaned to Prime the $3,000,000 that SBL borrowed from Stillwater Bank, on an unsecured basis and payable on demand, with the annual interest rate payable monthly in arrears at a variable interest rate equal to the Wall Street Journal Prime Rate plus 2% per annum (the "Prime Loan");

WHEREAS, the Prime Loan was evidenced by a Promissory Note, dated October 17, 1997, which Promissory Note was amended and restated by that certain Promissory Note, dated March 5, 1998, bearing a fixed interest rate per annum of 10.75%, with Prime as the maker and payable to the order of SBL (the "Prime Note");

WHEREAS, SBL pledged to the Stillwater Bank certain of its assets, including, but not limited to, the Prime Note, to secure its payment obligations under the SBL Loan;

WHEREAS, in April, 2000, SBL and Prime agreed to modify the Prime Note from a demand note to a note with a payment date of April 1, 2001, except under limited circumstances ("Extension Agreement");

WHEREAS, in order to obtain the Extension Agreement from SBL, Prime was required to guarantee SBL's Loan to Stillwater Bank on a limited basis pursuant to the terms of a Guaranty Agreement, dated as of April 21, 2000 ("Guaranty Agreement"), as amended and modified by that certain Agreement, dated April 21, 2000, by and between Stillwater Bank, Prime and SBL ("Stillwater Agreement"), and pledged to the

Stillwater Bank 1,973,461 shares of the Company's common stock, par value $.10 per share (the "Prime Stock"), owned by Prime pursuant to the terms of that certain Security Agreement, effective as of April 21, 2000, between Prime and the Stillwater Bank ("Prime Security Agreement");

WHEREAS, during 2001, Prime and SBL agreed to extend the payment date of the Prime Note until April 1, 2002;

WHEREAS, as of the date of this Agreement, the outstanding principal balance due under the Prime Note is $1,350,000, and all accrued interest through October 15, 2001, has been paid in full;

WHEREAS, SBL has proposed to the Company and Prime to take in payment of $1,000,000 of the unpaid balance due under the Prime Note, one million (1,000,000) shares of a newly created series of Class C Preferred Stock of the Company ("Preferred Stock"), with each share of such new series of Preferred Stock having, among other things, .875 votes and voting as a class with the Company's common stock, par value $.10 per share ("Company's Common Stock"), a liquidation preference of $1.00 per share and cumulative dividends at the rate of six percent (6%) of the liquidation preference per annum;

WHEREAS, the Company's Board of Directors (the "Board") established a Special Committee ("Special Committee") of the Board comprised of three outside and independent members of the Board, none (i) of whom are related to J. Golsen or any members of the Golsen Family, (ii) have any business dealings with the Company or any of its subsidiaries (other than serving as a director of the Company and a subsidiary thereof) or any of the Golsen Family or entities controlled by the Golsen Family or persons related to any member of the Golsen Family;

WHEREAS, the Special Committee, with the advice of its own counsel and investment bankers, none of whom have had any previous dealings with the Company, any subsidiaries of the Company, the Golsen Family or any entities controlled by the Golsen Family, have negotiated with SBL an agreement, whereby SBL has agreed to accept in payment of $1,000,000 of the Prime Loan one million shares of a new created series of the Company's Class C Preferred Stock, no par value ("New Series of Preferred"), with such shares of the New Series of Preferred having a designation of "Series D 6% Cumulative, Convertible Class C Preferred Stock, no par value, a liquidation preference of $1.00 per share and containing such designations, preferences, voting, dividend and relative, participating, optional or other special rights and qualifications, limitations or restrictions as stated and expressed in the Certificate of Designations attached hereto as Exhibit "A" ("New Series Preferred Certificate of Designations"), subject to the terms and conditions of this Agreement;

WHEREAS, upon completion of the transaction contemplated by this Agreement, Prime will owe to SBL under the Prime Note the remaining principal sum of $350,000;

WHEREAS, the New Series of Preferred is not, and will not in the future be, publicly traded and there is no, and there will not be in the future, any market for such stock;

-2-

WHEREAS, the Company's Common Stock is listed for trading on the Over-The-Counter Bulletin Board ("OTC-BB"), and the Company is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and has been subject to such filing requirements for the past ninety (90) days;

WHEREAS, SBL is an "accredited investor" and all of the equity owners of SBL are "accredited investors", as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act");

WHEREAS, in reliance upon the representations made by SBL in this Agreement, the transactions contemplated by this Agreement are such that the offer and issuance of securities by the Company hereunder will be exempt from registration under the applicable U.S. federal securities laws since this is a private placement and intended to be a nonpublic offering pursuant to Section 4(2) of the Securities Act and/or Regulation D promulgated under the Securities Act; and

WHEREAS, the New Series of Preferred is not, and will not be in the future, quoted or listed for trading on any securities exchange, organized market or quotation system.

NOW THEREFORE, for and in consideration of the premises and mutual agreements contained herein, the parties hereto agree as follows:

1. Payment of $1 million of Prime Note. Subject to the terms and conditions of this Agreement, at the Closing (as defined below) Prime shall pay, and SBL shall accept, $1,000,000 as partial payment of the outstanding principal amount due under the Prime Note, with such payment not in cash but in the form of the issuance by the Company of one million shares of the New Series of Preferred, designated as Series D 6% Cumulative, Convertible Class C Preferred Stock, no par value, having a liquidation preference of $1.00 per share, with all such shares of the New Series of Preferred containing such other preferences and relative, voting, dividend, participating, optional or other special rights and qualifications, limitations or restrictions as expressed in the New Series Preferred Certificate of Designations.

2. Outstanding Principal Balance. Upon issuance by the Company of the one million shares of New Series of Preferred to SBL, the outstanding unpaid principal balance due under the Prime Note shall be $350,000. At the Closing, SBL shall deliver to Prime the original of the Prime Note and the original of any amended and restated Prime Note, all of which shall be marked "Canceled" by SBL and so executed by SBL, and Prime shall, at the Closing, execute a new amended and restated promissory note ("New Note") replacing in all respects the Prime Note, with the terms and provisions of the New Note to be substantially similar to the Prime Note, except that the principal amount of the New Note shall be $350,000, bear an annual rate of interest of 10 3/4%, be unsecured and shall provide that the principal of the New Note shall be payable on demand. A copy of the New Note to be executed by Prime at the Closing is attached hereto as Exhibit "B".

-3-

3. Conditions Precedent. The Company's and Prime's obligations under this Agreement is subject to all of the following conditions precedent being complied with:

                  3.1    The Stillwater Bank shall have delivered to SBL the original and all copies
                           thereof of the Prime Note, so that SBL can mark "Canceled" and deliver
                           such to Prime at the Closing, all in a manner satisfactory to the Company; and

                  3.2    The Stillwater Bank and Prime shall have amended the Prime Guaranty limiting
                           Prime's obligations under the Prime Guaranty to an amount not to exceed
                           $350,000. In addition, Stillwater Bank shall have returned to Prime 1,000,000
                           shares of Prime Stock pledged by Prime to the Stillwater Bank, and Prime
                           and Stillwater Bank shall have amended the Prime Security Agreement so that
                           the only collateral pledged or to be pledged by Prime under the Prime Security
                           Agreement or any other security agreement relating to the Prime Guaranty or
                           any loans by the Stillwater Bank to SBL is 973,461 shares of the Company
                           Common Stock. Further, Stillwater Bank shall amend the UCC-1 Financing
                           Statement that may have been filed of record by the Stillwater Bank covering
                           any and all collateral, including the Prime Stock, pledged by Prime to Stillwater
                           Bank, to limit the collateral pledged by Prime to only 973,461 shares of the
                           Prime Stock and terminating its lien in and to any and all other collateral. All
                           of the above are to be in a manner satisfactory to the Company.

4. Closing. The consummation of this Agreement (the "Closing") will occur simultaneously with the conditions precedent set forth in Section 3 being met (the "Closing Date").

5. Representations, Warranties and Covenants of SBL. SBL hereby represents, warrants and covenants to the Company as follows:

                  5.1    Investment Intent. SBL represents and warrants that the shares of New Series
                           of Preferred are being, and any underlying shares of Company Common Stock
                           issuable upon conversion of the New Series of Preferred ("Conversion Shares")
                           will be, purchased or acquired solely for SBL's own account, for investment
                           purposes only and not with a view toward the distribution or resale to others.
                           SBL acknowledges, understands and appreciates that the shares of New Series of
                           Preferred and the Conversion Shares have not been registered under the Securities
                           Act by reason of a claimed exemption under the provisions of the Securities Act
                           which depends, in large part, upon SBL's representations as to investment intent,
                           investor status, and related and other matters set forth herein. SBL understands
                           that, in the view of the Securities Exchange Commission ("SEC"), among other
                           things, a purchase now with an intent to distribute or resell would represent a
                           purchase and acquisition with an intent inconsistent with its representation to the

-4-

Company, and the SEC might regard such a transfer as a deferred sale for which
the registration exemption is not available.

                 5.2    Certain Risk. SBL recognizes that the acquisition of the New Series of Preferred
                          involves a high degree of risk, and while the Conversion Shares are presently
                          quoted and traded on the Over-The-Counter Bulletin Board, such (i) are not
                          registered under applicable federal (U.S.) or state securities laws, and thus may
                          bot be sold, conveyed, assigned or transferred unless registered under such laws
                          or unless an exemption from registration is available under such laws, as more fully
                          described herein and (ii) the New Series of Preferred subscribed for and that are
                          to be acquired under this Agreement are not quoted, traded or listed for trading or
                          quotation on any organized market or quotation system, and there is therefore no
                          present public or other market for the New Series of Preferred, nor can there be
                          any assurance that the Conversion Shares will continue to be quoted, traded or
                          listed for trading or quotation on the Over-The-Counter Bulletin Board or on any
                          other organized market or quotation system.

                5.3     Prior Investment Experience. SBL acknowledges that it and/or the owners
                          of its stock have prior investment experience, including investment in non-listed
                          and non-registered securities, or has employed the services of an investment
                          advisor, attorney or accountant to read all of the documents furnished or made
                          available by the Company to it and to evaluate the merits and risks of such an
                          investment on its behalf and that it recognizes the highly speculative nature of this
                          investment.

               5.4     No Review by the SEC. SBL hereby acknowledges that this offering of the
                         New Series of Preferred has not been reviewed by the SEC because this private
                         placement is intended to be an nonpublic offering pursuant to Section 4(2) of the
                         Securities Act and/or Regulation D promulgated under the Securities Act.

               5.5     Not Registered. SBL understands that the New Series of Preferred and the
                         Conversion Shares have not been registered under the Securities Act by reason
                         of a claimed exemption under the provisions of the Securities Act which depends,
                         in part, upon SBL's investment intention. In this connection, SBL understands
                         that it is the position of the SEC that the statutory basis for such exemption
                         would not be present if its representation merely meant that its present intention
                         was to hold such securities for a short period, such as the capital gains period
                         of tax statutes, for a deferred sale, or for any other reason or fixed period.

-5-

               5.6     No Public Market. SBL understands that there is no public market for the New
                         Series of Preferred. SBL understands that although there is presently a public
                         market for the Company's Common Stock, including the Conversion Shares,
                         Rule 144 (the "Rule") promulgated under the Securities Act requires, among other
                         conditions, a one-year holding period following full payment of the consideration
                         therefor prior to the resale (in limited amounts) of securities acquired in a nonpublic
                         offering without having to satisfy the registration requirements under the Securities
                         Act. SBL understands that the Company makes no representation or warranty
                         regarding its fulfillment in the future of any reporting requirements under the
                         Exchange Act, or its dissemination to the public of any current financial or other
                         information concerning the Company, as is required by the Rule as one of the
                         conditions of its availability. SBL understands and hereby acknowledges that the
                         Company is under no obligation to register the New Series of Preferred or the
                         Conversion Shares under the Securities Act.

               5.7     Sophisticated Investor. That (a) SBL has adequate means of providing for its
                         current financial needs and possible contingencies; (b) SBL is able to bear the
                         economic risks inherent in an investment in the New Series of Preferred and that an
                         important consideration bearing on its ability to bear the economic risk is whether
                         SBL can afford a complete loss of its investment in the New Series of Preferred
                         and SBL represents and warrants that SBL can afford such a complete loss; and
                         (c) SBL has such knowledge and experience in business, financial, investment
                          and banking matters (including, but not limited to, investments in restricted, non-
                          listed and non-registered securities) that SBL is capable of evaluating the merits,
                          risks and advisability of an investment in the New Series of Preferred.

               5.8    Tax Consequences. SBL acknowledges that the Company has made no
                        representation regarding the potential or actual tax consequences for SBL which
                        will result from entering into the Agreement and from consummation of the
                        transaction contemplated hereunder. SBL acknowledges that it bears complete
                        responsibility for obtaining adequate tax advice regarding this Agreement.

               5.9    SEC Filing. SBL acknowledges that it and its equity owners have been previously
                        furnished with true and complete copies of the following documents which have
                        been filed with the SEC pursuant to Sections 13(a), 14(a), 14(c) or 15(d) of the
                        Exchange Act.

                                (i)  Annual Report on Form 10-K for the year ended December 31, 2000
                                (the "Form 10-K"); (ii) Current Reports on Form 8-K, filed during 2001;
                                (iii) Quarterly Reports on Form 10-Q for the quarter ended March 31, 2001

-6-

                                and June 30, 2001; (iv) the Company's Proxy Statement for the 2001
                                Annual Meeting of Shareholders; and (v) the information contained in any
                                reports or documents required to be filed by the Company under Sections
                                13(a), 14(a), 14(c) or 15(d) of the Exchange Act since the distribution of
                                the Form 10-K.

                5.10    Documents, Information and Access. SBL's decision to acquire the New
                           Series of Preferred in payment of $1,000, 000 of the Prime Note is not based
                           on any promotional, marketing or sales materials, and SBL and its representatives
                           have been afforded, prior to purchase thereof, the opportunity to ask questions
                           of, and to receive answers from, the Company and its management, and has had
                           access to all documents and information which SBL deems material to an
                           investment decision with respect to the purchase of New Series of Preferred
                           hereunder.

               5.11    No Registration, Review or Approval. SBL acknowledges and understands
                          that the private offering and sale of securities pursuant to this Agreement has not
                          been reviewed or approved by the SEC or by any state securities commission,
                          authority or agency, and is not registered under the Securities Laws. SBL
                          acknowledges, understands and agrees that the shares of New Series of
                          Preferred are being offered and exchanged hereunder pursuant to (x) a private
                          placement exemption to the registration provisions of the Securities Act
                          pursuant to Section 4(2) of such Securities Act and/or Regulation D promulgated
                          under the Securities Act and (y) a similar exemption to the registration
                          provisions of applicable state securities law.

               5.12    Transfer Restrictions. SBL will not transfer any New Series of Preferred
                          purchased until this Agreement or any Conversion Shares required unless such
                          are registered under the Securities Laws, or unless an exemption is available
                          under such Securities Laws, and the Company may, if it chooses, where an
                          exemption from registration is claimed by such Subscriber, condition any
                          transfer of New Series of Preferred or Conversion Shares out of SBL's name
                          on receipt of an opinion of the Company's counsel, to the effect that the
                          proposed transfer is being effected in accordance with, and does not violate,
                          an applicable exemption from registration under the Securities Laws, or an
                          opinion of counsel to SBL, which opinion is satisfactory to the Company, to
                          the effect that registration under the Securities Act is not required in connection
                          with such sale or transfer and the reasons therefor.

5.13 No Commission. SBL agrees and acknowledges that no commissions or other
remuneration is being paid or given directly or indirectly for soliciting the Exchange.

-7-

                5.14    Reliance. SBL understands and acknowledges that the Company is relying upon
                           all of the representations, warranties, covenants, understandings, acknowledgments
                           and agreements contained in this Agreement in determining whether to accept this
                           subscription and to issue the New Series of Preferred to SBL.

                5.15    Accuracy or Representations and Warrants. All of the representations,
                           warranties, understandings and acknowledgments that SBL has made herein are
                           true and correct in all material respects as of the date of execution hereof. SBL
                           will perform and comply fully in all material respects with all covenants and
                           agreements set forth herein, and SBL covenants and agrees that until the acceptance
                           of this Agreement by the Company, SBL shall inform the Company immediately
                           in writing of any changes in any of the representations or warranties provided or
                           contained herein.

                5.16    Indemnity. SBL hereby agrees to indemnify, defend and hold harmless the Company,
                           Prime and their respective successors and assigns, from and against any demands,
                           claims, actions or causes of action, assessments, liabilities, losses, costs, damages,
                           penalties, charges, fines or expenses (including, without limitation, interest, and attorney
                           and accountants' fees, disbursements and expenses), arising out of or relating to or in
                           connection with (i) any breach by SBL of any representation, warranty, covenant or
                           agreement made by SBL in this Agreement or (ii) the $1,000,000 of the Prime Note
                           being paid with the New Series of Preferred or (iii) any sale or distribution by SBL
                           of the New Series of Preferred or Conversion Shares in violation of the Securities
                           Act or any applicable state securities or blue sky laws (collectively, the "Securities
                           Laws"). Such right to indemnification shall be in addition to any and all other rights
                           of the Company or Prime under this Agreement or otherwise, at law or in equity.

               5.17    Survival. SBL expressly acknowledges and agrees that all of its representations,
                          warranties, agreements and covenants set forth in this Agreement shall be of the
                          essence hereof and shall survive the execution, delivery and Closing of this
                          Agreement, the sale, purchase, and conversion, if any, of the New Series of
                          Preferred, and the sale of the Conversion Shares.

6. Representations, Warranties and Covenants of the Company. In order to induce SBL to enter into this Agreement and to consummate the transactions contemplated by this Agreement, the Company and Prime hereby represent, warrant, and covenant to SBL as follows:

6.1 Organization, Authority, Qualification. The Company is a corporation duly
incorporated and in good standing under the laws of the State of Delaware. Prime

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is a corporation duly incorporated and in good standing under the laws of the
State of Oklahoma.

               6.2     Authorization. The Company and Prime have full power and authority to execute and
                         deliver this Agreement and to perform its obligations under and consummate the
                         transactions contemplated by this Agreement.

6.3 No Commission. The Company and Prime agree and acknowledge that no commission
is being paid or given directly or indirectly for soliciting this Agreement.

               6.4    Ownership of, and Title to, Securities. The New Series of Preferred to be issued
                        hereunder are, and all Conversion Shares, when issued, will be, duly authorized, validly
                        issued, fully paid and nonassessable shares of the capital stock of the Company, free
                        of personal liability.

7. Securities, Legends and Notices. SBL represents and warrants that it has read, considered and understood the following legends, and agrees that such legends, substantially in the form and substance set forth below, shall be placed on all of the certificates representing the New Series of Preferred:

New Series of Preferred Legends

           NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON STOCK
           ISSUABLE UPON THE CONVERSION OF THIS PREFERRED STOCK HAVE BEEN
           REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
           "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
           LAWS. THIS PREFERRED STOCK AND THE COMMON STOCK ISSUABLE UPON
           CONVERSION OF THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD,
           PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE
           OF AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
           EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND UNDER
           ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE PRIOR
           WRITTEN CONSENT OF LSB INDUSTRIES, INC. AND AN OPINION OF LSB
           INDUSTRIES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR THE
           HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE COMPANY,
           THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED UNDER
           APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION
           THEREFROM.

-9-

Conversion Shares Legends.

          THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
          HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
          AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE
          STATE SECURITIES LAWS. THIS COMMON STOCK MAY NOT BE OFFERED,
          SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
          ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AND
          QUALIFICATION IN EFFECT WITH RESPECT THERETO UNDER THE
          SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAW
          OR WITHOUT THE PRIOR WRITTEN CONSENT OF LSB INDUSTRIES, INC.
          AND AN OPINION OF LSB INDUSTRIES, INC.'S COUNSEL, OR AN OPINION
          FROM COUNSEL FOR THE HOLDER HEREOF, WHICH OPINION IS
          SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION AND
          QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE FEDERAL AND
          STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.

          8.     Miscellaneous.

                 8.1    Amendment; Waiver. This Agreement shall not be changed, modified or
                          amended in any respect except by the mutual written agreement of the parties
                          hereto. Any provision of this Agreement may be waived in writing by the party
                          which is entitled to the benefits thereof. No waiver of any provision of this
                          Agreement shall be deemed to, or shall constitute a waiver of, any other provision
                          hereof or thereof (whether or not similar), nor shall any such waiver constitute
                          a continuing waiver.

8.2 Binding Effect; Assignment. Neither this Agreement, nor any rights or obligations
hereunder are assignable by SBL.

               8.3     Governing Law; Litigation Costs. This Agreement and its validity, construction and
                         performance shall be governed in all respects by the internal laws of the State of
                         Oklahoma, except with respect to corporate law issues as to the Company relating to
                         the authorization, issuance and validity of the New Series of Preferred and the
                         Conversion Shares which shall be governed by the Delaware General Corporation
                         Laws, without giving effect to such states' conflicts of laws provisions.

               8.4     Headings The captions, headings and titles preceding the text of each or any Section,
                         subsection or paragraph hereof are for convenience of reference only and shall not
                         affect the construction, meaning or interpretation of this Agreement or the Warrants
                         or any term or provisions hereof or thereof.

8.5 Counterparts This Agreement may be executed in one or more original or facsimile
counterparts, each of which shall be deemed an original and all of which shall be

-10-

considered one and the same agreement, binding on all of the parties hereto,
notwithstanding that all parties are not signatories to the same counterpart.

               8.6    Transfer Taxes. Each party hereto shall pay all such sales, transfer, use, gross
                        receipts, registration and similar taxes arising out of, or in connection with, the
                        transactions contemplated by this Agreement (collectively, the "Transfer Taxes")
                        as are payable by such party under applicable law.

               8.7    Entire Agreement. This Agreement, along with the New Series Preferred
                        Certificate of Designations, merges and supersedes any and all prior agreements,
                        understandings, discussions, assurances, promises, representations or warranties
                        among the parties with respect to the subject matter hereof, and contains the entire
                        agreement among the parties with respect to the subject matter set forth herein and
                        therein.

               8.8    Notices. Except as otherwise specified herein to the contrary, all notices, requests,
                       demands and other communications required or desired to be given hereunder shall
                       only be effective if given in writing, by hand or by fax, by certified or registered mail,
                       return receipt requested, postage prepaid, or by U.S. Express Mail service, or by
                       private overnight mail service (e.g., Federal Express). Any such notice shall be deemed
                       to have been given (i) on the business day actually received if given by hand or by fax,
                       (ii) on the business day immediately subsequent to mailing, if sent by U.S. Express
                       Mail service or private overnight mail service, or (iii) five (5) business days following
                       the mailing thereof, if mailed by certified or registered mail, postage prepaid, return
                       receipt requested, and all such notices shall be sent to the following address (or to such
                      other address or addresses as a party may have advised the other in the manner
                      provided in this Section 8.8):

                      If to the Company or Prime:     Mr. Tony M. Shelby
                                                                     LSB Industries, Inc.
                                                                     16 South Pennsylvania
                                                                      P. O. Box 754
                                                                      Oklahoma City, Oklahoma 73102

                     If to SBL Corporation:              Mr. Jack E. Golsen
                                                                      President
                                                                      SBL Corporation
                                                                      16 South Pennsylvania Avenue
                                                                      Oklahoma City, Oklahoma 73107

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                8.9    No Third Party Beneficiaries. This Agreement and the rights, benefits, privileges,
                         interests, duties and obligations contained or referred to herein shall be solely for the
                         benefit of the parties hereto and no third party shall have any rights or benefits
                         hereunder as a third party beneficiary or otherwise hereunder.

IN WITNESS WHEREOF, the Company, Price and SBL have each duly executed this Agreement on the ___ day of October, 2001.

LSB INDUSTRIES, INC.,
a Delaware corporation

                                                                                  By:    /s/ Tony M. Shelby
                                                                                        Tony M. Shelby
                                                                                        Senior Vice President

PRIME FINANCIAL CORPORATION,
an Oklahoma corporation

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

SBL CORPORATION,
an Oklahoma corporation

                                                                                 By:   /s/ Jack E. Golsen
                                                                                       Jack E. Golsen
                                                                                       President

EX-99.18 4 cert-desig.htm CERTIFICATE OF DESIGNATIONS (SERIES D PREFERRED) Exhibit 99.18 - Certificate of Designations (Series D Preferred)

State of Delaware

Office of the Secretary of State
_________________________

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF DESIGNATION OF "LSB INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF NOVEMBER, A.D. 2001, AT 2:30 O'CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY RECORDER OF DEEDS.

/s/ Harriet Smith Windsor
Harriet Smith Windsor, Secretary of State

0833781 8100 AUTHENTICATION: 1449949

010580186 DATE: 11-15-01

CERTIFICATE OF DESIGNATIONS
OF
LSB INDUSTRIES, INC.

LSB Industries, Inc. (the "Corporation" or "LSB"), a corporation organized and existing under the Delaware General Corporation Law, hereby certifies pursuant to Section 151(g) of the General Corporation Law of the State of Delaware, that the following resolutions relating to the issuance of a new series of Class C Preferred Stock, no par value, of the Corporation consisting of 1,000,000 shares were duly adopted by a Special Committee of the members of the Board of Directors of the Corporation at a meeting held on October 9, 2001, pursuant to resolutions of the whole Board of Directors of the Corporation.

               RESOLVED, that pursuant to authority expressly granted to and vested in the Board
               of Directors of LSB Industries, Inc. ("LSB" or the "Corporation") by the provisions
               of the Restated Certificate of Incorporation of LSB, the Board of Directors of LSB
               does hereby create, and LSB may issue, pursuant to the terms of the Agreement,
               dated October 18, 2001, between LSB, Prime Financial Corporation, an Oklahoma
               corporation ("Prime") and a wholly owned subsidiary of LSB, and Stillwater National
               Bank and Trust Company ("Stillwater Bank") (the "Agreement"), from LSB's Class
               C Preferred Stock, no par value, a new series consisting of 1,000,000 shares
               designated as "Series D 6% Cumulative, Convertible Class C Preferred Stock,"
               no par value, and hereby fixes the designations, preferences, rights and privileges of
               such Series D 6% Cumulative, Convertible Class C Preferred Stock and the
               qualifications, limitations or restrictions thereof, as follows:

               1.     Designation. The shares of this series of Class C Preferred Stock shall be
               designated as "Series D 6% Cumulative, Convertible Class C Preferred Stock"
               (hereinafter called "Series D Preferred Stock"), having no par value, with said
               Series D Preferred Stock to consist of one million (1,000,000) shares.

               2.     Dividends; Cumulative. The holders of shares of the Series D Preferred Stock
               shall be entitled to receive cash dividends, but only when, as and if declared by the
               Board of Directors of LSB, in a manner as permitted by law, at the rate of six percent

STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:30 P.M. 11/15/2001
010580186 - 0833781

               (6%) per annum of the Liquidation Preference (as defined below) of such Series D
               Preferred Stock and no more, payable annually on such date in each year as shall be
               fixed by the Board of Directors of LSB ("Cash Dividends").

                    If Cash Dividends on the Series D Preferred Stock for any year shall not have been
               paid or set apart in full for the Series D Preferred Stock, the aggregate deficiency shall be
               cumulative and shall be paid or set apart for payment before any dividends shall be paid
               upon or set apart for payment for any class of common stock of LSB (other than a
               dividend payable in common stock of LSB).

                    Any accumulation of dividends on the Series D Preferred Stock shall not bear interest.
               The holders of Series D Preferred Stock shall not be entitled to receive any dividends
               thereon other than the dividends provided for in this paragraph 2.

                     Cash Dividends on Series D Preferred Stock shall be declared if, when and as the
               Board of Directors shall in their sole discretion deem advisable, and only from the net
               profits or surplus of the Corporation, in a manner as permitted by law as such shall be fixed
               and determined by the said Board of Directors. The determination of the Board of Directors
               at any time of the amount of net profits or surplus available for a Cash Dividend shall be
               binding and conclusive on the holders of all the Series D Preferred Stock of the
               Corporation at the time outstanding.

                     Except as otherwise provided in the last paragraph of this Section 2, when dividends
               are not paid in full upon the shares of this Series D Preferred Stock and any other preferred
               stock of LSB ranking on a parity as to dividends with this Series D Preferred Stock, all
               dividends declared upon shares of this Series D Preferred Stock and any other preferred
               stock of LSB ranking on a parity as to dividends with Series D Preferred Stock shall be
               declared pro rata so that the amount of dividends declared per share on this Series D
               Preferred Stock and such other preferred stock shall in all cases bear to each other the
               same ratio that accrued dividends per share on the shares of this Series D Preferred Stock
               and such other preferred stock bear to each other; provided, however, that dividends
               on preferred stock that provides for non-cumulative dividends shall be entitled to
               participate, and shall rank on a parity, to the extent of dividends due in the then current
               period for which such dividends are paid. Holders of share of Series D Preferred

-2-

               Stock shall not be entitled to any dividends, whether payable in cash, property or
               stock, in excess of the full cumulative dividends, as herein provided, on this Series
               D Preferred Stock. No interest or sum of money in lieu of interest, shall be
               payable in respect of any dividend payment or payments on this Series D
               Preferred Stock which may be in arrears.

                    Notwithstanding anything herein to the contrary, if at any time any dividend on LSB's
               then outstanding $3.25 Convertible Exchangeable Class C Preferred Stock, Series 2
               ($3.25 Preferred") shall be in default, in whole or in part, then no dividend shall be paid
               or declared and set apart for payment on the Series D Preferred Stock unless and until all
               cumulative accrued and unpaid dividends with respect to such $3.25 Preferred shall have
               been paid or declared and set apart for payment.

               3.     No Preemptive Rights. No holder of the Series D Preferred Stock shall have any
               preemptive rights. No holder of the Series D Preferred Stock shall be entitled to purchase
               or subscribe for any part of the unissued stock of LSB or of any stock of LSB to be issued
               by reason of any increase of the authorized capital stock of LSB, or to purchase or
               subscribe for any bonds, certificates of indebtedness, debentures or other securities
               convertible into or carrying options or warrants to purchase stock or other securities
               of LSB or to purchase or subscribe for any stock of LSB purchased by LSB or by its
               nominee or nominees, or to have any other preemptive rights now or hereafter defined
               by the laws of the State of Delaware.

               4.     Preference on Liquidation, etc. In the event of any voluntary or involuntary liquidation,
               dissolution or winding up of LSB, or any reduction in its capital resulting in any distribution
               of assets to its stockholders, the holders of the Series D Preferred Stock shall be entitled
               to receive in cash out of the assets of LSB, whether from capital or from earnings, available
               for distribution to its stockholders, before any amount shall be paid to the holders of the
               common stock of LSB, the sum of One and No/100 Dollar ($1.00), per share ("Liquidation
               Preference"), plus an amount equal to all accumulated and unpaid Cash Dividends thereon as
               of the date fixed for payment of such distributive amount. The purchase or redemption by
               LSB of stock of any class, in any manner permitted by law, shall not for the purpose of this
               paragraph be regarded as a liquidation, dissolution or winding up of LSB or as a reduction of
               its capital. Neither the consolidation nor merger of LSB with or into any other corporation or

-3-

               corporations, nor the sale or transfer by LSB of all or any part of its assets, shall be deemed
               to be a liquidation, dissolution or winding up of LSB for the purpose of this paragraph. A
               dividend or distribution to stockholders from net profits or surplus earned after the date of
               any reduction of capital shall not be deemed to be a distribution resulting from such
               reduction in capital. No holders of Series D Preferred Stock shall be entitled to receive or
               participate in any amounts with respect thereto upon any liquidation, dissolution or winding
               up of LSB other than the amounts provided for in this paragraph. If, in the event of any
               such liquidation, dissolution or winding up of LSB, there shall be shares of more than one
               class or series of preferred stock outstanding, and such other class or classes or series of
               preferred stock by their terms have a parity with the Series D Preferred Stock, and in such
               event there shall be assets distributable upon all shares of the Series D Preferred Stock
               and of such other classes or series of preferred stock in an amount less than the amount
               of which the holders thereof are entitled, then any amount available to be paid upon all
               such shares of preferred stock (including the Series D Preferred Stock) shall be divided
               among said classes or series of preferred stock in proportion to the aggregate amounts
               which would have been paid to the holders of the shares of each class or series had they
               received payment in the full amount to which they would be entitled in such event.

               5.  Voting Rights. Subject to the provisions of this paragraph 5, at every meeting of
               stockholders of LSB each holder of the Series D Preferred Stock shall be entitled to one
               (1) vote for each share of Series D Preferred Stock held of record in his, her or its name
               on all matters submitted to a vote of the stockholders of LSB. The Series D Preferred
               Stock, the Common Stock (as defined below) of LSB, LSB's Series B 12% Cumulative,
               Convertible Preferred Stock, par value $100.00 per share, and LSB's Series of Convertible
               Non-Cumulative Preferred Stock, par value $100.00 per share, shall vote together as
               one class.

               6.  Conversion Privileges. Subject to the terms of this paragraph 6, the holder of record
               of any share or shares of Series D Preferred Stock shall have the right at any time, at his,
               her or its option and election, to convert four (4) shares of Series D Preferred Stock
               into one (1) share of LSB common stock, par value $0.10 per share ("Common
               Stock"), (equivalent to a conversion price of $4.00 per share of LSB Common Stock)
               on the following terms and conditions:

-4-

                    (a)     LSB shall at the time of such conversion pay to the holder of record of any share
             or shares of Series D Preferred Stock any accrued but unpaid dividends on said Series D
             Preferred Stock so surrendered for conversion, except: (i) as otherwise limited by law or
             by any agreement or instrument to which LSB is a party or may be bound by (including, but
             not limited to, this Certificate of Designations), and (ii) that the amount of the dividend paid
             for the then current annual dividend period in which such conversion occurs shall be pro-
             rated for that portion of such year that has elapsed prior to the time the holder of such
             share or shares of Series D Preferred Stock exercises his, her or its rights of conversion. If
             LSB is limited by law from paying such accrued but unpaid dividends, in whole or in part,
             on the share or shares of Series D Preferred Stock surrendered for conversion at the time
             such are surrendered for conversion, then LSB shall only be required to pay that amount
             of such accrued but unpaid dividends as allowed by such law at the time of such conversion
             and no more. If LSB is limited under any agreement (including, but not limited to, this
             Certificate of Designations) from paying such accrued but unpaid dividends, in whole or in
             part, on the share or shares of Series D Preferred Stock surrendered for conversion at the
             time such are surrendered for conversion, then LSB shall pay to the holder of record thereof
             that portion of such accrued but unpaid dividends that LSB is unable to pay on such share
             or shares of Series D Preferred Stock at the time such are surrendered for conversion due
             to said agreement ("Unpaid Dividends") when LSB is no longer prohibited from paying such
             Unpaid Dividends under an agreement and prior to any dividends being paid upon or set
             apart for payment for any class of Common Stock of LSB (other than a dividend payable
             in Common Stock of LSB); and in connection therewith, LSB and such holder shall, at
             the time of such conversion, enter into a separate contract, the terms of which are to be
             satisfactory to LSB and such holder, evidencing LSB's obligation to pay to the holder
             thereof the Unpaid Dividends (without interest) after such conversion when LSB is no
             longer prohibited from paying such under an agreement and prior to any dividends
             being paid upon or set apart for payment for any class of Common Stock of LSB (other
             than a dividend payable in Common Stock of LSB).

                  (b)     In the event that LSB shall (i) pay to the holders of its Common Stock a stock
             dividend payable in its Common Stock, the number of shares of Common Stock issuable
             upon conversion of the Series D Preferred Stock shall be proportionately adjusted, effective
             as of the date of payment of such stock dividend; or (ii) have a stock split, reclassification,

-5-

             recapitalization, combination of outstanding shares or similar corporate rearrangement (other
             than a stock dividend which is provided for in (i) above), without any consideration therefor
             being received by LSB, increasing or decreasing the number of shares of LSB's Common
             Stock, the number of shares of Common Stock issuable upon conversion of the Series D
             Preferred Stock shall be proportionately increased or decreased, effective as of the date of
             the payment of or happening of such event; or (iii) be consolidated with or merge into
             another corporation, in which LSB is the non-surviving corporation, or sell all or
             substantially all of LSB's assets as an entirety under one plan or arrangement to another
             corporation and such consolidation, merger or sale shall be effected in such a way that
             holders of LSB's Common Stock shall be entitled to receive stock, securities or assets
             with respect to or in exchange for such Common Stock, then after the effective date
             of such consolidation, merger or sale each share of Series D Preferred Stock shall
             be convertible into (in lieu of LSB Common Stock) the number of shares of stock
             or other securities or assets to which such holder of the Series D Preferred Stock
             would have been entitled to upon such consummation as if the holder of the Series D
             Preferred Stock had so exercised his, her or its right of conversion under such Series
             D Preferred Stock immediately prior to such consolidation, merger or sale, and LSB
             shall make lawful provision therefor as part of such consolidation, merger or sale.

                  (c)     LSB shall not be required to issue any fraction of a share of Common Stock upon
             any conversion, but (i) may deliver scrip therefor, which shall not entitle the bearer thereof
             to vote, or to receive dividends or to any other or further right or interest, except to
             convert the same in amounts aggregating one or more whole shares of LSB Common
             Stock at any time within a period, fixed by the Board of Directors of LSB, which shall
             be stated in the scrip, or (ii) may pay in cash therefor an amount equal to the same fraction
             of the fair market value of a full share of LSB Common Stock. For such purpose of
             determining the fair market value of LSB Common Stock, the fair market value of a share
             of LSB Common Stock, shall be the last recorded sale price of such a share of LSB
             Common Stock on a national securities exchange on the day immediately preceding the
             date upon which such Series D Preferred Stock is surrendered for conversion or, if there
             be no recorded sale price on such day, the last quoted bid price per share of LSB
             Common Stock on such exchange at the close of trading on such date. If LSB Common
             Stock shall not be at the time dealt in on a national security exchange, such fair market

-6-

             value of LSB Common Stock shall be the prevailing market value of such Common Stock
             on any other securities exchange or in the open market, as determined by LSB, which
             determination shall be conclusive.

                  (d)     Any holder of a share or shares of Series D Preferred Stock desiring to convert
            such Series D Preferred Stock into Common Stock of LSB shall surrender the certificate or
            certificate representing the share or shares of Series D Preferred Stock so to be converted,
            duly endorsed to LSB in blank, with the signature of said endorsement guaranteed by a
            national bank or investment banking firm, at the principal office of LSB (or such other place
            as may be designated by LSB), and shall give written notice to LSB at said office that he
            elects to convert the same, and setting forth the name or names (with the address or
            addresses) in which the shares of Common Stock are to be issued.

                 (e)     The issuance of certificates for shares of Common Stock upon conversion of the
           Series D Preferred Stock shall be made without charge for tax in respect of such issuance;
           however, if any certificate is to be issued in any name other than that of the holder of record
           of the Series D Preferred Stock so converted, the person or persons requesting the issuance
           thereof shall pay to LSB the amount of any tax which may be payable in respect of any
           transfer involved in such issuance, or shall establish to the satisfaction of LSB that such tax
           has been paid or is not due and payable.

           7.    Redemption. There shall be no mandatory or optional redemption rights with respect to
           the Series D Preferred Stock.

           8.    Status of Reacquired Shares. Shares of the Series D Preferred Stock which have been
           issued and reacquired in any manner (until LSB elects to retire them) shall (upon compliance
           with any applicable provisions of the laws of the State of Delaware) have the status of
           authorized and unissued shares of the class of Class C Preferred Stock of LSB undesignated
           as to series and may be redesignated and reissued.

9. Priority. (a) For purposes of this resolution, any stock of any class or series of LSB
shall be deemed to rank:

(i) Prior or senior to the shares of this Series D Preferred Stock either as to
dividends or upon liquidation, if the holders of such class or classes shall be entitled

-7-

                  to the receipt of dividends or of amounts distributable upon dissolution, liquidation or
                  winding up of LSB, whether voluntary or involuntary, as the case may be, in preference
                  or priority to the holders of shares of this Series D Preferred Stock;

                        (ii)  On a parity with or equal to shares of this Series D Preferred Stock, either as to
                  dividends or upon liquidation, whether or not the dividend rates, dividend payment dates
                  or redemption or liquidation prices per share or sinking fund provisions, if any, are
                  different from those of this Series D Preferred Stock, if the holders of such stock are
                  entitled to the receipt of dividends or of amounts distributable upon dissolution,
                  liquidation or winding up of LSB, whether voluntary or involuntary, in proportion to
                  their respective dividend rates or liquidation prices, without preference or priority, one
                  over the other, as between the holders of such stock and the holders of shares of this
                  Series D Preferred Stock; and

                        (iii)  Junior to shares of this Series D Preferred Stock, either as to dividends or upon
                  liquidation, if such class or series shall be Common Stock or if the holders of shares of
                  this Series D Preferred Stock shall be entitled to receipt of dividends or of amounts
                  distributable upon dissolution, liquidation or involuntary, as the case may be, in
                  preference or priority to the holders of shares of such class or series.

          10.    Miscellaneous. The shares of the Series D Preferred Stock shall not be subject to the
          operation of or to the benefit of any retirement or sinking fund. The shares of the Series D
          Preferred Stock shall not have any other relative, participating, optional or other rights and
          powers not set forth above.

-8-

IN WITNESS WHEREOF, this Corporation has caused this Certificate of Designations to be signed and attested by its duly authorized officers this 18th day of October, 2001.

                                                                             LSB INDUSTRIES, INC.

                                                                             By:   /s/ Jack E. Golsen
                                                                                   Jack E. Golsen, President

/s/ David M. Shear
David M. Shear, Secretary

-9-

EX-99.19 5 pn.htm PROMISSORY NOTE Exhibit 99.19 - Promissory Note (Prime)

PROMISSORY NOTE - Fixed or Variable Rate - Commerical

DEBTOR(S) NAME AND ADDRESS Prime Financial Corporation 16 South Pennsylvania Oklahoma City, Oklahoma 73107		NOTE NUMBER 3	DATE OF NOTE 10/18/01	MATURITY DATE On Demand	PRINCIPAL AMOUNT $350,000.00
	CUSTOMER NUMBER		[ ] NEW LOAN [X]RENEWAL OF LOAN(S) NUMBER: 2			OFFICER
	[X] FIXED INTEREST RATE PER ANNUM 10.75 %		[ ]VARIABLE INTEREST RATE INDEX__________________		PRESENT INDEX RATE_________% MARGIN OVER INDEX__________% INITIAL PER ANNUM RATE_____%
	COLLATERAL CATEGORIES:
PAYMENT TERMS	[ ] SINGLE PAYMENT INCLUDING UNPAID AND ACCRUED INTEREST PAYABLE:______________________ [X] INSTALLMENT PAYMENTS AS FOLLOWS: On demand with interest paid monthly in arrears on the 15^th day of each month				This Note amends and restates that certain Promissory Note dated 03/05/98 in the principal amount of $3,000,000.00 made by Debtor in favor of Lender which is superseded herein.

PROMISE TO PAY. For value received, the undersigned Debtor, whether one or more, and jointly and severally if more than one, agrees to the terms of this Note and promises to pay to the order of the Lender named below at its place of business as indicated in this Note or at such other place as may be designated in writing by the Lender, the Principal Amount of this Note together with interest on the unpaid Principal Amount until Maturity at the per annum interest rate or rates stated above and according to the Payment Terms stated in this Note. Interest on this Note is calculated on the actual number of days elapsed on a basis of a 360 day year unless otherwise indicated above. For purposes of computing interest and determining the date principal and interest payments are received, all payments will be deemed made only when received in collected funds. Payments are applied first to accrued and unpaid interest and other charges, and then to unpaid Principal Amount. In this Note, "Debtor" includes any party liable under this Note, including endorsers, co-makers, guarantors and otherwise, and "Lender" includes all subsequent holders.

VARIABLE RATE. If this is a Variable Rate transaction as indicated above, the interest rate shall vary from time to time with changes (whether increases or decreases) in the Index Rate shown above. The interest rate on this Note will be the Index Rate plus a Margin, if any, as indicated above. Each change will become effective on the same date the Index Rate changes unless a different effective date is indicated above. If the Index Rate is Lender's base or prime rate, it is determined by Lender in its sole discretion, primarily on a basis of its cost of funds, is not necessarily the lowest rate Lender is charging its customers, and is not necessarily a published rate.

PAYMENTS NOT MADE WHEN DUE. Any principal and/or interest amount not paid when due shall bear interest at a rate of 6 percent per annum greater than the per annum interest rate prevailing on this Note at the time the unpaid amount came due, but in no event at a rate less than 15 percent per annum. In addition or in the alternative to the interest rate provided for in this paragraph Lender may assess a charge of $10.00 times the number of days late to cover cost of past due notices and other added expenses. In no event shall the interest rate and related charges either before or after maturity be greater than permitted by law.

ALL PARTIES PRINCIPALS. All Debtors shall each be regarded as a principal and each Debtor agrees that any party to this Note, with Lender's approval and without notice to any other party, may from time to time renew this Note or consent to one or more extensions or deferrals of the Maturity Date for any term(s) or to any other modification(s), and all Debtors shall be liable in same manner as on the original note.

ADVANCES AND PAYMENTS. It is agreed that the sum of all advances under this Note may exceed the Principal Amount as shown above, but the unpaid balance shall never exceed said Principal Amount. Advances and payments on this Note shall be recorded on records of Lender and such records shall be prima facie evidence of such advances, payments and unpaid principal balance. Subsequent advances and the procedures described in this Note shall not be construed or interpreted as granting a continuing line of credit for Principal Amount. Lender reserves the right to apply any payment by Debtor, or for account of Debtor, toward this Note or any other obligation of Debtor to Lender.

PREPAYMENT. Except as otherwise provided in this Note, Debtor shall have the right to prepay all or any part of principal due under this Note at any time without penalty, subject to the following conditions: (a) all interest must be paid through the date of any prepayment; and (b) if this Note provides for monthly or other periodic payments, there will be no changes in the due dates or amounts following any partial prepayment unless Lender agrees to such changes in writing.

COLLATERAL. This Note and all other obligations of Debtor to Lender, including renewals and extensions, are secured by all collateral securing this Note and by all other security interests and mortgages previously or later granted to Lender and by all money, deposits and other property owned by any debtor and in Lender's possession or control.

ACCELERATION. At option of Lender, the unpaid balance of this Note and all other obligations of Debtor to Lender, whether direct or indirect, absolute or contingent, now existing or later arising, shall become immediately due and payable without notice or demand, upon or after the occurrence or existence of any of the following events or conditions: (a) any payment required by this Note or by any other note or obligation of Debtor to Lender or to others is not made when due, or any event or condition occurs or exists which results in acceleration of the maturity of any loan agreement or in any instrument or document securing or relating to this Note or any other note or obligation of Debtor to Lender or to others; (c) any warranty, representation, financial information or statement made or furnished to Lender by or on behalf of Debtor proves to have been false in any material respect when made or furnished; (d) any levy, seizure, garnishment or attachment is made against any asset of any Debtor; (e) Lender determines, at any time and in Lender's sole discretion, that the prospect of payment of this Note is impaired; (f) whenever, in Lender's sole judgment, the collateral for the debt evidenced by this Note becomes unsatisfactory or insufficient either in character or value and, upon request, Debtor fails to provide additional collateral as required by Lender; (g) all or any part of the collateral for the debt evidenced by this Note is lost, stolen, substantially damaged or destroyed; (h) death, incompetency, dissolution, change in ownership or senior management, or termination of existence of any Debtor; or (i) a receiver is appointed over all or any part of Debtor's property, or any Debtor makes an assignment to the benefit of creditors, files for relief under any bankruptcy or insolvency laws, or becomes subject to any involuntary proceeding under such laws.

RIGHT OF OFFSET. Except as otherwise restricted by law, any indebtedness due from Lender to Debtor, including, without limitation, any deposits or credit balances due from Lender, is pledged to secure payment of this Note and any other obligation to Lender of Debtor, and may at any time when the whole or any part of such obligation(s) remain(s) unpaid, either before or after Maturity of this Note, be set off, appropriated, held or applied toward the payment of this Note or any other obligation to Lender by any Debtor.

ADDITIONAL PROVISIONS. (1) Debtor agrees, if requested, to furnish to Lender copies of income tax returns as well as balance sheets and income statements for each fiscal year following the Date of Note and at more frequent intervals as Lender may require. (2) No waiver by Lender of any payment or other right under this Note or any related agreement or documentation shall operate as a waiver of any other payment or right. All Debtors waive presentment, notice of acceleration, notice of dishonor and protest and consent to substitutions, releases and failure to perfect as to collateral and to additions or releases of any Debtor. (3)This Note and the obligations evidenced by it are to be construed and governed by the laws of the state indicated in Lender's address shown in this Note. (4) All Debtors agree to pay costs of collection, including, as allowed by law, an attorney's fee equal to a minimum of 15% of all sums due upon default or such other maximum fee as allowed by law. (5) All parties signing below acknowledge receiving a completed copy of this Note and related documents, which contain the complete and entire agreement between Lender and any party liable for payment under this Note. No variation, condition, modification, change or amendment to this Note or related documents shall be binding unless in writing and signed by all parties. No legal relationship is created by the execution of this Note and related documents except that of debtor and creditor or as stated in writing.

LENDER NAME AND ADDRESS	DEBTOR(S) SIGNATURE(S)
SBL Corporation P.O. Box 705 Oklahoma City, Oklahoma 73101-0705	Prime Financial Corporation By:___________________________________________ Vice President Exhibit B

EX-99.20 6 limit-guaranty.htm AMENDED LIMITED GUARANTY Exhibit 99.20 - Amended Limited Guaranty

AMENDED LIMITED GUARANTY

In consideration of SBL Corporation ("SBL"), an Oklahoma corporation, extending credit to Prime Financial Corporation ("PFC"), an Oklahoma corporation and subsidiary of LSB Industries, Inc. ("Guarantor"), a Delaware corporation, the Guarantor, on this 18^th day of October, 2001, does hereby guarantee PFC's payment obligations to SBL and all renewals and extensions thereof arising under that certain Promissory Note dated October 18, 2001, in the principal amount of Three Hundred Fifty Thousand and No/100 Dollars ($350,000.00), made by PFC in favor of SBL. The obligations of the Guarantor under this Guaranty shall be enforceable by SBL only after PFC has defaulted in the performance of its payment obligations to SBL, and notice of such default has been given to the Guarantor by SBL.

This Guaranty supersedes that certain Limited Guaranty dated March 5, 1998 given by Guarantor in favor of SBL and will expire upon the full performance of the payment obligations of PFC to SBL.

The Guarantor acknowledges to SBL that PFC is a wholly owned subsidiary of the Guarantor and is therefore directly and financially interested in PFC and its business and the consideration for this Guaranty.

This Guaranty shall be binding upon the undersigned Guarantor, its heirs, legal representatives, successors, and assigns, and shall inure to the benefit of SBL and its successors and assigns.

In witness whereof, this Guaranty is executed and delivered as of the date above indicated.

Attest:                                                                   LSB Industries, Inc.

   /s/ David M. Shear                                            By   /s/ Tony M. Shelby
Secretary                                                               Title:     V.P.

guarante\lsb\pfc_01.1018

EX-99.21 7 spec-cert.htm SPECIMEN CERTIFICATE (SERIES D PREFERRED) Exhibit 99.21 - Specimen Series D Preferred stock certificate

INCORPORATED UNDER THE LAWS OF
DELAWARE

No. **** Shares *****

LSB INDUSTRIES, INC.
The shares represented by this Certificate are subject to certain restrictions

No Par Value

THIS CERTIFIES THAT - - S P E C I M E N - - is the owner of ********** shares of Preferred Stock each of the Capital Stock of LSB Industries, Inc. designated as Series D 6% Cumulative Convertible Class C Preferred Stock transferable only on the books of the corporation by the holder hereof in person or by attorney upon surrender of this Certificate properly endorsed.

In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers and to be sealed with the Seal of the Corporation this ____ day of ____________________, _________.

____________________________________ ____________________________________
_____ Secretary ______ President

SHARES EACH

NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS PREFERRED STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS PREFERRED STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE PRIOR WRITTEN CONSENT OF LSB INDUSTRIES, INC. AND AN OPINION OF LSB INDUSTRIES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.

THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE PRIOR WRITTEN CONSENT OF LSB INDUSTRIES, INC. AND AN OPINION OF LSB INDUSTRIES, INC.'S COUNSEL OR AN OPINION FROM COUNSEL FOR THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION STATEMENT AND QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.

CERTIFICATE
FOR
*****
SHARES
of the
CAPITAL STOCK
designated as

Series D 6% Cumulative
Convertible Class C Preferred Stock
of
LSB Industries, Inc.

ISSUED TO
**** S P E C I M E N ****

DATED

___________________, _____

***********************

For Value Received, ____________________ hereby sell, assign and transfer unto _____________________________ Shares of the Capital Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint _____________________________ to transfer said Stock on the books of the within named Corporation with full power of substitution in the premises.

Dated ___________________________, XX_________.

In presence of _________________________________________

EX-99.22 8 ar-guaranty.htm AMENDED AND RESTATED GUARANTY AGREEMENT Exhibit 99.22 - Amended and Restated Guaranty Agreement

AMENDED AND RESTATED GUARANTY AGREEMENT

THIS AMENDED AND RESTATED GUARANTY AGREEMENT (this "Agreement") is executed effective the 8th day of November, 2001, by PRIME FINANCIAL CORPORATION, an Oklahoma corporation (the "Guarantor"), in favor of STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A. (the "Lender").

W I T N E S S E T H :

WHEREAS, the Lender has extended certain loans (the "Loans") to the parties identified below (the "Borrowers"), which Loans are evidenced by the promissory notes described below (the "Notes"):

Borrower	Note No.	Note Date	Original Principal Amount
SBL Corporation	37516	10-16-97	$1,985,508
Sylvia H. Golsen 1992 Trust	37517	10-16-97	$140,532
Steven J. Golsen 1992 Trust	37518	10-16-97	$139,680
Lori R. Rappaport #J-1 Trust	37519	10-16-97	$71,776
Stacy L. Rappaport #J-1 Trust	37520	10-16-97	$71,776
Amy G. Rappaport #J-1 Trust	37521	10-16-97	$73,908
Adam Z. Golsen #J-1 Trust	37522	10-16-97	$71,776
Michelle L. Golsen #J-1 Trust	37523	10-16-97	$71,776
Barry H. Golsen 1992 Trust	37524	10-16-97	$149,680
Linda F. Rappaport 1992 Trust	37525	10-16-97	$149,680
Joshua B. Golsen #J-1 Trust	37526	10-16-97	$73,908

WHEREAS, the Guarantor has guaranteed payment of the Notes by previously executing and delivering to the Lender for each Loan a certain Guaranty Agreement dated April 21, 2000 (the "Prior Guaranties"); and

AMENDED AND RESTATED GUARANTY AGREEMENT
F:\Docs\1470\2011\HL02921.WPD

WHEREAS, this Agreement is executed by the Guarantor and delivered to the Lender to induce the Lender to make the Loans and in satisfaction of a material condition precedent to the Loans and to amend and restate the Prior Guaranties.

NOW, THEREFORE, in consideration of the Loans by the Lender to the Borrowers and the benefits to be derived by the Guarantor therefrom, it is agreed as follows:

1. Definition of Loan Documents. For purposes of this Agreement, "Loan Documents" will mean this Agreement, the Notes and all other instruments executed and delivered by the Borrowers, the Guarantor or any other person or entity in connection with the Loans, all instruments issued pursuant to the foregoing documents and all extensions, renewals, modifications and amendments thereof.

2. Guaranty. The Guarantor irrevocably and unconditionally guarantees to the Lender the payment of the obligations of the Borrowers contained in the Loan Documents including, without implied limitation, the payment of all principal, interest, attorneys' fees, expenses of collection and other sums now or hereafter owing by the Borrowers to the Lender thereunder. The obligation of the Guarantor hereunder is an absolute, unconditional, irrevocable and continuing guaranty of payment and performance and will not terminate until the Borrowers have paid in full all amounts owing to the Lender under the Loan Documents and have performed all of the Borrowers' obligations under the Loan Documents.

3. No Release. The Guarantor agrees that the Guarantor's liability hereunder will not be released, reduced, impaired or affected by the occurrence of any one or more of the following events: (a) the Lender obtaining collateral from the Borrowers or any other person to secure payment or performance under the Loan Documents; (b) the assumption of liability by any other person (whether as guarantor or otherwise) for payment or performance under the Loan Documents; (c) the release, surrender, exchange, loss, termination, waiver or other discharge of any collateral securing payment or performance under the Loan Documents; (d) the subordination, relinquishment or discharge of the Lender's rights relating to the Loan Documents or any collateral described therein; (e) the dissolution, insolvency, bankruptcy or reorganization of the Borrowers, any other guarantor of any obligation of the Borrowers to the Lender or any other person now or hereafter liable for payment or performance under the Loan Documents; (f) the increase, renewal, consolidation, extension, modification, rearrangement or amendment from time to time of the Loans or of the terms of any one or more of the Loan Documents; (g) the sale, encumbrance, transfer or other modification of the ownership of the Borrowers or the Borrowers' assets or the change in the financial condition or management of the Borrowers; (h) the invalidity, unenforceability or insufficiency of any one or more of the Loan Documents or any collateral securing payment or performance thereunder; or (i) the release of any person from any personal liability with respect to all or part of the guaranteed obligations.

4. Enforcement. The Lender will not be required to pursue the Lender's remedies against the Borrowers or any other guarantor of the Loans prior to exercising the Lender's remedies under this Agreement.

AMENDED AND RESTATED GUARANTY AGREEMENT
F:\Docs\1470\2011\HL02921.WPD

-2-

5. Waiver of Rights. The Guarantor waives diligence, presentment, protest, notice of dishonor, notice of acceptance of this Agreement and all other notices of any nature except as provided in the Loan Documents or this Agreement. Performance by the Guarantor hereunder will not entitle the Guarantor to any payment by the Borrowers or any other guarantor of the obligations of the Borrowers whether under the Loan Documents or otherwise by reason of any claim for contribution, indemnification, reimbursement, subrogation or otherwise, until such time as the Borrowers and any other guarantor of the obligations of the Borrowers under the Loan Documents have paid in full all amounts owing to the Lender and have performed all of the Borrowers' obligations under the Loan Documents. Notwithstanding anything herein to the contrary, the Guarantor hereby waives all rights of subrogation, contribution, reimbursement or indemnity against the Borrowers in connection with this Agreement (but not against any other party) until such time as the obligations of the Borrowers under the Notes or the Loan Documents have been paid in full.

6. Expenses of Collection. The Guarantor agrees that in any action brought to enforce this Agreement, the Guarantor will pay to the Lender the reasonable attorneys' fees, court costs and other litigation expenses incurred by the Lender.

7. Cumulative Remedies. On the occurrence of any event of default under the Loan Documents or this Agreement, the Lender will be entitled to selectively and successively enforce any one or more of the rights held by the Lender, and such action will not be deemed a waiver of any other right held by the Lender. Except as provided herein or in the Loan Documents, all of the remedies of the Lender under this Agreement and the Loan Documents are cumulative and not alternative.

8. Miscellaneous. This Agreement has been negotiated, executed and delivered in Oklahoma City, Oklahoma County, Oklahoma, and is intended to be construed in accordance with the laws of the State of Oklahoma. All actions relating to or arising under this Agreement, whether filed by the Lender or the Guarantor, will be instituted only in a state court sitting in Oklahoma County, Oklahoma, or a federal court sitting in Oklahoma City, Oklahoma. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect or application for any reason, such invalidity, illegality or unenforceability will not affect any other provisions herein contained and such other provisions will remain in full force and effect. This Agreement cannot be amended except by an agreement in writing signed by the Guarantor and the Lender.

9. Reinstatement. The obligations of the Guarantor under this Agreement will be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrowers in respect of all or any part of the guaranteed obligations is rescinded or must be otherwise restored by any holder of such guaranteed obligations, whether as a result of any proceedings in bankruptcy, reorganization or otherwise, and the Guarantor agrees that the Guarantor will indemnify the Lender on demand for all reasonable costs and expenses (including fees of counsel) incurred by the Lender in connection with such rescission or restoration.

10. Limitation of Liability. Notwithstanding anything to the contrary herein contained, the liability of the Guarantor hereunder will not exceed Three Hundred Fifty Thousand Dollars ($350,000.00).

AMENDED AND RESTATED GUARANTY AGREEMENT
F:\Docs\1470\2011\HL02921.WPD

-3-

11. Restatement. This Agreement amends, restates and replaces the Prior Guaranties in their entirety and the terms and provisions hereby will supersede the terms and provisions thereof.

IN WITNESS WHEREOF, the Guarantor and the Lender have executed this Agreement effective the date first above written.

                                                            PRIME FINANCIAL CORPORATION, an Oklahoma
                                                            corporation

                                                            By   /s/ Jack E. Golsen
                                                                Jack E. Golsen, President

(the "Guarantor")

                                                           STILLWATER NATIONAL BANK AND TRUST
                                                           COMPANY, N.A.

                                                            By   /s/ Sean Fuller
                                                                 Sean Fuller, Senior Vice President

(the "Lender")

AMENDED AND RESTATED GUARANTY AGREEMENT
F:\Docs\1470\2011\HL02921.WPD

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EX-99.23 9 snb-security.htm SECURITY AGREEMENT (SNB) Exhibit 99.23 - Security Agreement (SNB)

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Agreement") is executed effective the 8th day of November, 2001, between SBL CORPORATION, an Oklahoma corporation, having a notice address at Post Office Box 705, Oklahoma City, Oklahoma 73101 (the "Debtor"), and STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A., having a notice address at 6305 Waterford Boulevard, Suite 205, Oklahoma City, Oklahoma 73118 (the "Secured Party").

W I T N E S S E T H :

WHEREAS, the Debtor and the other parties identified below (together with the Debtor, the "Borrowers"), are currently indebted to the Secured Party as evidenced by the promissory notes described below (the "Notes"):

Borrower	Note No.	Note Date	Original Principal Amount
SBL Corporation	37516	10-16-97	$1,985,508
Sylvia H. Golsen 1992 Trust	37517	10-16-97	$140,532
Steven J. Golsen 1992 Trust	37518	10-16-97	$139,680
Lori R. Rappaport #J-1 Trust	37519	10-16-97	$71,776
Stacy L. Rappaport #J-1 Trust	37520	10-16-97	$71,776
Amy G. Rappaport #J-1 Trust	37521	10-16-97	$73,908
Adam Z. Golsen #J-1 Trust	37522	10-16-97	$71,776
Michelle L. Golsen #J-1 Trust	37523	10-16-97	$71,776
Barry H. Golsen 1992 Trust	37524	10-16-97	$149,680
Linda F. Rappaport 1992 Trust	37525	10-16-97	$149,680
Joshua B. Golsen #J-1 Trust	37526	10-16-97	$73,908

SECURITY AGREEMENT
F:\DOCS\1470\2011\HL02923.WPD

WHEREAS, the Debtor has agreed to secure payment of the Notes and other indebtedness described herein by granting the Secured Party a security interest covering certain assets of the Debtor.

NOW, THEREFORE, (i) for and in consideration of the premises and the agreements herein contained; and (ii) for other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged, the Debtor hereby agrees with the Secured Party as follows:

1. Definitions. Unless otherwise defined herein, all terms used herein which are defined in the Oklahoma Uniform Commercial Code (the "UCC") will have the same meanings herein unless the context otherwise requires. The documents contemplated in this Agreement and the Notes are collectively referred to herein as the "Loan Documents."

2. Security Interest. The Debtor hereby grants to the Secured Party a first and prior security interest in, an assignment of, a general lien upon and a right of set-off against the following described property (the "Collateral"): (a) one million (1,000,000) shares of preferred stock, designated as Series D 6% Cumulative, Convertible Class C Preferred Stock (the "Stock"), of LSB Industries, Inc., a Delaware corporation ("LSB"), owned by the Debtor and represented by LSB Certificate No. 1, together with all additions and substitutions of shares of the Stock or certificates, together with all of the Debtor's interest and rights in the Stock, whether now owned or hereafter acquired, all cash and stock dividends attributable to the Stock, all increases relating to the Stock as a result of stock splits, mergers or any other reorganization, all monies and claims for monies due and to become due to the Debtor as dividends or arising under accounts, contracts, agreements and general intangibles relating to the Stock and all proceeds and products thereof; and (b) all of the Debtor's right, title and interest in and to that certain Promissory Note dated October 18, 2001, executed by Prime Financial Corporation, an Oklahoma corporation ("PFC"), in the original principal amount of Three Hundred Fifty Thousand Dollars ($350,000.00) (the "PFC Note"), and all additions and accessions to, replacements of, substitutions for, payments thereon and proceeds therefrom. This Agreement is intended for security only and is to secure the obligations of the Borrowers owing to the Secured Party as herein described. It is understood that the Secured Party does not hereby assume any of the obligations of the Debtor in connection with the Collateral.

                2.1     Voting Rights. Absent an event of default (hereinafter defined in paragraph 6) under
                          this Agreement or the Loan Documents that has not been cured, the Debtor will
                          retain all voting rights with respect to the Stock. On or after the occurrence of an
                          event of default and without further notice to the Debtor, the Secured Party will
                          have the right to exercise all voting rights, all conversion, exchange, subscription
                          and other rights pertaining to the Stock, whether or not the Stock has been
                          registered in the Secured Party's name. The Debtor hereby appoints the Secured
                          Party as the Debtor's lawful attorney-in-fact and proxy to exercise the foregoing
                          rights after the occurrence of an event of default. The Debtor agrees that the
                          foregoing proxy is coupled with an interest and is irrevocable.

2.2 Cash Dividends. Absent an event of default that has not been cured, the Debtor
will have the right to receive and retain for the Debtor's use all cash dividends paid

SECURITY AGREEMENT
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                         on the Stock. On or after the occurrence of an event of default and without further
                         notice to the Debtor the Secured Party will have the right to receive such cash
                         dividends and to apply the same toward satisfaction of the indebtedness hereby
                         secured or hold the same as part of the Collateral under this Agreement.

               2.3     Stock Dividends. In the event any stock dividends are paid on the Stock, or if any
                         stock or other securities are delivered to the Debtor in connection with any stock
                         split, merger or reorganization affecting the Stock, the Debtor will immediately
                         deliver to the Secured Party the certificates representing such stock dividends,
                         other stock or securities, together with executed endorsements or appropriate
                         powers. Any such stock dividend, other stock or securities will be held by the
                         Secured Party as part of the Collateral under the terms of this Agreement, provided
                         that the Debtor will retain all rights with respect to the Collateral as provided in
                         paragraphs 2.1 and 2.2 of this Agreement.

3. Secured Indebtedness. The security interest granted hereby in the Collateral is given to secure the Borrowers' payment of: (a) the Notes; (b) all extensions, renewals, amendments, modifications, substitutions and changes in form to the Notes; (c) all costs and expenses incurred in connection with the collection of the Notes and enforcement of the Secured Party's rights under the Loan Documents, including attorneys' fees and expenses; (d) all future advances by the Secured Party to the Borrowers under the Notes; (e) all other liabilities of the Borrowers to the Secured Party (whether primary, secondary, direct or indirect, absolute or contingent, sole, joint or several) due or to become due however evidenced or acquired; and (f) performance of the agreements herein set forth (the foregoing items (a) through (f) are collectively referred to herein as the "Secured Indebtedness").

4. Debtor's Agreements. Until payment in full of the Notes, the Debtor will perform or cause to be performed the following agreements:

                  4.1     Possession of Collateral. The Debtor agrees to deliver the Collateral to the Secured
                            Party, appropriately endorsed to the Secured Party or with stock powers in form
                            and substance satisfactory to the Secured Party in favor of the Secured Party. The
                            Debtor will provide the name and address of the stock transfer agent to the Secured
                            Party. Regardless of the form of any endorsement to the Secured Party, the Debtor
                            waives presentment, demand, notice of dishonor, protest, notice of protest and all
                            other notices with respect thereto.

                4.2      Additional Documents. The Debtor agrees to execute and deliver any documents
                           which are necessary in the judgment of the Secured Party to obtain, maintain and
                           perfect a security interest under this Agreement and to enable the Secured Party to
                           comply with any federal or state law to obtain or perfect the Secured Party's security
                           interest in the Collateral.

SECURITY AGREEMENT
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               4.3     Creation of Liens. The Debtor will not create, assume or suffer to exist any claim,
                         pledge, security interest, encumbrance or other lien (including the lien of an
                         attachment, judgment or execution) affecting any or all of the Collateral,
                         excluding only liens held by the Secured Party.

5. Debtor's Representations and Covenants. The Debtor hereby warrants, represents and agrees as follows:

5.1 PFC Note. The unpaid principal balance of the PFC Note plus all accrued unpaid
interest as of the effective date of this Agreement is $____________________.

5.2 Principal Place of Business. The Debtor's principal place of business is in the State
of Oklahoma.

               5.3      Title. The Debtor has absolute title to the Collateral free and clear of all liens,
                          encumbrances and security interests except for the security interest hereby granted to
                          the Secured Party and such other rights, if any, of the Secured Party, and the Debtor
                          warrants and will defend the same unto the Secured Party against the claims and
                          demands of all persons and parties whomsoever. The Debtor is not in default in the
                          performance of any obligation or the payment of any sum owing with respect to the
                          Collateral. On or after the occurrence of an uncured event of default, the Debtor will
                          take all steps necessary to cause or permit the Secured Party to cause the Stock to
                          be registered in the name of the Secured Party and new share certificates to be issued.

6. Default. The occurrence of default under the Loan Documents will constitute a default by the Debtor under this Agreement.

7. Remedies. On the occurrence of an event of default that has not been cured, the Secured Party may take the following actions:

                7.1     Remedy.  The Secured Party may (a) exercise in respect of the Collateral or any
                          portion thereof all of the rights and remedies of a secured party under the UCC,
                          or (b) at any time and from time to time sell, resell, assign and deliver, in the
                          Secured Party's discretion, all or any part of the Collateral, in one or more
                          parcels at the same or different times, and all right, title and interest, claim and
                          demand therein and right of redemption thereof, at public or private sale on
                          commercially reasonable terms. In connection therewith, the Secured Party
                          may bid on such Collateral for its own account and the Debtor hereby waives
                          and releases any and all equity or right of redemption. To effect any sale,
                          transfer or other disposal of any of the Collateral, the Secured Party has the
                          right, for and in the name, place and stead of the Debtor, to execute
                          endorsements, assignments or other instruments of conveyance or transfer
                          with respect to all or any of the Collateral.

SECURITY AGREEMENT
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                7.2     Sale Procedure.  Except as expressly provided for herein, no demand or
                          advertisement, all of which are hereby expressly waived by the Debtor, will be
                          required in connection with any sale or other disposition of any part of the Collateral
                          which threatens to decline speedily in value or which is of a type customarily sold
                          on a recognized market. In all other events, the Secured Party will give the Debtor,
                          at least ten (10) days prior notice of the time and place of any public sale and of
                          the time after which any private sale or other disposition is to be made, which
                          notice the Debtor agrees is reasonable, all other demands and advertisements
                          being hereby waived. The Secured Party will not be obligated to make any sale
                          of Collateral, regardless of the fact that notice of sale may have been given. The
                          Secured Party may adjourn any public or private sale or cause the same to be
                          adjourned from time to time by announcement at the time and place fixed for sale,
                          and such sale may be made at the time and place to which the same was so
                          adjourned. Upon each public or private sale of Collateral, the Secured Party or
                          any holder of the Notes, or any of their respective affiliates, may purchase all or
                          any of the Collateral being sold, free from any equity or right of redemption,
                          which is hereby waived and released by the Debtor, and may make payment
                          therefor in cash or, at the Secured Party's or such holder's option (by
                          endorsement without recourse), by tendering or releasing principal or accrued
                          and unpaid interest on the Notes, in lieu of cash, in a face amount equal to the
                          amount of the purchase price. The Debtor agrees to pay all reasonable costs and
                          expenses of every kind for sale or delivery, including brokers' and attorneys' fees,
                          and after deducting such costs and expenses from the proceeds of sale, the
                          Secured Party will apply any residue to the payment of the obligations under the
                          Notes and the Debtor will continue to be liable for any deficiency in accordance
                          with the Loan Documents. The balance, if any, remaining after payment in full
                          of all of the obligations under the Notes will be paid to the Borrowers.

               7.3     Private Sales.  Other than may be provided by law, the Debtor will not be required to
                         file a registration statement or otherwise register the Collateral under the Securities
                         Act of 1933 or any state securities or blue sky laws. The Debtor recognizes that the
                         Secured Party may be unable to effect a public sale of all or part of the Collateral by
                         reason of certain prohibitions contained in the Securities Act of 1933, as amended, as
                         now or hereafter in effect, or in applicable blue sky or other state securities laws, as
                         now or hereafter in effect, but may be compelled to resort to one or more private
                         sales to a restricted group of purchasers who will be obliged to agree, among other
                         things, to acquire such Collateral for their own account, for investment and not
                         with a view to the distribution or resale thereof. The Debtor agrees that private
                         sales so made may be at prices and other terms less favorable to the Debtor than
                         if such Collateral were sold at public sales, and that the Secured Party has no
                         obligation to delay sale of any such Collateral for the period of time necessary
                         to permit the issuer of such Collateral, even if such issuer would agree, to register

SECURITY AGREEMENT
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                         such Collateral for public sale under such applicable securities laws. The Debtor
                         agrees that private sales, absent other adverse circumstances, will not be deemed
                         to have been made in a commercially unreasonable manner. In connection with
                         the foregoing, the Secured Party may, at the Debtor's expense, consult with
                         counsel to determine whether a public or private sale of Collateral is necessary
                         or appropriate.

8. Miscellaneous. It is further agreed as follows:

8.1 Time. Time is of the essence of this Agreement and each provision of this
Agreement.

                  8.2     Notices. Any notice required or permitted to be given by this Agreement will be
                            deemed to have been given on the date such notice is delivered personally or by
                            telefacsimile to the party designated to receive such notice, on the date sent by
                            overnight courier or on the date deposited in the United States mail, postage
                            prepaid, and directed to the notice address specified in the initial paragraph of
                            this Agreement or otherwise provided to the Secured Party in writing.

                 8.3     Cumulative Remedies. No failure on the part of the Secured Party to exercise,
                           and no delay in exercising any right under this Agreement will operate as a waiver
                           thereof, nor will any single or partial exercise by the Secured Party of any right
                           under this Agreement preclude any other or further right of exercise thereof or
                           the exercise of any other right except as provided in the Loan Documents.

                8.4     Construction. This Agreement is to be construed according to the internal laws of
                          the State of Oklahoma. All actions with respect to this Agreement may be
                          instituted in the Courts of the State of Oklahoma or the United States District
                          Court sitting in Oklahoma County, Oklahoma.

                8.5     Amendment. Neither this Agreement nor any of the provisions hereof can be
                          changed, waived, discharged or terminated, except by an instrument in writing
                          signed by the party against whom enforcement of the change, waiver,
                          discharge or termination is sought.

                8.6     Severability. The provisions of this Agreement are severable, and if any clause or
                          provision is held invalid, illegal or unenforceable in any respect in any jurisdiction,
                          the validity, legality and enforceability of the remaining provisions contained herein
                          will not be in any way affected or impaired thereby.

                8.7     Binding Effect. This Agreement will be binding on the Debtor and the Debtor's
                          successors and permitted assigns, and will inure to the benefit of the Secured Party
                          and the Secured Party's successors and assigns.

SECURITY AGREEMENT
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               8.8     Continuing Agreement. This is a continuing Agreement and the grant of a security
                         interest hereunder will remain in full force and effect and all the rights, powers and
                         remedies of the Secured Party hereunder will continue to exist until all of the Secured
                         Indebtedness is paid in full. In such event, the Secured Party will execute a written
                         termination statement, reassign to the Debtor, without recourse, the Collateral and all
                         rights conveyed hereby and return possession of any Collateral in the Secured Party's
                         possession to the Debtor.

9. Restatement. This Agreement amends, restates and replaces in its entirety that certain assignment dated October 16, 1997, executed by the Debtor, pursuant to which the Debtor assigned and transferred to the Secured Party all of the Debtor's right, title and interest in and to that certain Promissory Note dated October 17, 1997, executed by PFC in the original principal amount of Three Million Dollars ($3,000,000.00), and the terms and provisions hereby will supersede the terms and provisions thereof.

IN WITNESS WHEREOF, the Debtor and the Secured Party have executed and delivered this Agreement effective the date first above written.

SBL CORPORATION, an Oklahoma corporation

By /s/ Jack E. Golsen
Jack E. Golsen, President

(the "Debtor")

STILLWATER NATIONAL BANK AND TRUST
COMPANY, N.A.

                                                                       By   /s/ Sean Fuller
                                                                            Sean Fuller, Senior Vice President

                                                                      (the "Secured Party")

SECURITY AGREEMENT
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EX-99.24 10 bow-security.htm SECURITY AGREEMENT (BANK OF THE WEST) Exhibit 99.24 - Security Agreement (Bank Of The West)

SECURITY AGREEMENT Stocks, Bonds and Possessory Collateral

DATE OF AGREEMENT
12/05/2000

DEBTOR NAME AND ADDRESS	PLEDGOR NAME AND ADDRESS	LENDER NAME AND ADDRESS
Golsen, Jack E. 16 South Pennsylvania Oklahoma City, OK 73103	Sylvia H. Golsen	Bank Of The West Clinton Branch P.O. Box 1207 Clinton, OK 73601

I. GRANT OF SECURITY INTEREST. For value received, the Undersigned whether one or more (hereinafter individually referred to as "Debtor" or "Pledgor" as their capacities are above set forth) hereby grants to Lender named above a security interest in the property described in Paragraph II, which property is hereinafter referred to collectively as "Collateral." This security interest is given to secure all the obligations of the Debtor and of the Pledgor to lender as more fully set forth in Paragraphs III and IV hereof.

II. COLLATERAL. The Collateral includes: (A) All specifically described Collateral; (B) All proceeds of Collateral; and (C) Other property as indicated below.

(A)	SPECIFICALLY DESCRIBED COLLATERAL
	370000 share(s) of L.S.B. Industries common/preferred stock evidenced by certificate number SEE ATTACHED EXHIBIT.

(B)	ALL PROCEEDS of the specifically described Collateral regardless of kind, character or form (including, but not limited to, renewals, extensions, redeposits, reissues or any other changes in form of the rights represented thereby), together with any stock rights, rights to subscribe, liquidating dividends, stock dividends, dividends paid in stock or other property, new securities, or any other property to which Undersigned may hereafter become entitled to receive by reason of the specifically described Collateral; and in the event Undersigned receives any such property, Undersigned agrees immediately to deliver same to Lender to be held by Lender in the same manner as Collateral specifically
(C)	OTHER PROPERTY which shall be deemed Collateral shall include all dividends and interest paid in cash on the Collateral, provided, however, that Lender at its option may permit such dividends and/or interest to be received and retained by Undersigned, but provided further, that Lender may at any time terminate such permission. Collateral shall further include without limitation, all money, funds, or property owned by Undersigned which is now or which hereafter may be possessed or controlled by Lender whether by pledge, deposit or otherwise.

III. OBLIGATIONS SECURED BY THIS AGREEMENT. The security interest herein granted is given to secure all of the obligations of Debtor or Pledgor to Lender including: (a) The performance of all of the agreements, covenants and warranties of the Debtor or Pledgor as set forth in any agreement between Debtor or Pledgor and Lender; (b) All liabilities of Debtor or Pledgor to Lender of every kind and description including: (1) all future advances, (2) both direct and indirect liabilities, (3) liabilities due or to become due and whether absolute or contingent, and (4) liabilities now existing or hereafter arising and however evidenced; (c) All extensions and renewals of liabilities of Debtor or Pledgor to Lender for any term or terms to which Undersigned hereby consents; (d) All interest due or to become due on the liabilities of Debtor or Pledgor to Lender; (e) All expenditures by Lender involving the performance of or enforcement of any agreement, covenant or warranty provided for by this or any other agreement between the parties; and (f) All costs, attorney fees, and other expenditures of Lender in the collection and enforcement of any obligation or liability of Debtor or Pledgor to Lender and in the collection and enforcement of or realization upon any of the Collateral.

IV. FUTURE ADVANCES. It is specifically agreed that the obligations of Debtor and Pledgor secured by this Agreement include all future advances by Lender to Debtor as set forth in Paragraph III above.

V. ADDITIONAL PROVISIONS. The Undersigned agrees to the Additional Provisions set forth on page two hereof, the same being incorporated herein by reference.

RECEIPT FOR COLLATERAL	SIGNATURE(S)
By:________________________________ Ritchie Johnston, President	/s/ Sylvia Golsen ____________________________ Sylvia H. Golsen _______________________________ _____________________________ _________________________________ ______________________________

Form 0406764 FCHAR12052000120235P (C) Copyright 7/97 American Bank Systems

EX-99.25 11 bf-pledge.htm COMMERCIAL PLEDGE AGREEMENT (BANCFIRST) Exhibit 99.25 - Commercial Pledge Agreement (BancFirst)

BancFirst

COMMERCIAL PLEDGE AGREEMENT

Principal $222,000.00	Loan Date 02-02-2001	Maturity 09-02-2005	Loan No. 4000040429	Call / Coll 20120 / 33	Account	Officer BKR	Initials
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations.

Borrower:	Jack E. Golsen (SSN: ###-##-####) Sylvia H. Golsen (SSN: ###-##-####) 16 South Pennsylvania Oklahoma City, OK 73107		Lender:	BancFirst OKC - MAIN AND BROADWAY 101 NORTH BROADWAY PO BOX 26788 OKLAHOMA CITY, OK 73126-0788 (405) 270-1000
Grantor:	SBL Corporation 16 South Pennsylvania Ave. Oklahoma City, OK 73107

THIS COMMERCIAL PLEDGE AGREEMENT dated February 2, 2001, is made and executed among SBL Corporation ("Grantor"); Jack E. Golsen and Sylvia H. Golsen ("Borrower"); and BancFirst ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means all of Grantor's property (however owned if more than one), in the possession of Lender (or in the possession of a third party subject to the control of Lender), whether existing now or later and whether tangible or intangible in character, including without limitation each and all of the following:

188,500 Shares of LSB Industries, Inc. Stock, Cusip No. 502160 10 4, Certificate Number OKC 11688 in the
name of SBL Corporation

74,500 Shares of LSB Industries, Inc. Stock, Cusip No. 502160 10 4, Certificate Number OKC 11717, in the
name of SBL Corporation

In addition, the word "Collateral" includes all of Grantor's property (however owned), in the possession of Lender (or in the possession of a third party subject to the control of Lender), whether now or hereafter existing and whether tangible or intangible in character, including without limitation each of the following:

(A) All property to which Lender acquires title or documents of title.

(B) All property assigned to Lender.

(C) All promissory notes, bills of exchange, stock certificates, bonds, savings passbooks, time certificates of
deposit, insurance policies, and all other instruments and evidence of an obligation.

(D) All records relating to any of the property described in this Collateral section, whether in the form of a
writing, microfilm, microfiche, or electronic media.

(E) All Income and Proceeds from the Collateral as defined herein.

CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures all obligations, debts and liabilities, plus interest thereon, of Borrower to Lender, or any one or more of them, as well as all claims by Lender against Borrower or any one or more of them, owed to Lender, whether of a like nature to the Note Indebtedness or not, whether arising from a loan or a purchased obligation, whether incurred for a consumer or a business purpose, whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, absolute or contingent, liquidated or unliquidated and whether Borrower may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable.

BORROWER'S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under this Agreement or by applicable law, (A) Borrower agrees that Lender need not tell Borrower about any action or inaction Lender takes in connection with this Agreement; (B) Borrower assumes the responsibility for being and keeping informed about the Collateral; and (C) Borrower waives any defenses that may arise because of any action or inaction of Lender, including without limitation any failure of Lender to realize upon the Collateral or any delay by Lender in realizing upon the Collateral; and Borrower agrees to remain liable under the Note no matter what action Lender takes or fails to take under this Agreement.

GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (A) this agreement is executed at Borrower's request and not at the request of Lender; (B) Grantor has the full right, power and authority to enter into this Agreement and to pledge the Collateral to Lender; (C) Grantor has established adequate means of obtaining from Borrower on a continuing basis information about Borrower's financial condition; and (D) Lender has made no representation to Grantor about Borrower or Borrower's creditworthiness.

GRANTOR'S WAIVERS. Grantor waives all requirements of presentment, protest, demand, and notice of dishonor or non-payment to Borrower or Grantor, or any other party to the Indebtedness or the Collateral. Lender may do any of the following with respect to any obligation of any Borrower without first obtaining the consent of Grantor: (A) grant any extension of time for any payment, (B) grant any renewal, (C) permit any modification of payment terms or other terms, or (D) exchange or release any Collateral or other security. No such act or failure to act shall affect Lender's rights against Grantor or the Collateral.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Grantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts.

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. Grantor represents and warrants to Lender that:

          Ownership. Grantor is the lawful owner of the Collateral free and clear of all security interests, liens,
           encumbrances and claims of others except as disclosed to and accepted by Lender in writing prior to
           execution of this Agreement.

Right to Pledge. Grantor has the full right, power and authority to enter into this Agreement and to pledge
the Collateral.

          Authority; Binding Effect. Grantor has the full right, power and authority to enter into this Agreement and
          to grant a security interest in the Collateral to Lender. This Agreement is binding upon Grantor as well as
          Grantor's successors and assigns, and is legally enforceable in accordance with its terms. The foregoing
          representations and warranties, and all other representations and warranties contained in this Agreement
          are and shall be continuing in nature and shall remain in full force and effect until such time as this
          Agreement is terminated or cancelled as provided herein.

No Further Assignment. Grantor has not, and shall not, sell, assign, transfer, encumber or otherwise dispose
of any of Grantor's rights in the Collateral except as provided in this Agreement.

          No Defaults. There are no defaults existing under the Collateral, and there are no offsets or counterclaims to
          the same. Grantor will strictly and promptly perform each of the terms, conditions, covenants and agreements,
          if any, contained in the Collateral which are to be performed by Grantor.

          No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing
          Grantor or to which Grantor is a party, and its certificate or articles of incorporation and bylaws do not prohibit
          any term or condition of this Agreement.

LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL. Lender may hold the Collateral until all Indebtedness has been paid and satisfied. Thereafter Lender may deliver the Collateral to Grantor or to any other owner of the Colalteral. Lender shall have the following rights in addition to all other rights Lender may have by law:

          Maintenance and Protection of Collateral. Lender may, but shall not be obligated to, take such steps as it deems
          necessary or desirable to protect, maintain, insure, store, or care for the Collateral, including paying of any liens
          or claims against the Collateral. This may include such things as hiring other people, such as attorneys, appraisers
          or other experts. Lender may charge Grantor for any cost incurred in so doing. When applicable law provides
          more than one method of perfection of Lender's security interest, Lender may choose the method(s) to be used.
          If the Collateral consists of stock, bonds or other investment property for which no

COMMERCIAL PLEDGE AGREEMENT
(Continued) Page 2
_______________________________________________________________________________________________

            certificate has been issued, Grantor agrees, at Lender's request, either to request issuance of an appropriate
            certificate or to give instructions on Lender's forms to the issuer, transfer agent, mutual fund company or broker,
            as the case may be, to record on its books or records Lender's security interest in the Collateral.

             Income and Proceeds from the Collateral. Lender may receive all income and Proceeds and add it to the
             Collateral. Grantor agrees to deliver to Lender immediately upon receipt, in the exact form received and without
             commingling with other property, all Income and Proceeds from the Collateral which may be received by, paid,
             or delivered to Grantor or for Grantor's account, whether as an addition to, in discharge of, in substitution of,
             or in exchange for any of the Collateral.

             Application of Cash. At Lender's option, Lender may apply any cash, whether included in the Collateral or
             received as Income and Proceeds or through liquidation, sale, or retirement, of the Collateral, to the satisfaction
             of the Indebtedness of such portion thereof as Lender shall choose, whether or not matured.

             Transactions with Others. Lender may (1) extend time for payment or other performance, (2) grant a renewal
             or change in terms or conditions, or (3) compromise, compound or release any obligation, with any one or
             more Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems advisable, without
             obtaining the prior written consent of Grantor, and no such act or failure to act shall affect Lender's rights
             against Grantor or the Collateral.

             All Collateral Secures Indebtedness. All Collateral shall be security for the Indebtedness, whether the
             Collateral is located at one or more offices or branches of Lender. This will be the case whether or not the
             office or branch where Grantor obtained Grantor's loan knows about the Collateral or relies upon the Collateral
             as security. In the event Grantor comes into the possession of any Collateral, Grantor will deliver it immediately
             to Lender.

             Collection of Collateral. Lender at Lender's option may, but need not, collect the Income and Proceeds directly
              from the Obligors. Grantor authorizes and directs the Obligors, if Lender decides to collect the Income and
              Proceeds, to pay and deliver to Lender all Income and Proceeds from the Collateral and to accept Lender's
              receipt for the payments.

              Power of Attorney. Grantor irrevocably appoints Lender as Grantor's attorney-in-fact, with full power of
              substitution, (a) to demand, collect, receive, receipt for, sue and recover all Income and Proceeds, and other
              sums of money and other property which may now or hereafter become due, owing or payable from the
              Obligors in accordance with the terms of the Collateral; (b) to execute, sign and endorse any and all instruments,
              receipts, checks, drafts, and warrants issued in payment for the Collateral; (c) to settle or compromise any and
              all claims arising under the Collateral, and in the place and stead of Grantor, execute and deliver Grantor's
              release and acquittance for Grantor; 9d) to file any claim or claims or to take any action or institute or take part
              in any proceedings, either in Lender's own name or in the name of Grantor, or otherwise, which in the discretion
              of Lender may seem to be necessary or advisable; and (e) to execute in Grantor's name and to deliver to the
              Obligors on Grantor's behalf, at the time and in the manner specified by the Collateral, any necessary
              instruments or documents.

              Perfection of Security Interest. Upon Lender's request, Grantor will deliver to Lender any and all of the
             documents evidencing or constituting the Collateral. When applicable law provides more than one method of
             perfection of Lender's security interest, Lender may choose the method(s) to be used. Upon Lender's request,
             Grantor will sign and deliver any writings necessary to perfect Lender's security interest. If any of the Collateral
             consists of securities for which no certificate has been issued, Grantor agrees, at Lender's option, either to
             request issuance of an appropriate certificate or to execute appropriate instructions on Lender's forms
             instructing the issuer, transfer agent, mutual fund company, or broker, as the case may be, to record on its
             books or records, by book-entry or otherwise, Lender's security interest in the Collateral. Grantor hereby
             appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary
             to perfect or to continue the security interest granted in this Agreement.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral. All such encumbrances incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note or at the highest rate authorized by law, from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable Insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. If Lender is required by law to give Grantor notice before or after Lender makes an expenditure, Grantor agrees that notice sent by regular mail at least five (5) days before the expenditure is made or notice delivered two (2) days before the expenditure is made is sufficient, and that notice within sixty (60) days after the expenditure is made is reasonable.

LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care in the physical preservation and custody of the Collateral in Lender's possession, but shall have no other obligation to protect the Collateral or its value. In particular, but without limitation, Lender shall have no responsibility for (A) any depreciation in value of the Collateral or for the collection or protection of any Income and Proceeds from the Collateral, (B) preservation of rights against parties to the Collateral or against third persons, (C) ascertaining any maturities, calls, conversions, exchanges, offers, tenders, or similar matters relating to any of the Collateral, or (D) Informing Grantor about any of the above, whether or not Lender has or is deemed to have knowledge of such matters. Except as provided above, Lender shall have no liability for depreciation or deterioration of the Collateral.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Borrower fails to make any payment when due under the Indebtedness.

Other Defaults. Borrower or Grantor fails to comply with or to perform any other term, obligation,

          Default in Favor of Third Parties. Should Borrower or any Grantor default under any loan, extension of credit,
          security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person
          that may materially affect any of Borrower's property or Borrower's or any Grantor's ability to repay the
          Indebtedness or perform their respective obligations under this Agreement or any of the Related Documents.

          False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or Grantor
          or on Borrower's or Grantor's behalf under this Agreement, the Note, or the Related Documents is false or
          misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at
          any time thereafter.

          Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect
          (including failure of any collateral document to create a valid and perfected security interest or lien) at any time
          and for any reason.

          Death or Insolvency. The death of Borrower or Grantor or the dissolution or termination of Borrower's or
          Grantor's existence as a going business, the insolvency of Borrower or Grantor, the appointment of a receiver for
          any part of Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor
          workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against
          Borrower or Grantor.

          Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by
           judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or Grantor
           or by any governmental agency against any collateral securing the Indebtedness. This includes a
           garnishment of any of Borrower's or Grantor's accounts, including deposit accounts, with Lender.
           However, this Event of Default shall not apply if there is a good faith dispute by Borrower or Grantor
           as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture
           proceeding and if Borrower or Grantor gives Lender written notice of the creditor or forfeiture
           proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture
           proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve
           or bond for the dispute.

            Insufficient Market Value of Securities. The Collateral to loan percentage falls below 200.00%; as a result of
            the deterioration of the market value of the Collateral , Grantor does not, by the close of business on the next
            business day after Grantor has received notice from Lender of the deterioration, either (1) reduce the amount
            of the Indebtedness in this loan as required by Lender or (2) pledge or grant an additional security interest to
             increase the value of the Collateral as required by Lender.

          Events Affecting Guarantor. Any of the preceding events occurs with respect to guarantor, endorser, surety, or
          accommodation party of any of the Indebtedness or guarantor, endorser, surety, or accommodation party dies
          or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the
           Indebtedness.

Adverse Change. A material adverse change occurs in Borrower's or Grantor's financial condition, or Lender

COMMERCIAL PLEDGE AGREEMENT
(Continued) Page 3
_______________________________________________________________________________________________

believes the prospect of payment or performance of the Indebtedness is impaired.

Adverse Change. A material adverse change occurs in Borrower's or Grantor's financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

          Cure Provisions. If any default, other than a default in payment or failure to satisfy Lender's requirement in the
           Insufficient Market Value of Securities section is curable and if Grantor has not been given a notice of a breach
          of the same provision of this Agreement within the preceding twelve (12) months, it may be cured (and no event
          of default will have occurred) if Grantor, after receiving written notice from Lender demanding cure of such
          default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days,
          immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default
          and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as
          soon as reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender may exercise any one or more of the following rights and remedies:

Accelerate Indebtedness. Declare all Indebtedness, including any prepayment penalty which Borrower would be
required to pay, immediately due and payable, without notice of any kind to Borrower or Grantor.

Collect the Collateral. Collect any of the Collateral and, at Lender's option and to the extent permitted by
applicable law, retain possession of the Collateral while suing on the Indebtedness.

           Sell the Collateral. Sell the Collateral, at Lender's discretion, as a unit or in parcels, at one or more public or
           private sales. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type
           customarily sold on a recognized market, Lender shall give or mail to Grantor, or any of them, notice at least
           ten (10) days in advance of the time and place of any public sale, or of the date after which any private sale
           may be made. Grantor agrees that any requirement of reasonable notice is satisfied if Lender mails notice by
           ordinary mail addressed to Grantor, or any of them, at the last address Grantor has given Lender in writing. If a
           public sale is held, there shall be sufficient compliance with all requirements of notice to the public by a single
           publication in any newspaper of general circulation in the county where the Collateral is located, setting forth
           the time and place of sale and a brief description of the property to be sold. Lender may be a purchaser at any
           public sale.

           Sell Securities. Sell any securities included in the Collateral in a manner consistent with applicable federal
           and state securities laws. If, because of restrictions under such laws, Lender is unable, or believes Lender is
           unable, to sell the securities in an open market transaction, Grantor agrees that Lender will have no obligation
           to delay sale until the securities can be registered. Then Lender may make a private sale to one or more persons
           or to a restricted group of persons, even though such sale may result in a price that is less favorable than
           might be obtained in an open market transaction. Such a sale will be considered commercially reasonable. If
           any securities held as Collateral are "restricted securities" as defined in the Rules of the Securities and Exchange
           Commission (such as Regulation D or Rule 144) or the rules of state securities departments under state "Blue Sky"
          laws, or if Grantor or any other owner of the Collateral is an affiliate of the issuer of the securities, Grantor agrees
           that neither Grantor, nor any member of Grantor's family, nor any other person signing this Agreement will sell
           or dispose of any securities of such issuer without obtaining Lender's prior written consent.

           Rights and Remedies with Respect to Investment Property, Financial Assets and Related Collateral. In
        addition to other rights and remedies granted under this Agreement and under applicable law, Lender
           may exercise any or all of the following rights and remedies: (1) register with any issuer or broker or
           other securities Intermediary any of the Collateral consisting of investment property or financial assets
           (collectively herein, "Investment property") in Lender's sole name or in the name of Lender's broker,
           agent or nominee; ()2) cause any issuer, broker or other securities intermediary to deliver to Lender
           any of the Collateral consisting of securities, or investment property capable of being delivered;
            (3) enter into a control agreement or power of attorney with any issuer or securities intermediary with
           respect to any Collateral consisting of investment property, on such terms as Lender may deem
           appropriate, in its sole discretion, including, without limitation, an agreement granting to Lender any
           of the rights provided hereunder without further notice to or consent by Grantor; (4) execute any such
           control agreement on Grantor's behalf and in Grantor's name, and hereby irrevocably appoints Lender
           as agent and attorney-in-fact, coupled with an interest, for the purpose of executing such control
            agreement on Grantor's behalf; (5) exercise any and all rights of Lender under any such control
            agreement or power of attorney; (6) exercise any voting, conversion, registration, purchase, option,
            or other rights with respect to any Collateral; (7) collect, with or without legal action, and issue receipts
            concerning any notes, checks, drafts, remittances or distributions that are paid or payable with respect
            to any Collateral consisting of investment property. Any control agreement entered with respect to
            any investment property shall contain the following provisions, at Lender's discretion. Lender shall be
            authorized to instruct the issuer, broker or other securities intermediary to take or to refrain from taking
            such actions with respect to the investment property as Lender may instruct, without further notice to
            or consent by Grantor. Such actions may include without limitation the issuance of entitlement orders,
            account instructions, general trading or buy or sell orders, transfer and redemption orders, and stop
            loss orders. Lender shall be further entitled to instruct the issuer, broker or securities intermediary to
            sell or to liquidate any investment property, or to pay the cash surrender or account termination value
            with respect to any and all investment property, and to deliver all such payments and liquidation
            proceeds to Lender. Any such control agreement shall contain such authorizations as are necessary
            to place Lender in "control" of such investment collateral, as contemplated under the provisions of
            the Uniform Commercial Code, and shall fully authorize Lender to issue "entitlement orders" concerning
            the transfer, redemption, liquidation or disposition of investment collateral, in conformance with the
            provisions of the Uniform Commercial Code.

Foreclosure. Maintain a judicial suit for foreclosure and sale of the Collateral.

           Transfer Title. Effect transfer of title upon sale of all or part of the Collateral. For this purpose, Grantor
            irrevocably appoints Lender as Grantor's attorney-in-fact to execute endorsements, assignments and
            instruments in the name of Grantor and each of them (if more than one) as shall be necessary or reasonable.

Other Rights and Remedies. Have and exercise any or all of the rights and remedies of a secured creditor under
the provisions of the Uniform Commercial Code, at law, in equity, or otherwise.

            Application of Proceeds. Apply any cash which is part of the Collateral, or which is received from the
            collection or sale of the Collateral, to reimbursement of any expenses, including any costs for registration
            of securities, commissions incurred in connection with a sale, attorneys' fees and court costs, whether or
            not there is a lawsuit and including any fees on appeal, incurred by Lender in connection with the collection
            and sale of such Collateral and to the payment of the Indebtedness of Borrower to Lender, with any excess
            funds to be paid to Grantor as the interests of Grantor may appear. Borrower agrees, to the extent permitted
            by law, to pay any deficiency after application of the proceeds of the Collateral to the Indebtedness.

            Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies,
            whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative
            and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not
            exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an
            obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right
            to declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement.

              Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding
              and agreement of the parties as to the matters set forth in this Agreement. All prior and contemporaneous
              representations and discussions concerning such matters either are included in this document or do not
              constitute an aspect of the agreement of the parties. Except as may be specifically set forth in this
              Agreement, no conditions precedent or subsequent, of any kind whatsoever, exist with respect to Grantor's
              obligations under this Agreement. No alteration of or amendment to this Agreement shall be effective unless
              given in writing and signed by the party or parties sought to be charged or bound by the Alteration or
              amendment.

              Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses, including
              Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this
              Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the
              costs and expenses of such enforcement. Costs and expenses include Lenders' attorneys' fees and legal
              expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy
              proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any
              anticipated post-judgment collection services. Grantor also shall pay all court costs and such additional
              fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be
used to interpret or define the provisions of this Agreement.

              Governing Law. This Agreement will be governed by, construed and enforced in accordance with federal
              law and the laws of the State of Oklahoma. This Agreement has been accepted by Lender in the State of
              Oklahoma.

Joint and Several Liability. All obligations of Borrower and Grantor under this Agreement shall be joint and

COMMERCIAL PLEDGE AGREEMENT
(Continued) &nbs p; Page 4
_______________________________________________________________________________________________

                 several, and all references to Grantor shall mean each and every Grantor, and all references to Borrower shall
                 mean each and every Borrower. This means that each Borrower and Grantor signing below is responsible for
                 all obligations in this Agreement. Where any one or more of the parties is a corporation, partnership, limited
                 liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the
                 officers, directors, partners, members, or other agents acting or purporting to act on the entity's behalf, and
                 any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed
                 under this Agreement.

                  No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless
                 such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising
                 any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this
                 Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance
                 with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of
                 dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's
                 obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement,
                 the granting of such consent by Lender in any instance shall not constitute continuing consent to
                 subsequent instances where such consent is required and in all cases such consent may be granted or
                 withheld in the sole discretion of Lender.

                 Notices. To the extent permitted by applicable law, any notice required to give given under this Agreement
                 shall be given in writing, and shall be effective when actually delivered, when actually received by
                 telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight
                 courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail
                 postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may
                 change its address for notices under this Agreement by giving formal written notice to the other parties,
                 specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor
                 agrees to keep Lender informed at all times of Grantor's current address. To the extent permitted by
                 applicable law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed
                 to be notice given to all Grantors.

                 Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal,
                 invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision
                 illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall
                 be considered modified so that it becomes legal, valid and enforceable. If the offending provision
                 cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required
                 by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not
                 affect the legality, validity or enforceability of any other provision of this Agreement.

                 Successors and Assigns. Subject to any limitations stated in this Agreement or transfer of Grantor's
                 interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors
                 and assigns. If ownership of the Collateral becomes vested in a person other than Grantor, Lender,
                 without notice to Grantor, may deal with Grantor's successors with reference to this Agreement and the
                 Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of
                 this Agreement or liability under the Indebtedness.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such term in the Uniform Commercial Code.

                  Agreement. The word "Agreement" means this Commercial Pledge Agreement, as this Commercial Pledge
                  Agreement may be amended or modified from time to time, together with all exhibits and schedules attached
                  to this Commercial Pledge Agreement from time to time.

Borrower. The word "Borrower" means Jack E. Golsen and Sylvia H. Golsen, and all other persons and
entities signing the Notice in whatever capacity.

Collateral. The word "Collateral" means all of Grantor's right, title and interest in and to all of the Collateral
as described in the Collateral Description section of this Agreement.

Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default

Event of Default. The words "Event of Default" mean any of the events of default set forth in this
Agreement in the default section of this Agreement.

Grantor. The word "Grantor" means SBL Corporation.

Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation
party to Lender, including without limitation a guaranty of all or part of the Note.

                  Income and Proceeds. The words "Income and Proceeds" mean all present and future income, proceeds,
                  earnings, increases, and substitutions from or for the Collateral of every kind and nature, including without
                  limitation all payments, interest, profits, distributions, benefits, rights, options, warrants, dividends, stock
                  dividends, stock splits, stock rights, regulatory dividends, subscriptions, monies, claims for money due
                  and to become due, proceeds of any insurance on the Collateral, shares of stock of different par value or
                  no par value issued in substitution or exchange for shares included in the Collateral, and all other property
                  Grantor is entitled to receive on account of such Collateral, including accounts, documents, instruments,
                  chattel paper, and general intangibles.

                   Indebtedness. The word "Indebtedness" means the Indebtedness evidenced by the Note or Related
                   Documents, including all principal and interest together with all other Indebtedness and costs and
                   expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.

Lender. The word "Lender" means BancFirst, its successors and assigns.

                  Note. The word "Note" means the Note executed by Borrower in the principal amount of $222,000.00 dated
                  February 2, 2001, together with all renewals of, extensions of, modifications of, refinancings of,
                  consolidations of, and substitutions for the note or credit agreement.

Obligor. The word "Obligor" means without limitation any and all persons obligated to pay money or to
perform some other act under the Collateral.

                   Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan
                   agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,
                   security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now
                   or hereafter existing, executed in connection with the Indebtedness.

BORROWER AND GRANTOR HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL PLEDGE AGREEMENT AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 2, 2001.

GRANTOR: SBL CORPORATION By: /s/ Jack E. Golsen Jack E. Golsen, President of SBL Corporation
BORROWER: X /s/ Jack E. Golsen Jack E. Golsen, Individually	X /s/ Sylvia H. Golsen Sylvia H. Golsen, Individually

EX-99.26 12 union-security.htm COMMERCIAL SECURITY AGREEMENT (BANK OF UNION) Exhibit 99.26 - Commercial Security Agreement (Bank of Union)

COMMERCIAL SECURITY AGREEMENT

Principal $158,208.88	Loan Date 08-27-2001	Maturity 08-27-2002	Loan No. 83827	Call / Coll	Account 013205213	Officer JAS	Initials
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations.

Borrower:

Jack E. Golsen (SSN: ###-##-####)
16 South Pennsylvania
Oklahoma City, OK 73107

Lender:

THE BANK OF UNION
THE BANK OF UNION, EL RENO
2000 S. COUNTRY CLUB RD.
P.O. BOX 1010
EL RENO, OK 73036

THIS COMMERCIAL SECURITY AGREEMENT dated August 27, 2001, is made and executed between JACK E. GOLSEN ("Grantor") and THE BANK OF UNION ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing now or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement:

          1,523,933 TOTAL SHARES OF LSB INDUSTRIES, INC. STOCK (533,333 SHARES OF PREFERRED
          "B" AND 990,600 SHARES OF COMMON) PLEDGED AS COLLATERAL ON JACK E. GOLSEN,
          GOLSEN PETROLEUM CORPORATION AND SBL CORPORATION NOTES; CASH VALUE LIFE
          INSURANCE; LOAN AGREEMENT

In addition, the word "Collateral" also includes all of the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located:

(A) All accessions, attachments, accessories, replacements and additions to any of the collateral described
herein, whether added now or later.

(B) All proceeds and produce of any of the property described in this Collateral section.

(C) All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out
of a sale, lease, or other disposition of any of the property described in this Collateral section.

          (D)     All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any
          of the property described in this Collateral section, and sums due from a third party who has damaged or
          destroyed the Collateral or from that party's insurer, whether due to judgment, settlement or other process.

          (E)     All records and data relating to any of the property described in this Collateral section, whether in the
          form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of Grantor's right,
          title, and interest in and to all computer software required tu utilize, create, maintain, and process any such
          records or data on electronic media.

Despite any other provision of this Agreement, Lender is not granted, and will not have, a nonpurchase money security interest in household goods, to the extent such a security interest would be prohibited by applicable law. In addition, if because of the type of any Property, Lender is required to give a notice of the right to cancel under Truth in Lending for the Indebtedness, then Lender will not have a security interest in such Collateral unless and until such a notice is given.

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor represents and promises to Lender that:

          Perfection of Security Interest. Grantor agrees to execute financing statements and to take whatever other
          actions are requested by Lender to perfect and continue Lender's security interest in the Collateral. Upon
          request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting
          the Collateral, and Grantor will note Lender's interest upon any and all chattel paper if not delivered to
          Lender for possession by Lender.

          Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above (or
          such other addresses as Lender may designate from time to time) prior to any (1) change in Grantor's
          name; (2) change in Grantor's assumed business name(s); (3) change in the authorized signer(s); (4)
          change in Grantor's principal office address; (5) change in Grantor's principal residence; (6) conversion
          of Grantor to a new or different type of business entity; or (7) change in any other aspect of Grantor that
          directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name
          or principal residence will take effect until after Lender has received notice.

No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing
Grantor or to which Grantor is a party.

          Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general
          intangibles, as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its
          terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and
          manner of preparation and execution, and all persons appearing to be obligated on the Collateral have
          authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There
          shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made
          under which any deductions or discounts maybe claimed concerning the Collateral except those disclosed
          to Lender in writing.

          Location of the Collateral. Except in the ordinary course of Grantor's business, Grantor agrees to keep the
          Collateral at Grantor's address shown above or at such other locations as are acceptable to Lender. Upon
          Lender's request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties
          and Collateral locations relating to Grantor's operations, including without limitation, the following: (1) all
          real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage
          facilities Grantor owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located.

          Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the
          Collateral from its existing location without Lender's prior written consent. Grantor shall, whenever requested,
          advise Lender of the exact location of the Collateral.

          Transactions Involving Collateral. Except for Inventory sold or accounts collected in the ordinary course of
          Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or
          otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit
          the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security interest
          provided for in this Agreement, without the prior written consent of Lender. This includes security interests
          even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all
          proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall
          not be commingled with any other funds; provided, however, this requirement shall not constitute consent by
          Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds
          to Lender.

          Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral,
           free and clear of all liens and encumbrances except for the lien of this Agreement. No financing statement
           covering any of the Collateral is on file in any public office other than those which reflect the security interest
           created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights
           in the Collateral against the claims and demands of all other persons.

          Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain, the
          Collateral in good order, repair and condition at all times while this Agreement remains in effect. Grantor further
          agrees to pay when due all claims for work done on, or services rendered or material furnished in connection
          with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral.

Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all
reasonable times to examine and inspect the Collateral wherever located.

          Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral,
           its use or operation, upon this Agreement, upon any promissory note or notes evidencing the Indebtedness,
          or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest
          any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and
          so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is
          subjected to a lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash,
          a sufficient corporate surety bond or other security satisfactory to Lender in an amount

COMMERCIAL SECURITY AGREEMENT
Loan No. 83827 (Continued) Page 2
_______________________________________________________________________________________________

          adequate to provide for the discharge of the lien plus any interest, costs, attorneys' fees or other charges that
          could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and
          Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall
          name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor
          further agrees to furnish Lender with evidence that such taxes, assessments, and governmental and other
          charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect
          to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation
          to pay and so long as Lender's interest in the Collateral is not jeopardized.

          Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules
          and regulations of all governmental authorities, now or hereafter in effect, applicable to the ownership,
          production, disposition, or use of the Collateral. Grantor may contest in good faith any such law, ordinance
          or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as
          Lender's interest in the Collateral, in Lender's opinion, is not jeopardized.

          Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be
          so long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or
          for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of
          any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due
          diligence in investigating the Collateral for Hazardous Substances. Grantor hereby (1) releases and waives any
          future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or
          other costs under any Environmental Laws, and (2) agrees to indemnity and hold harmless Lender against any
          and all claims and losses resulting from a breach of this provision of this Agreement. This obligation to
          indemnity shall survive the payment of the Indebtedness and the satisfaction of this Agreement.

          Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without
          limitation fire, theft and liability coverage together with such other insurance as Lender may require with
          respect to the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued
          by a company or companies reasonably acceptable to lender. Grantor, upon request of Lender, will deliver to
          Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including
          stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written
          notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice.
          Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not
          be impaired in any way by any act, omission or default of Grantor or any other person. In connection with all
          policies covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender
          with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or
          maintain any insurance as required under this Agreement, Lender may (but shall not be obligated to) obtain
          such insurance as Lender deems appropriate, including if Lender so chooses "single interest insurance,"
          which will cover only Lender's interest in the Collateral.

          Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the
          Collateral. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty.
          All proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by
          Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed
          Collateral, Lender shall, upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds
          for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the
          Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall
          pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their
          receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to
          prepay the Indebtedness.

          Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance
          premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender
          to be sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least equal to
          the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve funds are
          insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by
          Lender as a general deposit and shall constitute a non-interest-bearing account which Lender may satisfy
          by payment of the insurance premiums required to be paid by Grantor as they become due. Lender does not
          hold the reserve funds in trust for Grantor, and Lender is not the agent of Grantor for payment of the
          insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums shall
          remain Grantor's sole responsibility.

          Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy
          of insurance showing such information as Lender may reasonably request including the following: (1) the
          name of the Insurer; (2) the risks incurred; (3) the amount of the policy; (4) the property insured; (5) the then
          current value on the basis of which insurance has been obtained and the manner of determining that value;
          and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not
          more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable,
          the cash value or replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the collateral by Lender is required by law to perfect lender's security interest in such Collateral. If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender, in Lender's sole discretion, shall deem appropriate under the circumstances, but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, nor to protect or maintain any security interest given to secure the Indebtedness.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Grantor fails to make any payment when due under the Indebtedness.

         Other Defaults.  Grantor fails to comply with or to perform any other term, obligation, covenant or condition
         contained in this Agreement or in any of the Related Documents or to comply with or to perform any term,
         obligation, covenant or condition contained in any other agreement between Lender and Grantor.

          False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or
          on Grantor's behalf under this Agreement, the Note, or the Related Documents is false or misleading in
          any material respect, either now or at the time made or furnished or becomes false or misleading at any
          time thereafter.

          Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and
          effect (including failure of any collateral document to create a valid and perfected security interest or lien) at
          any time and for any reason.

          Death or Insolvency. The death of Grantor or the insolvency of Grantor, the appointment of a receiver
          for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor
          workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or
          against Grantor.

          Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by
           judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any
          governmental agency against any collateral securing the Indebtedness. This includes a garnishment
          of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of
          Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness
          of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender
          written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety
          bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole
          discretion, as being an adequate reserve or bond for the dispute.

          Events Affecting Guarantor. Any of the preceding events occurs with respect to guarantor, endorser, surety,
          or accommodation party of any of the Indebtedness or guarantor, endorser, surety, or accommodation party
          dies or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the
          Indebtedness.

Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes
the prospect of payment or performance of the Indebtedness is impaired.

COMMERCIAL SECURITY AGREEMENT
Loan No. 83827 (Continued) Page 3
_______________________________________________________________________________________________

Insecurity. Lender in good faith believes itself insecure.

          Cure Provisions.  If any default, other than a default in payment is curable and if Grantor has not been
          given a notice of a breach of the same provision of this Agreement within the preceding twelve (12)
          months, it may be cured (and no event of default will have occurred) if Grantor, after receiving written
          notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or
          (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems
          in Lender's sole discretion to be sufficient to cure the default and thereafter continues and
          completes all reasonable and necessary steps sufficient to produce compliance as soon as
          reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under the Oklahoma Uniform Commercial Code. In addition and without limitation, Lender may exercise any one or more of the following rights and remedies:

          Accelerate Indebtedness.  Lender may declare the entire Indebtedness, including any prepayment penalty
          which Grantor would be required to pay, immediately due and payable, without notice of any kind to
          Grantor.

          Assemble Collateral.  Lender may require Grantor to deliver to Lender all or any portion of the Collateral
          and any and all certificates of title and other documents relating to the Collateral. Lender may require
          Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender.
          Lender also shall have full power to enter upon the property of Grantor to take possession of and
          remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time
          of repossession, Grantor agrees Lender may take such other goods, provided that Lender makes
          reasonable efforts to return them to Grantor after repossession.

          Sell the Collateral.  Lender shall have full power to sell, lease, transfer, or otherwise dispose of the
          Collateral.  Unless the Collateral in whole or in part is perishable or threatens to decline speedily
          in value or is of a type customarily sold on a recognized market, Lender will give Grantor reasonable
          notice of the time and place of any public sale, or of the time after which any private sale or other
          disposition is to be made.  Notwithstanding any other provision of this Agreement, any require-
          ment of notice for this purpose shall be met if notice is mailed, postage prepaid, to the address of
          Grantor provided for in this Agreement at least ten (10) days before sale or other disposition or
          action. Lender shall be entitled to, and Grantor shall be liable for, all reasonable costs and
          expenditures incurred in realizing on Lender's security interest, including without limitation, all
          court costs, fees for sale, selling costs and reasonable attorneys' fees as set forth in the Note or
          in this Agreement. All such costs shall be secured by the security interest in the Collateral
          covered by this Agreement.

          Appoint Receiver. In any action by Lender for the foreclosure of this Agreement, whether by judicial
          foreclosure or power of sale, Lender shall be entitled to the appointment of a receiver upon any failure of
          Grantor to comply with any term, obligation, covenant, or condition contained in this Agreement, the Note,
          or any Related Documents.

          Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments,
          rents, income and revenues from the Collateral. Lender may at any time in Lender's discretion transfer any
          Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and
          revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the
          Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of
          accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar
          property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on
          the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these
          purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed
          to Grantor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts,
          money orders, documents of title, instruments and items pertaining to payment, shipment, or storage of
          any Collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to
          make payments directly to Lender.

          Obtain Deficiency.  If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment
          against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all
          amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a
          deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper.

          Other Rights and Remedies.  Lender s hall have all the rights and remedies of a secured creditor
          under the provisions of the Uniform Commercial Code, as may be amended from time to time. In
          addition, Lender shall have and may exercise any or all other rights and remedies it may have
          available at law, in equity, or otherwise.

          Election of Remedies.  Except as may be prohibited by applicable law, all of Lender's rights and remedies,
          whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative
          and may be exercised singularly or concurrently.  Election by Lender to pursue any remedy shall not exclude
          pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation
          of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare
          a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement.

          Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding
          and agreement of the parties as to the matters set forth in this Agreement. All prior and contemporaneous
          representations and discussions concerning such matters either are included in this document or do not
          constitute an aspect of the agreement of the parties. Except as may be specifically set forth in this Agreement,
          no conditions precedent or subsequent, of any kind whatsoever, exist with respect to Grantor's obligations
          under this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in
          writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

          Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses, including
          Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this
          Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the
          costs and expenses of such enforcement. Costs and expenses include Lenders' attorneys' fees and legal
          expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy
          proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any
          anticipated post-judgment collection services. Grantor also shall pay all court costs and such additional
          fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be
used to interpret or define the provisions of this Agreement.

Governing Law. This Agreement will be governed by, construed and enforced in accordance with federal law
and the laws of the State of Oklahoma. This Agreement has been accepted by Lender in the State of Oklahoma.

          No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless
          such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising
          any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this
          Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance
          with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of
          dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's
          obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement,
          the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent
          instances where such consent is required and in all cases such consent may be granted or withheld in the sole
          discretion of Lender.

          Notices. To the extent permitted by applicable law, any notice required to be given under this Agreement
          shall be given in writing, and shall be effective when actually delivered, when actually received by
          telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight
          courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail
          postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may
          change its address for notices under this Agreement by giving formal written notice to the other parties,
          specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor
          agrees to keep Lender informed at all times of Grantor's current address. To the extent permitted by
          applicable law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to
          be notice given to all Grantors.

           Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the
           purpose of executing any documents necessary to perfect, amend, or to continue the security interest
           granted in this Agreement or to demand termination of filings of other secured parties. Lender may at any
           time, and without further authorization from Grantor, file a carbon, photographic or other reproduction
           of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse
           Lender for all expenses for the perfection and the continuation of the perfection of Lender's security
           interest in the Collateral.

          Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal,
          invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal,
          invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be
          considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be
          so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the
          illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality,
          validity or enforceability of any other provision of this Agreement.

COMMERCIAL SECURITY AGREEMENT
Loan No. 83827 (Continued) Page 4
_______________________________________________________________________________________________

           Grantor, may deal with Grantor's successors with reference to this Agreement and the Indebtedness by
           way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability
           under the Indebtedness.

           Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor
           in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature,
           and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by any party against any other party.

          Agreement. The word "Agreement" means this Commercial Security Agreement, as this Commercial Security
          Agreement may be amended or modified from time to time, together with all exhibits and schedules attached
          to this Commercial Security Agreement from time to time.

Borrower. The word "Borrower" means JACK E. GOLSEN, and all other persons and entities signing the
Notice in whatever capacity.

Collateral. The word "Collateral" means all of Grantor's right, title and interest in and to all of the Collateral
as described in the Collateral Description section of this Agreement.

Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default".

          Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statues,
          regulations and ordinances relating to the protection of human health or the environment, including without
          limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
          amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act
          of 1986, Pub. L. No. 99-4999 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
          et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable
          state or federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words "Event of Default" mean any of the events of default set forth in this
Agreement in the default section of this Agreement.

Grantor. The word "Grantor" means JACK E. GOLSEN.

Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation
party to Lender, including without limitation a guaranty of all or part of the Note.

          Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity,
          concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential
          hazard to human health or the environment when improperly used, treated, stored, disposed of, generated,
          manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very
          broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste
          as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes,
          without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.

          Indebtedness. The word "Indebtedness" means the Indebtedness evidenced by the Note or Related
          Documents, including all principal and interest together with all other Indebtedness and costs and expenses
          for which Borrower is responsible under this Agreement or under any of the Related Documents.

Lender. The word "Lender" means THE BANK OF UNION, its successors and assigns.

          Note. The word "Note" means the Note executed by Grantor in the principal amount of $158,208.88 dated
          August 27, 2001, together with all renewals of, extensions of, modifications of, refinancings of,
          consolidations of, and substitutions for the note or credit agreement.

          Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan
          agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security
          deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter
          existing, executed in connection with the Indebtedness.

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AUGUST 27, 2001.

GRANTOR: X /s/ Jack E. Golsen Jack E. Golsen, Individually
LENDER: THE BANK OF UNION X Authorized Signer

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